House of Commons

Wednesday 6th November 2013 Commons Chamber

Wednesday 6 November 2013

The House met at half-past Eleven o’clock

Prayers

Wednesday 6th November 2013 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Wednesday 6th November 2013 Commons Chamber

The Secretary of State was asked—

[Jim Sheridan (Paisley and Renfrewshire North) (Lab)]

1. What assessment he has made of the potential effects of the legacy of the Glasgow 2014 Commonwealth games on the UK tourism industry.

[The Secretary of State for Scotland (Mr Alistair Carmichael)]

The Glasgow 2014 Commonwealth games provide a great opportunity to showcase Glasgow to the world. Following my recent meeting with Gordon Matheson of Glasgow city council, I am left in no doubt that the games will provide a long-lasting legacy of which the people of Glasgow can be proud. The United Kingdom Government are taking every step to promote the business opportunities that the games present, and I should be happy to receive suggestions in that regard from any Member in any part of the House.

[Jim Sheridan]

I welcome the Secretary of State to his first session of Scottish questions. I also send best wishes to his predecessor, who was a thoroughly decent man. [Hon. Members: “Hear, hear.”]

Next year’s Commonwealth games will attract thousands of visitors to Scotland. I believe that the best legacy that we can give them is to ask them to come back and visit us again, but that may be extremely difficult for some, given the high rate of air passenger duty. Will the Secretary of State ask his colleagues in the Treasury to review the position, and to carry out an impact assessment of the effects of APD on tourism in Scotland and in the United Kingdom as a whole?

[Mr Carmichael]

I am grateful to the hon. Gentleman for his welcome to what is, in fact, my first session of Scottish questions as Secretary of State. I have been present for Scottish questions once or twice before.

Let me also associate myself with the hon. Gentleman’s tribute to my right hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (Michael Moore), who did an excellent job. The additional powers that were given to the Scottish Parliament through the Scotland Act 2012 and the negotiation of the Edinburgh agreement are a lasting legacy from him.

I am aware that Glasgow airport is an important asset for the hon. Gentleman’s constituency, and I commend him for the vigorous way in which he prosecutes its interests. I always welcome any representations from Members in any part of the House, but air passenger duty is a matter for the Chancellor of the Exchequer, and the hon. Gentleman should get his representations in early ahead of the autumn statement. Good luck to him.

[Iain Stewart (Milton Keynes South) (Con)]

I, too, welcome my right hon. Friend to his new position.

An important legacy from London 2012 was better working between the transport agencies and providers. May I urge my right hon. Friend to work with Transport Scotland and other agencies to ensure that a similar legacy can be secured for Glasgow?

[Mr Carmichael]

I hope very much that that will happen. A significant transport legacy has already been established by the organisers of the games, and I see no reason why the lessons of the Olympic games, which are substantial and readily available, should not be learnt by those in Glasgow.

[Margaret Curran (Glasgow East) (Lab)]

I join others in welcoming the Secretary of State to his new position, and in paying tribute to his predecessor.

The legacy of the Commonwealth games is vital to the people of Glasgow and their prospects, particularly in relation to jobs, but today that has been overshadowed by reports concerning the future of shipbuilding on the Clyde. The work force on the Clyde are renowned for their skills and expertise, but they now face uncertainty about their future. Will the Secretary of State assure the House that he will work with trade unions and with the company to minimise any potential job losses, mitigate the effects on communities, and secure the future of shipbuilding on the Clyde?

[Mr Carmichael]

I thank the hon. Lady for her welcome. I can give her every assurance that, as in the recent crisis surrounding the Grangemouth plant, I will work with any party in any part of the country where Scotland’s vital interests are involved. I extend that invitation to the hon. Lady, to the Scottish National party, and to the Scottish Government. The issue is clearly important. Today is a day that we always knew was coming, but I believe that we will meet the challenges much more effectively by working together.

[Sir Menzies Campbell (North East Fife) (LD)]

May I urge my right hon. Friend to take the opportunity, as soon as he can, to visit the sporting facilities that have been created in the east end of Glasgow, particularly the indoor athletics track and the velodrome which is named after Sir Chris Hoy? Does he recognise that they meet the highest possible international standards, and constitute a substantial sporting legacy for the city of Glasgow and, indeed, the whole of Scotland?

[Mr Carmichael]

For, very possibly, the first time in the 30 years for which I have known my right hon. and learned Friend, I am one step ahead of him. I have, in fact, visited those facilities, and I was immensely impressed, principally by the fact that they are already accessible to some 75,000 people in the area. They will indeed constitute a lasting legacy. Glasgow city council has the opportunity to provide a business legacy, and I am delighted to announce that it has made the Glasgow city chambers available to UK Trade & Investment and other organisations for the duration of the games so that they can promote business opportunities.

[Angus Robertson (Moray) (SNP)]

I welcome the Secretary of State to his position. Today is a very sad day for many families in Glasgow, and I am sure the thoughts of everybody on both sides of the House are with them. How will the legacy to Glasgow of the Commonwealth games be affected by large-scale skilled industrial job losses in the city?

[Mr Carmichael]

I thank the hon. Gentleman for his welcome. As I have already said, we are working with UKTI to bring more business opportunities to Glasgow. As for the announcements, we will hear from the Secretary of State for Defence later today what the full extent of these developments is going to be, but they will be best tackled if we all work together. We have known for a long time that this day was coming.

[Angus Robertson]

And the legacy to Glasgow will be serious if nothing is done to help those who need it, so what can the Secretary of State and his Government do to help people in these circumstances?

[Mr Carmichael]

I will be doing what I have been doing since the day and hour I took over this job. I will work with the hon. Gentleman’s colleagues in the Scottish Government, if they are prepared to work with me. I will work with the councillors and officers at Glasgow city council. I will work with UKTI and, most of all, I will work with BAE Systems, which, in very difficult circumstances, has handled itself in a way that should be commended.

[Pete Wishart (Perth and North Perthshire) (SNP)]

2. What discussions he has had with the Secretary of State for the Home Department on the display of materials from the “Go home or face arrest” campaign in the Glasgow UK Border Agency office.

[The Secretary of State for Scotland (Mr Alistair Carmichael)]

I recently met both my right hon. Friend the Home Secretary and my hon. Friend the Minister for Immigration to discuss a range of immigration matters, including the campaign to which the hon. Gentleman refers. In a written statement last week my hon. Friend the Minister for Immigration informed the House that the poster campaign has no future in Scotland.

[Pete Wishart]

I thank the Secretary of State for that answer, but was it not absolutely appalling that these disgusting and xenophobic materials graced a public office in Scotland, contrary to everything we have tried to achieve through good and positive community relations in Scotland? This is all about a race to the bottom with the UK Independence party on immigration. We do not even do UKIP in Scotland. We do not even do Conservative; we have got the one lone panda of a Minister, the right hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell), sitting there. Can the Secretary of State reassure me that we will never see the likes of these posters again in Scotland?

[Mr Carmichael]

This is a serious issue, and I accept that these posters were not appropriate, but I think a slightly more measured approach than the hon. Gentleman’s is appropriate to questions such as this. It was made clear in the Immigration Minister’s statement last week that these posters will not be back. I am content with that position.

[Mr Philip Hollobone (Kettering) (Con)]

What is the Secretary of State’s estimate of the number of illegal immigrants in Scotland?

[Mr Carmichael]

I do not have that figure to hand, but I will be more than happy to make the appropriate inquiry and write to my hon. Friend.

[Keith Vaz (Leicester East) (Lab)]

I understand that the Secretary of State personally intervened to oppose this campaign. Can he tell us about the fate of the vans that were central to this campaign? Are they going to be pulped—or maybe recycled and used as ministerial vehicles?

[Mr Carmichael]

For me, the ministerial vehicle remains, while I am in London, the No. 159 or No. 3 bus, so I do not think I would derive any benefit from the right hon. Gentleman’s proposal. The vans were not used in Scotland, of course. There was, however, substantial concern about the use of the posters in the UKBA office there, which I have to say was particularly inappropriate given the good efforts of Glasgow city council and the wider community in Glasgow to ensure that the tone of the treatment of people coming to the city is appropriate.

[Sir Tony Baldry (Banbury) (Con)]

If the Scottish nationalists want to give everyone such a warm welcome in Scotland, can those of us whose grandfathers fought in the first world war with the Highland Light Infantry and whose great-grandfathers fought with the Gordon Highlanders and who consider ourselves in large part to be Scots, and consider Scotland in part to be home, have a vote in the referendum as well?

[Mr Speaker]

That is an ingenious question, but it suffers from the disadvantage of being entirely unrelated to Question 2.

[Katy Clark (North Ayrshire and Arran) (Lab)]

I welcome the Secretary of State to his post and pay tribute to the hard work that his predecessor put in. Positive Action in Housing, which he will be aware works with asylum seekers in Scotland, has called the posters “shameful and deeply offensive”. Given what he said about the tone, does he agree with that comment?

[Mr Carmichael]

I have made it clear that I consider the posters to be inappropriate. They were part of a trial, they have gone and they will not be back. I do not think anything else really matters.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

3. What recent discussions he has had on the effects of increasing energy prices on households in Scotland.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

6. What recent discussions he has had with Ministers of the Scottish Government on household and business energy bills.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

7. What recent discussions he has had with Ministers of the Scottish Government on household and business energy bills.

[The Secretary of State for Scotland (Mr Alistair Carmichael)]

Rising energy bills are obviously a serious concern for consumers and businesses. Over the past weeks, I have discussed the issue with representatives of the major energy companies. We continue to work closely with Scottish Government Ministers on all matters facing the economy in Scotland, including energy prices.

[Mr MacNeil]

As a fellow islander, may I say that it is good to see an Ileach, an Islay man, at the Dispatch Box? With my constituency suffering the highest level of fuel poverty in the UK, can the Secretary of State investigate the benefits that some renewables might bring to offset that? Although it is good that the islands will have different renewables strike prices, he well knows that not all islands are the same. Will he represent that view to the Secretary of State for Energy and Climate Change, to make sure that all islands can benefit and we can tackle these high energy prices?

[Mr Carmichael]

I am grateful to the hon. Gentleman for allowing me the opportunity to remind the House of this Government’s great achievement in establishing, and putting out for consultation, a strike price for island communities, which will make the development of renewable energy in communities such as his and mine a viable proposition at long last. That may have a contribution to make to tackling fuel poverty. I have already worked closely with the leader of his local council in this matter, and I urge him to do the same.

[Mark Lazarowicz]

The Government have been giving strong indications that they intend to move some of the cost of paying for energy efficiency to general taxation, and the Scottish National party Government have said that they want to do the same. Unless we also have measures such as Labour’s energy price freeze, would such a transfer not just let the energy companies off the hook and reduce the pressure on them to control prices?

[Mr Carmichael]

The hon. Gentleman is absolutely right to say that the position announced by Nicola Sturgeon takes money off energy bills but is going to have to be made up for elsewhere. At a time when there is already a £3.4 billion black hole in the SNP figures, one has to think that that is not going to offer much hope for people struggling to pay their energy bills already. We all know the problems associated with his price freeze, and I have no doubt that they will be rehearsed in the House later today. My particular concern relates to the position of smaller energy companies, which are at risk of being forced out. If we reduce the number of companies in the market, we will see prices go up—that cannot be good.

[Cathy Jamieson]

The Scottish Government and UK Government Energy Ministers appear to have joined forces to suggest that Labour’s plans for an energy price freeze would put the lights out. I know the Secretary of State to be a sensible man, so has he talked to the Scottish Government about this and does he agree that the energy price freeze would deliver a £120 saving to my constituents?

[Mr Carmichael]

I am afraid that we have heard dodgy figures from the Labour party before, and I think we have just heard yet another one from the hon. Lady. The truth is that Labour’s price freeze does risk reducing the number of companies in the market. If competition is reduced, the price goes up. That is basic economics and the Labour party should learn it.

[Mr Alan Reid (Argyll and Bute) (LD)]

People who are on SSE’s “Total Heating, Total Control” system have been told by SSE that their system will not work properly if they switch to another supplier, which means that they are totally dependent on SSE and the huge price increases that it places on them. That is an unacceptable abuse of a monopoly, so will my right hon. Friend investigate it?

[Mr Carmichael]

I am aware of the issue from my own constituency mailbag, and it relates to those currently on the “Total Heating, Total Control” tariffs. It is a fairly complex position, but I say to SSE that it has enormous customer loyalty from throughout the highlands and islands. When we get the answers to the questions that my hon. Friend poses, I shall be looking at them very closely, because I want to ensure that the customer loyalty that its hydro has in the highlands and islands is valued, and not abused.

[Mike Crockart (Edinburgh West) (LD)]

Ofgem has estimated that £27 of the average annual fuel bill pays to help the fuel poor, £21 pays for renewable obligations and £6 pays for feed-in tariffs. That comes to a total of £54, which is less than the tax paid on a single tank of petrol. Does the Secretary of State agree that that is a good return on a small outlay?

[Mr Carmichael]

My hon. Friend makes the point very well that although there are such charges on electricity bills the money is then spent wisely on improving the quality of housing and energy efficiency. That, of course, is the real opportunity offered by the energy debate and I think that the Government are sensible to pursue it.

[John Stevenson (Carlisle) (Con)]

Does the Secretary of State agree that the way to reduce energy costs overall is to encourage competition, support innovation, increase supply and remove unnecessary costs rather than a price freeze?

[Mr Carmichael]

I wonder whether my hon. Friend and I might have a slight difference of opinion in what we consider to be an unnecessary cost, but with that one caveat I have absolutely no difficulty in agreeing with him. Such an approach runs wholly counter to the Opposition’s proposals.

[Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)]

11. Last Saturday, my advice surgery was full of desperate people who do not know how they are going to get through the week, never mind through the winter. If the Government are not prepared even to consider the price freeze, what action will they take right now to help people to get through the winter?

[Mr Carmichael]

I take seriously the hon. Lady’s point. That is a real and deep concern for households across the country and that is why the Government have taken action on a number of fronts. This year, 230,000 homes will be warmer because of the increased energy efficiency measures that we support and 2 million vulnerable households will get help under the warm home discount. That is £135 off electricity bills for some of the poorest pensioners. The ongoing winter fuel payment for older people and the £25 cold weather payment have been made permanent by this Government.

[Margaret Curran (Glasgow East) (Lab)]

Labour’s energy price freeze would save Glasgow and Edinburgh city councils, Scotland’s two largest local authorities, close to £3 million a year. That is equivalent to 71 teachers and 140 care workers. In the vote later today, will the Secretary of State vote with the Tories and side with the energy companies or will he vote for Labour’s energy price freeze and side with the people of Scotland?

[Mr Carmichael]

I will be supporting the coalition Government and I am proud to do so, because we recognise that there are no easy answers in this debate and that the proposals from the Opposition will end up putting people’s prices up.

[Andrew Stephenson (Pendle) (Con)]

4. What assessment he has made of the effects on businesses in north-west England of Scotland remaining part of the UK.

[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

The detailed Scotland analysis papers we have published underline the value to businesses across the whole of the United Kingdom of Scotland remaining part of the Union. As it stands, the UK is a true domestic single market and currency union with free movement of goods and services, capital and people.

[Andrew Stephenson]

The Minister will be aware of the encouraging economic signs across the north-west of England, with employment up and a recent regional purchasing managers index showing that growth is higher than in any other region in the UK. Does the Minister agree with me that remaining part of the UK is the best way forward for Scottish business?

[David Mundell]

I absolutely agree with my hon. Friend that that is the best way forward not just for Scottish business but for business in the whole of the UK. Businesses in his constituency benefit from the single domestic market, which includes Scotland.

[Stewart Hosie (Dundee East) (SNP)]

I expect that Scotland will vote yes to independence next year and in those circumstances, the best hope for businesses in the north-west of England—and, indeed, businesses throughout England, which sell £50 billion of goods and services to Scotland every year—is the maintenance of sterling in a formal currency union, which was described by the right hon. Member for Edinburgh South West (Mr Darling) as logical and desirable. Does the Minister agree with the right hon. Gentleman or with yesterday’s scaremongering “project fear” nonsense from the Chief Secretary?

[David Mundell]

I most certainly do not share the hon. Gentleman’s expectation of the outcome of the referendum. He now chooses who to listen to. He used to listen to Mr Jim Cuthbert, who said:

“It’s very difficult to have independence within a currency union. Greece says it all. In any currency union, there are restrictions on individual members and that doesn’t equate to independence.”

[Gordon Banks (Ochil and South Perthshire) (Lab)]

Businesses in north-west England and in Scotland need much the same things, so will the Minister tell the House what Mark Allan, Axa UK’s economist, Brian Ashcroft, professor of economics at Strathclyde university, Andrew Goudie and John Kay, former economic advisers to Alex Salmond, and Gavin McCrone, former chief economist at the Scotland Office, have in common on the impact of currency decisions on business if Scotland does not remain part of the UK?

[David Mundell]

All those eminent individuals know that Scotland continues to benefit from being part of the single UK domestic market, and they know that anyone who votes for independence on the basis that Scotland would keep the pound in a currency union is hanging their coat on a very shoogly peg.

[Graeme Morrice (Livingston) (Lab)]

5. What assessment he has made of the effects of the privatisation of Royal Mail on people in Scotland.

[The Secretary of State for Scotland (Mr Alistair Carmichael)]

The privatisation of Royal Mail will protect the universal mail service for the people of Scotland. The Government, with their 30% stake, remain a substantial shareholder committed to the future growth of the company. By transferring the liabilities of the Royal Mail pension plan in April 2012, the Government have safeguarded the benefits for postal workers in Scotland and across the UK that had accrued up until that date.

[Graeme Morrice]

But can the new Secretary of State provide answers to the many people living in rural Scotland, along with the dwindling band of Scottish Lib Dem supporters, who believe that the coalition Government’s privatisation of Royal Mail is wrong and will lead ultimately to the end of the universal service obligation?

[Mr Carmichael]

If this privatisation was a threat to rural Scotland I would not support it. This is a privatisation born not from ideology but from necessity. Without it, the real threat would be Royal Mail losing business hand over fist, as it has since his Government liberalised the letter-post market.

[Sir Malcolm Bruce (Gordon) (LD)]

Does my right hon. Friend agree that the privatised Royal Mail, free from state aid restrictions and competition rules, offers the best opportunity of promoting the last-mile delivery service and securing the jobs of our dedicated local posties?

[Mr Carmichael]

My right hon. Friend has a rural constituency that I know well. The points that he makes are very well made. This was necessary to save the universal service and, for the first time, legislation privatising Royal Mail brought with it meaningful protections for that universal service.

[Mr Ian Davidson (Glasgow South West) (Lab/Co-op)]

Does the Minister agree that the privatisation of Royal Mail is likely to increase the cost of letters to Govan shipbuilders? Does he therefore agree that action must be taken to guarantee the future of Govan shipbuilders as quickly as possible? Does he also agree—

[Mr Speaker]

“Also” is not required.

[Mr Carmichael]

I commend the hon. Gentleman for his ingenuity in getting a reference to Govan shipbuilders on the record. He will have to wait to hear the full extent of the announcement. I assure him that Govan shipbuilders will benefit from the same mail delivery protections from Ofcom as everyone else.

[Mr Mike Weir (Angus) (SNP)]

Under the Postal Services Act 2011 the only protection for consumers is from Ofcom. Given the less than stellar performance of other utility regulators, why should consumers in Scotland have any confidence that their services will be protected?

[Mr Carmichael]

As I think the hon. Gentleman knows, but as he continues to ignore, the difference is that this time we have included meaningful protections that give Ofcom the power it needs to protect communities such as mine and his.

[Alison McGovern (Wirral South) (Lab)]

8. What assessment he has made of the potential effects on cultural tourism in the UK of a yes vote in the referendum on Scottish independence.

[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

Cultural tourism is thriving in Scotland and across the whole United Kingdom. We want Scotland to remain part of the UK to ensure that there are no unnecessary barriers to Scots visiting great cities such as Liverpool, and that people on the Wirral and across the United Kingdom can enjoy the great cultural experience that is Scotland.

[Alison McGovern]

When Liverpool became city of culture we took inspiration from our friends in Glasgow. Given the significant sporting and cultural connections between the cities of the north-west of England and the cities of Scotland, does the Minister think that our thriving visitor economy will be helped or hindered by an international border between north-west England and Scotland?

[David Mundell]

I can see no benefit to putting any barriers between Scotland and other parts of the United Kingdom, and I am sure our great city of Dundee in Scotland will learn from Liverpool’s experience as it seeks to become the city of culture.

[Several hon. Members]

rose—

[Mr Speaker]

Order. In the week in which he celebrates 40 years’ uninterrupted service in the House of Commons, I call Sir Alan Beith.

[Sir Alan Beith (Berwick-upon-Tweed) (LD)]

9. What recent discussions he has had with Ministers of the Scottish Government on cross-border strategic roads.

[The Secretary of State for Scotland (Mr Alistair Carmichael)]

My office keeps in regular contact with the Scottish Government on all transport issues concerning Scotland. The Government set out their commitment to a feasibility study on improvements to the A1 north of Newcastle. I am not aware of any such commitment on cross-border routes from the Scottish Government.

[Sir Alan Beith]

If Ministers want to give a very clear signal that England and Scotland are better together, may we have some tangible evidence before the referendum vote that the strategic road linking eastern England and Scotland will be dualled completely?

[Mr Carmichael]

I add my commendation to my right hon. Friend for the longevity and the quality of the service he has given to his constituents and to this House. He will know that we have already announced a feasibility study. That demonstrates our commitment to the case for further work. I am more than happy to work with him and with the Scottish Government if that is necessary in future.

The Prime Minister was asked—

[Steve Baker (Wycombe) (Con)]

Q1. If he will list his official engagements for Wednesday 6 November.

[The Prime Minister (Mr David Cameron)]

With Remembrance day coming, I am sure the whole House will join me in remembering those who have given their lives in the service of our country. Perhaps particularly with the President of the Republic of Korea here, we should remember those who fell in that conflict and all those who served, many of whom are now coming to the end of their lives, and we should again pay tribute to the heroic job our armed forces do to keep us safe.

This morning I had meetings with ministerial colleagues and others and, in addition to my duties in this House, I shall have further such meetings later today.

[Steve Baker]

I am sure we all wish to associate ourselves with the Prime Minister’s fitting tribute.

Hard-working businessmen facing tough decisions, decent trade unionists and newspapers including the Daily Mirror will have been appalled by the so-called leverage tactics of Unite in the Grangemouth dispute. Will my right hon. Friend take steps to ensure that families, children and homes are protected from a minority of militants?

[The Prime Minister]

My hon. Friend makes an important point. This sort of industrial intimidation is completely unacceptable. We have seen “Wanted” posters put through children’s letterboxes, we have seen families intimidated and we have seen people’s neighbours being told that they are evil. What has happened is shocking. It is also shocking that the Labour party is refusing to hold a review and to stand up to Len McCluskey. At this late stage, it should do so.

[Edward Miliband (Doncaster North) (Lab)]

Let me start by joining the Prime Minister in recognising the enduring importance of giving thanks on Remembrance Sunday to all those men and women who have served our country. This is a moment to remember all those who have lost their lives and to think about their families. That is why I know Members from across the House and people across the country are wearing their poppies with pride this week.

Can the Prime Minister guarantee that there will not be an accident and emergency crisis this winter?

[The Prime Minister]

We will do everything we can to make sure that the NHS continues to perform in the excellent way it does today. Let me give the right hon. Gentleman the latest figures: last week was the 27th week in a row that we met our A and E targets. The NHS is treating 1.2 million more people in A and E than it was when he was in office. But I can tell him where there will be a particular problem. There will not be a winter crisis in the NHS in Wales, where Labour is in control, because there is a crisis every day of the week in Wales, where Labour is in control.

[Edward Miliband]

The Prime Minister is simply wrong about the figures. If we look at what is happening in our hospital A and E departments, we see that the target has been missed for 15 consecutive weeks. The whole country will have heard that he cannot guarantee that there will not be a crisis in our A and E departments this winter, and that is because there already is a crisis. That is what the president of the College of Emergency Medicine says. [Interruption.] I know that Government Members do not want to hear about the crisis in A and E departments. He says that

“there are almost daily instances in most A&E departments of patients facing extended trolley waits.”

The Prime Minister said two years ago:

“I refuse to go back to the days when people had to wait for hours on end to be seen in A&E”.

He has broken that promise, has he not?

[The Prime Minister]

As I said, A and E departments in this country are now treating 1.2 million more patients than they were under Labour. Let me give the right hon. Gentleman one simple fact—[Interruption.]

[Mr Speaker]

Order. There is simply too much noise on both sides of the Chamber. I appeal to the House, because I get bucket-loads of letters every week from members of the public complaining about it. Cut it out: it is low-grade, down-market and unnecessary.

[The Prime Minister]

Let me give the right hon. Gentleman one simple fact: today in our A and E departments the average waiting time is 50 minutes. When the shadow Health Secretary was sitting on the Government Front Bench the average waiting time was over 70 minutes. Those are the facts. Because this Government did not take the shadow Health Secretary’s advice—[Interruption.] I would not listen to him, because he is the man who refused to apologise for the mess at Stafford. The NHS in our country is getting better under this Government.

[Edward Miliband]

Across the medical profession they are saying that there is a crisis in A and E, but the Prime Minister is saying, “Crisis? What crisis?” How out of touch can he be? In the last year, 1 million people waited more than four hours in A and E. A and E waiting times are up, the number of patients kept waiting on trolleys is up, delayed discharges are up, and ambulance response times are up. Why is that happening? It is because of his top-down reorganisation, which nobody wanted and nobody voted for. Can he tell the House how many NHS managers have received a six-figure redundancy package as a result of his reorganisation?

[The Prime Minister]

What I can tell the right hon. Gentleman is that there are now 20,000 fewer administrative grades in the NHS, 5,500 more doctors in our NHS, 1,000 more midwives in our NHS and 1,000 more health visitors in our NHS. Let me tell him why that is the case: his shadow Health Secretary said that it would be irresponsible to increase spending on the NHS, and we rejected that advice. We rejected Labour. We invested in our NHS. We are proud of our NHS.

[Edward Miliband]

What the shadow Health Secretary did was warn against cutting social care, and that is exactly what the Government did. That is the crisis the Prime Minister has produced. Here is the answer to the question he did not answer: 2,300 managers have received six-figure payoffs—[Interruption.]

[Mr Speaker]

Order. There is too much noise. It had better stop, or the process will take longer. To those who cannot grow up I say: try.

[Edward Miliband]

The Prime Minister is giving P45s to nurses and six-figure payoffs to managers. Can he tell us how many of the people who have been let go from the NHS have been fired, paid off and then re-hired?

[The Prime Minister]

First, we are saving £4.5 billion by reducing the number of managers in our NHS. For the first time, anyone re-employed has to pay back part of the money they were given. That never happened under Labour. We do not have to remember Labour’s past record, because we can look at its record in Wales, where it has been running the health service. It cut the budget by 8.5%, it has not met a cancer target since 2008, and it has not met an A and E target since 2009. The fact is that the right hon. Gentleman is too weak to stand up to the poor management of the NHS in Wales, just as he is too weak to sack his shadow Health Secretary.

[Edward Miliband]

And we have a Prime Minister too clueless to know the facts about the NHS. Let us give him the answer, shall we? The answer is that over 2,000 people have been made redundant—[Interruption.] The hon. Gentleman says it is rubbish; it is absolutely true—we have a parliamentary answer from one of the Health Ministers. Two thousand people have been made redundant and re-hired, diverting money from the front line as this Prime Minister sacks nurses. [Interruption.] The Prime Minister seems to be saying it is untrue; well, if he replies he can tell me whether it is untrue. We know why the NHS is failing: his botched reorganisation, the abolition of NHS Direct, cuts to social care, and 6,000 fewer nurses. There is only one person responsible for the A and E crisis, and that is him.

[The Prime Minister]

We have taken 20,000 administrators out of the NHS—and I am not going to take lectures from a Government who saw patients drinking out of—[Interruption.]

[Mr Speaker]

Order. Members are shouting at the tops of their voices at the Prime Minister, and they must stop doing so.

[The Prime Minister]

Let me give the right hon. Gentleman the facts about the NHS under this Government: mixed-sex accommodation down by 98%, 1.2 million more people treated in A and E, and half a million more in-patients. We are doing all that, and we are not following Labour’s advice, which was to cut the NHS. That is the truth under this Government—the NHS getting better. Labour would have cut it, and Labour never stands up for the NHS.

[Edward Miliband]

What the whole country will have heard today is a Prime Minister complacent about the A and E crisis and clueless about what is actually happening in the NHS. What the British people know is that the NHS is heading into winter with fewer nurses, a lack of senior A and E doctors, and a shortage of beds. He promised he would protect the NHS, but it is now clear that the NHS is not safe in his hands.

[The Prime Minister]

Once again, the right hon. Gentleman is just wrong on the facts. Let me give him a simple fact: there are more A and E consultants working in A and E than there were five years ago. That is why we are meeting our targets in England and that is why Labour is missing its targets in Wales. I am clear that my job is to stand up for the NHS and deliver a stronger NHS—when is he going to understand that his job is to stand up to the bully boys of Unite and show some courage?

[Mr Marcus Jones (Nuneaton) (Con)]

Q2. Over the past week we have heard about the Unite union’s attempts and strategy to disrupt business supply chains. Given the Government’s push for inward investment, what signal does the Prime Minister think Unite’s action sends around the world to businesses looking to invest in Britain?

[The Prime Minister]

This sort of industrial intimidation is bad for Britain, and it very nearly cut off petrol supplies to a large part of our United Kingdom. Every week the Leader of the Opposition comes here calling for an inquiry into this, an inquiry into that—he never stops calling for public inquiries, but he has not got the guts to hold one of his own into Unite.

[Angus Robertson (Moray) (SNP)]

People watching these exchanges today will be struck that when nearly 1,800 people have learned that they are to lose their jobs, neither the Leader of the Opposition nor the Prime Minister has seen fit to raise it thus far. I hope that the Prime Minister’s thoughts are with the families of people who are set to lose their jobs. Will he confirm that he agrees with the BAE statement that Glasgow is the best place to build frigates?

[The Prime Minister]

I do think this is a vitally important issue, and that is why the Defence Secretary will be making a statement right after Prime Minister’s questions. These are extremely difficult decisions, and our first thoughts should be with all those who are affected. Frankly, I was surprised that the Leader of the Opposition did not choose to raise this vitally important issue.

Let us be clear about what we need to do here. We want our Royal Navy to have the best and most modern ships and the best technology, and that means we will go on building warships on the Clyde. We will be announcing three new offshore patrol vessels, keeping that yard busy rather than paying it to remain idle, as the previous Government proposed. In Portsmouth, yes, there will be job reductions, but there are many more people involved in ship servicing than in shipbuilding, so the work force will go from 12,000 to 11,000. But no one should be in any doubt of two things. Under this Government, we will have aircraft carriers, Type 45 destroyers, the new frigates, and the hunter-killer submarines; and there is something else they should know: if there was an independent Scotland we would not have any warships at all.

[Mr Graham Brady (Altrincham and Sale West) (Con)]

Q3. As we approach Remembrance Sunday and the centenary of the first world war, will the Prime Minister join me in commending the work of the Victoria Cross Trust? Will he consider how the Government might assist the trust in its important task of restoring and maintaining the graves of some of the nation’s bravest soldiers, sailors and aircrew?

[The Prime Minister]

I pay tribute to my hon. Friend for his support for the Victoria Cross Trust and the hard work that he has done. I welcome any initiative that commemorates those who have given their lives in the defence of our country. Many Victoria Cross holders’ graves fall under the protection of the Commonwealth War Graves Commission. We will continue to work with the Commonwealth War Graves Commission and the Victoria Cross Trust to do everything possible to ensure that those people are remembered properly.

[Heidi Alexander (Lewisham East) (Lab)]

Page 47 of the Tory party manifesto says:

“We will stop the forced closure of A&E and maternity wards, so that people have better access to local services”.

How is that going, Prime Minister?

[The Prime Minister]

There are no changes to services unless they are supported by local GPs. That is completely different from what happened under Labour, when there were top-down closures of hospitals. That is not happening under this Government.

[Damian Collins (Folkestone and Hythe) (Con)]

Q4. According to Unite, it is“increasingly recognised that…bullying, harassment and violence are a major problem throughout industry.”Does the Prime Minister agree that the authorities should always investigate allegations of harassment against employees and their families, including when the allegations involve the members of a trade union?

[The Prime Minister]

My hon. Friend is absolutely right. The allegations of industrial intimidation are serious and need to be looked at properly. Because the Labour party is ducking its responsibilities, we will have to consider what we can do to look at the matter. The leader of the Labour party is behaving like the mayor of a Sicilian town towards the Mafia: “They put me in and I don’t want them to take me out.”

[Jim McGovern (Dundee West) (Lab)]

Q5. Last month, I asked a question about zero-hours contracts. I think most hon. Members would agree that the response that I received was a fudge about the determination of employers and employees. I will put it plainly and simply to the Prime Minister: how many people in this Palace and in the Government buildings are employed on zero-hours contracts?

[The Prime Minister]

I do not have those figures to hand. What I can tell the hon. Gentleman is that we are having a review of zero-hours contracts. We are looking particularly at people on zero-hours contracts who are forbidden from working for other employers. This Government will look at the matter. The last Government, who saw zero-hours contracts go through the roof, did absolutely nothing about it.

[Mark Reckless (Rochester and Strood) (Con)]

Q6. The Prime Minister and his Chancellor closed the gaping loophole left by the last Government that allowed the rich to avoid stamp duty. Is it not time to close the other disgraceful loophole that they left, which allows overseas residents to buy up the best housing in London without paying capital gains tax?

[The Prime Minister]

My hon. Friend makes an important point. The stamp duty change that we made is vital in ensuring that foreign buyers pay stamp duty in London. That needed to happen. [Interruption.] The shadow Chancellor, who was the City Minister when all these things went wrong, is shouting his head off as usual. It is this Government who have insisted that people pay the taxes that are due.

[Paul Goggins (Wythenshawe and Sale East) (Lab)]

Q7. The Prime Minister is right to extend supervision to prisoners with short sentences and to look for new ways to reduce reoffending, but he must be aware of the growing concern that his Government’s plans will fatally undermine the probation service. Now that a criminal investigation has been opened into G4S and Serco, will he sit down with his Justice Secretary, reconsider the options and at least trial the payment-by-results proposal to see whether it works?

[The Prime Minister]

The right hon. Gentleman has huge experience in this area. I welcome what he says about the importance of ensuring that there is probation support for people as they leave prison, which will happen under the plans that we are putting in place. I think that payment by results can make a big difference in reducing reoffending. The cruel fact is that half of all prisoners are back in prison within two years. It is time to try a different approach and that is what the Lord Chancellor is doing.

[Chris Kelly (Dudley South) (Con)]

Q8. Manufacturing business Petford Tools in my constituency accessed the regional growth fund earlier this year, creating 23 jobs as a result. Will my right hon. Friend join me in congratulating managing director Melvin Sinar and major customers Jaguar Land Rover, Bentley and JCB on that success, and consider visiting the company with me on his next visit to the black country?

[The Prime Minister]

I would be delighted to make that visit with my hon. Friend. I have made visits with him in the past to look at what is happening in the black country in terms of greater job opportunities. That is part of the picture of a country where there are 1.4 million more people in private sector employment. In spite of the predictions that we would lose jobs, 1 million more people are in work in Britain today.

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

It is the first duty of any Government to protect the public. Since the Prime Minister decided deliberately to downgrade the country’s anti-terror laws, two suspects have used their Government-granted freedom to escape, the latest one clad in a burqa. Will the Prime Minister admit that that decision was a hugely irresponsible mistake, and in particular will he revisit the sunset clause that will lift the remaining regime on the remaining suspects in January?

[The Prime Minister]

I do not accept what the right hon. Gentleman says. The facts are these: under the control order regime, seven people absconded under control orders. Control orders were being endlessly hacked away at by the courts, so we needed to put a new system in place—a system that has the confidence of the police and the security services. Of course we will look at every single thing we can do to make sure the system is as good and robust as it can be, but we in this House should be frank that we are dealing with people who we are not able to charge and lock up, many of whom we would like to throw out of our country but currently cannot. We have to have some sort of regime like this, but we will do everything we can to make it as robust as possible.

[David Morris (Morecambe and Lunesdale) (Con)]

Q9. Will my right hon. Friend the Prime Minister join me in congratulating DST Engineering in Morecambe? It exports and fabricates metal products throughout the world and has contributed to the 15% drop in youth unemployment in my constituency. Overall, unemployment has fallen by 10% in the past three months alone. Is that not in stark contrast to the gloomy economic predictions of the Labour party, and will my right hon. Friend visit DST Engineering with me?

[The Prime Minister]

My hon. Friend does an excellent job standing up for the people of Morecambe, and across the north-west private sector employment is up by 45,000 since 2010. The number of people claiming jobseeker’s allowance is down by 29,000. He is right that the Labour party predicted we would lose 1 million jobs, but the answer is the complete opposite. There are 1 million more people working in our country, and it is about time Labour apologised for prediction after prediction being wrong.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

Q10. Last month, Tory councillor Abdul Aziz was at an invite-only party at No. 10. Councillor Aziz is subject to an arrest warrant in Pakistan in connection with a brutal murder. After shaking this man’s hand and having photos taken at No. 10 with this gentleman, would the Prime Minister now like to say that he thinks he should return to Pakistan and face justice?

[The Prime Minister]

I am looking carefully into this case and I will write to the hon. Gentleman.

[Sir Peter Tapsell (Louth and Horncastle) (Con)]

May I ask the Prime Minister whether he is of the opinion that the intelligence services of some countries may be dangerously out of political control? Is he confident that he is kept fully informed of all sensitive external initiatives taken by our services?

[The Prime Minister]

I do not want to break the rule of not commenting on intelligence issues, but to answer my right hon. Friend’s question as directly as I can, I have looked very carefully at the governance that we have in the UK for our intelligence services, the work of the Intelligence Services Commissioner and the Intelligence and Security Committee, and the oversight, particularly by the Home Secretary and the Foreign Secretary. I think we have a good system in our country, and to answer my right hon. Friend’s question, yes, I am fully involved in these decisions.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

Q11. Two years ago, the Prime Minister rightly agreed that extra resources should be made available to assist in the search for Madeleine McCann and yet, only months later, he turned down a similar request from Kerry Needham, my constituent, whose son Ben is still missing after 22 years. Will the Prime Minister please think again and respond positively to my recent letter to him by making extra resources available to help a desperate mother to search for her son?

[The Prime Minister]

This is an absolutely heartbreaking case—the whole country has followed it over the years. I will look carefully at the letter the hon. Lady has written to me. Obviously, it is important that the police make such decisions themselves. Governments should always stand by to help, which is what happened in the Madeleine McCann case, but I will look at what the hon. Lady says and see what I can do.

[Mr Mike Hancock (Portsmouth South) (Ind)]

Will the Prime Minister elaborate on his earlier statement on what the Government will put in play in terms of mediation and mitigation of the dreadful effects of the 940 core jobs at BAE in the dockyard in Portsmouth, and the many thousands of jobs in its supply chain, that are going? I should be grateful if he would expand on that fairly rapidly.

[The Prime Minister]

I will expand a little but leave the Defence Secretary to give a detailed answer. As I have said, what is happening in Portsmouth is this: the current work force of 12,000 in defence-related and shipbuilding activities will go down to 11,000. The Ministry of Defence will invest £100 million in Portsmouth in vital ship-servicing work. As the hon. Gentleman knows, many more people have been involved in ship servicing than in shipbuilding. Of course, some of the largest and best-equipped warships we have ever had in our country will be based and hosted at Portsmouth—the two aircraft carriers and the Type 45 destroyers in particular—which will mean a lot of work for Portsmouth and for our naval base there for many, many years to come.

[John Cryer (Leyton and Wanstead) (Lab)]

Q12. Many women face discrimination at work when they become pregnant, so how will charging them £1,200 to go to an industrial tribunal help them? Before the Prime Minister has another attack of the Lyntons and starts talking about all the dreadful trade unionists on the Opposition side of the House, I should like to make it clear that I am a trade unionist and damn proud of it.

[The Prime Minister]

Millions of people in our country can be very proud of being trade unionists. The problem is that they are led so badly by bully-boys—[Interruption.] They are led so badly by people who seem to condone intimidating families, intimidating witnesses and intimidating the Leader of the Opposition. That is what we have come to with Unite. They pick the candidates, choose the policy, pick the leader and bully him till they get what they want.

[Mr Speaker]

Order. Actually, I think the question was about tribunals, if memory serves.—[Interruption.] No it is a good idea to remember the essence of the question that was put.

[Charlotte Leslie (Bristol North West) (Con)]

Q13. Judicial reviews can be valuable in enabling communities to have their say, but what steps is the Prime Minister taking to prevent what is happening in Bristol, where a small, unrepresentative group is using judicial review, costing the local taxpayer thousands of pounds, to prevent the building of a badly needed stadium for Bristol Rovers football club, which Bristolians badly want, and which would bring game-changing benefits to our city?

[The Prime Minister]

My hon. Friend has been campaigning very hard and relentlessly to provide Bristol Rovers with the ground they need. I commend her for that. Obviously, there has been an issue with judicial reviews. Judicial reviews play a role in holding the Government to account, but I share her frustration that judicial review has become something of an industry. We need to fix that and have taken a series of steps to try to do so.

[Several hon. Members]

rose—

[Mr Speaker]

Order. I call Mr David Winnick—[Interruption.] Order. Can we have a bit of hush and a bit of courtesy? The hon. Gentleman happened not to hear me call him, which is perfectly understandable.

[Mr David Winnick (Walsall North) (Lab)]

Q14. One of the domestic objectives of the second world war was to bring about a fairer society in Britain. Is the Prime Minister aware how wrong it is for him and the Chancellor, who have never had any form of financial insecurity, to pursue policies that hit the most hard-pressed and most vulnerable—the millions of people in our society, many of whom are on low pay, who find it difficult to feed and clothe their children? What is happening is totally unacceptable, and I find it contemptible.

[The Prime Minister]

What I would say to the hon. Gentleman is that we have taken 2.4 million of the poorest people in our country out of income tax altogether. The figures simply do not fit with the story he is trying to tell. Inequality is at its lowest level since 1986—fact. The pupil premium is directing more money to the poorest children in our schools—fact. Applications from disadvantaged children to universities have gone up, not down—fact. There are fewer workless households—[Interruption.] I am keen to answer the question, and it is a very direct answer. Workless households down by 425,000, payday lending regulated properly for the first time and, yes, a proper consultation on zero-hours contracts—those are the actions that we are taking to build a fairer country and instead of complaining about them, the hon. Gentleman should be backing them.

[Mr Peter Bone (Wellingborough) (Con)]

On 3 September I wrote to the prisons Minister requesting a meeting to discuss the future of HMP Wellingborough. I received no response to that request. This week, I received a letter from the prisons Minister saying that the site of Wellingborough prison was to be sold. I do not understand that, as Wellingborough prison was the third cheapest in the country to run. Would the Prime Minister meet me and concerned constituents to discuss the matter?

[The Prime Minister]

What I will do is arrange very quickly for my hon. Friend to have that meeting with the prisons Minister that he asked for, so that he can discuss the future of the prison estate. It is important that we modernise it and make sure that we get good value for money for the people whom we keep in prison, and for the taxpayer.

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

The Prime Minister has just been boasting again about 1 million extra jobs. Can he therefore explain why in my constituency the number of people unemployed for more than two years has risen by 350% in the last year alone? It is now the worst figure in the country. Nine of the 10 worst constituencies on this measure are in the north-east, including all three Sunderland seats. Is that because they are the same old Tories, who do not care about the north-east?

[The Prime Minister]

We are seeing across our country, including in every region, more job opportunities, more people involved in our private sector and the claimant count coming down. In the north-east, for example, we have the new Hitachi factory, which will make a real difference, and the expansion of Nissan, which is doing extremely well. But I totally accept that we need to do more to keep our economy growing, to keep people employed and to grow the number of jobs. I am certain about one thing: we will not do that if we put up borrowing or taxes. The fact is that today Labour is the greatest risk to our recovery.

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

Can the Prime Minister confirm that in the review of levies on energy bills the fairness of the funding process will be the priority, and that the Government still support vital measures to insulate people’s homes to ensure that the fuel-poor can keep their houses warmer in winter?

[The Prime Minister]

Of course we want to see insulation programmes and of course we want to help people, especially vulnerable households, to keep their bills down. But we should be looking at every subsidy and every levy and ensuring that it is value for money and that it is not in place for a moment longer than it is needed.

[Alison McGovern (Wirral South) (Lab)]

The Chancellor of the Exchequer would not answer this question yesterday, so let me give the Prime Minister a try. How many of the so-called new private sector jobs that he crows about are people on zero-hours contracts?

[The Prime Minister]

I do not have the figure for that, but the fact is that there are more people at work in our economy than ever before, two thirds of those jobs have been full-time jobs, and while we are on the subject of pay, perhaps it is a good moment to recognise that Labour-controlled Doncaster does not pay the living wage, whereas Conservative-controlled London does.

[Peter Luff (Mid Worcestershire) (Con)]

On a difficult day for UK shipbuilding, is it not more important than ever to tell our young people that modern engineering offers varied and rewarding careers, and that we urgently need many more engineering apprentices and graduates—the message both of this week’s “tomorrow’s engineers” week, and of Monday’s report from the Department for Business, Innovation and Skills chief scientist, Professor John Perkins?

[The Prime Minister]

My hon. Friend is right about that, and he has campaigned long and hard to encourage respect for engineering and for more young people to study engineering. We are seeing a growth in the number of young people studying engineering, but it is true that there are still engineering jobs on the skills shortage list of the Migration Advisory Committee. That is a rebuke to our country, and we need to get more young people studying maths and science at school and more people studying engineering at our universities.

[Susan Elan Jones (Clwyd South) (Lab)]

Last year, bankers’ bonuses grew 91% faster than wages for ordinary working people, despite the Prime Minister’s assurances that this would not happen. Will the Prime Minister tell us: is he unwilling to act or just a bit useless at being Prime Minister?

[The Prime Minister]

The point the hon. Lady should bear in mind is that bonuses were 85% higher when the shadow Chancellor was sitting in the Treasury. It is this Government who are making sure that people—[Interruption.]

[Mr Speaker]

Order. I want to hear the Prime Minister’s answer, and so does the House.

[The Prime Minister]

In fact, we inherited a situation where cleaners were paying higher tax rates than the hedge fund managers they were working for. If the hon. Lady wants to see someone who is useless, she should look at her own Front Bench.

Aircraft Carriers and UK Shipbuilding

Wednesday 6th November 2013 Commons Chamber

12:36

[The Secretary of State for Defence (Mr Philip Hammond)]

With permission, Mr Speaker, I would like to make a statement on the future shipbuilding programme for the Royal Navy and, in particular, the aircraft carrier project.

As the House will know, the previous Government entered into a contract with the Aircraft Carrier Alliance, an industrial consortium led by BAE Systems, to build two 65,000-tonne aircraft carriers—the largest ships in the Royal Navy’s history. In the strategic defence and security review 2010, the incoming Government, faced with the challenge of dealing with a £38 billion black hole in the Ministry of Defence budget, was advised that under the terms of the contract it would cost more to cancel the carriers than to build them. The Public Accounts Committee has subsequently described that contract as “not fit for purpose” and identified, in particular, the misalignment of interests between the MOD and the contractors, manifested in a sharing arrangement for cost overruns which sees, at best, 90p of every pound of additional cost paid by the taxpayer, and only 10p paid by the contractor, as the root cause of the problem.

I agree with the PAC’s analysis. In 2012, I instructed my Department to begin negotiations to restructure the contract better to protect the interests of the taxpayer and to ensure the delivery of the carriers to a clear time schedule and at a realistic and deliverable cost. Following 18 months of complex negotiations with industry, I am pleased to inform the House that we have now reached heads of terms with the alliance that will address directly the concerns articulated by the PAC and others. Under the revised agreement, the total capital cost to Defence of procuring the carriers will be £6.2 billion, a figure arrived at after detailed analysis of costs already incurred and future costs and risks over the remaining seven years to the end of the project. Crucially, under the new agreement, any variation above or below that price will be shared on a 50:50 basis between Government and industry, until all the contractor’s profit is lost, meaning that interests are now properly aligned, driving the behaviour change needed to see this contract effectively delivered.

The increase in the cost of this project does not come as a surprise. When I announced in May last year that I had balanced the defence budget, I did so having already made prudent provision in the equipment plan for a cost increase in the carrier programme above the £5.46 billion cost reported in the major projects review 2012 and I did that in recognition of the inevitability of cost-drift in a contract that was so lop-sided and poorly constructed.

I also made provision for the cost of nugatory design work on the “cats and traps” system for the carrier variant operation and for reinstating the ski-jump needed for short take-off and vertical landing operations. At the time of the reversion announcement, I said that these costs could be as much as £100 million; I am pleased to tell the House today that they currently stand at £62 million, with the expectation that the final figure will be lower still.

Given the commercially sensitive nature of the negotiations with the Aircraft Carrier Alliance, I was not able publicly to reveal these additional provisions in our budget, since to do so would have undermined our negotiating position with industry. However, the MOD did inform the National Audit Office of these provisions, and it is on that basis that it reviewed and reported on our 10-year equipment plan in January this year.

I am therefore able to confirm to the House that the revised cost of the carriers remains within the additional provision made in May 2012 in the equipment plan; that as a result of this prudent approach, the defence budget remains in balance, with the full cost of the carriers provided for; and that the centrally held contingency of more than £4 billion in the equipment plan that I announced remains unused and intact, 18 months after it was announced.

In addition to renegotiating the target price and the terms of the contract, we have agreed with the Aircraft Carrier Alliance to make changes to the governance of the project better to reflect the collaborative approach to project management that the new cost-sharing arrangements will induce and to improve the delivery of the programme. The project remains on schedule for sea trials of HMS Queen Elizabeth in 2017 and flying trials with the F-35B commencing in 2018.

Overall, this new arrangement with industry will result in savings of hundreds of millions of pounds to taxpayers, and I pay tribute to the team of MOD officials, led by the Chief of Defence Matériel, who have worked hard over a long period of time to deliver this result.

In reviewing the carrier project, we also reviewed the wider warship-building programme within the context of the so-called terms of business agreement, or TOBA, between the MOD and BAE Systems signed in 2009 by the last Government. As the House will know, we remain committed to the construction of the Type 26 global combat ship to replace our current Type 23 frigates, but the main investment approval for the Type 26 programme will not be made until the design is more mature, towards the end of next year.

There is, therefore, a challenge in sustaining a skilled shipbuilding work force in the United Kingdom between the completion of construction of the blocks for the second carrier and the beginning of construction of the Type 26 in 2016. Under the terms of the TOBA, without a shipbuilding order to fill that gap, the MOD would be required to pay BAE Systems for shipyards and workers to stand idle, producing nothing while their skill levels faded. Such a course would add significant risk to the effective delivery of the T26 programme, which assumes a skilled work force and a working shipyard to deliver it.

To make best use of the labour force, therefore, and the dockyard assets, for which we would anyway be paying, I can announce today that we have signed an agreement in principle with BAE Systems to order three new offshore patrol vessels for the Royal Navy, based on a more capable variant of the River class and including a landing deck able to take a Merlin helicopter. Subject to main-gate approval in the coming months, these vessels will be constructed on the Clyde from late 2014, with the first vessel expected to come into service in 2017.

The marginal cost of these ships, over and above the payments the MOD would anyway have had to make to keep the yards idle, is less than £100 million, which will be funded from budget held within the equipment plan to support industrial restructuring. This order is good news for the Clyde. It will sustain around 1,000 jobs as the carrier construction work reaches completion, secure the skills base there and ensure the ability to build the Type 26 frigates in due course, while turning the MOD’s liabilities under the TOBA into valuable capability for the Royal Navy.

I turn now to the final part of this statement. The House will be aware that, this morning, BAE Systems has announced plans to rationalise its shipbuilding business as the surge of work associated with the carriers comes to an end. Regrettably, that will mean 835 job losses across Filton, the Clyde and Rosyth, and the closure of the company’s shipbuilding yard in Portsmouth. The loss of such a significant number of jobs is, of course, regrettable, but was always going to be inevitable as the work load associated with the carrier build came to an end.

I want to pay tribute to the men and women on the Clyde and in Portsmouth who have contributed so much to the construction of the Royal Navy’s warships—including, of course, the Queen Elizabeth class carriers. BAE Systems has assured me that every effort will be made to redeploy employees, and that compulsory redundancies will be kept to a minimum. The company is now engaged in detailed discussions with the unions representing the work force in Portsmouth and on the Clyde.

I know that the loss of shipbuilding capability will be a harsh blow to Portsmouth. The Government and the city council, together with Southampton, are in discussions about a city deal package for the area, to boost growth and jobs in the local economy. We expect to be able to make an announcement on that shortly. I can also announce that Admiral Rob Stevens, the former chief executive of the British Marine Federation, will chair a new maritime forum to advise the Solent local enterprise partnership on its maritime vision.

Despite the end of shipbuilding activity, Portsmouth will remain one of two home ports for the Navy’s surface fleet, and will continue to undertake the vital support and maintenance work that sustains our most complex warships, including the Type 45 destroyers and, of course, the aircraft carriers themselves. Indeed, with both carriers based in Portsmouth, the tonnage of naval vessels based in the port will be at its highest level since the early 1960s, sustaining a total of around 11,000 jobs in the dockyards and related activities. To support this level of activity, I can announce today an investment of more than £100 million over the next three years in new infrastructure in Portsmouth to ensure that the carriers can be properly maintained and supported.

The Chair of the Public Accounts Committee has previously described the carrier programme as

“one of the most potent examples of what can go wrong with big projects in the public sector”.

That is the legacy that this Government inherited: a carrier contract that was not fit for purpose and a TOBA that would have required the MOD to pay BAE Systems to do nothing while our shipbuilding skills base faded away. These announcements today put that legacy behind us. They will secure the future of British warship building, set the aircraft carrier project on a new path with clear alignment between industry and the MOD, and deliver important new capability in the form of offshore patrol vessels for the Royal Navy. I commend this statement to the House.

12:47

[Vernon Coaker (Gedling) (Lab)]

I thank the Secretary of State for his courtesy in providing me with early sight of his statement. It is with a heavy heart that I, and I think all Members, listened to what he had to say. However, it was important that he came to the House today, and I am glad that he did so. Let me say at the outset that when the Government do the right thing on defence, especially when difficult decisions need to be taken, they will have our support. We will always say and do what we believe to be in the interests of Britain and its people. These are complicated and detailed matters, and it will take some time to examine the consequences of today’s announcements by BAE Systems and the Government.

The Secretary of State focused today on the aircraft carrier programme. May I remind him that his party supported that programme? From what he was saying, that might have been difficult to believe. He also talked about the start of the Type 26 programme and the interim work. I will return to those subjects in a moment.

My first thoughts, and those of all hon. Members, are with the employees who are facing job losses today, and with their families and the communities in which they live. Britain’s shipbuilders are the best in the world. They have proved that over decades and even centuries, and this is a difficult day for all those people who take pride in our maritime prowess and the history of our nation. Will the Secretary of State join me in praising those who give such great and dedicated service to our country?

What discussions has the Defence Secretary’s Department had with the Department for Business, Innovation and Skills about providing support to ensure that the unique abilities of our skilled work force, particularly in Portsmouth, are not lost? I do not mean over the last week or a number of days; I mean over the last three and a half years of this Government. It seems to me that it is only since news of the potential job losses were leaked out that the Government have given any thought to this matter. In fact, in February 2012, the White Paper, “National Security Through Technology”, said that the MOD

“does not consider wider employment, industrial, or economic factors in its value-for-money assessments.”

Does the right hon. Gentleman still agree with that statement?

Will the Defence Secretary join me in praising the role of the trade unions which have worked closely with the company and have approached these very serious issues with maturity and shown leadership in representing their members across the whole of this United Kingdom? Will he confirm that the Government need to use this opportunity to set out a clearer path to help the UK-based defence industry play its part in modernising both our industrial base and our equipment programme? Does he agree that a strong UK defence industry can be both responsive to the changing threats we face, as well as part of a vibrant, advanced and high-skilled private sector, stimulating jobs and growth?

The Secretary of State made much of his repeated claim that the Government inherited a £38 billion black hole. That figure does not stand up to scrutiny. He has never explained how he got to that figure and it has never been accepted by any credible organisation, including the National Audit Office, which said it was impossible to arrive at such a figure. Can he tell us how he arrived at that figure and what assumptions he used to produce it?

On the aircraft carriers, the Secretary of State has trumpeted the new agreement to split 50:50 with the industry any overrun on the target cost. Will he confirm that any new changes by the MOD, such as the debacle over the “cats and traps” for fighter jets, which were changed and changed back again—the right hon. Gentleman now says it wasted only £62 million—will be fully met by the MOD? The fact that future costs will be split 50:50 is welcome. Most of the risk has already passed, as evidenced by the fact that the anticipated cost of the programme has almost doubled. And, of course, the 50% that the Government will meet still runs to hundreds of millions of pounds. It does not take an accountant to work out that 50% of £800 million—the reported rise in costs this week—is a lot of money for the taxpayer. Will he confirm that he expects no further rises in the cost of the aircraft carriers?

The cost of the restructuring that has been outlined will be borne by the Ministry of Defence. Will the Secretary of State tell us how much that will be and how it will be paid for?

We welcome the fact that skills will be maintained by the development and construction of the three offshore patrol vessels announced by the Defence Secretary today. Will he give a little more detail about how much these will cost, and will he outline what plans he now has for the second aircraft carrier and whether it is his intention to mothball it?

There has been a lot of conjecture about the role that the politics of the Scottish referendum played in the decision to keep shipbuilding in Govan. Will the Secretary of State confirm, as I and everyone else believe, that today’s decisions were taken on the basis of what is in Britain’s best interests and what will sustain the skills of the work force, thus maintaining the future of our shipbuilding industry and our country’s defence? Will he outline what safeguards are in place if Scotland votes to leave the United Kingdom? None of us wants to see that, but we need to know what plans he has for all eventualities. We must retain a sovereign shipbuilding capability for this country.

Finally, will the Defence Secretary join me in saying that whatever the difficulties we experience, this country is a proud maritime nation? We have a proud, dedicated Navy, serviced by a proud, dedicated shipbuilding work force. We must maintain that across the United Kingdom, and retain the ability to build the warships we will need to defend our island, protect our interests across the world and keep us secure. That is both a task and a duty for us all.

[Mr Hammond]

I appreciate the hon. Gentleman’s measured tone and I join him in congratulating once again the work forces on the Clyde and in Portsmouth on the excellent naval vessels that have been built for the Royal Navy over the last few years, including the carrier that remains in build.

I know the hon. Gentleman is new to his post, but he is really going to have to check some of the history before he starts making sweeping statements. He tells me that when the carrier programme was announced, the cost was £3.6 billion. Almost as soon as it had been announced, the then Secretary of State announced a two-year delay, which the National Audit Office says drove a further £1.6 billion into the cost of the carrier. The largest single element of cost increase in this programme was a deliberate act by the then Labour Government to delay the project by two years.

The hon. Gentleman asks me when we first engaged with the Department for Business, Innovation and Skills about the challenges of maintaining a skilled work force. He suggests that that has happened only in the last few days. I can tell him that the Minister of State, Department for Business, Innovation and Skills, my right hon. Friend the Member for Sevenoaks (Michael Fallon), who is in his place on the Front Bench, sat down a year ago to discuss this subject and has been in discussions with the local authorities in the area for at least a year over how to deal with the challenges that these inevitable changes present.

The hon. Gentleman asked me about the union response. I look forward to seeing the union response in full. I understand that, so far, the unions at national level have been constructively engaged with what they understand is an effort to save the shipbuilding industry in the UK. They recognise that the level of employment in naval shipbuilding represented a surge around the carrier project that was never going to be sustainable in the long term. The challenge now is to protect the skills base as we downsize the industry.

The hon. Gentleman asks me about the £38 billion black hole. We could have a very long conversation about that, but put simply, it is the difference between the projected budget available and the commitments that the previous Government had announced. I have set that out in detail. Because the hon. Gentleman is new to his post, I would be happy to write to him and set it out again for his benefit. I would be happy to discuss it with him at any time in the future.

The hon. Gentleman asks about the consequences of the STOVL—short take-off and vertical landing—reversion. If we were to change the specification in the future, the MOD as the customer would, of course, have to accept the consequences, but we are confident that the design of the aircraft carriers is now mature. The mistake made in 2008—it was a small one—was that the contract was placed before the ship had been designed. Unfortunately—I kid my hon. Friends not—anybody who has ever tried to place a contract to build a house before the house has been designed will know that that is a licence to print money for the contractor.

The hon. Gentleman asks whether I can guarantee that there will be no further rises on the £6.2 billion price. Of course I cannot give him an absolute guarantee, but I can tell him that with every pound of additional cost being shared as 50p for the Government and 50p for the contractors, we will at least have the contractor’s serious attention to try to maintain control over the project—something that we did not have under the contract construct that the last Labour Government left us.

The hon. Gentleman asks how we have paid for the additional costs. If he had been paying attention to the statement, he would know that I told him that the full costs announced today were provided in the balanced budget equipment programme that I announced in May 2012.

Yes, the hon. Gentleman is absolutely right that we are acting as the Government of the United Kingdom in the best interests of the whole of the United Kingdom, looking at where best to deliver Britain’s warship building capability in the United Kingdom in order to make it sustainable and cost-effective in the future.

[Mr James Arbuthnot (North East Hampshire) (Con)]

My right hon. Friend has said that “with both carriers based in Portsmouth, the tonnage of naval vessels based in the port will be at its highest level since the early 1960s”, which is excellent news. Does that mean that the Government have reached the entirely sensible decision to bring both carriers into service?

[Mr Hammond]

As my right hon. Friend knows, that decision will be made in the strategic defence and security review 2015. Whether the decision is to bring the ship into service or to mothball it, it will be kept at Portsmouth.

[Anas Sarwar (Glasgow Central) (Lab)]

At the time of the Grangemouth crisis, the First Minister of Scotland said that we should not try to play constitutional politics with such a serious issue, and I hope that he applies the same principle now to what is a very concerning time for workers in Govan.

I welcome the Secretary of State’s announcement of the new contract, but that will give little comfort to workers in Portsmouth, Govan, Scotstoun, and Rosyth who will be losing their jobs during this difficult period. Will the Government give us a pledge that they will work with employees throughout the United Kingdom who are affected by what he has announced, with the trade unions and with the company to ensure that those who have lost their jobs are supported, while also trying to find a sustainable long-term future for shipbuilding that will protect jobs and investment in the UK?

[Mr Hammond]

What I have announced today will provide that sustainable long-term future for shipbuilding. We have answered the $64,000 question of how we would bridge the gap between completion of the aircraft carrier blocks and the commencement of the Type 26 build programme by commissioning three additional ocean-going patrol vessels which will be built on the Clyde. We have a sustainable naval shipbuilding industry in the United Kingdom, as of today’s announcement.

Of course it is regrettable that jobs will be lost. That is a function of the surge in the size of the industry that is needed to deliver these very large carriers. We will work across Government with the unions, communities and other stakeholders who will be affected to ensure that the transition is as smooth as possible.

[Caroline Dinenage (Gosport) (Con)]

The end of shipbuilding in Portsmouth is devastating for a community with a record of more than 800 years of proud service to the Royal Navy. Does the Secretary of State know when we shall hear of plans to help to ease the pain of this decision—particularly in relation to the city deal—and does he know what conversations have taken place with Portsmouth city council about the timing of today’s announcement?

[Mr Hammond]

My hon. Friend is, of course, right. As I acknowledged in my statement, the decision will be very hard for people in Portsmouth to accept. However, we should put this in context: 940 jobs will be lost, but 11,000 will remain in dockyards-related activity in Portsmouth, which will be the largest centre of surface maritime support in the United Kingdom—and that will continue into the future.

We are engaged in discussions with both Portsmouth and Southampton city councils about the city deal proposal, and I am advised that a statement is likely to be made very soon, as soon as those negotiations have concluded.

[Jim Sheridan (Paisley and Renfrewshire North) (Lab)]

As a former shipyard worker, let me say on behalf of the men and women in our British shipyards that, although they take pride in what they build, they do not necessarily care what they are building. Those at BAE Systems must learn to explore the commercial market, because they will not be able to sustain the company if it is wholly dependent on MOD contracts.

As for the question of industrial relations, we should contrast what is happening with the trade unions at BAE Systems with what has happened at Grangemouth. One employer respects its employees, and the other does not.

[Mr Hammond]

I am happy to report that relations in the shipbuilding industry between management and unions are good and constructive. The unions understand the challenge that the industry faces, and they have worked with the management to address it. That sometimes means that union officials must make tough decisions as well, because they know that the industry cannot be sustained at its current size.

The hon. Gentleman alluded to the diversity of the shipbuilding industry. We hear a great deal about how shipbuilding will be sustained through the commercial market and the third-nation market, including the market for warships, but I am afraid I have seen no evidence to suggest that we are able to compete in what is a very aggressive global market for commercial shipping. I think that the shipbuilding industry in this country will be primarily dependent on Royal Navy orders placed in the United Kingdom, because of the sovereign requirement for us to have warship building capability.

[Mr Mike Hancock (Portsmouth South) (Ind)]

Can the Secretary of State explain why it was decided to transfer the existing work that was commissioned in Portsmouth away from the yard, so that the employees there will have no opportunity to complete the construction of the aircraft carriers? Can he also assure us that the MOD will not seek to claw back any of the money that is made available to Portsmouth through the city deal?

[Mr Hammond]

Let me respond first to the question about the aircraft carriers. Today BAE Systems announced its plan for rationalising the industry, as it must do under the TOBA in order to sustain warship building capability in the future. The challenge for us is to bridge the gap between the completion of the carrier and the start of the Type 26 programme. By moving three carrier blocks to the Clyde, along with the manufacture of the OPVs, we shall be able to sustain warship building on the Clyde and to maintain its viability into the future.

I should be happy to discuss the city deal negotiations with the hon. Gentleman, who, I know, is well acquainted with the affairs of Portsmouth city council. I understand that the MOD is prepared to make land available as part of an overall scheme which would create investment and employment opportunities in the city.

[Mr Ian Davidson (Glasgow South West) (Lab/Co-op)]

As the Member of Parliament who represents Govan Shipbuilders, I welcome the order that has been placed there for the OPVs. It is a great tribute to the skills, commitment and hard work of the work force, both management and staff. As one of my colleagues observed earlier, Govan shipbuilder is no INEOS.

May I also point out that, given that this is an order from the Royal Navy, it would not have been available to a separate Scotland? Regrettably, the Minister seems not to have placed a firm order for the Type 26 frigates to be built on the Clyde. Will he confirm that that will not happen until we know the result of the referendum? Will he also confirm that work is being transferred from Portsmouth and England to Scotland in order to bridge the gap between the end of the aircraft carrier building programme and the beginning of the Type 26 programme?

[Mr Hammond]

As I have just said to the hon. Member for Portsmouth South (Mr Hancock), the company intends to transfer three blocks to the Clyde so that the flow of work will be continuous until we are ready to cut steel on the OPVs at the end of 2014.

We will not repeat the mistake that the last Government made with the aircraft carriers of placing an order for a ship that has not yet been designed. That would be like signing a blank cheque to BAE Systems. Much as I admire and appreciate that company’s contribution to both our economy and our defence, I have no interest in signing blank cheques to it.

[Mr Gary Streeter (South West Devon) (Con)]

I congratulate my right hon. Friend on the skilful way in which he has reshaped the aircraft carrier contract and protected the skills base in the United Kingdom. Will he confirm that, in shaping the special package of measures for Portsmouth—which I support—he has not taken work away from Plymouth dockyard, including the maintenance of ships or future base-porting of the Type 26?

[Mr Hammond]

Funnily enough, I anticipated the possibility of that question from my hon. Friend. I can assure him that nothing that I have announced today will have any direct impact on Plymouth.

[Angus Robertson (Moray) (SNP)]

I thank the Secretary of State for giving me advance sight of his statement, and commend him for making it today. It was originally to be made tomorrow, but I think it right for the shipyard workers and their families to have certainty, and I know that he has done the right thing.

I am sure that the Secretary of State’s thoughts are with all shipworking families, many of whom are learning just a few short weeks before Christmas that their jobs are on the line. Earlier today, BAE Systems stated that the appropriate place for frigates to be built was Glasgow. Does he agree with that?

[Mr Hammond]

I am grateful to the hon. Gentleman, because his question has prompted me to acknowledge that my statement was made today in response to media stories which had created speculation that needed to be dealt with. I apologise to the Opposition for having to make the statement on an Opposition supply day.

I am obviously not responsible for the statement made by BAE Systems, but the company’s judgment, on the basis of value for money, is that the Clyde is the best place in which to build the Type 26 global combat ship, and the MOD concurs with that judgment.

[Sir Nick Harvey (North Devon) (LD)]

This is a sad day for Portsmouth, given its proud heritage of supporting the Navy, and the decision has been a bitter pill for the workers there and elsewhere to swallow. We owe them all our thanks. However, was there not a certain inevitability about the coming of a day on which these painful judgments would have to be made? Oversupply of naval shipbuilding capacity is a problem with which successive Governments have had to deal, and the TOBA gave BAE Systems the opportunity to make a commercial judgment. Will the Secretary of State confirm that the judgment was commercial rather than political? While I can see the elegance of placing the OPV contract on the Clyde, will other British shipyards get the opportunity to bid for this? It is a small enough job that plenty of them would be able to handle.

[Mr Hammond]

No, the contract will be placed under the overall umbrella of the terms of business agreement we have with BAE Systems, and, as I made clear in my announcement, we are effectively ordering the OPVs to soak up money we would have been paying in any case to have these yards standing idle, and in doing so significantly de-risking the start-up of the Type 26 programme by making sure the skills base remains in place in Glasgow.

I share my hon. Friend’s view, however, that there is a certain inevitability about the announcement we have made today. Governments have put off the moment, and the carrier order represented a pretty massive 130,000-tonne postponement of the moment, but we cannot alter the inevitable fact that we do not have a large enough Navy to sustain a multi-yard shipbuilding industry in the UK.

[Mr John Denham (Southampton, Itchen) (Lab)]

The record will show that the last Labour Government secured south-coast shipbuilding with a share of the destroyer order and then of the carrier programme. Today’s crisis has been coming for some time. Does the Secretary of State’s statement not confirm both that no effort has been made by the Government in the past three years to win extra orders for the Portsmouth shipyard and that work will be transferred from Portsmouth to other shipyards, hastening its closure? Does the Secretary of State understand why many in southern England feel they have been sold down the river today by a Government whose attention has been elsewhere?

[Mr Hammond]

No, and, frankly, travelling around the world in support of UK defence exports as I do, I should not be lectured by someone who was a Minister in the last Government, which completely neglected the UK defence industry—failed to travel and failed to engage with potential customers around the globe. That is a completely ludicrous suggestion from the right hon. Gentleman. It is not the Government’s job to win orders, whether for warships or aircraft. It is the Government’s job to support the industry in doing what it has to do, and we have been doing just that, and I can tell the right hon. Gentleman that I myself and my colleagues have visited countries as diverse as Brazil and Australia in pursuit of naval shipbuilding orders to support those yards.

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

A strong Navy is good for both Portsmouth and Plymouth. May I urge my right hon. Friend to ensure that any changes to the TOBA will not hamper or do damage to Devonport in my Plymouth, Sutton and Devonport constituency? Will he also look at whether the other vessels that are being commissioned could potentially be base-ported in Plymouth?

[Mr Hammond]

No decision has yet been made about the location of the base port for the vessels I have announced today. Just to be clear, what this announcement will do is effectively suspend the TOBA for the duration of the period when the OPVs are being built and then see its final demise upon the placing of the order for Type 26 global combat ships. I hope we have seen the very last TOBA payment being made to the industry by the MOD.

[Katy Clark (North Ayrshire and Arran) (Lab)]

Politics is about choices, of course. What impact has the funding of the Trident replacement had on the decisions that have led to the announcements of job losses today?

[Mr Hammond]

None. The Trident programme is a capital programme. The constraining factor in terms of the Royal Navy is far more around operating costs and crewing than the capital costs of platforms. We have to make sure we have a Navy that is sustainable and that we can afford to operate and crew in an increasingly tight market for engineering skills, where we often have to pay premium rates to get people with the appropriate skills. There is no point in building platforms we cannot afford to put to sea.

[Mr Andrew Tyrie (Chichester) (Con)]

The Secretary of State appears to have resolved a massive problem that he inherited, and he deserves our congratulations for that, although the closure of the Portsmouth yards will be a big blow for many of my constituents. Can he give an initial estimate of the likely scale of the compulsory redundancies and will he reiterate the assurance that he has already given once, that none of those jobs were lost to keep jobs in Scotland at a politically sensitive time?

[Mr Hammond]

I thank my hon. Friend for his comments. On the last point, the analysis of where best to build the Type 26 ships, which will have to be built to a very tight budget and a very tight timetable, was made by the company—endorsed by the MOD, but made by the company. I can tell him, as I think I said in the statement— or, certainly, as the Prime Minister said earlier on—that 940 job losses are anticipated at Portsmouth between now and the end of 2014 as a result of the decision to end shipbuilding. About 11,000 jobs in the dockyards and the supporting infrastructure will remain.

[Sammy Wilson (East Antrim) (DUP)]

There is a great affinity, of course, between Northern Ireland and Scotland, and many people will feel for those in the shipbuilding industry who are losing their jobs. Will the Secretary of State give us an assurance that, through procurement policies and the promotion of UK industry, everything will be done to keep the shipyards in Scotland viable, and does he agree that this decision shows that Scotland is far better-off within the United Kingdom than in having some kind of pseudo-independence?

[Mr Hammond]

The hon. Gentleman is exactly right about that last point. If Scotland were not a part of the United Kingdom, I would certainly not have been able to make the statement and announcement I have made today.

[Mr Mark Hoban (Fareham) (Con)]

This is a sad day for Portsmouth, and many of my constituents work in the dockyard. My right hon. Friend will know that the shipbuilding facility is in the heart of the naval dockyard. Is it possible to look at the footprint of the naval dockyard to see how more land might be released from it to expand the commercial port and create opportunities for jobs and growth in the commercial sector?

[Mr Hammond]

I am grateful to my hon. Friend, and he is right that the shipbuilding hall that will now become unused as a result of the announcements today is inside the secure dockyard perimeter. There have been discussions about how that could be carved out, and how security arrangements could be changed to accommodate its use. This is, of course, primarily a matter for the company that owns the shipbuilding hall, but I can confirm to my hon. Friend that we are looking at all options to support employment-generating activity both in the dockyard and on MOD land adjoining it.

[Mr Frank Roy (Motherwell and Wishaw) (Lab)]

This is a catastrophic day for the families of 835 shipbuilders, and the reality is that there will be more job losses. How many jobs does the Secretary of State estimate will be lost in the service sector for the shipyards?

[Mr Hammond]

I have not got an estimate of the number of jobs in the wider economy, but I can say this to the hon. Gentleman: when the carrier project was announced and the Type 45 destroyers were being built, everybody—including, I believe, the hon. Gentleman—understood that we were benefiting from a surge of work that was very welcome but that was never going to be sustainable in the long term. Of course the day when that work comes to an end is regrettable, and the consequent redundancies are difficult, but this is not something that has come unexpectedly; it is something that has long been understood and anticipated, and the announcement we have made today is good news for the Clyde, and I would have thought the hon. Gentleman would have wanted to welcome it.

[Dr Julian Lewis (New Forest East) (Con)]

Despite the Defence Secretary’s criticism of the contracts, does he accept that the restoration of carrier strike capability to the fleet is an absolute strategic necessity, and does he also accept that one reason for the loss of Portsmouth as a shipbuilder is that the last Government reduced the total number of frigates and destroyers from 35 to 19—and, regrettably, this Government have done nothing to reverse that?

[Mr Hammond]

My hon. Friend is factually correct: the last Government did, indeed, reduce the total number of destroyers to be built in the Type 45 programme, largely because of the hole that was opening up in the aircraft carrier budget due to the delay in the project that I mentioned earlier. He is right, too, that we can talk all day about the history of the placing of the order for these two very large ships—the largest ships the Royal Navy will ever have had—but the fact is that we are getting them: they are being built, and we are proud of them and we are going to make excellent use of them in projecting UK naval maritime power around the world.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

The Secretary of State has repeatedly said that this day was expected, so what work has been done to look at diversification into other industries, particularly in the marine renewables sector, for these skilled workers? To follow up the point made by my hon. Friend the Member for Motherwell and Wishaw (Mr Roy), if that estimate of the knock-on effect has not been obtained, when will it be obtained?

[Mr Hammond]

As the hon. Lady probably knows, estimates of effects on the wider economy are never precise, although estimates can be made. I am happy to write to tell her our best estimate, but it will be just that—the best estimate. She will know that in Scotland the responsibility for wider industrial support and the promotion of employment opportunities rests with the Scottish Government, and I would expect them to be actively engaged in this programme.

[George Hollingbery (Meon Valley) (Con)]

I thank the Secretary of State for his statement, although of course it is not welcome news for a number of my constituents who work at the Portsmouth dockyard. Mr Speaker, I hope that you will allow me a moment to pay tribute to the efforts of my hon. Friend the Member for Portsmouth North (Penny Mordaunt), who has worked tirelessly on this subject. She has spent an enormous amount of time trying to secure the future of shipbuilding in the UK and at meetings I have attended with her it seems that she has secured at least some change, in that the importance of the commitment to the new offshore patrol vessels should not be underestimated. She and I argued not only that we should build more warships, but that there should be regeneration support for the Solent area should the worst happen. We have got the former and it sounds as though we will get the latter. If so, will the Secretary of State ensure that the many small and medium-sized enterprises based in places such as my constituency and the others around Portsmouth are also able to access such support?

[Mr Hammond]

First, I am happy to join my hon. Friend in paying tribute to the tireless work that has been done by my hon. Friend the Member for Portsmouth North (Penny Mordaunt), who, since I have known her, has talked about almost nothing but the shipbuilding industry in Portsmouth. Let me confirm for him that we will do everything we can to ensure that the support package for Portsmouth will be put together in a way that genuinely diversifies the local economy. That is what is needed now, and that includes support for SMEs. I will make sure that my right hon. and hon. Friends in the Department for Business, Innovation and Skills are aware of his comments.

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

Given that BAE Systems has announced that there will be job losses at Rosyth and given the Secretary of State’s wider comments about ship maintenance, I am sure that he will be happy to have an urgent meeting with one of his Ministers and me to discuss the future of Rosyth. May I press him to say what will happen if Scotland chooses to become a separate nation in September next year? Will the Type 26 order stay on the Clyde?

[Mr Hammond]

The Type 26 order will not be placed until the design is mature, which will not be until towards the end of next year, and so the hon. Gentleman’s question is premature. A significant number of workers who are nominally based on the Clyde are being bussed on a daily basis to Rosyth to boost the work force during the carrier assembly phase, so the announcement made by BAE Systems should be read in that context. My understanding from Babcock is that the yard at Rosyth has a bright future with private sector work—offshore work—as well as with the programme to assemble both the Queen Elizabeth and the Prince of Wales, which itself will keep the yard busy until 2020.

[Sir Edward Leigh (Gainsborough) (Con)]

Has Whitehall finally learned the lessons from what, from a public accounts point of view, must be one of the worst politically driven, stop-start contracts in our history? Will the Secretary of State assure us that never again will the Treasury insist on delaying a contract for one or two years to save money and end up with a cost of hundreds of millions of pounds more? Just so that the taxpayer knows exactly how much this has cost him, will the Secretary of State repeat what the carriers were supposed to cost originally and what they are now costing us, and when the planes were supposed to be flying operationally from them and when they will actually fly?

[Mr Hammond]

It is always a brave person who says that Whitehall has learned the lessons. I can certainly give my hon. Friend this commitment: as long as I am Secretary of State for Defence, we will not be placing any contracts for things that we have not designed and we will not be driving cost into projects by making announcements of delay that are simply driven by the exigencies of poor budgeting and poor financial control. He asked me to repeat the numbers. When the project was announced in 2008 it had a budget line attached to it of £3.6 billion, but of course when the previous Government first proposed the aircraft carrier project the budget was much less than that, at £2.25 billion. Nobody I have met, in the industry or in the Navy, ever believed the project could be built for £3.6 billion. There was a degree of fantasy accounting going on, the reasons for which I will leave my hon. Friend to speculate upon.

[Pete Wishart (Perth and North Perthshire) (SNP)]

More than 800 jobs have been lost across Scotland today as a result of the Secretary of State’s announcement. He is absolutely right to say that we cannot play politics with this and we have to put aside the constitutional issues. One way in which he could do that, if he is sincere and honest about it, is to say today that he will respect the decision of the people of Scotland next year, and that regardless of which way they decide, he will honour all existing work and contracts.

[Mr Hammond]

What the hon. Gentleman has not heard is that the contract for the Type 26 cannot be placed until the design is mature, and that will not be until the end of 2014. The Scottish National party is nothing if not glass half empty; what I have actually announced today is that thousands of jobs have been saved, but he chooses to present it as hundreds of jobs have been lost.

[Tracey Crouch (Chatham and Aylesford) (Con)]

Shipbuilding in Chatham ended 30 years ago and although the dockyard is a diverse business hub today, its closure left scars of devastation and deprivation on the town. When the Secretary of State is putting together his support package for the areas sadly affected by today’s announcement, will he look at the history of the closure of Chatham dockyard, learn the lessons and make sure that proper investment is made to ensure that these areas are not blighted as, unfortunately, Chatham was blighted?

[Mr Hammond]

I would be very happy to look at the history of Chatham. As my hon. Friend says, Chatham’s historic dockyard is now a thriving and vibrant location, attracting investment and employment, and that is what we want to make sure also happens in Portsmouth. Of course the point about Portsmouth is that it will continue to be a major naval port, with large-scale maritime support and maintenance activity going on; it will not become a historic port in the sense that Chatham has become one.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

Does the Secretary of State accept that shipbuilding on the south coast has already been consolidated by the removal of defence-related shipbuilding from Southampton to Portsmouth, by agreement? Does he also agree that the contract for parts of the carrier to be built in the naval dockyards in Portsmouth was very much part of that consolidation? Does he therefore accept that the removal of the aircraft parts manufacturing will be regarded as a substantial betrayal of all that consolidation effort? Does he consider it wise strategically to extinguish shipbuilding permanently on the south coast, leaving just one site for UK defence-related shipbuilding?

[Mr Hammond]

The hon. Gentleman is right to say that consolidation of the shipbuilding industry is not a single event; it is a process that has been going on for decades, and the absorption of VT by BAE Systems was part of it. I am afraid that the inexorable logic, given the size of the Royal Navy and the budget we have for building new ships, is that we can support only one naval shipbuilding location in the United Kingdom—anything else is fantasy economics.

[Mr Andrew Turner (Isle of Wight) (Con)]

One strength of the Isle of Wight’s economy is its historic involvement with shipbuilding; a number of my constituents work in the Portsmouth dockyard and many companies on the island are part of the supply chain. What assessment has been made of the impact of this announcement on the Isle of Wight’s economy?

[Mr Hammond]

I must confess to my hon. Friend that I have not assessed the impact on the Isle of Wight economy specifically. I know, however, that the local enterprise partnerships and local authorities have been aware of these challenges for some time. If it will help my hon. Friend, I will dig out what assessments have been made by others and draw his attention to them.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

Successive UK Governments have failed Scotland and have failed shipbuilding, against a background of more than 100 ships being built in Norway last year. The little that remains in Scotland, as we know from Lance Price’s diaries, is due only to a strong SNP and our independent state of mind. Does the Secretary of State agree with that reality?

[Mr Hammond]

No. The SNP’s policies would drive shipbuilding out of Scotland finally and would be the last nail in the coffin of the industry. Today, we have announced that the Clyde will effectively become the focus of the whole of the UK’s warship building industry, that we will move the remaining carrier blocks around to support that industry, and that we will place new contracts to support the yard and ensure that it maintains the skills to build the Type 26 class, and all the hon. Gentleman can do is stand up and carp. I think that people will draw their own conclusions.

[Mr Tobias Ellwood (Bournemouth East) (Con)]

Labour claims to support the British shipbuilding industry but, if memory serves, it was Labour that cut the Type 23 fleet by three, cut the Type 45 fleet by six orders and slowed down the new carrier order. Does the Secretary of State agree that if we are to assist our shipyards, one way to do it is to commit to operating both aircraft carriers rather than mothballing one of them in Portsmouth harbour?

[Mr Hammond]

Clearly, that decision will be made in the 2015 SDSR. My personal view is well known: I believe that having spent the best part of £3 billion on building the carrier, the £70 million-odd a year that will be required to operate it looks like good value for money.

[Jim Shannon (Strangford) (DUP)]

I welcome the Secretary of State’s statement and his obvious commitment to shipbuilding. What assistance will there be to encourage the retention of shipbuilding skills through apprenticeships and will the opportunity for such apprenticeships be available to all the regions of the United Kingdom of Great Britain and Northern Ireland?

[Mr Hammond]

I cannot answer for any wider initiatives that my right hon. and hon. Friends in the Department for Business, Innovation and Skills might be introducing. The deal to which I have alluded today is a city deal that specifically relates to Portsmouth and Southampton, and therefore by definition it will make funding available for job creation and regeneration only in those areas.

[Steve Brine (Winchester) (Con)]

I thank the Secretary of State for his statement. He knows that there will be grave concern in my Winchester constituency about the shipbuilding element. Those further down the supply chain will be listening to his statement keenly, no doubt wanting to ask many questions and, I must say, given what is happening in Hampshire, choking on their lunch hearing the SNP representatives complaining about the announcement. May I echo the other comments that have been made and urge him to leave no stone unturned not just in Portsmouth but across the wider region in the pursuit of regeneration of the yard and the jobs it supports, even as far up as Winchester?

[Mr Hammond]

As a south-east MP, I understand well that not all of the south-east is affluent with high employment. There are areas that depend on specific industries which are as vulnerable as other areas anywhere in the country. I will endeavour to ensure that the points that my hon. Friend has raised are taken fully into account.

[Peter Luff (Mid Worcestershire) (Con)]

I commend the Secretary of State, the Minister for defence equipment—the Under-Secretary of State for Defence, my hon. Friend the Member for Ludlow (Mr Dunne)—the Chief of Defence Matériel and all those involved for making the best of a very difficult situation. Will my right hon. Friend clarify the purpose and capabilities of the three new very welcome offshore patrol vessels?

[Mr Hammond]

They will be more capable than the existing River class, as they will be able to take a larger helicopter and will be 10 metres longer. They will be able to undertake a full range of duties, including not only fishery protection but the interdiction of smuggling, counter-piracy operations and the protection of our overseas territories.

[Mr Julian Brazier (Canterbury) (Con)]

I, too, pay tribute to my hon. Friend the Member for Portsmouth North (Penny Mordaunt) for her doughty struggle to get a good city deal for her constituents and for the vision for the OPVs that to my knowledge she has been outlining for at least two years. Will the Secretary of State confirm that the OPVs will to some extent provide a force multiplier for our frigate fleet? Some of the roles carried out by frigates do not require full frigate capability, so the OPVs could be a way of partially expanding that capability.

[Mr Hammond]

At the risk of causing her to blush, I am happy once again to praise my hon. Friend the Member for Portsmouth North. I should say to my hon. Friend the Member for Canterbury (Mr Brazier) that no decision has yet been taken about whether the old River class vessels will be retired after the new OPVs are brought into service. That decision will have to be made in SDSR 2015 based on the ongoing budget challenges of maintaining additional vessels at sea. That will be a decision for the Royal Navy.

[Bob Stewart (Beckenham) (Con)]

Most people suggest that our biggest defence capability is not in maritime patrol aircraft. I am no expert—although I can see that there are many naval experts in the Chamber—but could this new River class OPV, with its enhanced length and helicopter deck, also be used to cover the gap between 240 nautical miles, the distance a land-based helicopter can go out from our shores into the Atlantic, and the 1,200 nautical miles for which we are treaty responsible? Could it perhaps play some sort of MPA role in that area?

[Mr Hammond]

I have not looked at the specification in detail, but I do not envisage that the thing will be able to take off and fly. I understand the point that my hon. Friend is making, however, and we are conscious of the gap in maritime patrol aircraft capability. It is one issue that will be addressed in SDSR 2015 and we will manage the gap in the meantime through close collaboration with our allies. We are considering all the options, including, potentially, the use of unmanned aerial vehicles in a maritime patrol role in the future.

[Neil Carmichael (Stroud) (Con)]

I congratulate the Secretary of State on salvaging a sustainable shipbuilding future for this country from the wreckage left by the previous Government. Looking to the future, and bearing in mind his comments about engineering, does he agree with me that we should be encouraging young people to think about entering the defence services as engineers to develop new technologies, including in electronics and composite materials?

[Mr Hammond]

Absolutely. I must say to my hon. Friend and for the record that there are huge opportunities available across the defence industry and in the defence establishment for young people with engineering skills. I am glad to say that all the evidence suggests that my right hon. Friend the Secretary of State for Education’s reforms are having the effect of reawakening the interest of young people in the STEM—science, technology, engineering and maths—subjects. Increasing numbers are taking them up and that is good news for the future of British industry.

[Jason McCartney (Colne Valley) (Con)]

David Brown Gear Systems from Lockwood in my constituency has secured a design contract for the new Type 26 global combat ship. As well as confirming the new time scale for the Type 26s, will my right hon. Friend say when we will know how many vessels will be ordered?

[Mr Hammond]

I have not confirmed the new timetable for the Type 26. It was always our intention that we would mature the design fully before we placed a contract, in order to avoid the mistakes of the past. The current planning assumption is that we will order 13 vessels.

[Mr Philip Hollobone (Kettering) (Con)]

When we talk about aircraft carriers, we tend to focus on their construction, but, of course, when they become operational they will require trained crews. With which navies are we co-operating to train the requisite personnel and might there be expanded opportunities in places such as Portsmouth for onshore training in the run-up to deployment?

[Mr Hammond]

A certain amount of training can be done synthetically onshore, but I am grateful to my hon. Friend because he gives me the opportunity to reiterate publicly and on the record our gratitude to the United States navy and the United States marine corps, who are assisting us in keeping alive our carrier skills during a period when we are not operating fixed-wing aircraft off UK carriers. We have pilots and deck officers embedded in the US navy and the US marine corps and we will develop our fleet of F-35B aircraft, with the first operational squadron based in the United States at Eglin air base. It will return to the UK in 2017 as a trained squadron ready to stand up immediately on its arrival. Without that support from the US, we would be struggling to get back into the carrier business. We should be immensely grateful.

Unsolicited Telephone Calls (Caller Line Identification)

Wednesday 6th November 2013 Commons Chamber

Motion for leave to bring in a Bill (Standing Order No. 23)

13:39

[Alun Cairns (Vale of Glamorgan) (Con)]

I beg to move,

That leave be given to bring in a Bill to require disclosure of caller line identification by non-domestic callers; to require Ofcom to consider applications for exemption from such disclosure; to provide that telephone providers may not make a charge for providing caller line identification; and for connected purposes.

The aim of the Bill is to help to reduce nuisance calls. The issue is significant and should not be underestimated. My constituents in the Vale of Glamorgan and others across the country are fed up with the menace of nuisance calls. They are annoyed about receiving unsolicited telephone calls trying to sell them gas or electricity that they do not want, or financial services or holidays in which they have little interest. They do not want to claim for mis-sold payment protection insurance on a loan that they never had, nor do they want to sue the local authority for an accident that never occurred or buy a boiler from a company they have never heard of.

My constituents are subject to frequent telephone calls offering those services and more against their will. BT reported that it received 50,000 calls in one month to its nuisance call bureau, yet only a fraction of that number of complaints is made formally to Ofcom or to the Information Commissioner’s Office. I suggest that that is because of the difficulty of the process, and a large part of that is due to the problem of identifying the marketing organisation that makes the call. Enough is enough. Credit must be given to the consumer organisation, Which?, which was amongst the first to highlight the problem. The Under-Secretary of State for Culture, Media and Sport, the hon. Member for Wantage (Mr Vaizey), too, should take credit for taking significant steps to help to tackle the issue, leading to hefty fines for some companies levied by Ofcom and the Information Commissioner. More action needs to be taken, and legislation needs to be changed if that action is to occur. The Minister has made a commitment to publish a strategy document later this year, which shows the high priority that he gives to the issue.

The all-party group on nuisance calls published a report last week with 16 recommendations aimed at combating the problem. There were two key themes. The first focused on third-party consent, and my hon. Friend the Member for Edinburgh West (Mike Crockart), co-chair of the all-party group, sought to make progress on that with his private Bill last Friday. The second theme relates to caller identification, which is covered by my Bill. The measure will help people to take action against such calls. It will enable them to complain effectively when a nuisance is caused that could lead to fines and penalties, subject to Ofcom and ICO investigation. It will also allow people to choose whether or not to answer the phone. My constituents want to live in peace and answer the telephone to friends, family and others to whom they choose to talk.

Much of the difficulty derives from the fact that it is nearly impossible to tell who is calling, in spite of the fact that the caller ID facility is widely available. That is largely because marketing organisations choose to withhold their number. Legislation and guidance already exist to allow individuals to opt out of receiving marketing calls. Constituents can register with the Telephone Preference Service, effectively advising marketing companies that they are not permitted to call without prior consent. In theory, that should stop the vast majority of calls and allow complaints to be made against companies that break the code. However, it is almost impossible to complain about an organisation breaching the rules without knowing its identity. That is the position in which many constituents find themselves as a result of withheld numbers.

Under the code, the organisation should identify itself at the outset of a call. However, if a company breaks the rules by calling a TPS-registered number in the first instance they are highly unlikely to adhere to the condition that requires identification to the person answering the call, particularly if that person is irritated.

When the caller ID facility became available during the early ’90s a few organisations withheld their number. In general, that was limited to the police, medical organisations and charities such as those supporting victims of domestic violence. Now, however, a significant proportion of marketing organisations choose to withhold their number, making the choice of whether to answer the call almost impossible, but also making it extremely difficult to make a complaint to Ofcom or the ICO.

One of my constituents, Mr Haynes from Cowbridge, simply refuses to answer any call when the number is withheld in the expectation that it is a marketing call. As a result, he could well be ignoring calls from his local police station or GP practice. I have also found it difficult to contact him from the parliamentary estate, because the parliamentary system withholds the telephone number.

Requiring all non-domestic callers to display their numbers unless they have good reason not to do so, as in the examples I have already mentioned, will help people such as Mr Haynes and millions across the country to take action against those who call against the rules. In the Bill, I propose that Ofcom be required to consider applications for exemptions. The general rule should be that the organisation, whether public or private, would have to disclose their number unless there is a good reason why they should not do so. I have already mentioned the police and domestic violence charities, and there may well be others that need to be considered, but they should be seen as the exception rather than the general rule.

The Bill requires telephone network operators to make the caller ID facility available free of charge. I was alarmed to hear some weeks ago that if a customer did not sign up to an annual contract two major UK telephone network operators would charge for adding that facility. That is simply unacceptable. It effectively charges a customer who has been plagued with nuisance calls to complain about breaches to the code. When the issue was scrutinised in the all-party group’s evidence session, one operator sought to excuse the policy, and suggested that it could have arisen as a result of additional energy costs in displaying caller ID. We rejected that absolutely, and we received widespread support for doing so, including from mobile operators that provide the facility free of charge. I was pleased to hear Ofcom’s strong response, and I hope that operators will reflect on its comments, as well as those by all parties present at the all-party group.

The Bill will make a significant difference to constituents across the country. It will allow responsible organisations that adhere to the respective codes to continue their work. It will put much of the control back in the hands of the receiver of the call. They can choose whether to answer it, and report breaches to the ICO or Ofcom. Of course, it may take time for the Bill to become law, but in the interim, I urge non-domestic callers to display their number voluntarily. It would be a simple action that would gain much respect from the public. In that vein, I appeal to network operators not to charge customers to use the caller ID facility and to review their policy. The impact of not doing so would be to charge customers to make a complaint about nuisance calls. Offering the facility would offer the network operator a marketing advantage.

The Bill is a small part of helping to combat the issue of nuisance calls, and I am pleased to have the support of Members from all parts of the House, It is a Bill that has little financial consequence, but which could have a significant benefit for many of our constituents. Many of those who are at home during the day, particularly the elderly and the most vulnerable, are plagued by nuisance calls. I urge hon. Members to support the Bill.

Question put and agreed to.

Ordered,

That Alun Cairns, Mike Crockart, Steve Brine, Fiona Bruce, Dr Julian Huppert, Steve Rotheram, Bob Stewart, Sir Andrew Stunell, Martin Vickers, Mr Mike Weir and Simon Wright present the Bill.

Alun Cairns accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 28 February 2014 and to be printed (Bill 126).

Opposition Day

Wednesday 6th November 2013 Commons Chamber

[10th allotted day]

Energy Price Freeze

Wednesday 6th November 2013 Commons Chamber

[Mr Speaker]

I advise the House that no amendment has been selected.

13:50

[Caroline Flint (Don Valley) (Lab)]

I beg to move,

That this House calls on the Government to freeze electricity and gas prices for 20 months whilst legislation is introduced to ring-fence the generation businesses of the vertically integrated energy companies from their supply businesses, to require all electricity generators and suppliers to trade their power via an open exchange, to establish a tough new regulator with the power to force energy suppliers to pass on price cuts when wholesale costs fall, and to put all over-75-year-olds on the cheapest tariff.

At the heart of this debate is a question about whether we believe that people have been overcharged and let down by a regulator that has failed to do its job, and that to win back the trust of the British people we need to mend this broken market. Today we put before the House a motion that proposes two measures to provide real help now through a temporary 20-month price freeze and by putting all those over the age of 75 on the cheapest tariff, as well as deep structural reforms to the way that this market works for the future. These are the measures that we will take if we win the next election, but these are measures that this Government could take now, for which they would have our full support.

[Albert Owen (Ynys Môn) (Lab)]

In those structural reforms, does my right hon. Friend consider that Ofgem, the regulator, would have responsibility for those who are not on the mains gas grid?

[Caroline Flint]

My hon. Friend coined the term “energy island” to describe his island constituency of Anglesey and I know he takes a keen interest. We have already said in the House and elsewhere that we believe that those who are off-grid should come under our new regulator. Of those people who are off-grid, only 10% rely on oil for both their heating and their light. The rest have oil for heating but rely on electricity, so our price freeze would have an impact on many off-grid customers as well.

[Several hon. Members]

rose—

[Caroline Flint]

I will make a little progress, then I will be happy to give way.

[Charles Hendry (Wealden) (Con)]

Will the right hon. Lady give way?

[Caroline Flint]

I will make a little more progress.

At the outset I want to deal with a few of the myths that the Government have resorted to peddling in the absence of any credible policies of their own and because they are confused about how to respond to our proposals. The first myth is that the price freeze cannot or will not happen or that the idea is a con. Let me tell the House that there is only one situation in which this price freeze will not happen: if the Conservatives or Liberal Democrats win the next election. If we are elected, this price freeze will happen. The idea that a price freeze will not work if wholesale prices increase is complete and utter rubbish.

As the energy companies themselves admit, they are not buying today all the energy they need to supply their customers tomorrow. They buy their gas and electricity two, three or even four years before it is supplied, precisely in order to manage the risk of fluctuation in wholesale prices. The Secretary of State must know this, so the Government’s argument does not stand up.

The second myth is that companies will undermine the freeze either by hiking up their prices beforehand or by increasing them afterwards, but as I asked the Secretary of State at the last Energy and Climate Change questions, if companies collude to increase their prices beyond anything that can be justified before the next election, will he stop them? If he will not, let me be clear: we will take action. As for what happens after the price freeze ends, the reason it lasts for 20 months is that that is how long we think it will take to enact our reforms to overhaul this market. By that point, we will have a new regulator in place, with the power to force companies to cut their prices when wholesale costs fall, which will prevent the kind of mark-up and overcharging that we all know is happening. This price freeze will happen and it will work.

[Duncan Hames (Chippenham) (LD)]

Does the right hon. Lady agree that it would be in the interests of bill payers for all Governments to have an objective of keeping the cost of capital in the industry as low as possible so that bill payers may get their energy as cheaply as it can be produced?

[Caroline Flint]

I do agree. It is sad that in recent times so many people who want to invest in energy have said that the capital costs are going up because of the dithering and indecisiveness of this Government towards investment in energy.

The third myth is that our proposals will deter investment. Nothing could be further from the truth. As EDF’s decision on Hinkley Point C shows, what matters for investors is long-term certainty on returns, not short-term gains based on overcharging. That is why we have supported the Energy Bill and given our backing to the framework of contracts for difference and the capacity market. And we will put right this Government’s failure to set a decarbonisation target, in order to give low-carbon investors the certainty they need to invest throughout this decade and the next.

[Charles Hendry]

Can the right hon. Lady name a single international investor who says that they are more likely to invest the billions of pounds we need in our energy infrastructure as a result of the policies that she is following? I know many who say they are less likely to invest, but can she name one who is more likely to?

[Caroline Flint]

What I hear from investors such as Siemens is their concern that the fact that the Government have not signed up to a decarbonisation target has affected their confidence in investing in our country. It is incredibly sad that the investment in renewable energy has halved in the past three to four years that this Government have been in charge.

[The Secretary of State for Energy and Climate Change (Mr Edward Davey)]

Can the right hon. Lady tell the House whether anyone has visited her or her right hon. Friend the Leader of the Opposition as an investor or a utility and said that because of the Government’s policies they are less likely to invest? Has anyone said that to her?

[Caroline Flint]

For the past month we have seen the Secretary of State and members of the Government standing up for the big six—[Hon. Members: “The big seven.”] —the big seven, rather than standing up for the consumers and businesses of this country, which are being ripped off. If we want a secure future in which investment can come forward, we need a little less bickering on the Government Benches about green levies and less fighting against what consumers want.

[Andrew Gwynne (Denton and Reddish) (Lab)]

My right hon. Friend is right to debunk the myth about investment. Is she aware that under this Government we have dropped to seventh in the world in investment in clean energy technology?

[Caroline Flint]

Absolutely. Investment has halved from £7 billion to just over £3 billion. It is a shame that the consensus that we created in government has not been held together because of the fractious relationships on the Government Benches.

[Several hon. Members]

rose—

[Caroline Flint]

I will make some progress before I give way again.

What the Secretary of State has to understand is that markets work only with consent. We know that there are some on the Government Benches who want to turn concern about rising energy bills into opposition against renewable energy. Unless we reform this market and restore trust, those same people will continue to undermine public support for the investment we need.

[Caroline Lucas (Brighton, Pavilion) (Green)]

I support the Opposition motion, as far as it goes, but does the right hon. Lady accept that without serious investment in energy efficiency, there will be no permanent end to fuel poverty? If so, can she explain why there is no mention of energy efficiency in her motion?

[Caroline Flint]

The hon. Lady is right. Energy efficiency is important, and I am sure that, like me, she is saddened by the attacks on those parts of the Bill that support energy efficiency measures for the most vulnerable and poor households in our country. It is interesting to see how the big six—[Hon. Members: “Seven.”]—the big seven have gone to Government saying, “Relieve us of this burden,” but they take out full-page adverts in national papers talking about how they have helped millions of people with their energy efficiency. They cannot have their cake and eat it. Labour will produce a Green Paper in 2014 with more detailed proposals on energy efficiency to make sure that we deal with both parts of the problem—market reform, prices and investment in renewable and clean energy, as well as how we help people keep bills down through energy efficiency.

[Toby Perkins (Chesterfield) (Lab)]

If there was any doubt about the extent to which the Government have got it wrong, the fact that they think an energy policy needs the approval of the big six before being credible tells us everything we need to know. Will my right hon. Friend confirm which of the energy companies are making the biggest profits, and are they therefore the biggest investors in future infrastructure?

[Caroline Flint]

Centrica, which owns British Gas, has passed on the largest share of profits to its shareholders but made the least amount of investment, but all the companies are making good profits.

What we have not seen is a market that encourages competition to the extent that the energy companies strive to compete with each other on price and to win the support of their customers. That is also what the motion is about, because the fourth myth is that our proposals will somehow undermine competition, but our market reform proposals would increase competition. They would level the playing field and enable independent generators and small suppliers to compete more effectively. Of course, no energy company, big or small, wants us to do something that reduces its profits, but suppliers such as the Co-op recognise that in order to restore trust the people need to see a clean break with the past. Smaller suppliers such as Ecotricity and Ovo, which might not necessarily like our price freeze, nevertheless say that it does not threaten their viability.

The fifth myth is that the problems we see in our energy market today can somehow all be laid at the door of the previous Administration, a Labour Administration who—the House might recall—introduced winter fuel payments, which the current Secretary of State described at the time as a gimmick, insulated over 2 million homes through Warm Front and lifted over 1.5 million people out of fuel poverty. Before Labour came to power, consumers could not even switch electricity supplier. As he knows, the restriction on suppliers also being generators was removed in 1993, under the previous Conservative Government, which led to the vertical integration we have seen over the past two decades. If the Secretary of State wants to compare records, I am happy to have that debate, but I think that the public would be better served if we all engaged in a proper debate on how to reform the market for the future.

The Secretary of State might not agree with our proposals, and that is his choice. He will have to account to the 47,550 bill payers in his constituency if he opposes our price freeze in the Lobby this evening. I believe that the public deserve a proper debate. The motion presents the House with clear proposals to restore people’s faith in the energy market and get them a fairer deal.

[Steve Brine (Winchester) (Con)]

The right hon. Lady is being generous in giving way. She mentioned smaller suppliers. She will be aware of Utilita, one of the good small energy companies, which is based in my constituency. I wonder whether she is aware of the comments of its managing director, Bill Bullen, who wrote in The Times shortly after the Leader of the Opposition’s conference speech that with any price freeze

“the impact on smaller energy suppliers will be much harder felt and the level of competition in the market will drop.”

Is that now an Opposition policy intention?

[Caroline Flint]

Small suppliers have told us on the record that the most important thing for their future viability and competition is openness, transparency and access, and that is what our proposals seek to do.

Let me deal with each of our proposals in turn. The first is to freeze gas and electricity prices for 20 months. We would do that—the Government could do this now—by legislating to give the Secretary of State the power to modify suppliers’ licences to stop them raising their prices. Over 20 months it would save the average household £120, the average small business £5,500 and the average medium-sized firm nearly £33,000.

[Neil Carmichael (Stroud) (Con)]

rose—

[Caroline Flint]

I am not going to give way.

The reason that is needed is simple: the public have been overcharged. Figures we published yesterday revealed a large and growing gap between the costs that energy companies have paid on the wholesale market and the prices they have charged their customers. They confirm what the chief executive of Ovo said the week before last when he noted that wholesale prices had been broadly flat over the last two years and that companies could be facing higher wholesale costs only if they had bought energy from themselves and above the market price.

Those figures, which have been audited by the House of Commons Library, also confirm that the mark-up cannot be explained by any of the other excuses we keep hearing from the companies when they raise prices, be they network charges or policy costs, because more than half the increase in bills has gone straight to the energy companies, either in the form of higher profits or to pay for inefficiencies in their businesses.

[Andrew Gwynne]

My right hon. Friend will also be aware of the information Ofgem published this week showing that wholesale prices have increased by just 1.7%, while the average bill has increased by more than 9%. Is not that why Labour is absolutely right to call for a price freeze?

[Caroline Flint]

My hon. Friend is absolutely right. There is a growing chorus of voices saying that something is wrong in the market and in what we are being told about rising costs leading companies to increase bills. It just does not add up. Research by the Institute for Public Policy Research has shown that efficiency savings alone could knock £70 off the average bill. To correct the overcharging that has happened in the past and give consumers some badly needed respite for the future, we propose to freeze prices for 20 months.

[Ian Lucas (Wrexham) (Lab)]

Is not there a good precedent for acting when there is a defect in the market? Did not the Conservative Government in 1981 impose a windfall tax on the banks when the market did not work and the banks themselves made a windfall?

[Caroline Flint]

My hon. Friend is right. I think that the former Prime Minister, Margaret Thatcher, also imposed a windfall tax on oil and gas. The truth is that when the market is not working it is important for Governments to step in, because failing markets do not provide competition or the security that people want from the energy sector. We all agree that these things, whether energy or water, are essential to life and that we all need them. In that situation, people expect Governments to step in and ensure that the market is fit for purpose.

[Nic Dakin (Scunthorpe) (Lab)]

Is not it interesting that the previous Conservative who won a general election, Sir John Major, recognises the need to do something, which is why he has urged a windfall tax on this occasion?

[Caroline Flint]

In his wide-ranging speech, the former Prime Minister expressed his concern about Governments being out of touch with the public, whether on energy or the cost of living. He suggested a windfall tax, but we want something that goes straight to consumers, which is why we think the price freeze is the right way ahead.

[Several hon. Members]

rose—

[Caroline Flint]

I will make some progress, because I am conscious of the time.

Vital though the price freeze is, it is not the only part of the package before the House today. There is widespread agreement that Britain’s energy market is neither as competitive nor as transparent as it should be. There are two connected reasons for that. The first is the vertically integrated structure of the big six energy companies. The principle underpinning privatisation was that supply companies would compete with each other to drive down generation costs and keep prices efficient, but today all the big six energy companies both generate and retail power. Collectively they supply over 98% of the retail market and account for 70% of electricity generation. The problem is that if suppliers are also generators, what incentive is there to keep wholesale costs down if the effect is to reduce the profits of the company as a whole? While energy companies often claim that their profit margins are only 5%, they omit to mention that their profits on generating electricity are, on average, closer to 20%.

The second connected problem is that if the big six can supply most of their customer base from their own power stations; there is little incentive to trade on the open market. It is not possible to determine what physical volumes of gas and electricity are traded within vertically integrated companies as that information is never disclosed, and the prices they charge themselves are never published, but according to the London Energy Brokers Association just 6% of energy is traded on the open market. That makes it difficult for independent generators to secure long-term deals to sell their output, which in turn inhibits future investment. At the same time, independent suppliers are prevented from expanding and new suppliers are deterred from entering the market because they find it difficult to access forward contracts that provide the volume and shape to meet their customers’ needs.

That is why the motion proposes two fundamental changes to the way in which the market works at the moment. First, it would force the big six energy companies to ring-fence their generation businesses from their supply businesses. This would counter the natural conflict of interest within vertically integrated companies and ensure that the interests of supply businesses are better aligned with those of their customers in enabling them to seek out the best possible prices. It would also prevent self-supply, which, in turn, should increase the volume of energy being traded openly and create a more competitive and transparent market. If the Secretary of State disagrees, will he explain how the public interest is served by allowing energy companies to generate energy and supply it to themselves at a price that is never disclosed, and in a way that makes it almost impossible for other players to get a foothold in the market? How does that help consumers, how does it help competition, and how does it increase transparency? If he does not disagree, why will he not back our proposal, or what is his alternative?

[Mr Davey]

I am listening very closely to the right hon. Lady, because she is, I think, putting before the House a new proposal on ring-fencing. For the sake of clarity, is that about splitting up the big six companies into new companies—a total break-up—or an accounting separation and self-supply restriction? Which is it? We need to know.

[Caroline Flint]

I have to say to the Secretary of State that I am very disappointed with that intervention. [Interruption.]

[Mr Speaker]

Order. Let the right hon. Lady be heard.

[Caroline Flint]

Beyond the customary theatrics that sometimes dominate debate in this House, for which we should all admit our responsibility from time to time, I would say that if one looks back over Hansard it is clear that for the past two years, whether at DECC questions, in Opposition day debates or in urgent questions, I have been putting forward measures to reform this market, including a break-up of the way in which the companies run their generation and retail sides. We have said in this House—I will obviously send this information to the Secretary of State—that we need to create, as we did with the networks, a separation in relation to the way in which the companies run things. That does not necessarily mean having two companies, but it does mean having two different legal entities. The Secretary of State is, in effect, saying, “Oh, it’s all right—it’s fine.” We have made this proposal time and again, and it has been reported in the press time and again. It is unfortunate that he lets himself down with that sort of intervention.

[Albert Owen]

The Secretary of State should read the transcript of last week’s Energy and Climate Change Committee meeting with the big six, at which the chief executive officer of E.ON, the only one who bothered to turn up, said that he had no problem with separating retail from generation.

[Caroline Flint]

We will be publishing a green paper that will expand further on our energy market reforms. Of course we welcome a discussion with the big six and others about how we take this forward, but we are very clear that we have to stop the cosy relationship between the generation and retail sides. It cannot be allowed to go on in the way it has.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

Does my right hon. Friend agree that it is important to restate that this whole debate is about consumers? This is about the British public—ordinary families and businesses who need the best deal—and not about having a petty debate about whether a company is one legal entity or two legal entities.

[Caroline Flint]

It is about recognising the problem and trying to find a solution. That is exactly what Labour has been doing and talking about, as is on the record in this House, for the past two years. The Government are not listening to consumers or to those who want to get access to the market because they are standing up for the big six.

[Mr Davey]

rose—

[Caroline Flint]

I will give way to the Secretary of State again, although he will obviously have a right of reply.

[Mr Davey]

The right hon. Lady is telling us about these policies that she has. In forming them, did she read Ofgem’s final proposals on wholesale power market liquidity, which were published in June?

[Caroline Flint]

We have looked at, and debated in this House, the way in which Ofgem has been working in the past few years. We looked at the way in which it was working under the Labour Government when it did not use the powers we gave it. It is not fit for purpose and it needs a massive change. The sadness about Ofgem is that when it has produced reports on, for example, whether bills are going up when wholesale prices are not, it has done very little about the situation.

[Several hon. Members]

rose—

[Caroline Flint]

I will take one more intervention and then make some progress.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

I thank my right hon. Friend for kindly giving way; she is being very generous with her time. I imagine that she, like me, has gone to visit energy companies and has seen for herself that one, not far away from this building, has its generation department physically next door to all its displays and where it buys energy. Does she believe that that is the issue we now need to address, as stated in the motion?

[Caroline Flint]

My hon. Friend is right; she is talking about the trading floor in Victoria. It is interesting how closely the different parts of these organisations work together. In fact, some companies have welcomed the move to separate the generation and supply side, but we are not interested in a piecemeal approach with six different versions of what it should involve. That is why we need law that is consistent, transparent, and does the job.

At the moment, poor liquidity is recognised as the single biggest obstacle to improving competition in the energy market. If all electricity had to be traded via an open exchange, or a pool, that would create a level playing field that would enable any market participant to compete on price in order to retail power to the public. This would be different from the previous pool in two important respects. First, under the previous pool there were only two generators, who were therefore able to exert considerable influence on the market price and, indeed, to ratchet it up over time. Today, there are many more generators. Secondly, when the old pool was originally established in 1990, only generators were able to place bids, which again gave them excessive market power. Today, there is no reason why a two-way pool, with generators and suppliers both placing bids, could not be introduced. Indeed, if the Government look around the world, at the Nord pool in Scandinavia or the power exchanges in the United States, they will see plenty of examples of markets with more exchange-based trading of this kind that are more liquid, more transparent, and encourage greater competition.

Of course, we should do this in the most cost-effective way. Given the volumes that are already being traded on the day-ahead exchange, we would be open to creating a pool by requiring all generators and suppliers to trade 100% of their output on the N2EX exchange. If the Secretary of State does not agree, will he explain why he thinks that allowing these firms to do most of their trading in secret, behind closed doors, serves the public interest?

[Mr Mike Weir (Angus) (SNP)]

I am listening very closely to the right hon. Lady, and I even agree with some of it, but I am genuinely confused about the idea of a pool and how it fits in with the Energy Bill’s contracts for difference, which guarantees a strike price for generators. I fail to see how putting all the energy into a pool will create competition, as the price has already been set, and if it goes above that, the company will have to pay back the difference, while if it goes below it, the taxpayer will have to pay.

[Caroline Flint]

That might be the price for the generator but it is not the retail price, and that is what is important in terms of competition and keeping pressure on. I am surprised that Scottish National party Members decided not to support the price freeze. They are on the side of the Prime Minister and the big six while my colleague Johann Lamont—Scotland’s Labour leader—and Scotland’s millions of energy consumers support the price freeze.

[Mr Khalid Mahmood (Birmingham, Perry Barr) (Lab)]

Does my right hon. Friend agree that while Government Members bicker about the structure of the energy companies, my elderly and infirm constituents will be perhaps be dying this winter because of the energy price hikes under that lot over there?

[Caroline Flint]

What is happening to people now is very concerning. All the consumer organisations and those from the fuel poverty lobby are extremely worried about the choices that people are making between heating and eating. The idea of putting on another jumper is an insult to those people, many of whom are older and more vulnerable residents who are not online and are in the group that does not switch. Switching is not going to happen as a result of entreaties from the Government, and we need more action on that.

[Several hon. Members]

rose—

[Caroline Flint]

I will make some progress, because I want to get on to one of our other policies that could have an effect this winter.

A competitive, transparent energy market is our aim, but markets must have rules. The question is what those rules allow and what they encourage. Do they mend broken markets or do they allow some firms to take advantage at the expense of everybody else? The motion proposes two important changes to the rules.

First, we all think that there should be simpler and fewer tariffs, but we must also ensure that the market protects those who are less able to switch. The over-75s are the most likely to live in homes with poor energy efficiency and the most vulnerable to cold weather, but they are the least likely to switch supplier and the least able to access the cheapest deals, which are often online. As a result, they often pay more than they need to. The motion proposes that we make the energy companies put all over-75s on the cheapest tariff. The energy companies have told me that they can do that.

Secondly, the constant attacks on clean energy are short-sighted because investing in clean, home-grown energy and energy efficiency will improve our energy security, make us less reliant on imports and leave us less vulnerable to price shocks in world markets.

[Duncan Hames]

Will the right hon. Lady give way?

[Caroline Flint]

No, I will not give way.

We currently have the problem that when wholesale costs increase, bills go up like a rocket, but when wholesale costs fall, bills fall like a feather, if at all. In a properly competitive market, cost reductions would be passed on as quickly and as fully as cost increases. I urge the House to support the proposal in the motion to establish a new regulator with the power to force companies to cut prices when wholesale costs fall. I know that the president of the Liberal Democrats supports that proposal, because he said so to the audience and viewers of “Question Time” when I sat next to him on the panel a few weeks ago. I hope that the Secretary of State will confirm his party’s support for the proposal in his speech.

That is what real action looks like. That is what a Government who put the interests of ordinary people ahead of the energy companies would look like. What a contrast it is with this Government: a Government who pretend to put everyone on the cheapest tariff, even though 90% of people will see no benefit, but who refuse to put all over-75s on the lowest deal; a Government whose only answer is to tell people to shop around, even though switching levels have fallen to an all-time low, as people have lost faith with the market; and a Government who want to roll back the very measures that will insure us against rising prices in the future because they are too weak to stand up to the energy companies today.

Let us remember that 60% of the levies that the Government are rushing to blame were introduced by them. It was the Chancellor of the Exchequer who introduced the carbon floor price, which leaves British consumers and industry paying over and above what is paid by our European neighbours for energy. They talk about value for money, but it is they who designed the energy company obligation—a scheme that requires 53 pieces of information to be submitted for one measure to be installed. When they talk about moving policy costs from people’s bills to people’s taxes, let us remember that it was this Government who abolished Warm Front and now have the unenviable record of being the first Administration since the 1970s not to have a publicly funded energy efficiency scheme.

Today’s motion might refer only to energy prices, but it is about much more than that. It is about who our country is run for. Is it a country that works for hard-working people or are we settling for a country where only a few at the top do well and everyone else struggles? The Opposition know that the first and last test of economic policy is whether living standards are rising for ordinary people. Today, the House faces a choice: a choice between whether it is people’s bills that will be frozen this winter or their homes; a choice between whether we reform broken markets or defend them; a choice between whether we stand up for the 60 million people who live in this country or the big six energy companies, for the 2.4 million businesses or the big six energy companies. The reality is that if we do not fix this broken market, nobody else is going to. Today, in this House, we have it within our power to provide real help now to millions of people who are facing the cost of living crisis and to reform the energy market to deliver fairer prices in the future. I commend the motion to the House.

[Mr Speaker]

Before I call the Secretary of State to reply for the Government, I remind the House that in consequence of the large number of Members who wish to speak, I have imposed an eight-minute limit on Back-Bench contributions.

14:24

[The Secretary of State for Energy and Climate Change (Mr Edward Davey)]

I have notified you, Mr Speaker, and the right hon. Member for Don Valley (Caroline Flint) that I will not be here for the final part of the debate. I apologise for that. The Minister of State, Department of Energy and Climate Change, my right hon. Friend the Member for Bexhill and Battle (Gregory Barker), will be summing up.

I want to make it clear at the start of my speech that the Government worry about rising electricity and gas bills all the time. As part of our economic strategy, we are working to bring down prices, get people into jobs and get the economy going. I will touch on that general point shortly.

I welcome this debate and hope that there will be many more debates like it, because we want to debate which party and which side of the House has the best policies to help people and to improve Britain’s energy market.

I regret the fact that we have lost the consensus on energy and climate change policy that we had until very recently, because consensus is vital. We need tens of billions of pounds of investment in new energy generation and networks. If we are to persuade investors, not just in the UK but around the world, to invest in the UK, they need to see that there is consensus on these issues. I hope that we will get back to that. I thought that we had got back to it when there were just eight votes against the Third Reading of the Energy Bill. All the major parties, including the nationalist parties, voted in favour of the Bill. All the Labour Front Benchers voted in favour of the Bill. I welcomed that at the time. I just wish that the consensus had not broken down so quickly.

[Caroline Flint]

Will the Secretary of State acknowledge that in supporting the Energy Bill, we made it quite clear that it did not contain measures to tackle the problems in the broken market or the concerns of consumers? We made it clear that we reserved the right to continue to campaign for the measures that we have outlined today, which would fix the market and put consumers at the top of our concerns.

[Mr Davey]

We rejected the right hon. Lady’s arguments at that time and we reject them again today, as I shall set out. However, I am serious when I say that it is critical that we show investors around the world that there is consensus on these issues. I will try to rebuild that consensus in this debate and time and again afterwards, because I believe that that is in the national interest.

[Charles Hendry]

I completely agree with my right hon. Friend on the need for consensus. Does he agree that one of the outcomes of the consensus that there had been until recently was very low political risk when investing in the energy infrastructure of this country? As a direct result of what the Labour party has done, there is now political risk in this country, which pushes up the cost of borrowing and pushes up bills.

[Mr Davey]

My hon. Friend is right. What the Labour party has done has increased the cost of capital. Who loses as a result? The consumer. By recklessly proposing this irresponsible policy, the Labour party has shown that it is against the consumer.

[David Mowat (Warrington South) (Con)]

The Secretary of State has made a valid point about the consensus on the Energy Bill. Is he aware that the Labour party amended the Energy Bill yesterday in a way that will ensure that coal stations are switched off more quickly, at an estimated average cost per consumer of £50? The Labour party then comes to this House and proposes this motion. What does he think about that?

[Mr Davey]

We are listening to their lordships House. I have to tell my hon. Friend that the argument is a little more complicated than what he has set out.

Consensus is critical, not just across the House, but within the coalition parties. I accept that there have been debates within the coalition, but we have come together and produced a coherent energy policy. I will aim to rebuild the consensus with the right hon. Member for Don Valley because, as I think she knows, that is in the national interest.

[Ian Murray (Edinburgh South) (Lab)]

I am grateful to the right hon. Gentleman for giving way so early in his contribution. He talks about sending a message of consensus from this House to investors in the energy market in this country, but today he has the opportunity to send a message of consensus from this House to people who are struggling to heat their homes this winter. Will he take that opportunity?

[Mr Davey]

I certainly will because I believe we have the best policies. There are two routes to rebuilding that crucial consensus. The first, which I would love to take, is to invite the right hon. Lady and the leader of the Labour party to discuss the issues with me so that we can try to reach out to Labour Members, explain why we think their policies are extremely damaging, and try to get the energy policy back on to that important political consensus. I fear, however, that that will not be possible. The noises we have heard from the Leader of the Opposition and the right hon. Lady suggest that they do not see the error of their ways, despite many people explaining it to them.

[Caroline Lucas]

rose—

[Mr Davey]

I will give way to the hon. Lady but I then must make some progress.

[Caroline Lucas]

Will the Secretary of State accept that the green deal is not working, that zero-carbon homes are off the agenda and renewable energy is under attack, and that a late amendment to the Energy Bill in the other place shows that the Government are trying to scrap their legal duty to end fuel poverty altogether? Is he really surprised that the public do not believe his Government’s crocodile tears over rising energy bills when the Government’s own policies are making that worse?

[Mr Davey]

I completely reject everything the hon. Lady said. First, £31 billion has been invested in clean energy since 2010, and according to Ernst and Young we are now the fourth best place to invest in renewable energy—that is up, despite what the right hon. Member for Don Valley often says. More than 85,000 assessments have been made under the green deal, and more than 81% of those who have had green deal assessments have either had work done, are getting it done, or are considering having it done. That is much more of a success. The hon. Member for Brighton, Pavilion (Caroline Lucas) does her case no good by talking down the green deal.

[Several hon. Members]

rose—

[Mr Davey]

I will not give way as I want to make some progress. I have made it clear that I would like the Opposition to come and talk to us so that we can rebuild that national consensus, but I fear that that is not going to happen. Instead, we will have to expose Labour’s so-called policies for the fraud they are. I am going to do that in full today and, I hope, in future debates. I hope that when Labour Members hear the arguments against the policies of those on their Front Bench, they will reflect and realise how irresponsible and ineffective those policies are.

[Several hon. Members]

rose—

[Mr Davey]

I want to make some progress. I also want to talk about the context for this debate, which is the cost of living. When considering the cost of living, one tends to think about inflation and how the general price basket is affecting people, particularly the poorest in our land. We should be focused on getting inflation down robustly.

When we came to government, inflation was 3.4% and rising. We had to bring it down, and latest figures show that this month inflation is lower at 2.7%, and forecast to stay low. That is an achievement. In the context of the cost of living we have seen employment and growth go up, and unemployment, the deficit and inflation go down. That economic record will help people up and down the country because we are seeing the benefits of that. To give an example to the Labour party, in the past year alone, disposable incomes have grown.

[Luciana Berger]

Will the right hon. Gentleman give way?

[Mr Davey]

I will not give way. Disposal incomes are now higher than in any year from 1997 to 2010. That is because of our income tax cuts for people on low and middle incomes, because we have taken action on fuel duty and frozen council tax—[Interruption.]

[Madam Deputy Speaker (Dawn Primarolo)]

Order. The Secretary of State has indicated that he is not going to give way, which means that Members should not shout across the Chamber. It is becoming impossible to hear what the Secretary of State is saying.

[Mr Davey]

I was making the case that we have taken action to help people with the cost of living. Look at what has happened to gas and electricity prices. Under Labour gas bills doubled. In the previous Parliament, the average annual rise in gas prices was 12% per annum; in this Parliament it has been 10% per annum—far too high, but less than under the Labour Government. We could say the same about electricity prices. In the previous Parliament the average annual rise in electricity prices was 8% per annum; it is now 7% per annum—too high, but a better record than under Labour. According to recent Office for National Statistics figures for household spending on electricity and gas bills there was a 9% per annum rise in the previous Parliament; that is down to 6% in this Parliament. We want to do better, but we will not follow the record of the Labour party, which was dismal on prices and bills.

[Steve Baker (Wycombe) (Con)]

Has the Secretary of State made an assessment of how much of the recent price rises are the result of the Labour party announcing its policies and causing people to look forward?

[Mr Davey]

I have not made that analysis, but I know that others have and are concerned that Labour’s policy will put up energy prices in many different ways.

I promised to analyse Labour’s policy and contrast it with the Government’s, and I will do that now. Let us start with Labour’s price freeze. The right hon. Member for Don Valley tried to say that the Government have put myths about. She tried to debunk those myths, but failed completely. We have made it clear that we believe that Labour’s policy is a complete con because prices could go up after the price freeze. The right hon. Lady’s answer to that is the amazing piece of legislation she is going to introduce, which will stop that. It will not, however, because the proposed legislation she described has no price regulation in it. If she is going to say that she will introduce full-scale price regulation, let her get to her feet now. If she is not, she simply cannot say that prices will not go up after her price freeze.

[Harriett Baldwin (West Worcestershire) (Con)]

On that point, did not the Leader of the Opposition admit the day after the announcement of his policy that he could not guarantee that prices could be frozen if world energy prices rise?

[Mr Davey]

That is absolutely spot on. When he responded to that point, my right hon. Friend the Prime Minister made it clear that the Leader of the Opposition had sold the pass on their policy. If wholesale prices go up during the price freeze, they will not just hit consumers—we are worried that consumers will be fleeced by Labour’s policy—but they will also hit the competition and the small suppliers who are producing deals that people are already benefiting from.

[Caroline Flint]

Does the Secretary of State believe that the big six companies are overcharging their customers?

[Mr Davey]

I believe that competition is the way to sort that out, and I thought the right hon. Lady was saying that in her speech. I thought the point of her speech was to say that the markets are not working, and that in order to tackle overcharging she wants the markets to work. Is she saying that that is not her position and that she will bring in profit caps and stop companies overcharging, or is it competition? Competition or regulation—let the right hon. Lady come to the Dispatch Box and tell us. She cannot.

[Duncan Hames]

Will my right hon. Friend give way?

[Mr Davey]

I will make some progress and then I will let my hon. Friend in.

Labour’s price freeze is a con. It damages competition and, as we have heard, it damages investment. That contrasts with what the Government are offering, which is direct help to the poorest in society, radical energy efficiency programmes, and a focus on competition that the Labour party never had. That direct help, the warm home discount—£135 off the bills of 2 million of the poorest people—was never offered by the Labour party. We are taking forward the winter fuel payment and we have tripled the cold weather payment. That is direct help to the poorest people, and we are proud of that.

[Rehman Chishti (Gillingham and Rainham) (Con)]

Will the Secretary of State give way?

[Mr Davey]

I will make some progress and then I will give way.

On energy efficiency, the energy company obligation—which the hon. Member for Brighton, Pavilion said is not working—has already helped 216,000 households this year alone, and we expect many more people to benefit from that by the end of the year. I have explained how well the green deal is going with 85,000 assessments already made.

When the Government talk about switching, the Labour party pooh-pooh it, saying, “That’s not the way to do it. Switching isn’t so important.” However, let us look at the facts on switching. uSwitch shows that, between 1 November 2012 and 31 April 2013, people who switched any supplier for both gas and electricity saved an average of £294, which is far more than they would save from the energy freeze offered by Labour.

[Nigel Adams (Selby and Ainsty) (Con)]

Does the Secretary of State agree with my constituent, Nick Jones, who wrote to me on Friday—I have never met or spoken to him—about the Prime Minister’s advice on switching? He saved £611 a year on his gas and electricity costs. He was prompted to look at his phone costs and saved a further £230. He said:

“I can only say a big thank you to the Prime Minister for his advice and giving me the confidence to take this step and make a saving of £841 per year to my family’s budget.”

Is not switching a better approach than trying to fix the market, which is the mad-cap scheme proposed by the Opposition?

[Mr Davey]

My hon. Friend is absolutely spot on. As the uSwitch figures show, there are big savings to be made. Interestingly, the right hon. Member for Don Valley says that switching is not enough and talks down switching and the opportunity of millions of people in our country to make big savings. She should be ashamed.

We are pushing switching very, very hard. The evidence is that switching is growing fast, as described by my hon. Friend the Member for Selby and Ainsty (Nigel Adams). Let me give the House one further piece of evidence. First Utility has increased its customer numbers by 57% from the beginning of October. People are switching in larger numbers. They are moving away from Labour’s big six to the coalition’s competition.

[Caroline Flint]

The amounts that people have saved in the Secretary of State’s examples suggest that they were being overcharged in the first place. Does he agree that getting the best tariff and encouraging switching does not mean that people will get a good deal? The market is rigged.

[Mr Davey]

I am coming to the rigged market, but the market was rigged by the Labour Government. It is Labour’s big six and Labour’s market. We are changing and reforming it while Labour does nothing.

One thing that worries me about switching is that we need to ensure that it operates for the poorest in our country. The right hon. Lady and another hon. Member made the point that, sometimes, the fuel poor and many elderly people do not get the benefits of the market and are not helped by competition switching—the figures bear that out. We cannot just rely on switching; we need to ensure that it works for those people. That is why the Government have put so much money behind the Cheaper Energy Together scheme and collective switching, and why we are putting money behind the big energy saving network. We want to ensure that Age UK and the Citizens Advice Bureau go out into communities to offer advice to those people. That is how to ensure that the poorest in the land can get the best deals in our land.

[Mr Khalid Mahmood]

Is the Secretary of State aware that the poorest people cannot switch if they are in debt to the company they are with?

[Mr Davey]

Yes, I am aware of that. That is why we have raised the amount. Under Labour, it was about £100 or £150. With Ofgem, we have raised it to £500 to enable people to switch. I am afraid the hon. Gentleman is behind the times.

[Duncan Hames]

For those of us who want more competition, is not the problem that the price freeze and the forward purchase of energy, which the right hon. Member for Don Valley (Caroline Flint) has described, is much more difficult for the smaller suppliers than for the bigger ones? The price freeze will do nothing to support a competitive market when it comes to an end.

[Mr Davey]

My hon. Friend is absolutely right. We have seen a big growth in independent suppliers and competition, which did not happen under Labour. Labour Members now want to kill it. Having created the big six, they want to help them. We will not allow that to happen.

[Several hon. Members]

rose—

[Mr Davey]

I will give way to my hon. Friend the Member for Ipswich (Ben Gummer) and then make progress. I apologise to other colleagues.

[Ben Gummer (Ipswich) (Con)]

The Opposition missed something else in the debate. In my constituency, more than 400 jobs—[Interruption.] Will the right hon. Member for Don Valley (Caroline Flint) listen to my point? [Hon. Members: “Ooh!”] I find it surprising that we have to listen to childish noises from Opposition Members when we are debating such an important matter. More than 400 people in my constituency have jobs in independent energy companies that are challenging the big six. One of them challenges on business services, and the other provides to consumers. Those 400 jobs will go the minute the market is controlled by the Labour party. Do Labour Members not care about those jobs?

[Mr Davey]

My hon. Friend makes an excellent point. Our policies will work. We know that because they are working. We are getting the supplies and switching.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

rose—

[Toby Perkins]

rose—

[Mr Davey]

I am going to make some progress. I have given way a lot and will not give way for a while yet.

On Labour’s pool and ring-fencing proposals, the Government contrast the policies of the right hon. Lady with our policies for greater transparency in the financial accounts of the big six and for Ofgem’s wholesale market reform “Secure and Promote”. Interestingly, when I asked her whether she had read that document, she said that she had not—[Interruption.] To be fair, let me correct the record: she did not answer the question. If she has read it, she can come to the Dispatch Box and tell us. She is not coming to the Dispatch Box, so we know that she has not read the document. Let me help the right hon. Lady. It would have been beneficial for the Opposition to have read the documents. They claim that Ofgem is appalling and is not doing any work on competition, but the document shows that it has done so.

Interestingly, the reason for the work is given at the beginning of the document. Ofgem produced the document because it wants to make more competitive markets to help the consumer. The right hon. Lady has not read the document. That is not very good. It is clear from her policies that she has not done so.

[Rehman Chishti]

Will the Secretary of State give way?

[Mr Davey]

No, I am not giving way.

The right hon. Lady talked about the pool and the exchange on which the electricity will be traded, but she has not noticed that the day-ahead market in Great Britain has boomed under this Government. In 2011, just 5% of final Great Britain demand for power was traded on the day-ahead exchange. In the past six months, more than 50% was traded. We have seen a big increase, but she did not even bother to mention it.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

Will the Secretary of State give way?

[Mr Davey]

No, I am not giving way.

Ofgem has looked at whether or not it should mandate 100%. It will ensure that there are new reporting requirements so it can check what is happening. It will say that, if the number does not improve and stays as it is, it will intervene. It is not intervening now—the right hon. Lady will not know this because she has not read the document—because the independent generators have not asked for it to do so. The independent generators say that the day-ahead market is not the problem for competition and that the day-ahead market is not the market in which there is room to drive down prices. They say that the problem is the forward markets—the month-ahead, six months-ahead, year-ahead and the two years-ahead markets.

[Andrew Gwynne]

Will the Secretary of State give way?

[Mr Davey]

No, I will not give way. I want to explain to the House why the document is so important, and why Ofgem’s policies, which the Government support—we have put reserve powers in the Energy Bill to push them through—are so important for competition and pushing prices down for consumers.

Independent generators need to know who will buy their electricity. The right hon. Lady is right that the big six can sell it to themselves, but independent generators cannot do so—they must sell it to someone else. That is a big risk for the independent generators, and they need to be able to cover it. Primarily, they do so at the moment through purchase power agreements or through bilateral trades, which are used mainly when selling to businesses. However, they say that they cannot guarantee those, so they must spend more, and that their capital costs increase because of those risks.

Independent generators face another risk. The question is not only whether they can sell energy, but whether they can buy it. If they have a contractual power purchase agreement and their generation capacity is not working for a particular month and they are unable to supply, they fail their contract. To be able to enter more contracts and expand their businesses, they therefore need to know that they can buy energy in the wholesale markets if their generating capacity is not working.

It is therefore essential that we have a liquid market for four months, six months and 24 months ahead. Guess what? The previous Government did nothing to enable that competition in generating markets. Interestingly, the policies the Opposition have proposed today will also do nothing about the real problem. The description that the right hon. Lady gave of her policies proves that point. If she had read the document, she would have seen on page 8 the analysis by Ofgem—working on all the contributions from the independent suppliers and all the people in the industry—is that the problem she has identified is no longer a problem. It has marked that problem “green”. The problems that we have identified, which we and Ofgem are fixing, are all marked “red”. She really needs to do her homework. There is no point the official Opposition coming to this House with ill-thought-through policies that will not work. Our policies will work for the consumer, push competition into the market and get prices down.

[Neil Carmichael]

Does my right hon. Friend agree that it is slightly surprising that the Opposition know so little about the big six, when one of their number—a shadow Minister in the other place—was actually director of government affairs for SSE? How does that stack up?

[Mr Davey]

It is true that the Labour party created the big six: it is Labour’s big six.

[Andrew Gwynne]

In the Secretary of State’s wibbly-wobbly world, it sounds as though everything in the energy market is working perfectly well. Does he therefore agree with the chief executive of Centrica that a daily profit of £7.4 million is a modest return?

[Mr Davey]

Let me put it on the record that it is important that our energy companies make profits. I think we need reasonable profits for people to invest. I also know why it is important that companies make profits: the right hon. Lady agreed with me when I asked her, last time we debated this. I asked her whether energy companies should make profits and she agreed.

[Several hon. Members]

rose—

[Mr Davey]

Let me finish answering the hon. Member for Denton and Reddish (Andrew Gwynne). I am not satisfied with the energy markets that we inherited from the last Government. We want to make sure that competition is working. That is why we have already had the retail market review with Ofgem, which is now improving competition in the retail markets. It is why we have Ofgem’s latest proposals in “Secure and Promote”, which the Opposition have not read, to improve competition in the wholesale market. I am not satisfied with the markets at the moment, but our policies—with Ofgem’s help—are coming into place now.

We have had to run to make sure we turn round the markets we inherited, but I can tell the hon. Gentleman how quickly our policies are now coming in. The retail market review comes into effect, in terms of people’s bills, next month. Ofgem is still consulting with the industry, but expects to give a final response to its consultation this year. Then its proposals for a market maker, which will ensure transparency so there are none of the secret deals that the right hon. Lady keeps on about, will start happening in the first half of next year. We are producing the competition proposals and they are coming into force. People have not seen the benefits of them yet—I accept that—because we have been trying to turn round the rigged market that we inherited. We are now turning it round and people will begin to see the benefits over the years ahead.

[Dr Whitehead]

The Secretary of State has been waving a document around. Can he turn to the page in that document that discusses netting off between companies in the long-term market? Can he turn to the page in that document that discusses the question of creating trades at time of closure by companies? If he cannot do so, will he accept that the document is not quite the panacea for all the transparency issues that he thinks it is? Will he go away and review the things that the document does not say as well as what it does say about the transparency of the market?

[Chris Ruane (Vale of Clwyd) (Lab)]

He knows his stuff!

[Mr Davey]

I agree that the hon. Member for Southampton, Test (Dr Whitehead) does know his stuff, unlike many of his colleagues.

[Chris Ruane]

Answer the question!

[Mr Davey]

I am going to answer the question. When the hon. Member for Southampton, Test reads this paper, he will know that it is in a series of papers and other papers deal with those issues. The relevant paragraph—it does not deal with netting off, but it deals with the impact of netting off—is on page 7. The right hon. Member for Don Valley should like this, because we have some agreement on the need to make sure there is competition in the wholesale markets. It states:

“It could also encourage business models that reduce the need to trade in the wholesale market, such as vertical integration and long-term contracts. Poor liquidity therefore inhibits competition between incumbent players in the market.”

In other words, we need these proposals so that there is more competition in the forward markets so that new entrants can come in and the prices that the incumbents charge are more transparent—something that the right hon. Lady says that she wants to see.

[Toby Perkins]

I have heard the Secretary of State in this mood before. The last time was when he was defending the pub companies. A few months after he left that job, his party agreed that we were right and that he had been wrong all along. He is a tremendous defender of the vested interest. Can he tell me why any of the thousands of people in Chesterfield who happily signed our petition because they are so concerned about the cost of fuel should have any confidence, listening to him, that because he is doing this job things will be any different in the future? People are struggling, and he just does not have the answers.

[Mr Davey]

The hon. Gentleman cannot have been listening to the debate. It is clear that it is the Government who are standing up to vested interests, because we are bringing in competition against Labour’s big six. The problem for the Opposition is that they created the big six: we are the ones putting pressure on the big six.

[Rehman Chishti]

The Secretary of State will have heard the shadow Secretary of State say earlier that Ofgem is not fit for purpose. But when the Leader of the Opposition was Secretary of State for Energy and Climate Change, he said that Ofgem was fit for purpose. Does that not clearly show that the Opposition have no consistency, no vision and no strategy on these matters?

[Mr Davey]

My hon. Friend has been incredibly helpful because he anticipates what I am about to say about the third part of Labour’s policy package. It would abolish Ofgem, which it created and which the Leader of the Opposition reformed. It will replace it with Ofgem 2—a tough, new regulator. It is such a charade we could hardly make it up. We have been reforming Ofgem. We have given it powers that the right hon. Lady’s party failed to do in government. For example, if an energy company is found to have maltreated a customer the fines will go to the customer, not to the Chancellor of the Exchequer. That is one example of the new powers.

We have a new regime in the Energy Bill, with a strategy, policy and statement to make sure that Ofgem is doing the job that this House and the Government want, and we have now got new leadership at Ofgem. I look at the record—we are now tackling competition issues in the retail market and the wholesale market. It is true that under the last Government Ofgem was not as powerful or active as it should have been: we have reformed that.

We have gone further than that by now proposing to consult on criminal sanctions for manipulation of the energy markets. We are increasing the robustness of the regime by having an annual competition test. We have shown that we are not complacent. Although we have taken major measures to improve competition in the markets that we inherited, we want to go further year after year, because we believe in competition even though the Opposition do not.

[Caroline Flint]

The Secretary of State suggests that the Government have given powers to Ofgem to ensure that any redress goes to customers, but can he explain why recently, when Scottish Power were found guilty of mistreating their customers, of the £8.5 million fine only £1 million was to be shared among the 335,000 customers who were estimated to be victims of the company’s bad practices, while the rest was to be put towards the warm home discount? That does not sound to me like it is going to the customers who were victims of the company’s bad practices.

[Mr Davey]

I am surprised by that point, because the powers are in the Energy Bill and will take effect when it gets Royal Assent.

We need a big debate on energy and climate change, and I hope that we keep having the debate not just today, and not just in the House, but over the next year and across the country. There are difficult issues in the debate, such as the trilemma of making sure that we decarbonise, keep the lights on and do so in an affordable way. It is not only this country that has to face those challenges: they are being faced across the world and especially in other European countries that face the same rises in gas prices that we are struggling with.

The solutions are not easy. They are often complicated. I have been grateful for the right hon. Lady’s support during the passage of the Energy Bill—it may be qualified support, but it was support—but on this issue we obviously have a different set of policies. We agree that there are problems—not enough competition and people are struggling with bills—and we have to produce a solution for them. What we have heard from the official Opposition is irresponsible, ill-thought-through populist nonsense that will not assist a proper debate. Any analysis of the policies that are being served up soon reveals major flaws. I invite my right hon. and hon. Friends to reject the motion, and I invite the Opposition to think again and to act, for once, in the national interest.

15:00

[Anas Sarwar (Glasgow Central) (Lab)]

The Secretary of State spoke for just over 35 minutes. Nothing he said will have given any comfort to my constituents, or to anyone suffering as a result of the energy crisis. Perhaps he should reflect on what he has said and come back with something that will mean a lot more to people struggling with their household bills at this difficult time.

[Toby Perkins]

My hon. Friend will be aware that thousands of people in Chesterfield have signed a petition in favour of the policy we are debating today. After today, rather than send them a long letter, I will send them the Secretary of State’s speech, so they can see exactly what the Liberal Democrats think of the struggles they are facing.

[Anas Sarwar]

Absolutely, although I imagine my hon. Friend’s constituents would fall asleep after five minutes rather than read the speech in its entirety.

As winter bites and the nights become colder, many of our constituents are again worrying about the cost of heating their home. Wholesale energy costs have increased by only 1.7% this year, but the average bills that Glaswegian families have had to pay have rocketed by more than 10%. According to Fuel Poverty Evidence Review, more than 800,000 Scottish households—almost 35% of Scots—are fuel-poor, and spend 10% or more of their household income on energy.

What my constituents know, what I know and what the entire country knows, with the apparent exception of both the Prime Minister and the First Minister of Scotland, is that the British energy market is broken. It is dominated by only six companies, which collectively supply 99% of British households and generate more than two thirds of the country’s electricity.

[Mr MacNeil]

According to figures from the House of Commons Library, last year UK electricity prices increased by 5.7% on average, while the EU average was a fall of 3.5%. In fact, the UK had the highest increase of all the G7 and EU countries, bar Japan. Last year, the UK had the third highest prices in this area. Eight years ago it was little better—the fifth highest in the EU. Why does the hon. Gentleman think that the UK consistently pays the highest energy prices in the developed world?

[Anas Sarwar]

The hon. Gentleman highlights the need to fix a broken market across the UK. The bizarre thing is that he wants to leave the UK, but stay in the UK energy market. That is against the interests of the people of Scotland. I will come on to the wider policy of the Scottish nationalists in a moment.

Given that we have had price hikes of more than £300 since the last election, and at the same time more than £7 billion of profits have gone to the shareholders of the big energy companies, does that not highlight the case for breaking the monopoly of the big six companies?

[Duncan Hames]

Will the hon. Gentleman give way?

[Anas Sarwar]

I am sorry, but I have given way twice already.

Last week, we saw the big six sit before the Select Committee on Energy and Climate Change and claim that prices in the past few years have been driven by wholesale costs, when it has already been demonstrated that that is not the case. That was confirmed by some of the smaller companies, one of which told the Committee:

“I can’t explain any of these price rises… I have been somewhat confused by looking at the explanations for the price rises that we’ve seen in the past three or four weeks.”

There have been billions of pounds’ worth of profit while pensioners in my constituency face the impossible choice of heating or eating this winter. What could be more indicative of a broken market than one that leaves our most vulnerable citizens unprotected at a time of greatest need, solely in the name of higher profits?

The problem is not simply the behaviour of the energy giants. My constituents are literally paying the price of being trapped between an uncaring, out-of-touch Tory-Government pursuing cuts and profit at any cost, and a distracted Scottish Government desperately trying to frame any and every problem as a reason for independence—two Governments more interested in electoral dividing lines and narrow ideology than in improving the lives of the Scottish people. They are choosing to stand up for the vested interests of the big six energy companies and boost their profits while Scottish families struggle to pay their bills. It is indeed a sad day when Governments become a cheerleader for the energy companies, instead of putting struggling people first.

Scots are now faced with a crippling combination of rising living costs and frozen wages that have created a cost of living crisis that both Governments are failing to address. Disappointingly, however, Alex Salmond wishes only to talk about the powers he wants rather than getting on and using the powers he has to make a difference. There is now an interesting coalition in the context of the constitutional debate in Scotland. We have a coalition of the Scottish National party, the Tories, the Liberal Democrats and the big six energy companies all standing up for their own interests, not the interests of the people of Scotland. The Prime Minister’s policy was not announced first by him: the first person to announce the Prime Minister’s policy on energy prices was the Deputy First Minister of Scotland, Nicola Sturgeon, at the SNP conference. She said that the SNP wanted to take the cost off the energy bill and instead put it on the tax bill, meaning that people who are working hard will continue to have to pay the price while big energy companies will get away scot-free. Those are the wrong priorities, and they are damaging.

What else have we heard from the nationalists? They want not just to let energy companies off meeting their responsibilities for renewables, but give them a massive tax cut. They want to cut corporation tax, which will mean that after independence they will have more, not less, profits. What is even more confusing is that they say—we have heard it already from the hon. Member for Na h-Eileanan an Iar (Mr MacNeil)—that the UK energy market is broken and that is why we need independence. Their policy, however, is to say, “Let’s break away from the United Kingdom, but let’s share the UK energy market.” That is not in the best interests of Scotland. Scotland makes up 8% of the UK population, yet one third of spending on renewables is spent in Scotland, so the whole of the UK is contributing, through their energy bills, to supporting the renewables industry. Do we honestly think that one third of renewables spending will continue to be spent in Scotland after independence? I do not think so. Independence would break the historic pooling of resources across the UK for the benefit of all.

[Mr MacNeil]

Is the hon. Gentleman aware of the purchase of renewable energy in the Republic of Ireland?

[Anas Sarwar]

Absolutely. We have not heard about Ireland for a long time. I am happy to consider the example of Ireland to show why we are better off in the UK. Corporation tax in Ireland is half the UK rate, but unemployment is double that in the UK. That shows us how working in partnership with our friends and neighbours in England, Wales and Northern Ireland benefits bill payers not just in Scotland, but across the UK.

I want to highlight a positive example in my constituency and my city of what a caring administration can do to help people who are struggling at this difficult time. The Labour-led council in Glasgow, which, despite facing more than £150 million in budget cuts from the Scottish Government, has again stepped up to protect Glasgow pensioners over the age of 80 by offering a £100 winter fuel payment to those struggling to meet the costs of energy this winter. That is a Labour council using its powers to protect the most vulnerable in our communities. It is not making excuses about why it cannot or will not act, and it is not looking to pass the buck or put the blame on to someone else. It is not pointing fingers, or using other people’s misery as a basis to promote a political agenda or independence. Instead, it is providing a lifeline to thousands and responding to the cost of living crisis affecting our constituents. I am proud that on the Labour Benches we are standing up for British consumers.

Under a Labour Government, we will not just break up the big six energy companies’ monopoly, but ensure fairness in the system and cut bills. For the people in my constituency, 38,549 households will have their bills cut if a Labour Government are returned at the next general election. We will save a typical household £120 and an average business £1,800, at a time when household budgets are being squeezed. Labour will not stand by but take action, as Glasgow city council has done, to help hard-pressed Scottish and UK families. We will put people first, while others continue to put their ideologies and political obsessions before the interests of the people of Scotland and the UK. We will tackle the cost of living crisis that is denied by the UK Government and the Scottish Government, despite official figures from the House of Commons Library that confirm that working people are £1,500 a year worse off under those Governments. Prices have risen faster than wages in 39 of the past 40 months, on both the First Minister’s and the Prime Minister’s watch; and chief executives have enjoyed pay increases averaging 7%, while public sector workers have had to endure real-terms pay cuts and worsening conditions. Tackling energy prices is crucial to easing the burdens on family incomes, which are symptomatic of a problem that these Governments are simply unable or unwilling to address.

As my right hon. Friend the Leader of the Opposition said yesterday, the Government have nothing to say about our plans for the living wage, the falling value of the minimum wage or zero-hours contracts. They are silent because they believe in a race to the bottom and they know these things create the low-wage, high-profit economy that they seek and fundamentally believe in. It is an economy where profits of £7 billion and tax cuts for the richest peacefully co-exist every single day with millions of people living in poverty. It is an economy that prioritises six large companies over the well-being of 60 million people.

The Opposition want real action to help British families: a price freeze while our broken energy market is fixed; a regulator that can cut unjustified price rises; a ring fence between the generation and supply businesses of the energy companies to ensure proper transparency and to force energy companies to trade the energy they produce in the open market; and a new simple tariff structure that people can understand. People in this country deserve action to help them during the winter months, not the damaging ideology of this Tory Government.

15:10

[Charles Hendry (Wealden) (Con)]

I put on the record my entry in the Register of Members’ Financial Interests, including my presidency of National Energy Action, the country’s leading fuel poverty charity.

Anybody listening to the speech from the right hon. Member for Don Valley (Caroline Flint) will have been oblivious to the fact that this country faces an energy crunch. There is no doubt that it is coming. We can debate whether it will be in the latter part of this decade or in the middle of it, but clearly we need an enormous amount of new investment if we are to deliver the energy security we need. I make no apology, therefore, for starting my speech by talking about energy security. We cannot have affordability without security of supply.

[Mr Brian H. Donohoe (Central Ayrshire) (Lab)]

Does the hon. Gentleman agree that nuclear power is part of the equation and that the Scottish Executive have made a grave error of judgment in ruling it out as a source of energy in Scotland?

[Charles Hendry]

I will not get involved in the private discussion between the Labour party and the Scottish National party, which seems to be creeping into this debate, but it is a matter of regret that new nuclear power plant will not be built in Scotland as well as England.

Without the necessary investment, we will see not the lights going out, as people sometimes say, but brown-outs, where major energy users are asked to come off line for a period, and a price spike, which will have very damaging consequences for businesses and consumers. We need huge investment, therefore, in a range of different sectors. As part of the solution, we need to reform the market to bring in more investment than we have seen for many years. The situation was bad under the last Labour Government, but it goes back much further. Although we recognise the need for others to enter the market, I am disturbed by part of this debate, because we cannot secure such investment without the big six. We need the big six alongside other players in the market, and were we to drive them away, it would be much more difficult to deliver the necessary security of supply.

Market reform is part of the process, but until recently, so has been political consensus. When the right hon. Lady reflects on her speech today, I hope she will consider its impact in the boardrooms in Spain, Germany, France and elsewhere around the world. They will be saying, “Is this a party that welcomes our involvement and future investment in the UK?” I can assure her that she is introducing a degree of political risk, making it more difficult to secure the investment we need if we are to deliver the affordability we want.

[David Morris (Morecambe and Lunesdale) (Con)]

Is my hon. Friend aware that when the Leader of the Opposition announced the price freeze, £1 billion was wiped off the energy stock market overnight?

[Charles Hendry]

That did happen, but it is actually worse than that, because to deliver the £100 billion-plus we need invested in our low-carbon sector, the companies investing need to borrow money, and the greater the political risk, the higher the interest on that borrowing. If the cost of borrowing increases by even 1%, the result will be a dead-weight cost of £1 billion a year on consumers’ energy bills—just to pay for Labour’s political risk.

[David Mowat]

Will my hon. Friend give way, quickly?

[Charles Hendry]

I will not, because we are all on a strict time limit.

Some of the projects that Labour says it cares about most will be hardest hit. Low-carbon projects are lumpier and require more investment upfront and so are most difficult to finance. I am talking about nuclear projects, renewables projects and in due course, I hope, carbon capture and storage. If companies looking to invest in those areas think that the terms under which they might invest could be changed retrospectively to their disadvantage, they will move away from the UK. We have to make this country more attractive to investment than elsewhere. If we do not, companies looking at international opportunities—

[Albert Owen]

Will the hon. Gentleman give way?

[Charles Hendry]

I will not. I know the hon. Gentleman’s enthusiasm for nuclear, and I want that nuclear power station built on Anglesey almost as much as he does. I care very strongly about that.

If we are to get the necessary investment, we must make a compelling case for why companies should come here, rather than go somewhere else.

We have heard reference to the decarbonisation target, but there is nothing in the motion about how that can be met. The measures in the motion would make it harder to get the investment we need to reach that target. Labour is going back to what it has done before, setting grandstanding, ambitious targets without putting in place the road map necessary to meet them. When we came into government, we had to put in place the renewables road map and the fuel poverty road map to address some of those challenges.

The motion is not only counter-productive, but shows breathtaking ignorance of the factors that have driven up prices. We know that prices in this country over recent years have been driven up more by the wholesale price of gas, which is beyond—I believe—even the control of the right hon. Lady and Governments of any colour. The International Energy Agency says that we are moving into a golden age of gas, but it warns us not to assume that it will be cheap, as countries such as Japan and Germany move from nuclear to gas and growth in China and India means a greater demand for gas there as well. Those will remain the issues really determining prices.

Labour’s policy is based on a deliberate falsehood about the causes of energy price increases and would be counter-productive, even if companies did not increase their prices to take account of it. It might play well with focus groups and work as a short-term political initiative, but it will do massive long-term damage to our ability to attract investment into the country, and in the process will do massive long-term damage to consumers, who will end up picking up the tab. That is especially unfortunate, because there are areas in the motion—for example, on transparency—where we could build on Ofgem’s work and deliver the common ground that many of us care passionately about.

So what do we do? First, we need to have an honest debate about the factors driving up prices and to link that with an understanding of the long-term investment we need in this country and how we are going to secure it. As the Secretary of State said, we need once more to take politics out of energy policy, just as John Hutton and Malcolm Wicks did and as we tried to do in the early years of this Government. That is an important objective in its own right. We also need action now on the changes that Ofgem is proposing. These decisions should be taken by the regulator, not by politicians. One of the changes that we have made is to say that the Government should set the policy framework and that a robust regulator should then deal with how the market operates, rather than having politicians constantly wanting to be regulators as well as policy makers. We also need to focus on ease of switching, and we need to do more to ensure that people are on the best available tariff.

Finally, I want to talk about what we in the Government can do to reduce the impact on bills. We could take some of the extra charges off the bills. In this regard, I have some sympathy with the amendment tabled by the Scottish nationalists. There are two elements of our energy bills that are highly regressive. The charges are borne by consumers including those on the lowest incomes, but the benefits often go to those on much higher incomes. They relate to energy efficiency and to feed-in tariffs for microgeneration, and I hope that the Government’s review of those policies will look at what could be done to fund those areas out of general taxation. They are good, important policies that we should support, but the way in which they are paid for at the moment means that people on the lowest incomes are paying a disproportionate amount towards their delivery. The Government have rightly decided to review that matter, and I hope that that will offer some early relief for consumers.

This is an important debate. We need to get away from the simplistic measures proposed in the Opposition’s motion. We also need to take this opportunity to have a debate about this country’s long-term energy needs, and about how we are going to meet security of supply requirements in a low-carbon way and, above all, in a way that will keep energy affordable now and into the future.

15:21

[Mr Jim Hood (Lanark and Hamilton East) (Lab)]

The Secretary of State apologised to the House at the beginning of his speech, saying that he would not be here for the summing-up speeches, and the House accepted that. I was rather disappointed, however, that he did not comply with the long-held convention of the House by staying in his place to hear the following speaker from the Opposition Benches. That was disappointing, to say the least, and I feel obliged to comment on it.

I was once told that if someone stands by the side of a river and watches the logs go down, like the tide of mankind, they will see them float back again if they stand there long enough. I was reminded of that when I watched the energy company executives giving evidence to the Energy and Climate Change Committee last week. That exotic gathering of four had in its midst three representatives of the big six. Their evidence mimicked the three wise monkeys. They saw no evil in the hiking of energy prices, they did not hear the universal condemnation of their greed, and they spoke in glowing terms of their care and compassion while British consumers are suffering charges that have been fabricated by their rigging of the market.

I served on the Standing Committee of the Bill that privatised the electricity industry. I recall that the Secretary of State at the time was Mrs Thatcher’s favourite boy, Cecil Parkinson. He was followed by John Wakeham. I note that there is a private Member’s Bill relating to the legacy of Mrs Thatcher. Well, the things we are discussing today are her legacy. I remember another former Conservative Prime Minister, Harold Macmillan—by then the Earl of Stockton—accusing the Thatcher Government of selling the family silver. That is exactly what they did when they sold off the electricity, gas, coal and water industries, and we are in deep water today because of that legacy.

In my maiden speech, I recalled being a miner, and quoted Nye Bevan saying:

“This island is made mainly of coal and surrounded by fish. Only an organising genius could produce a shortage of coal and fish at the same time.”

The Tories, past and present, were and are such organising geniuses.

[Ian Lavery (Wansbeck) (Lab)]

Is my hon. Friend and fellow former miner aware that it was announced on Tuesday that 48% of the UK’s energy is generated by coal?

[Mr Hood]

Yes. Indeed, half the world’s energy is produced by coal.

We are an island people and, in my younger life when I was a miner, we were self-sufficient in energy. It is thanks to Government failures that we now have to go cap in hand to the Russians for gas, to the Chinese for coal—they are now buying up coal all over the world—and the French for nuclear-generated electricity.

[David Mowat]

Will the hon. Gentleman give way?

[Mr Hood]

I feel compelled to give way to the hon. Gentleman, because he has been trying to intervene on many Members, and nobody has allowed him in.

[David Mowat]

I thank the hon. Gentleman for giving way, although the Secretary of State did, in his generosity, let me have a go. The hon. Gentleman makes a good point about coal. Over 50% of this country’s capacity comes from coal. Was he as surprised as I was to see that Labour had tabled an amendment to the Energy Bill yesterday whose effect would be to close down the existing coal stations more quickly than is already planned. Does that not seem odd?

[Mr Hood]

I have been in this House a while now, and I have seen policies from both sides. There is too keen an opinion about being anti-coal. I know that the hon. Member for Brighton, Pavilion (Caroline Lucas) and the green movement, and some coalition Members, are anti-coal, but it is a fact of life that our energy would be a lot cheaper today if we had not closed down the Scottish mining industry. I attended an Adjournment debate today called by my hon. Friend the Member for Mansfield (Sir Alan Meale), in which he described how the few miners that are left had been deprived of their concessionary fuel. He talked about how pensioners, widows and disabled miners had lost out on their pension rights. This is all because there is no mining industry to support our people in retirement. That is quite shameful.

Since 2011, the cost of energy has risen at an average rate of 1.6% a year, but the big six have increased prices by an average of 10.4% a year. I have listened to those who defend that situation, including the Secretary of State, who was so illiberal that it was untrue. He was more Osborne-ite than Lib Dem. I also listened to the hon. Member for Wealden (Charles Hendry). They seem to justify not freezing energy prices and not correcting the rigged market because to do so would interfere with investment. If those who are taking us for a ride by rigging the markets are saying, “If you stop me rigging the market, I will not invest,” my response would be that Governments have to govern. We cannot be held hostage by those monopolies. The situation in Scotland in recent weeks, in which the Government were being held to ransom, should worry us all.

The truth is that my constituents are hurting, as are yours, Madam Deputy Speaker, and we need a Government who are on their side, not one who make excuses, support the bosses and the privileged few, reward the wealthy and punish the poor. That is not what this Parliament should be doing.

I am getting nostalgic as I recall another one of my favourite quotes—that it is “the duty of government to seek to improve the quality and standard of life of its poorest citizen. Any Government that doesn’t do that is immoral”. We need to revisit that quote. Everything we do in this place should be driven not by the need to punish the poor for their poverty, but by the need to help them and lift them out of their poverty. When Governments and Parliaments fail at doing that, it has to be examined.

[Rehman Chishti]

The hon. Gentleman provided a quote on how not helping the poor is immoral, and I agree with him; of course that is right. If, however, we look at what happened to fuel poverty under the previous Government, we find that it went up by 50% in the last five years of that Administration—from 2.5 million to 4.7 million people. Does the hon. Gentleman agree with me, therefore, that the conduct of the previous Government was immoral?

[Mr Hood]

I could give the hon. Gentleman the obvious answer, but I will give him the polite answer. I do not welcome comments like that from Government Members when they are three years into their own government but always want to talk about the previous Government, especially when prices have been rigged, increases have been imposed on working people and the poor have been punished. All I hear is a young ambitious Conservative Back Bencher who wants to get on to the Front Bench by talking about what happened years or generations ago. I invite the hon. Gentleman and his hon. and right hon. Friends to consider what I said earlier: it is his duty, my duty and our duty to seek to improve the quality of life of our poorest citizens. We are not doing that. When the Labour leader talks about freezing prices and sorting out this rigged market, it might not be a panacea, but it is a good start.

15:31

[David Mowat (Warrington South) (Con)]

We all agree that there is a real problem here and that the real problem is energy bills and fuel poverty, not just for consumers, but for industry, too. We hear about energy-intensive industries closing all the time.

It is refreshing that we are here talking about reducing energy prices. In a lot of energy debates, I usually go through the Division Lobbies trying to stop the Opposition from increasing energy prices. We have divided, for example, on the decarbonisation target and on a perfectly respectable and reasonable proposal from the Minister of State, Department of Energy and Climate Change, my right hon. Friend the Member for Bexhill and Battle (Gregory Barker), to reduce the solar tariff from six times grid parity to four times grid parity. As I mentioned earlier, Labour tabled an amendment in the House of Lords last night that will increase bills. Let us agree, however, that we are on the same side, at least in terms of our objective—we want to decrease bills.

Before I explore that further, let me highlight an inconvenient truth that is at the heart of this debate. That inconvenient truth is comparability with other countries in the EU. I heard the shadow Secretary of State make two observations about other EU countries. I think she said that Spain already had a cap. That is true; she is right. Spain’s energy prices, however—for gas and electricity—are higher than ours. I do not think there is much point in having a cap if energy prices are higher than ours. The right hon. Lady also mentioned Scandinavia and its pool as a model for her pool. Again, if she looks at the gas and electricity prices in Denmark and Sweden, she will see that they are the highest in the EU—considerably higher than ours. We need to be careful, therefore, to look at these things in the round. [Interruption.] The shadow Secretary of State intervenes from a sedentary position; if she wants to intervene, I will be far more generous than she was.

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

The hon. Gentleman mentioned comparative prices and specifically mentioned Denmark. Is not one of the problems the fact that consumers here in Britain have to pay higher prices because much of the responsibility for conservation is being placed on those who purchase power—consumers—rather than on others whose main concern seems to be to deliver to their shareholders?

[David Mowat]

I am going to talk about progressive versus regressive ways of paying. Let me make the point again that among the 27 countries in the EU, our gas prices are the 26th highest. If a cartel is being operated, it is not a very good cartel. That is not to say that consumers are not in real difficulty now. One of the big issues, and one of the distinctive features of our energy market, is not so much the unit price as the fact that our housing stock is spectacularly poor in terms of energy insulation.

[Mr Donohoe]

The hon. Gentleman is right to say that the prices are lower, but can he explain why in the last few years the increase has been larger than in any other European country?

[David Mowat]

No, I cannot, because I am not an expert on the market. I am merely trying to establish whether the absolute prices that we are paying vis-à-vis our European competitors indicate the existence of a cartel, as has been claimed on many occasions. That does not appear to me to be the case, but someone can always intervene on me—actually, they cannot, because that would be the third intervention and I would not be given extra time, but someone could always discuss the point with me in future.

The fact remains that we have the 26th highest gas prices out of 27 in Europe and we need to be clear about what problem we are trying to solve. The problem that we should be trying to solve is the problem of our housing stock, whose standards need to be raised to the level of the standards in the rest of Europe. Germany’s gas prices are 40% higher than ours, but its gas bills are lower than ours. Why? Because its housing is better insulated and better built.

I have five points to make. My first point is that whatever we decide to do on the basis of the various reviews, we should not reverse the thrust of our policy on insulation. We should not give up on the energy company obligation, the green deal and smart meters. I do not agree with the hon. Member for Brighton, Pavilion (Caroline Lucas) on many issues, but I do agree that far and away the most effective way of making progress on energy in general is to ensure that there is better conservation and more efficiency.

Secondly, we need to make the market work better—

[Dr Whitehead]

Will the hon. Gentleman give way?

[David Mowat]

No, I will not, because I have already given way twice.

I welcome the proposal for a competition review: it would clear the air. If there is indeed no cartel, surely everyone should welcome it. I also welcome the proposal for 24-hour switching, although, having reflected on why I might not switch as often as I should, I concluded that it was still too difficult. I have just moved house, and it took a long time for me to manage to speak to those guys on the phone. I suggest to Members on both Front Benches that we should introduce a fining system. If it takes more than 10 or 12 rings for any of the big six to answer the phone and transfer callers to someone who can deal with their query, that company should be fined. I bet that if we introduced such a system, we would find that the energy companies hired more people and dealt with calls more efficiently, and switching—whether in 24 hours or not—would be much easier.

Of course we need more new entrants to the market, but I have a further, serious criticism to make of the big six. They have described a margin of 4% or 5% as reasonable, which is an entirely spurious observation. I have no idea whether such a margin is reasonable, but the point is that we should evaluate them on the basis of their return on capital employed. A margin of 4% is a huge margin for a foreign exchange dealer and for a petrol retailer, but a very small margin for any other retailer. When someone asks if £7 million a day is too much profit or too little, that is a very hard question to answer. The big six are entitled to a reasonable return on their capital employed. We should focus on that, and they should focus on it too when they are telling us how reasonable they are.

[Ian Lavery]

Will the hon. Gentleman give way?

[David Mowat]

I am sorry; I will not.

I understand that a former Prime Minister has suggested that, if we experienced a particularly cold winter and, as a consequence, the energy companies made more money than they had budgeted to make, a windfall tax might be an appropriate response. The companies could argue that something in the other direction should be provided in the event of a warm winter, but I agree with the former Prime Minister that if they make additional, incremental, supranormal profits over and above what they would have made in a normal winter, a windfall tax—or what a consultant would presumably describe as a profit-sharing mechanism—is fair enough.

There might need to be structural changes in the industry. If the market is not working, I agree with the Opposition that they are entitled to intervene. We have just intervened in the private pensions industry. I campaigned for that, and it was right. If this market is not working, they are right to intervene. My problem is that I have looked very hard but I genuinely find it difficult to see the evidence that the market is not working to the extent that they say. We must remember, too, that we need these guys to put £200 billion into our infrastructure in the next decade.

My third point is about what I consider to be our increasingly unilateral position on carbon emissions leadership. We need to have a grown-up discussion about this, and the House needs to understand that our carbon emissions are 20% lower than Germany’s per unit of GDP and per capita. We are not a high-carbon country, yet as we see Europe and Germany reining back—unabated building of coal-power stations and vetoing the emissions trading system and all that goes with that—it is not reasonable for us to be constrained by unilateral carbon leadership. If we are going to do that, we need to be honest about the cost. Frankly, too often people say some of these policies are cost-neutral or even cost-effective. They are not; there is a cost to them. It may be a price worth paying, and maybe we should pay it, but at least let us be honest.

My fourth point is about the balance between regressive and progressive taxes. I agree that putting all these charges on to bills is particularly regressive, and if the current review finds that certain parts should come into general taxation, I will support that.

My final point is that we should have more honesty in this debate. There is a cost to going green. It is not enough for those on the Front Benches to say that in 10 years’ time it will be seen to be more cost-effective to be doing this than not. That is quite unlikely; it is quite unlikely that we will discover we have to do these things for the sake of the planet, as opposed to burning coal, which would be much cheaper, and that there is no cost to it. There is a cost to this; we should take it on the chin and discuss things in that context.

The energy companies should stop talking about their 4% or 5% margins, which is a ridiculous concept, and start talking about what their return on capital is. I do not believe it is an unreasonable return, although I may be wrong, but at least let us be honest.

15:42

[Albert Owen (Ynys Môn) (Lab)]

It is a pleasure to be speaking for the first time under your chairmanship, Madam Deputy Speaker, and I congratulate you on your election to the post.

I am very pleased that the former Energy Minister, the hon. Member for Wealden (Charles Hendry), is still in his place, because he is right that there was consensus between my good friend the late Malcolm Wicks and him, and they had a good working relationship. When he talks about political risk, however, he should not look across to this side of the Chamber. He should look within his own party and within the coalition, and see the debate within the coalition, which is causing divisions on energy policies today.

I am pleased this issue is high on the agenda. I have been banging on about energy prices for some time and I am glad it is now in the political mainstream. I am glad my party and party leader are leading on this issue, too, because I am afraid the Government are for ever in the wake on these issues. Only 18 months ago the Prime Minister had a summit in No. 10 Downing street. He was there for a few minutes—he was very busy—but he said he had sorted the energy companies out on prices. When I intervened on the then Energy Secretary, Chris Huhne, in a debate and asked him whether he had told the energy companies to hold their prices down, he replied, “No need, they’re already going to do it on their own,” but here we are today with rises in prices that people and business cannot afford.

[Ian Lavery]

My hon. Friend and I had the dubious pleasure of attending that Select Committee hearing last week, and comments about a modest return have been made here today, too. The Centrica boss said to the CBI yesterday that £2.7 billion was a modest return. That is £7.4 million per day, or £86 per second. Is that a modest return, or is it robbery?

[Albert Owen]

My hon. Friend will recall that I challenged the Centrica bosses. Indeed, I challenged the CEO of Centrica not to take his bonus this year, because his salary and bonus combined have gone up by 38% since 2008 while bills from his company have gone up by 36%. I am a customer of British Gas, although perhaps not for much longer. To be fair to the CEO, Sam Laidlaw, he has decided not to take his bonus this year. I hope that others will listen and follow suit, because it is immoral that these companies are saying, “We are making only a modest amount,” yet they are paying themselves more than a modest bonus out of their profit. They tell us that the internal market between generation and retail is working okay and that they are separate entities, but they pay their bonuses altogether as one company, and they take a huge amount in dividends for their shareholders.

[Mr Jim Cunningham (Coventry South) (Lab)]

Like my hon. Friend, I have raised this issue over a long period. I thought two or three years ago that we should have had a proper investigation into whether there is a cartel. When I was on holiday in Cornwall a couple of years ago, five tankers were lined up for a couple of weeks. If someone is telling me that something is not going on in that market, I do not know what to say.

[Albert Owen]

I used to work on oil tankers and gas tankers, and I know that they stay at anchor for some time waiting for the prices to vary before they empty their cargo and get the price for it. That is an important issue.

The energy market is flawed, as Government Members have actually agreed. The Secretary of State, who made an appalling speech and left quickly, did not tackle the issues at all and did not come up with any suggestions. He said that the Government were doing things for the consumer, but the reality is that the Select Committee and others have been lobbying hard for Ofgem, the regulator, to help the consumer. It is doing slightly more but not enough—and it is too late. It is a disgrace that the Secretary of State leaves so quickly after making so many interventions in this debate—he is not even prepared to sit there. The energy team has been reduced by half a Minister, as one of them is doing a job share with the Department for Business, Innovation and Skills, yet the Secretary of State cannot sit down there. Instead he has to get a Whip to sit on the Front Bench because the team has been depleted. Energy is at the top of people’s agenda, but it is way down at the bottom of this Government’s priorities.

The hon. Member for Warrington South (David Mowat) asked why, compared with Europe, we are paying less for our bills. One reason—I have told him this before and I hope he is listening—is that people in many other European countries pay VAT at 20% or more on their fuel and energy costs. I am sure that he is not suggesting that this country takes that approach so that we can make a comparison—

[David Mowat]

rose—

[Albert Owen]

I am not going to give way, as the hon. Gentleman has had a good number of interventions on that. VAT is one reason for the situation he describes.

For other things the hon. Gentleman has to look not to Europe but to his own Front-Bench team, because the ECO—energy company obligation—was introduced this January by the Government. The Prime Minister boasted that it was one of his flagships of the greenest Government ever and about how the green levies were going up, yet only last week he said he was going to change all that. The Prime Minister is making policy on the hoof—I will never accuse him of being consistent on anything and he is certainly not consistent on energy policy.

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

Will the hon. Gentleman give way?

[Albert Owen]

Yes, I will. I hope that the Minister will give way when he is winding up, too.

[Gregory Barker]

Of course I will. Can the hon. Gentleman give me one example of when any Government Member boasted about levies going up? We may have boasted about policies, but when did we boast about levies going up?

[Albert Owen]

The Prime Minister has said numerous times on the record—I will find this and send it to the Minister—that his Government are the greenest ever and are putting on extra green levies; when he compares our schemes with the Government’s schemes he boasts that these levies are actually increasing to help on that. That is exactly what the Prime Minister has done, and I am sorry that the Minister does not understand his own Prime Minister—it is complicated at times.

[Toby Perkins]

rose—

[Albert Owen]

I will give way briefly, but I am cutting into my own time.

[Toby Perkins]

This is the quote that my hon. Friend was looking for. The Prime Minister told “The Politics Show”:

“I think green taxes as a whole need to go up”.

[Albert Owen]

There we are. I am sure that the Minister agrees with the Prime Minister on that, and I thank my hon. Friend. Another levy that this Government have introduced unilaterally and which has pushed prices up is the carbon floor price. It is an Osborne levy if ever there was one. Again, the Government boasted in the Budget about how they were using these levies to control companies and push up costs on business. Those who blame Europe should remember that this is in addition to the European emissions trading scheme, and that companies in Britain are paying more because of what this Government have done this year—the levy came into being in April. It is no use their blaming Europe, or previous Governments. They must take responsibility, because all our constituents are paying the price of this Government's energy policy. That is why we are having the debate today.

I want to mention small businesses, because they are suffering more than the domestic customer. Average rises for small businesses, which do not have the luxury of comparison sites on which they can switch easily, have been up to 20%. I hope that the Government—and, indeed, my right hon. Friend the Member for Don Valley (Caroline Flint)—will consider helping those businesses. They cannot absorb the cost, so they pass it on to the customers. That means that we pay for those rises.

I am a member of the Select Committee on Energy and Climate Change and we had a robust discussion with the energy companies last week. Let us be honest. We hear the Government talking about Labour’s big six, and the Prime Minister leads on that. They forget that in 1993, Sir John Major—that Marxist, who has been accused of being a red by many people for wanting to intervene in the market—set up the integrated system we have now and allowed the then big three to dominate the energy market. Let us not take any lessons about how the big six were set up. Flawed privatisation policies and the former Prime Minister’s interventions allowed the companies to be both generators and retailers. That is the situation. I know that it does not sit comfortably with the Conservative party, but it is a fact and I challenge the Minister to say otherwise.

We have talked about green levies and wholesale prices.

[Gregory Barker]

I promise the House that I will not make a habit of jumping up and down to intervene before I get the chance to wind up. Will the hon. Gentleman give a little of his speech to the 13 years in which the Labour party had the opportunity to shape energy policy? Will he defend what went on in those 13 years?

[Albert Owen]

I am certainly happy to do that. I sat on the Committee that considered the Energy Bill in 2008, which helped many places. It even helped to set up the Hinkley Point agreement that we just reached. The Liberal Democrats voted against the Bill. The Energy Act 2010 gave more powers and responsibilities to the regulator to deal with prices. I remind the Minister that we did not get into office in 2010 and I wish that he would use those powers, which he and his party supported at the time. I am happy. We enacted the Climate Change Act 2008 and we set up the Nuclear Decommissioning Authority to deal with legacy waste in our country. We have a record of which we can be very proud.

We are in the Chamber today after three years of a Government under whom we have seen rocketing prices, and all they want to do is blame somebody else. It is time the Government stood up and were accountable for their actions. The Liberal Democrats are helping them—I am not just having a go at the Tories. We need to get consumer rights, which is why I was happy to hear my right hon. Friend the shadow Secretary of State say in response to an intervention I made earlier that under a Labour Government, a new regulator would look after customers who were not on the gas mains. Switching and the reduction for those on dual fuel do not apply to lots of constituents in this country, and we need to extend the reach. I am very pleased by that commitment, because I have been asking this Government to introduce such a provision—I have asked each Minister, and there have been quite a few—and they have refused to do so.

In this country, we need a party and a Parliament that stand up for the customer—for small businesses and individuals who, year after year, not as a spike but as a trend, are being ripped off by the energy companies. It is time for Parliament to act and today is an opportunity for us to do so. I am proud to support the motion tabled in the name of my right hon. Friend the shadow Secretary of State and my right hon. Friend the Leader of the Opposition. When we are in government, we will make the changes that the people of this country deserve.

15:54

[Tessa Munt (Wells) (LD)]

Labour's 20-month price freeze has hit the headlines and will prove superficially popular with the voters, but there are many reasons why it will not work, much as we all want to reduce people’s bills. It is a hopeless strategy to try to control the sales price of businesses that have volatile raw material costs, because prices will go up before the freeze as companies try to hedge against the risks of a Labour election win. In fact, that has probably already begun. Prices will go up again after the freeze as companies seek to recover any losses that they think they have sustained.

During any freeze prices will stay artificially high even if raw material costs go down. Having begun to take the drug of price fixing it would be hard to kick the habit after 20 months. Why not 24 or 30, or doing it again the following winter, or the one after that? The proposal risks further damage to the market as a result of uncertainty, which may well spread to other industries. There would be huge political pressure to freeze prices in other sectors, risking further chaos and a return to the situation facing us in the 1970s.

This all has to be paid for—that is the economic inevitability. History shows that price fixing does not work and damages the economy in turn. The willingness of the right hon. Member for Don Valley (Caroline Flint) to interfere with the market would unsettle other sectors, break some smaller suppliers such as First Utility, which was promoted with the switch of the Leader of the Opposition. The supplier has gone public and explained that its most famous customer’s policy would put it out of business.

The UK energy system clearly needs modernisation and massive investment. The proposed price freeze increases the political risks for this country and for its new investors. All of this will put up long-term prices—the consumer will pay. Any Government who freeze prices would undermine the role of the independent regulator, Ofgem, and no doubt would succumb to the temptation to recruit their own staff of bureaucrats and inspectors to enforce their policy.

We should ensure that Ofgem does its job; keep up the pressure on the big six suppliers; look at encouraging more new entrants; do lots more to save energy in the first place; get a fair deal for people on pre-payment cards and meters; ensure that consumers receive bills that they can understand; support the development of many more green energy provisions on a local basis such as the Wedmore power co-operative solar array, which opened this weekend in my patch; and make it swift and easy to switch suppliers.

Finally, it is unclear whether the shadow Secretary of State was advocating a windfall tax rather than a price freeze. However, such a tax seems to be a better idea by far as there would be an opportunity to redistribute any windfall to those who need the most help. Every pound spent to support those with disproportionately high bills, particularly on energy-saving measures for those very households, is a pound well spent. Planning a price freeze demonstrates a lack of understanding of business, and shows the impact of interfering in this market, which would cost consumers more, not less.

15:58

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

This is the first time I have had the privilege of speaking under your chairmanship, Madam Deputy Speaker, and I am delighted that you are a Deputy Speaker.

We have had an interesting debate. I am sorry that the Secretary of State has left the Chamber, but I note that he apologised for doing so. I found it astonishing, however, that he asked for consensus, but went on to make one of the most provocative speeches that I have ever heard in the House, particularly on a subject where he is on a weak wicket. I can imagine going round my constituency speaking to elderly folks and people with disabilities, and people—far too many—suffering from fuel poverty and saying, “Well, we’re not doing anything about the cost of energy, but we’ve reached consensus.” I do not believe that consensus can be reached because, like many of my hon. Friends, I have been involved in these issues for more than 10 years. If right hon. and hon. Members have a minute or two, they might want to study the debate that I secured in Westminster Hall on this subject on 23 January 2007, in which the hon. Member for Wealden (Charles Hendry) made a good speech. I have to say, with respect, that I do not recall quite the emphasis on investment that we heard today; nevertheless, I cannot take away from him the points that he made on that occasion.

A few weeks later I put a question to our own Prime Minister, Tony Blair, on 7 February 2007, and by a remarkable coincidence prices fell the next day. I am not sure that this speech will have the same effect, but I will make the points that I want to make and that, I am sorry to say, are not new because I and others have made them so often. That is why I do not believe that consensus is possible.

I support the motion before the House and the proposition from my right hon. Friend the Leader of the Opposition and colleagues on the Front Bench. It resonates with long-suffering consumers. The commitment to a price freeze is absolutely right, and the fact that it is new, even from those on my own Front Bench, whether in government or in opposition, does not take away from its validity.

[Mr Jim Cunningham]

Does my right hon. Friend recall that under the previous Conservative Government a big battle went on in the House one Friday morning, especially among Members of the governing party, in relation to an increase in cold weather payments that the then Government would not concede? Does my right hon. Friend recall that it was a Labour Government who created the Department of Energy and Climate Change, which the Minister represents? The Government say that the Labour Government did not take these matters seriously. We did, and we introduced housing insulation for the less well-off.

[Mr Clarke]

As always, my hon. Friend makes a valid point. I know that he represents Coventry South, but as he comes from Coatbridge, I am not surprised at the logic that he introduces to the debate.

I support the motion before the House. I do not believe that some of the ideas that we have heard from Government Members, including from the Secretary of State, about tinkering around the edges, transferring green taxes to general taxation and other measures that have been mentioned for over a decade would necessarily work. We heard yet again about switching. Well, I hope it works this time. On previous occasions the experience of my constituents has been that no sooner did they switch to one company than that company put up its prices. There was therefore very little point in them taking that advice. I question whether switching will work now.

Given the seriousness of the problems, there is a call for transparency. The veil of secrecy that exists in the energy industries is wholly unacceptable in the modern world, with the massive profits of energy companies and increasing fuel poverty. The energy markets are utterly broken. Surely we as a Parliament are not prepared to accept that without protest, and why should our constituents do so?

In the Government’s response to today’s debate a great deal of faith was placed in the regulators, but I do not share it—not for one second. In the debate that I mentioned at the start of my speech I had quite a lot to say about the regulators.

[Mr Nigel Dodds (Belfast North) (DUP)]

Rural areas and places such as Northern Ireland are heavily dependent on home heating oil, which means that energy bills are 50% higher on average than even the high bills that people in Great Britain are suffering, but there is no regulation of that sector of the energy market. Does the right hon. Gentleman agree that something needs to be done to help those families who are particularly hard hit by very high energy bills?

[Mr Clarke]

The right hon. Gentleman makes an excellent and very valid point.

That part of the motion relating to the regulator is very important. I do not believe that Ofgem has done the job it was expected to do, no matter who set it up. I have met Ofgem, written to it and listened to what it had to say. It responded to one of our representations on 1 January 2007, the day after Hogmanay—Scots Members will understand what I mean—by issuing a press release stating that if the energy companies, the big six, continued what they had been doing, in its view they would have “jam on their fingers”. Given the figures on hypothermia even then—I will mention those later if I have time—it should have spoken much more strongly.

We are entitled to ensure that the public are no longer duped about the actual cost of energy. I would have expected that to be the role of a proactive regulator. For example, the four major companies that have raised prices blamed wholesale prices, green levies and network costs for the latest bill increases of between £100 and £150, which have led to an average bill of £1,400 a year. In 2010 npower’s electricity wholesale prices fell by 13%, but that was not passed on to the consumer, and the average wholesale price fell by 4% in 2011 and rose by less than 2% in 2012, yet the company increased retail prices by 5.1%, 7.2% and 9.1% respectively in those years, and E.ON and EDF behaved likewise. More recently, wholesale energy prices rose by 1.7%, but consumers are facing an increase in their bills of 11.1%.

How can that possibly be justified? How can it be said that the market is working and that if we leave it alone things will work out? I do not know about the word “cartel”, but I know that there appears to be a measure of collusion, and certainly a measure of delivering price demands to customers that cannot be defended. I do not believe that Ofgem is best placed to act in our interests.

I support the commitment to a price freeze and think that it is very welcome. It is right that my right hon. and hon. Friends on the Front Bench should demand action now. I accept that it will take time to sort things out. If we have not done it in the 10 years to which I have referred—we certainly have not—then 20 months is not a very long time to have the kind of open debate and consultation about energy that I believe the British people are entitled to expect. I also congratulate North Lanarkshire council on its commitment to its house insulation programme.

I realise that many of these things are happening because of the austerity that exists in Britain today. Nevertheless, unless we have an energy strategy that is fair about prices, the environment, markets and proper regulation, our people will suffer. I do not believe that it is in the interests of right hon. and hon. Member, to allow such a situation to develop or beyond the wit of this Parliament, and indeed this Government, to do something about it now.

16:09

[Neil Carmichael (Stroud) (Con)]

I think that this is the first time I have been in action while you have been in the Chair, Madam Deputy Speaker, so let me congratulate you on your election.

It is a great pleasure to follow the right hon. Member for Coatbridge, Chryston and Bellshill (Mr Clarke). I listened carefully to the hon. Member for Ynys Môn (Albert Owen), and I agree with his views about nuclear power. Nevertheless, I think that the Secretary of State made an excellent and powerful speech that drilled some very big holes in the speech by the shadow Secretary of State.

We have to get three things across straight away. First, we cannot talk sensibly about energy policy without noting that commodity prices across the globe are rising, and it is therefore unacceptable to talk about this in a strictly local way. My hon. Friend the Member for Wealden (Charles Hendry) made that point very powerfully in connection with rising gas prices having affected overall energy prices.

[Sir Malcolm Bruce (Gordon) (LD)]

The hon. Gentleman is making an important point. Does he think that the Labour party may have embarked on a process that will inevitably lead to a comprehensive prices and incomes policy, because when other prices go up, people will look for the same action in those areas? Have not we been there before, and was it not a very uncomfortable space to be in?

[Neil Carmichael]

That is a good point, and I will deal with it later. I thank the right hon. Gentleman for reminding me to mention it.

Secondly, we cannot talk sensibly about this subject unless or until we understand the economic circumstances in which we live. A lot of people would say that we want lower energy prices, and absolutely we do—the Government are right to emphasise that—but we have to produce some economic growth to help to drive down prices and to drive up wages and salaries where appropriate. We have to get that on the table and well understood.

Thirdly, it is a bit rich for Labour Members to claim that this is all our fault when during 13 years they did not build one single nuclear power station. [Interruption.] They did not, and we have got on with the job. The Government are absolutely right about that.

My main points are these: first, commodity prices are global, and we cannot influence them globally but must respond to them sensibly and locally; secondly, we must consider the economic circumstances; and thirdly, we have the history of failure by the previous Labour Government.

We have to increase capacity, and that is why the Energy Bill is so important. We talk about the big six, but in my constituency we have a large number of small companies and one fairly big one that is not a member of the big six but is a powerful beast nevertheless—Ecotricity, which is busy taking new customers from the big six because of the price rises. That is an example of effective competition being driven, and quite right too, by the arrival of more capacity.

[Duncan Hames]

I have a small competitor in the electricity supply market in my constituency as well. Does the hon. Gentleman recognise that these smaller competitors would be disadvantaged during a price freeze because in trying to buy energy on the forward market they lack the collateral that the big six have, and therefore, during that period, the big six would be advantaged over the competition?

[Neil Carmichael]

The hon. Gentleman is right—that is a perfectly good point.

[Luciana Berger]

Will the hon. Gentleman give way?

[Neil Carmichael]

Not yet, because I am dealing with this point. A price freeze simply freezes the problem and does not enable a solution to be introduced. I have admitted that we need to find ways of driving prices down—of course we do—but a price freeze is not the right way because it will prevent firms from responding normally to the market. As the right hon. Member for Gordon (Sir Malcolm Bruce) correctly noted, if we start freezing one thing it is not long before we need to freeze a few more things in order to keep up.

[Several hon. Members]

rose—

[Neil Carmichael]

I will give way to the hon. Member for Brighton, Pavilion (Caroline Lucas) if she is quick.

[Caroline Lucas]

That is immensely kind; I thank the hon. Gentleman so much. He talked about the smaller company in his constituency. If it is the one I think it is, its chief executive has said that the reason it was able to keep prices lower was because it had been investing in renewables, not getting hooked up in gas or other fossil fuels. Is that not the conclusion to draw from the hon. Gentleman’s remarks?

[Neil Carmichael]

That brings me to my next point, which is, ironically, that there is a tension between wanting to have lower prices and protecting the environment. I have often thought that the Department of Energy and Climate Change is both poacher and gamekeeper. We need to continue investing in green energy. I will always promote green energy because my constituency has a lot of important companies that are working extraordinarily hard to develop green technologies. However, we must respond to the price issue as well. That is why the Government are right to calibrate the green taxes more sensibly to reduce prices in the energy market. I get the sense more and more that the Opposition agree that the price freeze is simply idiotic.

I will talk about two other important matters. The first is energy storage. We do not give enough attention to that subject. Energy storage technologies will help and we need to invest in them. I hope that we will see energy storage treated as a capacity in the Energy Bill and that it will be invested in. Liquid air, for example, provides us with an opportunity to store energy and thereby flatten out demand and sort out the trough problems.

My hon. Friend the Member for Warrington South (David Mowat) spoke sensibly about the need to focus on making houses more energy efficient. Of course we must do that. We have the least energy-efficient houses in Europe in broad terms. We have to continue with the green deal. I am delighted that the Minister is promoting that and that it has got off to a good start. We have to ensure that our houses do not leak energy, but contain it and therefore use less of it. That is one way to reduce bills.

Something that has not been discussed in the debate thus far is competitiveness, not just in this country, but across Europe. In January, the Prime Minister set out the stall for renegotiating our position in the European Union. One of the key points that he made was that we should strengthen the single market in energy. He was absolutely right. We have to recognise that there are lower commodity prices on the continent. We must be able to benefit from those prices. We need to attract investment from the continent and we must invest in the continent so that we have a more competitive and more connected energy policy.

Connectivity is lacking in certain areas. We need more investment in our infrastructure so that we can be sure that whatever form of energy we alight upon can get to the right place in the most cost-effective and efficient way. That is definitely a way to drive down prices. We must set out the stall for increasing competition in the energy market both locally and internationally, with Europe as a target. That would not be a particularly difficult thing to do.

[Dr Whitehead]

The hon. Gentleman makes an important point about interconnectivity. Will he therefore explain why the Government have specifically excluded interconnections from their capacity market arrangement? Will he be at the forefront of trying to change that?

[Neil Carmichael]

It is always great to hear from a fellow member of the Environmental Audit Committee. He asks a very good question. [Hon. Members: “Answer the question.”] And he will get a very good answer. I am referring to connectivity across Europe. I do not think that the remit of the Energy Bill extends that far. There is not sufficient connectivity between England and France. There is no connectivity between Norway and—

[Dr Whitehead]

rose—

[Neil Carmichael]

No, the hon. Gentleman has had a fair crack of the whip.

In summary, this is about powering through with more competition and ensuring downward pressure on prices, while recognising the global and economic challenges we still face, even though they are being rapidly dealt with by the Government. We cannot talk about a subject as critical as energy without considering those other issues—that is the key point on which I shall conclude.

16:20

[Simon Danczuk (Rochdale) (Lab)]

It is a delight to follow the hon. Member for Stroud (Neil Carmichael); I cannot think of anybody I would rather follow in this debate. I thank my colleagues for initiating this important debate. I want to use this opportunity to talk about my experience and that of my constituents when dealing with energy companies.

I welcome the proposal from the leader of the Labour party to freeze energy bills, certainly for consumers but very much for businesses as well. In my constituency I meet businesses on a regular basis that have been treated appallingly by energy companies and/or their brokers. Businesses have been expected to put down unrealistic bonds or deposits so that they can get energy, and they are also being conned—quite literally—into energy deals that are wholly inappropriate for them. Action needs to be taken.

Let us consider how consumers are treated by energy companies. Over the past few days there has been talk in the press about how energy companies are deliberately hanging on to their customers’ money. I am in no doubt that that is a deliberate policy by some of the energy companies, and I will give the House two or three examples of what energy companies are doing with their customers’ money.

One example is something of which I have personal experience. Until two years ago I had a prepayment meter. Someone on a prepayment meter receives an annual statement that sets out what they have used and what they are likely to use in the next 12 months. It predicts how much energy someone will use, and what the likely cost will be. I decided, understandably, to move to direct debit to reduce the bill. I phoned the energy company—British Gas—and the call handler explained that they had to go through a process of assessing what my bill was likely to be. I pointed out that a prediction had already been made in the annual statement, but of course they insisted on going through the process of counting the number of radiators and asking how many people were in the household. Lo and behold, to nobody’s surprise the company suggested a higher direct debit on a monthly basis than what I had been paying for the past 12 months.

In reality, the company was trying to bamboozle me into paying more per month. I am fairly forthright and insisted that it stuck to a reasonable amount of money, but my concern is that many people, particularly those on prepayment meters, are some of the most vulnerable in our society and could easily have been bamboozled into paying a higher direct debit than they should have paid. I am convinced that that call handler had been encouraged to take people down that route so that they would pay more.

[Luciana Berger]

I thank my hon. Friend for kindly giving way. He articulates an important point about vulnerable customers who are paying above the odds on prepayment meters. However, it is not just those on prepayment meters who pay direct debits; we all have the opportunity to do that. I have raised this point before in the House, but is my hon. Friend aware of actions by companies such as E.ON, which was previously my energy provider? I see myself as very forthright, but when I called it to amend my direct debit—I knew I was paying above the odds on a monthly basis—it would not allow me to amend it. I had to pay the price it offered me, and that was it. I had to pay above the odds, and it was essentially allowed to accumulate money from me. That was the only choice offered to me; otherwise I had to pay a quarterly amount, and a much higher price for my energy.

[Simon Danczuk]

I am obviously not aware of that particular case although I am happy to make representations to E.ON on my hon. Friend’s behalf, and try to get her a better deal. She makes an important point.

My second example is from when I moved house, just over 12 months ago. I stopped the relationship with British Gas to move to another provider, yet the money it was taking from me continued to leave my account. I had to get on the phone and kick up a stink to get the money back. British Gas had retained literally hundreds of pounds that were due to me. That was being done to maximise its profits.

Let me give the House a third example. This one is from a constituent, Alan Valentine, who contacted me this week because of the hullabaloo on energy prices. His mother died in March, and he paid the final bills using British Gas’s automated payment system. Needless to say, a company called Past Due Credit Solutions was soon chasing him for payments he had already made. Mr Valentine states:

“I am concerned mainly that many thousands may be sent demands for bills already paid, many hundreds of whom may be elderly or forgetful, many of whom may then pay the bill again.”

Those are clear examples of energy companies doing all they can to maximise their handling and holding of consumers’ money. Those behaviours are wholly unacceptable.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

Before my hon. Friend moves on from energy companies, does he find it perplexing that there seems to be no Government action against energy companies that are quietly getting rid of existing tariffs such as the E.ON pensioner fixed-rate tariff, which are designed to protect people? They are doing so in the name of Government policy—the policy of the Prime Minister—on reducing tariffs. What is fair about that?

[Simon Danczuk]

My hon. Friend poses a very good question. What is fair about that?

Energy companies are quickly becoming the new banks. I am delighted that Labour is calling time on their behaviour. If the Conservative-Liberal Government will not take action, I am pleased that a Labour Government will.

16:26

[David Morris (Morecambe and Lunesdale) (Con)]

It is a pleasure to be in your presence while you are in the Chair, Madam Deputy Speaker. This is the first time I have spoken under your guidance.

I want it to be known that I am not standing up for energy companies or anything to do with them. I am standing up for common sense and the consumer. All hon. Members are keen for energy prices to drop. I am proud to support the work of my right hon. Friends the Secretary of State for Energy and Climate Change and the Prime Minister. For the first time in decades, genuine action is being taken to improve our energy market. I really believe that.

The right hon. Member for Don Valley (Caroline Flint), who is not in her place, said a lot about myths. All political parties like to talk about myths, but let us talk about reality. If a potential Prime Minister stands up in the Chamber and says, “I am going to freeze energy prices,” they will send the stock market into disarray. That is what happened. Overnight, £1 billion was wiped off the stock market in energy.

I have two nuclear power stations in my constituency—energy is the largest employer in my constituency. Hon. Members can imagine the horror of my constituents who saw that. They knew immediately that the energy companies would react to safeguard their interests after losing £1 billion, and they hiked energy up by 10%. They then wanted their customers to sign up to a three-year freeze deal, which would completely negate what the Leader of the Opposition wanted to achieve. That is the reality of what happened.

[Toby Perkins]

Is the hon. Gentleman seriously saying that the price freeze offered by a number of companies recently—not any future price freeze—was linked to the Labour party conference? Is he saying that the Labour party conference announcement led to those price freezes? I have not heard anyone else make that case, so is that what the hon. Gentleman is seriously saying?

[David Morris]

I am referring to the announcement in the Chamber—obviously this is a more official domain than the Labour party conference.

The three-year price freeze negated completely the policy. It seemed popular, people are still talking about it, and the press are talking about it with gusto. But the reality is that unless the energy industry is renationalised, that is how the markets will react. Last time there was a similar run, the Leader of the Opposition was Secretary of State for Energy and Climate Change. We had a price fix of three years. If he could not do anything against the markets when he was in power, what makes him think that he can do it now? It is all pie in the sky. In reality, the energy companies will carry on looking after themselves, the consumers will get the hike on the threat of a price freeze, and it will cause pandemonium among consumers, especially in their pockets.

As I have said, my constituency has two nuclear power stations. The announcement by the Leader of the Opposition has the potential—if it has not already—to damage pension funds through the shares in the company.

[Dr Whitehead]

Because gas is the market maker, the two nuclear power stations in the hon. Gentleman’s constituency are making large amounts of additional money from the electricity they sell at gas market maker prices because they are not subject to the carbon floor price. Therefore they are completely insulated from the effects that he mentions. Far from being worried about the situation, I would suggest that they are worried about the possibility that the Government might remove the carbon floor price and thus remove the free money that they are getting.

[David Morris]

I disagree with the hon. Gentleman’s analogy. We are talking a lot about gas, but the two nuclear power stations are huge employers in my constituency. What is the Opposition saying to my constituents with the suggestion of a price freeze? Will there be a freeze on their wages? That is what would happen. How can those two new stations produce energy efficiently and make some profit out of doing so without passing the effect of the price freeze down to the people who work in the area? The local economy would be hard hit. It is one thing to announce price freeze policies on the hoof, but that is the reality.

We are trying to be more responsible. I agree that we must take down green levies, which are a blight on struggling families. The average British family pays £112 a year because of green levies and I am delighted that the Prime Minister is taking action on that. We all support low-carbon energy production, but there is no point in confusing saving the planet with taxing people to death. We also need to invest in local energy production which is less susceptible to foreign crises and currency fluctuations. My hon. Friend the Member for Warrington South (David Mowat), who is no longer in his place, articulated accurately how the European markets are dealing with this problem. We can debate what sort of locally produced energy we should have, and I am very aware of people’s different views on that, but having local production is vital in my area for a variety of reasons, including the local economy and the cost to the consumer.

[Bob Stewart (Beckenham) (Con)]

It is clear from what my hon. Friend says that we need more nuclear power stations. They will produce energy at the lowest price, so let us get on with it.

[David Morris]

My hon. Friend takes a Churchillian stance on this issue. We do need more nuclear power in this country and I have never made any bones about saying so. Under this Government, Britain has done well at improving homes to make them more energy efficient, and that cuts costs even at a time when costs are rising. I want us to go further and consider the possibility of tax breaks for companies that build homes with solar panels.

We must push to bring more companies into the market. In 1997, there were 20 major energy companies; now, there are just six. The monopoly must be broken up, and that will never happen unless people are willing to switch providers. The Leader of the Opposition switched supplier. I do not want to ridicule him for that; I want to praise him, because he did the right thing. I just wish he would encourage others to join him, because this is one way of creating competition that will push costs down.

There are more ideas than the ones the Department of Energy and Climate Change is working on, but whatever happens the public must be aware that while the Labour price freeze sounds attractive, it is fundamentally weak and will not lead to lower energy bills—it might even increase them. The truth is that there is no obvious solution to the problem, but by putting a number of measures in place we can take control of it. I support the work of the coalition on energy markets. For the sake of my constituents, I beg hon. Members on both sides of the House not to put that work at risk.

16:35

[Mr Mike Weir (Angus) (SNP)]

I hope everyone in the House agrees that the rising cost of energy is putting huge strains on families throughout the country. The motion calls for a freeze on energy prices. That is superficially attractive, but it is mired in difficulties, not least because it freezes the inequalities in the system. It is true, however, that the energy companies have serious questions to answer about the reason prices are rising. Every year we are told that it is due to the wholesale price of energy, and the Energy Secretary repeated that in last week’s statement. However, the chief executive of Ovo Energy, appearing before the Select Committee and on TV this week, stated that the cost of gas he is buying is lower than it has been in the past four years. Ofgem originally questioned whether there had in fact been a price rise, before rowing back. Its position can best be summed up as: “It depends how you read the figures,” which hardly instils confidence.

I fully understand that the situation is probably not straightforward, in that the need to ensure sufficient supplies well into the future and the volumes of energy purchased by the large companies, effectively as futures, as against that of smaller companies who may buy on the spot market, may make a difference, but both the regulator and the Department must act decisively. If there is any suggestion that wholesale prices have not risen as claimed, the rises must be cancelled or curtailed. It is not good enough to call for a Competition Commission inquiry. That will take years and we need quick action now to find out the truth of the claims. To that extent, I support the call to ensure that when wholesale prices are reduced they should be passed on to the consumer. The consumer is rightly suspicious and we require much greater transparency.

I have said on other occasions, and will repeat it again, that we would be prepared to look at any proposals for reducing energy bills, but I have concerns about the Labour proposal for a one-off energy price freeze. What would happen, for example, if energy companies substantially increased prices prior to, or immediately after, the freeze? Would a Labour Government force a reduction? Would they bring in a permanent control of prices? How would they deal with the urgent need for investment in our energy infrastructure? In an intervention, I asked about contracts for difference and the pool system. Hon. Members will recall that contracts for difference were supposed to guarantee a price to stimulate much needed investment in energy infrastructure. I do not understand how that would fit into the proposed system.

The right hon. Member for Don Valley (Caroline Flint) spoke at length about splitting up energy companies, but she seemed to be talking about the split between the two wings of energy companies—the wholesale and the retail supply side. That has dangers. Anyone who watched the recent “Dispatches” programme on energy prices would have seen what was said about E.ON and the rather unique way it deals with that. Apparently, the retail side makes no money because it pays huge rates of interest on money borrowed entirely from associated companies within the group. How will that be dealt with in the proposed system? E.ON is already effectively split between wholesale and retail, but that is not having an effect, because it is a matter of artificial accountancy, borrowing money from other companies within the group. As an alternative, we have proposed transferring from energy bills to general taxation the cost not of all green measures, but specifically of the fuel-poverty measures and the energy company obligation, which we calculate would reduce energy bills by 5% or about £70 each and every year—it would not be a one-off saving. This would have the added advantage of delivering a more integrated fuel-poverty programme than could be achieved if we left it to the energy companies.

In the energy statement last week, the Secretary of State again repeated that the Government had taken powers to implement the Prime Minister’s promise to put everyone on the lowest tariff. I have pointed out before, and will do so again, that the measures in the Energy Bill will not have that effect. The Bill requires energy companies not to put everyone on the lowest tariff, but only to make the offer, which might be lost in the mass of paper we receive from them already. Is not part of the problem that there is such a lack of trust in energy companies that whatever they offer will be met with total scepticism by consumers, even when they offer free loft insulation or suggest the most appropriate tariff?

The proposed changes will even fail to help the poorest in our society who have to rely on prepayment meters—this is another difficulty with the energy price freeze. For someone on a direct debit tariff, it might be fine, but anyone on a prepayment meter will still be stuck on a higher tariff, because generally their tariffs are higher than direct debit tariffs. If we are truly intent on ensuring that everyone has the lowest possible bills, these measures should not only operate within an existing contract, but allow people to move to a cheaper contract. Instead of freezing the price, we need to mandate that people be moved to a cheaper contract.

Perversely, prepayment meters are one of the few examples where consumers pay much more if they pay cash in advance. That is important, because Citizens Advice Scotland recently issued an energy report showing that the majority of people coming to it with energy problems have trouble with prepayment meters. It cited examples of people putting £10 in a meter, only to see £7 taken to meet existing debts, leaving them with only £3 of energy, which is completely insufficient to heat homes.

The motion calls on the Government to put all over-75s on the cheapest tariff. Although any help is welcome, it rather depends on the tariffs. If the cost of energy continues to rise, the amount payable will also continue to rise throughout the various tariffs, so this measure would not hit at the heart of the problem of the relative affordability of energy. It is not clear whether the motion intends that people should be put on the cheapest tariff that their present supplier offers or the cheapest overall tariff. The best option is to have a cheaper specific tariff that is identical across all companies and available to the over-75s. That would attack the problem. A system of higher winter fuel allowances for elderly people would also be a much better option. Furthermore, to take up the point raised by the hon. Member for Ynys Môn (Albert Owen) about off-grid consumers, I have tried repeatedly—and will do so again on 27 November—to raise in the House the idea of earlier winter fuel allowances for those off the gas grid.

It has been interesting to listen to Labour Members. Understandably, they seem to have great disdain for the energy companies. I was particularly struck by the speech from the hon. Member for Glasgow Central (Anas Sarwar), who is no longer in his place. In a recent article in The Independent, however, I noticed that at the very conference at which Labour announced its new policy, it had a céilidh sponsored by Scottish Power, so it has not always been so reluctant to dance to the tune of the big energy companies.

16:43

[Duncan Hames (Chippenham) (LD)]

I did not anticipate having the opportunity to speak, so I am grateful to you, Madam Deputy Speaker, for calling me and to colleagues whose speeches I have heard.

It is important first to set out our objectives for energy policy, on which, even in this heated debate, a large majority of the House can reach a consensus. We want energy that is affordable and reliably available to businesses and households. We want to meet our energy needs in a way that also meets our commitments in the carbon budget to reduce carbon emissions and take responsibility for the consequences of our choices for the rest of the world. It is worth bearing in mind, in seeking to do all those things, that the question of affordability can be addressed not only through energy-specific policies but through wider economic policy.

I suspect that energy is not going to get any cheaper, so it is important that we look to other mechanisms to make our energy more affordable. Above all, I would certainly agree with those who have spoken today about the need to become more efficient in our energy use in order to get the bills down. I also hope that we can support economic policies that will provide for growing incomes, so that people’s ability to pay their energy bills will be improved. That should be an objective of this Government and any other.

My main interest in speaking in the debate is to elicit more detail from those on the Opposition Front Bench about the proposals that they want MPs to vote for this afternoon. The “deep structural reforms” that the right hon. Member for Don Valley (Caroline Flint) talked about introducing after a 20-month price freeze are worthy of closer scrutiny by Members on both sides of the House, but I lack any confidence that the interim measure of a price freeze would actually work. I want to ask some questions about that, and I hope that the hon. Member for Rutherglen and Hamilton West (Tom Greatrex) will be able to answer them when he sums up.

How long would it take to bring about a price freeze, once a Government Minister had decided to introduce one? Could he or she do it under their own executive authority? Would they need to put it to the Cabinet, or get a Government write-round to support the proposal first? Could it be done through regulations, or would it need to pass through this House? Would it require primary or even emergency legislation?

I would be interested to hear how long it would take to implement such a freeze, regardless of which party was in power, if a Minister was minded to do so. That would also tell us how long the energy companies would have to respond to the situation before the Government were able to implement the freeze. Would it be possible for the energy companies, either under this Government or a future Government, to get price rises in before a freeze came into effect?

What would be the consequences of a price freeze while it was in place? The right hon. Lady said that, even if wholesale prices were changed during a freeze, electricity suppliers would not feel the effect or need to increase their prices because they would already have purchased their energy on the forward markets. As I have tried to explain in earlier interventions, that will present a particular challenge to the very companies that I hope all Members want to have a greater presence in the electricity market, because those smaller companies are at a disadvantage compared with the big six when trying to buy electricity on the forward markets.

It is not difficult to understand. An independent electricity generator entering into a contract to sell its electricity some time in the future to a supplier of electricity to businesses and other customers is giving up the opportunity to sell it to anyone else. It will therefore have to be extremely confident that the supplier will still have the financial strength to pay for that electricity later on. Generators look for collateral in those circumstances, and the big six clearly have the necessary collateral to see them through that process. It is much harder for the smaller, challenger companies.

[Dr Whitehead]

The hon. Gentleman talks essentially about the security of long-term bilateral deals. Does he accept that the effect of a pool, particularly a full purchase-in and a full buy-out pool, removes a number of the issues he has raised about the uncertainty of whether we can get a buyer and whether the person who is buying ultimately has the wherewithal to do so?

[Duncan Hames]

I thank the hon. Gentleman for that intervention. I said that I was interested in the long-term proposals outlined by the right hon. Member for Don Valley. However, I am talking about what happens during the period of the price freeze, before some of the changes she proposed come into effect; and I was highlighting the difficult position in which the small suppliers are left during that period.

This issue relates not just to wholesale prices, as other increases in costs that suppliers will experience during this price-freeze period are relevant, too. Suppliers will experience regular increases in costs for distribution and transmission, and unless they are in a position to change their prices before the freeze comes into effect, that will be a direct hit. Although some Labour Members may believe that the big six can take that hit, it is a much bigger challenge for smaller competitors to be able to absorb it. In fact, a market in which losses need to be absorbed for a period of time before it is possible to break even acts as a barrier to entry. If we want a more competitive market, introducing a new barrier to entry and to the viability of new entrants will clearly not help bring about competition. In order to be able to grow market share, new entrants rely on people having an incentive to switch. I would be interested to hear what the Opposition think will be the practice of competition during the 20-month freeze. How possible do they believe it will be for the smaller competitors to challenge the big six during this period, or will it just be one of entrenchment for the big six companies?

At the start of the debate, I asked whether the right hon. Member for Don Valley agreed with me—and she did—that it was in the long-term interest of consumers for Government policy to seek to reduce the cost of capital to businesses in the industry. If we enjoy in the future a very competitive energy market—after whichever Government have been busy reforming the electricity market—the lower the cost of capital, the lower the prices will be that consumers pay.

It seems to me incontrovertible that an industry experiencing a Government intervention which forces a price freeze for a period of 20 months will have the effect of raising the cost of capital. Investors do not have to invest in the sector if they do not wish to do so; they can invest elsewhere. If they know that the Government have frozen prices, that will be a reason for the cost of capital to increase. Ultimately, that would push up prices for consumers, even after all the reforms that the shadow Secretary of State outlined. That would not be in the best interests of consumers. I do not believe that this idea is going to work.

16:53

[Dr Alan Whitehead (Southampton, Test) (Lab)]

Perhaps the best thing we can do this afternoon is to shoot a number of canards standing in the way of grasping the central issue of how to reset the market in such a way that it will work in favour of consumers and customers instead of against customers’ interests. Frankly, saying that proposals to reset the market will lead to a deterioration in investment prospects or a loss of market value that will prevent people from investing is the first and one of the biggest of such canards.

A substantial amount of investment is needed, but it cannot be judged on the basis of the interests of integrated utility management; it will come from companies investing in the wires, in smart meters and in new forms of generation that are independent of the utilities. Indeed, the balance sheet of the big six suggests that not a very high proportion of that £100 billion-plus investment is likely to come from them in any event. It appears that the factors relating to the investment will be manifold, and will not necessarily be related to the fortunes of the big six.

To say that resetting the market will cause it to work in a terrible way in the future is effectively to say that breaking up what is currently a seriously dysfunctional system will lead to problems. That strikes me as a counsel of despair not just where the market is concerned, but where consumers are concerned, and it is, perhaps, the second big canard to be shot. It is claimed that the Energy Bill will put a number of things right, and it will, but what it will not put right is the malfunctioning of the market. What is extraordinary about the Bill—as with the energy reform White Paper that preceded it—is that the one thing it does not do is reform the energy market. It lets the market carry on just as it has in the past, and we know that the market is seriously dysfunctional.

Bilateral trade that rolls down the curve conceals a considerable amount of what is actually going on. One might think, for example, that there is a relationship between the 24% profit that is made by generators overall and the 5% that is made by retailers, because one sells to the other, and one might therefore wonder where the missing money in the middle is going. In fact, much of it is going to people who are trading with themselves and “netting off” so that their trades do not appear as trades at all, or even creating trades close to gate closure in order to balance the two sides of the operation of an integrated company.

We know that the energy market is pretty dysfunctional, and we know that it needs to be reformed. The question is, can we reform it by simply continuing with business as usual and hoping that Ofgem will continue to produce documents that aim to introduce a little more transparency to a market that, by definition, is largely not transparent, or should we do more to reset the market in favour of customers?

[Mr David Anderson (Blaydon) (Lab)]

I apologise for not being in the Chamber earlier, Madam Deputy Speaker. I was at a Select Committee meeting.

As always, my hon. Friend is speaking very knowledgeably, and he is making a good point about the dysfunctionality of the energy market. When, 25 years ago, it was first suggested that the market should be privatised, we were told that one of the key reasons for privatising it was that the risk would be transferred from the Government—from the public purse—to the private sector. Is not the truth that, in the last 25 years, the risk has been transferred from the Government to the private sector, and thence to the customer? The customer bears the risk whatever happens.

[Dr Whitehead]

My hon. Friend is right. The market tends eventually to land its risk, its transfer arrangements and its outcomes squarely on customers’ bills. The point about a price freeze is that it must be seen in the context of the other measures that it is being suggested should accompany it as a way of securing a pause while the market is reset.

[Bob Stewart]

For the sake of my education, will the hon. Gentleman clarify one point? It seems to me that if we had a nationalised energy company and the prices went up, there would be only two ways of paying for that: through the customer, and through the Government. Does the hon. Gentleman agree that, whether a company is nationalised or commercial, the customer pays in the end?

[Dr Whitehead]

The hon. Gentleman asks a rather complicated question. Currently, gas is the market-maker and companies that produce energy that is not gas-based sell their energy into the retail market at the electricity-equivalent of the price of energy produced by gas. It is to be hoped that one of the effects of energy market reform will be that a change in the balance of production, in particular as a result of increasing amounts of renewables, will mean that gas is no longer the market-maker. That is another canard that will need to be shot in the long term.

[Bob Stewart]

Gas is the most expensive?

[Dr Whitehead]

Obviously, the world gas price varies considerably. The UK market is currently based around the gas price. If gas is no longer the market-maker over the medium and long term, a number of interesting consequences will arise, particularly in terms of how we would relate volatile markets to retail prices.

That is one of the issues that would be dealt with by the Opposition’s proposals to introduce a pool. If there is a pool into which everybody transparently sells their products and the pool then sells to energy retailers, that would deal with a number of problems that have arisen as a result of the imperfections in the market, and which would remain despite the Energy Bill trying hard to address them. If there was a pool, they would be dealt with even if gas was still the market-maker, but the market would be much more efficient in the long term if that was not the case.

We should consider in this context the fact that independent generators do not believe they have a clear market for their products. That issue remains unsolved by the Energy Bill provisions. If there were a pool, it would be substantially solved in as much as they would know they had a buyer into the pool and a seller out from the pool. If the current dysfunctional market were reset in the way the Opposition propose—with a price freeze while the market is reset, a pool, and a regulator that can properly relate what is happening in world prices to how they are being passed on through the pool and out the other side—a lot of the issues we have been talking about today would become far more simple and transparent, and the future solutions would be customer-oriented.

I do not say that that would solve the problem of increased energy prices in the future, because it is certainly true that world energy prices continue to increase and that there would be price increases for the consumer. It is not true, incidentally, that under those circumstances energy companies would simply take back the money lost during a price freeze, because there would be regulation reflecting world prices. Although prices have gone up, the world gas price has not gone up over the past year and a half. A fair relationship between world energy prices and retail prices could be achieved through a combination of new forms of regulation, an energy pool and a reset of the market.

We must look at these proposals as part of a wider package that, at its heart, is on the side of the consumer. At present we have a dysfunctional market that will never end up on the side of the consumer unless it is fundamentally reset so that it points in the right direction. My sorrow is that, although the Energy Bill has many good provisions that deserve to be supported, it does not do that, and that is what the Opposition proposals are trying to do, and that is why they should be looked at seriously—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. Time is up. I call Debbie Abrahams.

17:04

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I wish to start by putting the energy bill crisis into the context of the cost of living crisis. As we know, since May 2010 prices have risen faster than pay every month apart from this April. Why was April different? It was different because people on high incomes wanted to take advantage of the tax break that this Government had given them. We also know that one in four children live in poverty—in some wards in my constituency the figure is one in two—with the level set to increase in the next few years. By 2020, because of this Government’s policies, 1.1 million more children will be living in poverty. These are the choices that this Government have made.

Escalating heating bills are a major factor affecting costs to households and to businesses. Last year those costs increased by between 6% and 11%, and since this Government came to power an extra £300 has been added to energy bills. So why is this happening? Until the last few months, this country had a flatlining economy—we have had three years of it. Although the growth over the past few months is welcome, if we had had just 1% growth since 2010 we would have generated £335 billion more in the economy, with all the associated jobs and personal income that that would have brought. If we had had 2% growth, we would have generated £551 billion, and many economists believe that that will just not be recoverable.

Related to that situation has been the fact that pay has either gone down or been frozen. Some 400,000 more people are living below the living wage, bringing the number of those doing so up to 5.2 million. In Oldham, the level of weekly pay has fallen from £432 in 2010 to £426 in 2012, which is well below the regional and national averages. But this is not just about the Government’s mismanagement of the economy; they seem incapable of showing leadership and standing up for ordinary people against powerful vested interests. Too many big businesses have for too long been behaving unethically, whether we are talking about tax evasion or aggressive tax avoidance, cheating the Exchequer of up to £35 billion a year; large companies choosing to pay small businesses in their supply chain late—an estimated £30 billion is owed to small businesses in late payments; or the big six energy suppliers acting as a cartel, claiming that wholesale energy costs have driven up energy bills by 10.4% on average a year, whereas this actually costs them only 1.6% on average.

I tried to intervene on the Secretary of State to make the point that this is happening at a time when these companies are publishing profits of £3.7 billion, which is an increase of 73% since 2010. According to Ofgem’s latest electricity and gas supply market indicators, the typical domestic dual fuel bill now stands at £1,420 a year compared with the £1,105 that it was in May 2010. But what have this Government done, apart from tell us to put jumpers on? Governments set the tone for the culture of a society. They do so not only explicitly through their policies, but by what they imply. It is clear from this Government’s policies and actions exactly where their priorities lie, and it is not with ordinary people and with addressing the inequalities and poverty that exist in this society.

The effect is, as one would expect, fuel poverty. Its level had fallen in recent years, following the various energy-efficiency measures introduced under the last Labour Government, such as the Warm Front programme. But with rising energy bills swamping all that, even under the Government’s new definition of fuel poverty there are now 2.4 million people who are fuel poor, with the average household fuel poverty gap standing at £494.

The Fuel Poverty Advisory Group warned in 2010 that instead of fuel poverty being eliminated by 2016, more than 7 million households could be fuel poor. In Oldham East and Saddleworth, 16% of households—8,000—are fuel poor. To help them, Oldham council launched a collective energy switching scheme that enrolled 22,000 households. The council admits, however, that that is not enough—and it is not enough.

There are wider effects. Sir John Major has said that the real choice people face is whether to heat or eat. I am particularly concerned about this winter and its effect on the most vulnerable in society—older people and those who are ill or disabled. We know that on average 24,000 people, predominantly older people, will lose their lives every winter. Last year however, there was a 75% increase in the number of expected deaths, partly because of the increase in flu but also, according to statistical analysis, because of the extreme cold. It is inconceivable that heating costs will not play a part in the number of excess winter deaths we face, and it is just not good enough to say “Put a jumper on.” If we consider the issue in the context of the crisis in accident and emergency, we can see that there will be absolute meltdown.

It is not only the elderly and the vulnerable who are affected. A constituent wrote to me who is a teacher with a young son of four and twin girls of 20 weeks. She lives in private rented accommodation with her husband, but the landlord cannot afford to update the boiler. She is not eligible for anything. She said, “Last winter was a nightmare. I have newborn babies; what am I going to do? What will support me? The heating costs are bad enough.” I have also had constituents, similar to those mentioned by my hon. Friend the Member for Rochdale (Simon Danczuk), who have written to me about their constant battles with the energy companies. It is just not good enough.

[Mr Anderson]

My hon. Friend is making a very serious speech. Is it not true that when we talk about professionals such as teachers struggling to find the extra money, they are the same people who have had their pay frozen for almost three years? The Government are now talking about freezing their increments, too. They are losing out twice over: costs are going up and their wages are stagnant. That is a direct result of the Government’s policies.

[Debbie Abrahams]

I could not agree more with my hon. Friend. It is a double whammy and the Government are doing nothing to address it.

When the Minister replies, perhaps he can respond to the questions that my constituent has raised. What is she to do? She is working, so she cannot claim support to renew her boiler. Thousands of families up and down the country face equivalent problems and he must give a response on the difficulties mentioned by other Opposition Members.

I wholeheartedly support the pledges made by my right hon. Friend the Leader of the Opposition and my right hon. Friend the Member for Don Valley (Caroline Flint). We must overhaul the energy market, abolishing Ofgem and creating a tough new energy watchdog. We must require the energy companies to pool the power that they generate and we must require those companies to put all over-75s on the cheapest tariff.

17:13

[Toby Perkins (Chesterfield) (Lab)]

I am delighted to have the opportunity to speak in such an important debate, because I believe that today we are discussing an issue that goes to the heart of the cost-of-living crisis that my constituents are living through day in, day out. We need urgent action to address the problem and I am pleased that that is exactly what Labour proposes today.

Since the Prime Minister took office, energy bills have risen by almost £300 per family. Of course, we all know that when my right hon. Friend the Member for Doncaster North (Edward Miliband) was Energy Secretary, prices came down. During the debate, I have been saddened but also a little heartened. I am saddened because we have heard from a Government who are making it absolutely clear that they will take no action on one of the key issues facing my constituents. At a time when members of the public are calling so desperately for something to happen and we are hearing a Government who are so very much out of touch defending the status quo, I must admit that I was a little heartened to think that when we go to the next election they will have to look the electorate in the eye on the doorsteps, saying, “We were given the chance to do something, but we turned our backs on you and stood up for the big energy companies.” That heartens me very much in electoral terms, despite my disappointment about the impact on my constituents.

Opposition Members have raised an army of straw men to explain why they cannot take serious action. It is not possible for anyone who is worried about energy prices to hear the speech of the Secretary of State and believe that things would be any different under him in future than they are today or than they were yesterday. He raised the green deal. The number of people assessed for the green deal would fill Old Trafford, but the people who have taken up the green deal would not even fill the Chamber. That is the scale of the failure.

[Gregory Barker]

The hon. Gentleman is absolutely wrong. He confuses the number of people who have taken up green deal finance with the number of people who have had an assessment and installed green deal measures. Once they sit down at their kitchen table, a surprisingly large number of people—thousands and thousands—elect to take all the savings immediately and install the measures.

[Chris Ruane]

How many?

[Gregory Barker]

British Gas alone has installed more than 10,000 green deal measures for customers who have elected to install them. Some 80% of people who have had a green assessment say that they have already installed measures, are currently installing measures, or are likely to do so.

[Madam Deputy Speaker (Dawn Primarolo)]

Order. Interventions are brief. I allowed the point to be made, but that really was too long.

[Toby Perkins]

Just like many other Government Members, the more the Minister spoke the less he said. Seven people in the Prime Minister’s constituency benefited from that.

[Chris Ruane]

Six.

[Toby Perkins]

Was it six? I got it wrong. The measure is a pitiful failure and to hold it up as an example of a Government success shows how little the Government know and how little they are doing.

In the few weeks since the Labour conference the Government have been in complete disarray on one of the central cost of living issues that we face. When I listened to the speech by the hon. Member for Morecambe and Lunesdale (David Morris) I was reminded of someone who thought that if we did anything to these powerful energy companies they might end up hurting us in return. Basically, we should just leave them alone, because if we did not they might up put up prices or not increase wages for his constituents. I was reminded of someone who thinks that the way to tackle a bully is not to tell anyone about what they are doing because the bully might get them after school. It was absolutely pitiful, and the hon. Gentleman’s constituents will have heard what he said—I am sure that they will be made aware of it—and they will know that he is someone who absolutely refuses to take their side or stand up to the big six.

When we hear Government Members say that we need to put pressure on the big energy companies while at the same time coming up with a host of risible reasons for not taking action, saying that that would be dangerous, we know that the Conservatives and Liberal Democrats are not the answer to this problem.

Prices are going up because when the wholesale price of energy increases the energy companies pass that on, but when it drops our constituents do not see a fall in their bills. If that sounds familiar to Government Members I would not be surprised, because it is precisely what the Prime Minister said when he was Leader of the Opposition. In Bedford in 2009, when he was still attempting to occupy the centre ground, he said:

“I think we all feel that when gas prices or oil prices go up, they rush to pass the costs onto us and yet when we read in the papers that the oil price has collapsed and the gas prices are coming down, we wait for a very long time before we see anything coming through on our bills”.

I could not agree more, and it is a shame that the Prime Minister does not say now what he did when he was attempting to be elected.

Only last month, Which? estimated that flaws in the market have left consumers paying £3.9 billion a year over the odds since 2010. We have a duty to our constituents to end this great rip-off. One-nation Labour has a long-term vision to do just that—not simply with the energy price freeze but with a suite of measures that will radically transform the market. There are three steps that will make a significant difference, including, first, separating the parts of the business that generate energy from the parts that sell to consumers. My hon. Friend the Member for Southampton, Test (Dr Whitehead) was excellent, as he always is, on the importance of this, setting out its real value. Secondly, we would introduce a simple new tariff structure and make sure that people over 75 always paid the lowest tariff. Thirdly, there would be a measure to abolish Ofgem, which has failed to stand up for consumers, and to replace it from January 2017 with a new energy watchdog with teeth.

The 42,000 households in my constituency cannot wait for those proposals to bear fruit. They need action now. They need a Prime Minister who is not strong on the weak and weak on the strong but who is brave enough to stand up to the energy companies and deliver a price freeze. An incoming Labour Government will legislate with immediate effect to make this happen and will put an average of £120 back into the pockets of every household in Chesterfield. Unfortunately, the response of the Prime Minister and the response that we heard from the Secretary of State was once again to stand up for the wrong people and to take the side of vested interest. It seems that the Conservatives will do anything to prevent the big six from having to reduce their profits.

Instead, the Prime Minister has suddenly turned on the evil of green taxes. As my hon. Friend the Member for Ynys Môn (Albert Owen) reflected earlier, green taxes are so evil that he told “The Politics Show” in 2006:

“I think green taxes as a whole need to go up”.

In 2006 he told “Newsnight” that

“we think green taxes should take a bigger share of overall taxes.”

So evil were these green taxes that his Government introduced 60% of the green levies currently imposed on energy companies. We all remember when the Prime Minister was the Leader of the Opposition and was attempting to present the modern face of Conservatism. He has certainly travelled a long way from “vote blue, go green”. He has shot the husky and simply told people to pull up their hoodie. He is not standing up on behalf of the people in my constituency.

The Prime Minister has not explained how, when he abolishes the green levies, the burden will move to general taxation. Where will the money come from? I do not believe the Government are going to increase taxes. That leaves one of two possibilities. Either it will go on to the deficit, which the Government have so singularly failed to eradicate in the way they promised, or they will reduce the budget for schools, hospitals, roads or other Government Departments. We have had nothing from the Secretary of State or Ministers about how they propose to fund those measures from general taxation. It was interesting that in the Secretary of State’s entire speech, he did not once mention the idea of getting rid of green levies and raising the money from general taxation. That spoke volumes about the extent of the disarray that the Government are in.

The issue is not just the impact on consumers. Labour is very much the party of small business. Our policy of an energy price freeze is an example of that. Annual energy bills for small businesses have gone up by an average of £10,000 since 2010. Small businesses will benefit hugely not just from the price freeze, but from a market that works for consumers. In addition, our plan to cut business rates for small business would mean an average saving of nearly £450 for 1.5 million business properties. These two policies demonstrate to small businesses that it is only Labour that will stand up on their side and cut their costs so that they can reinvest in new jobs and new products. Labour’s policy is good for consumers, good for business and good for the economy. I am proud to say that I will be supporting it and voting for it today.

17:23

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

There are 6,196 households in my constituency that are in fuel poverty, using the 10% of income measure, but those statistics are from 2011 and are the most recent. Since then prices have risen at least twice, while real wages are stagnating, so I am sure those figures will be much higher now. Energy prices are a key driver of the Prime Minister’s cost of living crisis, which has seen on average £1,200 wiped off the real value of the annual incomes of working people in the north-east.

Those fuel poverty figures do not tell the whole story. They do not show the households on the borderline of fuel poverty or those that may have a decent income, but for which energy costs are just one of a number of ever-rising costs that they have to meet, such as rent, child care bills, kids’ clothes, school uniforms, food and groceries. It is this reality that this Prime Minister and this Government do not understand. It is all very well telling people to wear a jumper around the house. Does the Prime Minister not realise that people do that already, my family included?

In the north-east, where it gets cold from September onwards, we put blankets over our legs when we watch telly. Some people even use quilts to keep warm, especially the elderly. There is a whole north-south divide element to this debate that needs to be addressed. As someone who lives in both places all year round, I know that there is regularly a 10° C difference, and that is without the added wind chill factor. According to the BBC’s weather forecast, at 4 o’clock today, when I last checked, it was 14° C in London and 8° C in Sunderland, and that is a mild gap. What about those who have to wear jumpers or layers of clothing when they go to bed at night because they have been unable to put the heating on all evening, or all week?

Why are energy prices rising? As we have heard, average wholesale prices have risen by just 1.6% a year since 2011, which accounts for around £16 of the increase in bills since 2011, but consumers’ bills have risen by 10.4% on average. That is six times more, at around £100 a year. That is being used to fund the fat-cat salaries of the big six and double the profits for their shareholders. Are Ministers really telling the residents and small businesses of Washington and Sunderland West, including the 6,196 households living in fuel poverty, that they would rather stand up for the right of the big six to boost their profits than for the people they are elected to this place to serve?

We must not lose sight of the fact that it is still the very poorest and most vulnerable of my constituents who pay the highest unit costs for their energy because they are on prepayment meters. They cannot switch to cheaper rates because there is very little competition, if any, for their business. They cannot pay a set amount by direct debit each month to spread the cost of winter over the rest of the year because the energy companies will not give them that credit facility. If they cannot afford the £10 to top up the meter, the lights and boiler just do not go on.

The energy company executives who appeared before the Energy and Climate Change Committee last week assured my hon. Friend the Member for Glasgow North West (John Robertson) that they would not cut off the elderly or disabled this winter, but those on prepayment meters cannot just keep using their heating; they are cut off the minute they run out of money or emergency credit.

[Mr Anderson]

My hon. Friend will remember from the days when she worked with me in Unison that we had discussions with the energy people when they changed to prepayment meters, meaning that people now self-disconnect. Companies can now say that they no longer cut people off or have responsibility for that, but those people are forced to disconnect themselves. The number of people in this country who live without access to heat, fuel and warmth because they have no choice is hidden, and that is a disgrace.

[Mrs Hodgson]

My hon. Friend makes a very good point. I would like to know what advice the energy company executives will give all those people. Will they offer them a deal they can afford in order to keep warm this winter, as they said they would during the Select Committee hearing?

I am going to share something quite personal today. I know that there are some MPs, although not many, whose background is similar to mine. I grew up in poverty. I know what it is like to have no central heating, and I know what it is like when you then have central heating but are not able to put it on because your mam cannot afford it. I know what it is like to wake up so cold that you cannot bear to undress to get washed and ready for school. I know what it is like to have a thick layer of ice on the inside of your bedroom window—I used to think everybody did in winter. I know what it is like to have the electricity man knock on your door and cut of your power when you are 13 years old and minding your two younger brothers while your mam has popped out to see your nanna because it is the middle of winter. I know what it is like to sit and wait, scared in the cold and dark, until your mam comes home, trying to keep two little boys occupied and make them feel safe.

That was in 1979, the first year of the previous Tory Government, and the year I was politicised and realised what it actually meant to have a Tory Government. My mam was not feckless; we were poor. There is a difference. A lot of people living in fuel poverty today are working. They are not feckless either, but there is a cost of living crisis beyond their control and not of their making.

I know that 34 years later some families still have experiences similar to mine. I remember talking to a member of staff at a Sure Start children’s centre who told me about the mothers of young children who often came to the centre with their child for hours at a time because it was warm and they were unable to use their appliances or TV at home because they could not afford to top up the meter.

I have recently heard about heat buddies in the north-east—groups of people who go to each other’s homes in turn to save heating their home in the evening. I have also heard that bath houses are being requested—in 21st-century Britain—because people do not have the money to heat their homes or water, so they wash with a kettleful of water in a sink and cannot face even trying to boil enough water for a bath as their home is too cold for them to bathe in. For goodness’ sake, Mr Speaker, what sort of country are we living in? Is it Victorian Britain? Is it Dickensian Britain?

[Mr Anderson]

Tory Britain.

[Mrs Hodgson]

Tory Britain—exactly. What are the Government doing for these people? What they need—what we all need—is an energy market that is forced to work in the interests of consumers, not shareholders. But until a Labour Government have the opportunity to make the required changes stated in the motion, they need a Prime Minister with the bottle and the guts to tell the energy companies that enough is enough—that people in 21st-century Britain should be able to have a bath in their own home and to go to bed warm enough to wear just a nightie or a pair of pyjamas, and not to die because of the cold with central heating they cannot afford to use.

[Toby Perkins]

I very much appreciate what my hon. Friend is saying—she is making a very powerful speech. The problem is not that the Prime Minister does not have the courage to stand up to the energy companies; it is that it is not in his make-up to stand up to the energy companies. It is not what he wants to do; it is not what he came into politics to do. He is not in politics to stop the energy companies making profits and to make consumers better off.

[Mrs Hodgson]

Is not the country all the worse for that? Well, I hope that the Prime Minister and his Government sleep warm in their beds at night, because huge numbers of people in the country he governs certainly do not, and will not this winter.

I would like to wrap up my remarks by quoting some extracts from a letter that I received a couple of weeks ago from Mrs Templeton, a constituent of mine from Biddick in Washington. Mrs Templeton wrote:

“I am writing to say how disgusted me and my hubby are about the rise in energy prices…Mr Miliband says he will freeze prices in 2015, but what can be done now?...I cannot believe the country is taking this on the chin...we should fight back…The top people in these companies will not worry about the increase, but believe me, most of the country are afraid of putting their heating on.”

There are millions of Mrs Templetons across the country—people who are sick of their bills keeping on going up but never coming down, sick of seeing energy companies’ profits ballooning while they have to choose between heating and eating, and sick of this Prime Minister doing nothing about it but defend the status quo. If he does not have the strength to fight back on behalf of Mrs Templeton and all those other people across this country, I suggest that he should stand aside and let someone who does do so.

17:32

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

It is an honour to follow my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson), who made an impassioned speech. I seek to echo some of the points she made and to speak strongly in support of the Opposition’s motion. I do so as the MP representing the constituency with the third highest level of fuel poverty, according to the Government’s new definition.

Not a week goes by when I do not have a constituent come to me to raise their serious worries about their energy bills. That is sometimes because they have been ripped off by their energy company. We have heard many examples of people who have paid above the odds for their direct debits or have been penalised when they have moved and have not received the credit to which they are entitled. We have heard about specific issues to do with people who have prepayment meters but often find that very difficult and have to pay over the odds in any repayments that they have to make. I speak in support of the motion on behalf of all my constituents and people right across this country.

The constituents we represent, and people up and down the country, are paying a staggering £315 more for their energy bills than they did back in 2010. That is against the backdrop of a cost of living crisis in which people have seen prices rise faster than their wages in 39 out of the past 40 months. Many of my hon. Friends have talked about the real choice that people in our country—the seventh most industrialised in the world—are having to make between heating and eating. That is not a joke or a catchphrase—I have seen it on far too many occasions, as have many of my hon. Friends. We are the only G7 country in which the Red Cross is providing emergency food aid. It does not help that people are having to spend £1,400 a year on average for their dual fuel bill, but have not seen their wages go up accordingly.

Some 700,000 people have accessed emergency food aid through a food bank. That is a national disgrace. The responses that the Prime Minister has given from the Dispatch Box at Prime Minister’s questions have been pitiful. He has not acknowledged the depth of the problem in this country. It is a stain on our national conscience. I am ashamed that people in my constituency have to go to a food bank because they cannot afford to put food on the table. To link that point back to this energy debate, people are often unable to use the goods in the emergency food aid bag that they receive from the Trussell Trust because they cannot afford the gas that it would take to heat them up on the cooker.

Those are the issues that our country faces in 2013. I look forward to the Minister’s response because what the Secretary of State said was pitiful. He talked about switching, but for all the people who are facing a very cold winter, the best deal in a broken market is not a good deal. The figures that were released yesterday showed that the gap between the wholesale price and the prices that energy companies are charging us is getting wider. The wholesale price has gone up by 1.7% and the average bill has gone up by 9%. At a time when people are struggling to get by and there is a cost of living crisis, it is difficult for people to deal with those price increases.

That is why I support the Opposition motion. We need a price freeze. The Government have an opportunity to implement the price freeze today. I sincerely hope that they will, even though the Secretary of State indicated that they will not. A price freeze would assist 40,221 households in my constituency alone. It is not just households that will benefit, but businesses. We need a price freeze so that we can implement the raft of measures that are needed to reform the market. I notice that many Government Members are fixated on the freeze. The freeze is the vehicle by which we will implement the changes in legislation that are needed to fix the market.

What are the changes that are required urgently? We need to separate the retail market from the generation side. I mentioned in an intervention on my right hon. Friend the Member for Don Valley (Caroline Flint) that I have been to one of the energy companies. I saw for myself the physical collocation of the generation and retail sides. The room in which the company oversees its generation—the big six generate 70% of the capacity in the UK—is right next door to where it buys and sells its energy. The idea that the two sides do not liaise or engage with each another is ludicrous. That is why we need urgently to separate the retail side from the generation side.

We need to introduce a two-way pool in the energy market so that there is transparency in the cost of energy generation, which we do not currently have. It is in the best interests of the energy companies to charge themselves a high price. We do not know what that price is because it is decided in back-room deals among themselves. There is a pool, but it makes up only a fraction of the market. We need the whole market to use the two-way pool so that we can see the price of energy and to encourage new entrants into the market. At the moment, the big six dominate the energy market, making up about 99% of it, and there is little opportunity for new entrants to come in.

We need to have standardised tariffs so that people can compare energy prices properly. At the moment, the tariffs are very confusing. People need the switching websites because they cannot compare prices for themselves. The previous Secretary of State for Energy and Climate Change told the Select Committee that when he had tried to switch, he could not do so because it was so complicated. There are hundreds of tariffs. If we had standardised tariffs, people would be able to compare prices easily.

[Mrs Hodgson]

My hon. Friend is making an excellent speech. Does she agree that it is important that over-75s are put on the lowest tariff automatically, for the very reasons that she has just given?

[Luciana Berger]

I thank my hon. Friend for that intervention as I was just about to make that very point. I am delighted that the motion reinforces our policy that energy companies should automatically put over-75s on the cheapest tariff. That would assist 5,867 people in my constituency, and constituents of hon. Members across the House. Older customers are less able to benefit from direct debit deals because they are less likely to have access to a bank account, or access to the internet to get online deals. It is possible, perhaps through data-sharing, for energy companies to put the over-75s on to those cheapest tariffs. They could do that today and make a real difference to hundreds of thousands of pensioners up and down our country.

I am supporting the motion today because we need a tough new watchdog. We know that Ofgem is not doing a proper job because back in 2008 it was investigated, and 16 different areas identified.

[Debbie Abrahams]

Does my hon. Friend want to comment on what the Secretary of State said about Ofgem and that report? Does she think Ofgem is doing a good job?

[Luciana Berger]

I thank my hon. Friend for that contribution. Back in 2008, 16 areas were identified where Ofgem was not doing a proper job. The other year it was found that it had improved in only four of those 16 areas which, over that time, is frankly not good enough. When millions of our constituents and businesses up and down the country are suffering, we need a proper regulator with teeth, as well as the responsibility and ability to ensure that when there are reductions in wholesale costs, those reductions are passed on to consumers in way that is not done at the moment.

The Secretary of State was keen to talk about the green deal and the energy company obligation, which the Government have presented as a sort of quick-fix. Of course we need to do everything to ensure that we help millions of households across the country that do not have proper insulation in their homes, as that is one of the best ways to reduce bills. What the Government have proposed, however, and what they are doing on the green deal—well, the figures speak for themselves and we wait to see what will happen by the end of the year. The Minister said he would not be sleeping at night if 10,000 homes had not had a green deal package, but we wait to see the figures.

[Gregory Barker]

Well over 10,000 homes have already installed green deal measures.

[Luciana Berger]

I am referring to figures of those that have actually completed. I return to my point that we have the green deal in hand with the ECO, and thousands of people in the insulation industry have lost their jobs.

Let me mention an actual individual. Mr Sturdy in my constituency is 85 years old. He has previously had a stroke, suffered from angina, and undergone a quadruple heart bypass. He has been visited in his home three times by three separate companies purporting to help him with the energy company obligation. Separately, his energy company, SSE, said “Go to Carillion as it will help you with the energy company obligation.” He has paid hundreds of pounds to get his loft cleared and his thin insulation removed, yet all those companies cannot provide him with the insulation he needs. He has spent hundreds of pounds and his home is now less well insulated than it was before. He is facing a very cold winter and I hope the Government will address that in their remarks.

17:43

[Mr Michael Meacher (Oldham West and Royton) (Lab)]

I found the Secretary of State’s speech one of the most disappointing and unconvincing that I have heard for quite a time. It seemed to me that he was quite rattled—at times shrill; at times patronising—and perhaps that explains why he fled the Chamber the second it was over. He appealed for consensus with the Opposition at the start, but only on terms that suit his friends in the big six. His only proposal to reduce prices was by competition, which everyone can see has patently collapsed in the present semi-monopoly system. He had no plausible answer whatsoever for stopping the current gross overcharging. He spoke about transparency—which, of course, we all want to see—but never explained how the present excessive opaqueness could effectively be remedied within the present system.

It needs to be said at the outset that whatever opinion people in the Chamber, or outside, may have about an energy price freeze, this necessary examination by Parliament of the cost of living in general, and the cost of energy for the nation in particular, would never have happened had the Leader of the Opposition not put down a very powerful marker in his conference speech two months ago. The debate has thrown the Government into a tizzy, which they do not know how to handle. The Prime Minister was rushing around threatening to remove the green levies, which is the opposite of what he said a few months ago, and apparently forgetting that this is supposed to be the greenest Government ever. He was even beating his chest threatening all manner of action against the water industry for its price rises.

The Secretary of State was jerked into action, threatening to criminalise market manipulation, demanding yet another Ofgem investigation—is this the 18th?—into company profits, and proposing to speed up switching suppliers from five weeks to 24 hours, which is unworkable, because if all suppliers put up prices by roughly the same amount at about the same time, which is the experience we have had, it will make no difference.

The key point is that none of that flurry of activity to protect the consumer would have happened had not my right hon. Friend the Leader of the Opposition made a commitment to real action, which two thirds of the electorate immediately hailed as exactly what was needed. It is absolutely extraordinary that the Leader of the Opposition, who currently has no executive power at all, has exercised more influence over Murdoch and BSkyB, over Leveson and press regulation, over Syria and starting another war, and now over energy pricing and the cost of living, than all members of the Government put together.

Let us be clear on the key point, which is rather different from the understanding of many Government Members. An energy price freeze is not a policy programme in itself—of course it is not—but merely an important element in wider reform. As Opposition Members have made perfectly clear, it will be followed by a return to trading energy through a pool system, which will be more transparent than the current system, together with separation or unbundling of the different arms of the energy companies. They are currently vertically integrated, which means that they can both generate energy and supply it to the customer, which makes it very hard, if not impossible, to assess the extent of their profits, because they trade with themselves and with one another.

There are good reasons to review the current energy market structure and the business model on which it is based. Ever since Kyoto, global warming has made mitigating CO₂ emissions the dominant challenge. The decline in the UK’s indigenous natural gas fields has made ensuring the security of supply and managing the energy sector’s impact on the balance of payments key objectives. Whether the liberalised market alone is capable of achieving those objectives automatically can be questioned—[Interruption.] Well, experience has shown that it is targeted on micro-efficiencies and on extracting egregious profits.

What has happened in the past two decades to deal with that policy fragmentation? There has been a persistent accumulation of directives, rules and subsidy schemes that are intended to cure the liberalised market of its intrinsic indifference to decarbonisation and the security of supply. All that has been programmed and overseen by a growing army of regulatory bodies, quangos and advisory institutions. We have thus ended up with the worst of both worlds—a byzantine industrial structure theoretically co-ordinated by the market mechanism, but one that nevertheless requires omniscient policy makers to mastermind everything it does. I submit that that is not sustainable.

With or without a price freeze, we face the distinct possibility of a capacity shortage—in other words, the lights going out—by the middle of this decade. If the lights go out, it will not be because of a temporary price freeze; it will be because a market based on a private oligopoly has not concentrated, and perhaps cannot be expected to concentrate, its efforts on fundamental issues of national security rather than on the short-term gains of senior executives and shareholders. Surely the lesson is that restructuring a broken and dysfunctional market is the key to solving the problem of crippling rises in energy prices.

As an emergency measure to stabilise a situation in which price hikes have clearly got out of control, and to provide leeway to introduce wider reforms, a limited price freeze is certainly needed. It is also justified, as other hon. Members have pointed out, when Ofgem data suggest that wholesale prices over the past year have been almost flat—rising by perhaps 1.7%—but retail prices are now being pushed up by the big six by between 8% and 11%. Indeed, according to Ofgem, some of the big six have seen their wholesale prices actually fall over the last three years.

The Prime Minister’s itch to roll back the green levies is a false economy, and not only because they represent such a small component of the rise in prices. The Department of Energy and Climate Change estimates that the full range of green policies—I am referring to the energy efficiency savings from earlier Energy Bill-funded schemes, the impact of policies on wholesale prices, boiler regulations and the EU minimum standards of electrical efficiency—will cut typical gas bills by 1% and electric bills by 11% in 2020.

17:51

[Mr David Anderson (Blaydon) (Lab)]

Ever since the Leader of the Opposition made his speech in Brighton and we came back to Parliament, this issue has dominated the parliamentary system, especially in the Whitehall farce we see every week that is allegedly called Prime Minister’s questions, but should really be called Prime Minister’s deflections. We have had a series of throwaway remarks from the Prime Minister about the price freeze issue. He said last week that the problems could be resolved if everybody did what our leader did and switched companies. The Government have blamed the price rise in wholesale gas, but last week the Prime Minister came back and asked, “Who created the big six?”, as if he had not spent the last 42 months in power doing nothing about the power of the big six. That is all good knockabout, music-hall stuff, but I bet the people of Oldham, Liverpool and Washington, who have been spoken about in the last half hour, are not laughing as they sit at home shivering and wondering how they will pay the bills over the next few months.

Let us look at the Prime Minister’s case. Last week he had a go at our leader for switching electricity suppliers. Well, our leader is a canny lad and he might have saved himself £500 a year. But we need £110 million of investment, and it is a farce for the Prime Minister to point to an amount of £500 as a reason why we should not do something. He has blamed wholesale prices and said that the Government cannot control the markets, but privatisation was supposed to transfer the risk from the state to the private companies. Instead, it has transferred the risk directly to the people who cannot afford to pay—our constituents.

This is also a question of trust. Are we being told the truth about wholesale prices?

[Mr Tom Clarke]

I welcome the fact that my hon. Friend refers to wholesale prices. Does he believe that the regulators are as transparent as we would expect them to be when they examine something as important and influential as wholesale prices?

[Mr Anderson]

The regulator clearly admits not being fit for purpose. My hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) mentioned the report from 2008. Ofgem said then that it had not been transparent. The actual gas wholesalers are not transparent. I do not know whether hon. Members are familiar with the Henry hub, which is a pipeline and hub in Louisiana that distributes the vast majority of natural gas in the United States. It is also used as the name for the pricing point for gas prices on the markets in New York. Those prices are set in dollars per million BTUs—British thermal units. In April 2012, 1 million BTUs cost $1.95. In June 2008, they cost $12.6. So the cost was six times lower in April 2012 than it was in June 2008. Even now, it is only $3.62 per 1 million BTUs, yet we are told it has to go up because the price has gone up. How can we trust people who manipulate the figures?

On 6 September 2013, the US Energy Information Administration stated:

“The 36% decrease in the average natural gas price paid by manufacturers between 2006 and 2010, from $7.59 to $4.83…was large enough”—

but—

“Since that survey was conducted, natural gas prices have fallen further.”

The people responsible for energy in the US are saying that prices have gone down, but we have been told that bills have had to go up so much because wholesale gas prices have gone up so much. Are we being misled? Is there a cartel? People say that there is not, but have we forgotten about OPEC? Have people forgotten what happened to us in the 1970s, when people literally had us over an oil barrel? Why should we expect more today from the same people?

The Prime Minister’s other deflection was about who created the big six. I will accept some responsibility, because I believe that my party did not do enough in government to control the energy market. Up until 2008, we did not get our act together and the huge price increase seemed to wake people up. The Conservative party, however, cannot get away from its history. It created the big six by its decision, in the 1980s and 1990s, to privatise the utilities industries. The Conservative Government started by dismantling the most technically advanced coal industry in the world, an industry that was leading the world on clean coal technology—could we not use some of that now? They then went and told Sid to buy shares in gas, electricity and water. They were actually using public money to bribe people to get themselves back into power. It worked very well for them, but the chickens are coming home to roost and the people feeling it are sitting at home at night wondering if they dare put the fire on. We have left billions of tonnes of coal under our feet to lie dormant, while we are being held to ransom by gas and oil companies. We have to bring energy into this country from the most unstable places in the world.

There has been a lot of talk in the past few years about carbon capture and storage. I had the pleasure of sitting in a Committee with the Minister and discussing how wonderful the green deal was going to be. That all led to nothing. The price freeze is welcome—it is a step in the right direction and people need it. What is also required is proper regulation by Ofgem, or whatever takes its place.

[Debbie Abrahams]

Does my hon. Friend agree with my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) that it is scandalous that Ofgem has not delivered on all the criteria it was meant to? That also fits into what my right hon. Friend the Member for Doncaster North (Edward Miliband) has pledged.

[Mr Anderson]

I find it scandalous, but not surprising. Ofgem was never capable of dealing with people who have spent lifetimes manipulating oil and energy markets throughout the world. Why should the world be any different from how it has been for a hundred years? That is one of the reasons why the people who came before us in this House had the sense to nationalise the energy utility sector. It could then be run in the interests of the people of this country, and not for the people who do not live in this country. All they want to do is siphon money off from the purses and wallets of the people we represent to fund their own profits. While I am not surprised, I am concerned.

My party has a problem. I am clear that unless we have control this situation will go on and on. We might have a 20-month window when we freeze prices, which is welcome, but what happens after that? Will companies be able to put prices up? We have been told that the market will be reformed in a way that will stop them doing that. Well, I will believe that when it happens. This probably will not go down well with my hon. Friends on the Front Bench, but anybody who listened to “Question Time” last week—the real question time where sometimes people answer questions, not just deflect them—will know that when it was suggested that we nationalise these industries again there was a huge cheer from the people in the room. They realise that without proper ownership we will never control these people. The people who went before us knew what they were doing.

We are coming up to the 25th anniversary of the privatisation of the utilities, and look what we are left with after 25 years of them having it all their own way. We have no security of supply and instead are relying on some of the most unstable countries in the world for our basic energy needs. We have not followed up on developing new technologies—where we once led the world—not just in coal, but in wind and wave and other things; on those things, we should be much further advanced than we are. We have a national grid that the people running it accept is not fit for purpose, and we have just stood back and let the companies get on with it. They have not upskilled the work force or trained it to meet the challenges of the future, because they have been too busy siphoning the money off into profits, and at the end of the day, the people carrying the can are the customers, our constituents.

At the Labour party conference, our leader said repeatedly that this country deserved better. We do deserve better, and it is clear that only Labour will deliver it. I am probably wasting my time, given that the invisible men of the Liberal Democrats are not even here—and there are only four Members of the major governing party here—but unless we vote for the motion tonight, this will not happen before 2015, and unless the people of this country vote for us in 2015, it will not happen then either. Ours are serious solutions for serious times. So far, all we have heard from the so-called leader of this country have been attempts to deflect responsibility with jibes, cheap jokes and humour. This is no laughing matter. We need to realise that this is a matter of life and death for the people whom we represent. We realise that, and so do the parties on the Government Benches, but they will not face up to it.

18:01

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

I am glad for the opportunity to make a few comments in this debate. As for all colleagues—at least on the Opposition Benches—who have spoken, the issue of rising energy prices comes up every week in my surgeries and public meetings. It is utterly complacent for the Secretary of State to lecture us about rising disposable incomes, as if that were the solution to the problem and energy prices did not really matter. He should try and tell that to people who, on top of rising energy prices, have been forced to accept a drop in hours, a wage freeze or rising housing costs, which is the reality for millions up and down this country.

To date, the Government’s measures have not worked, as they have implicitly recognised, because if they were working, why would the Prime Minister have announced, on the hoof, his two major changes in energy prices? Last year, came the promise to put everyone on the cheapest tariff, which then became a promise to simplify tariffs, from which millions of energy customers will not benefit; then, this year, came the sudden review of green levies, which has now become simply the transfer of some energy efficiency measures into general taxation, or so it would appear.

The Government’s policies have not worked to date because they rely on claimed features of the energy market that, by themselves, have not and cannot bring about the required level of market reform and apply downward pressure on energy prices. First, as my hon. Friends have said, the Government are relying on competition, but as even the Secretary of State would seem to accept, competition is not bringing down prices. After all, given that the prices charged by the major energy companies all seem to rise at roughly the same time and at roughly the same rate, we may be excused for being sceptical about competition. We now seem to be relying on switching, but after three and a half years in power, the Government have realised that it is not as easy to switch as they suggested, so they are going to introduce measures to make it easier.

[Mr Tom Clarke]

I regret that I did not have time to refer to small businesses in my speech. Does my hon. Friend agree that small businesses do not welcome being asked to switch, in addition to all the other bureaucracy they have to deal with?

[Mark Lazarowicz]

That is a good point. One problem with relying on switching is that the Government’s measures do not tackle the problem of people switching and then finding it does not bring the expected advantages and so deciding to switch again. I have experience in my constituency of people who are tied into a year’s contract that they cannot get out of. Conservative Members gave the House examples of people making wonderful savings by switching, but I wonder whether those consumers will still find switching to be advantageous in a year’s time. I accept that switching is important, but it is ridiculous to suggest that it is a panacea, as the Government seem to be doing.

The Government are also relying on simpler tariffs to solve the problems. Unfortunately, the simplification is proving to be of much less benefit than first promised. Many customers are now worse off because of the simplification measures. I have highlighted the impact of the way in which Ofgem encouraged a return to the use of a standing charge—in order, it said, to simplify the charging system. This has resulted in many customers with low energy usage, who are often on low incomes, facing sometimes substantial increases. To be fair to the Minister of State, Department of Energy and Climate Change, the right hon. Member for Bexhill and Battle (Gregory Barker), he agreed to meet me when I raised this issue, and we were due to meet today. The meeting had to be postponed because of this debate, but I shall certainly press him on this issue in due course.

The Government know that their policies are not making an impact on energy prices, and that is why the Secretary of State and the Government as a whole have been running round like headless chickens trying to come up with a response to the clear set of policies outlined by my right hon. Friend the Member for Doncaster North (Edward Miliband), the party leader, and by my right hon. Friend the Member for Don Valley (Caroline Flint) at the Dispatch Box today.

The Government appear to be relying for a solution on the transfer of some of the cost of energy efficiency measures to general taxation, which will have some limited impact on energy bills. A move in that direction might have some theoretical merit, although we would all want to see how it would be worked out in practice and, above all, how it would be paid for. As my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) has just pointed out, however, none of these measures would have been put forward by the Government, were it not for the plans announced by Labour.

The Government’s proposed measures will have only a limited impact. They, and the similar measures that the Scottish National party have proposed for Scotland if it were to be independent, also suffer from a big weakness—namely, that transferring the cost to general taxation would let the energy companies off the hook. That would lessen the pressure on them to keep prices down. It would also create the risk that the limited saving to customers would gradually be eaten up by price rises imposed by the companies to take up the slack—unless such measures were accompanied by Labour’s price freeze or a similar measure to prevent the companies from taking advantage of the price cut.

Labour’s proposals for an energy price freeze are clear, coherent and comprehensive. They would make a real difference to consumers, households and businesses up and down the country, and that is why I support the motion. I hope that some Government Members will join us in the Lobby, but that seems unlikely, given that so many of them appear to regard this issue as so unimportant that they have not even taken part in the debate. Their constituents will certainly not hold them in high regard for being absent from a debate on such an important issue.

18:08

[Ian Lavery (Wansbeck) (Lab)]

Thank you for calling me to speak in the debate, Mr Speaker. I have been in the Chamber most of the day, but I had to go to a debate on the draft deregulation Bill, which I see as a punishment. I apologise if I repeat points that have been made in my absence.

This debate is really worth having. This is the most important issue in the lives of ordinary people up and down the country. It is great to see so many people supporting Labour’s proposal for a price freeze, because it means so much to them. It could make a difference of between £120 or £130 a year to families who are struggling to put bread on the table. Since 2010, the average household’s energy bill has increased by more than £300 a year. Energy companies have increased their profits on the back of spiralling energy bills for hard-pressed households. Energy prices have rocketed, and they are set to increase again in the near future. Only this week, Ofgem’s latest electricity and gas supply market indicators have shown that the typical domestic dual fuel bill stands at £1,420 a year, in stark contrast to the £1,105 at the time of the general election in May 2010.

One of my great concerns in life is people living in poverty, including people who are in fuel poverty. Ministers have admitted that, despite a recalculation and reconfiguration of the how the fuel poverty figures are arrived at, the number of people in fuel poverty is expected to rise in the next two years. The recalculation was supposed to reduce the figures, but they will increase in any event. Figures from Ofgem this week show that the wholesale costs have increased by only 1.7% this year, while bills are up on average by more than 9%; and 60% of the levies, which the Government blame for putting up energy bills, were introduced by this Government.

Ordinary people are entitled to know why these bills have been increased. People are at a loss to see why their bills are escalating. For the first time I can remember—as I look around, I see that I am one of the youngest, of course—people in this country cannot afford to buy energy. They simply do not have enough money to buy energy to keep themselves warm. Is that what we politicians want—giving people the choice between heating their homes or eating with their families? I am not being dramatic; it is a fact of life. If anybody has any doubts about that, they should come to me and I will introduce them to people who are heavily in debt and cannot manage their everyday costs.

I am greatly concerned about the trading system and the cartels that have been described today. We met energy companies last week and tried to get some information from them, but it is very difficult to achieve that. The trading systems appear to be mysterious. How do these companies trade? People are not sure about that. How do these companies trade in the long term, and how do they trade in the short term? How do these big six companies trade at all? It is a real mystery. The Government need to find out more about it, and Ofgem needs to investigate it. Ofgem does not even ask the energy companies for their trading figures. That is illuminating, and there is no reason why that should not form part of the regulatory reform of energy companies’ responses to Ofgem. There is a real sense of financial jiggery-pokery. The mystery of the big six is seriously outflanking a Government who forget the misery of increasing numbers of people in fuel poverty yet support the monsters who create such despair. We really need to tackle this.

When I came back into the Chamber, my hon. Friend the Member for Blaydon (Mr Anderson) was mentioning the various options and said that it looks as if this energy market is broken. How can we fix it? The energy companies are crying crocodile tears, claiming that they cannot make ends meet, while at the same time they are making fortunes. The boss of Centrica said only yesterday that profits of £2.7 billion were modest. That is a profit of £7.4 million a day or £86 a second. These chief executives and secretaries and senior managers are receiving massive bonuses too—bigger bonuses than premiership footballers. These wages structures makes premiership footballers look as if they are on workfare. We need to look at that.

Let me end by saying something rather controversial. I really believe that the system is broken. If prices are being increased twice or thrice every year on a uniform basis by a cartel, and if all these people are saying that they cannot make ends meet while directors are making fortunes and shareholders billions, we need to look at that as well. Is it not time for us to break up the cartel? Is it not time for us to consider different options? Is it not time for us to do what was suggested by a member of the Energy and Climate Change Committee the other day—it was not a Labour Member—and consider adopting co-operatives such as those that operate in New York, and indeed elsewhere in America and in Canada, enabling the public to own part of the system?

[Mr Anderson]

My hon. Friend is, as always, making an excellent speech. I am pleased that he has mentioned America, because the American Government’s Energy Information Administration has said not just that the cost of natural gas to manufacturers fell by 36% between 2006 and 2010, but that at the same time the total cost of energy fell by 11%. Can my hon. Friend remember whether we in this country saw a 36% or even an 11% drop in bills during those four years?

[Ian Lavery]

That is the very point that I want to make.

I said that I was going to be slightly controversial. If the directors are creaming off billions, the shareholders are making millions, and the only people who are suffering are the consumers, who, for the first time in my lifetime, cannot afford to pay for electricity or gas, the system is broken. If we do not change that system, it will be in a really dangerous state.

I am going to say what some people are dreading hearing me say. There should be a serious investigation to establish whether the entire electricity system and the big six should be returned to some form of public ownership. That would enable us to control what we owned as a Government, and, most important, we would be able to ensure—because the Minister would ensure—that ordinary people, particularly the most vulnerable members of society, would not be cold in winter. We would prevent 24,000 or 25,000 deaths. It is a dodgy subject, and people are frightened of it, but we cannot control what we do not own, and we are not controlling the energy companies.

18:17

[Caroline Lucas (Brighton, Pavilion) (Green)]

I am very pleased finally to have an opportunity to contribute to this important debate, because it concerns a crucial issue that is raised with me time and again by my constituents. We should bear in mind that, as many other Members have said today, behind all the statistics that often dominate debates such as this are real people and real suffering. We are talking about people who wake up with ice on the inside of their windows, and about people who huddle in a single room because that is the only room that they can afford to heat.

More than 1.5 million children in he United Kingdom are growing up in cold homes. Each winter, four times as many people are killed by fuel poverty as are killed on Britain’s roads, and fuel poverty-related illnesses cost the national health service more than £1 billion every year. I think that, given that background, few would deny that we have an energy bill crisis. In the context of the Fuel Poverty Advisory Group’s warning that fuel poverty affects 6 million households, the profits of the big six are deeply offensive. Between 2008 and 2010, their profits doubled to £4.6 billion. Last year, Centrica alone made profits of £1.3 billion, no doubt benefiting in a range of ways from the secondments of its employees to the Department of Energy and Climate Change and from its boss Sam Laidlaw’s influence as a former member of the Prime Minister’s business advisory group. That is just one example of the revolving door between the big fossil fuel companies and Whitehall, which was similarly well oiled under the last Government.

A temporary bill freeze would be a welcome respite from price hikes which, as the Committee on Climate Change has reminded us, are mainly due to increases in the price of gas. I called for a price cap, along with a windfall tax on big six profits and a public inquiry, almost two years ago, on one occasion during a Westminster Hall debate in February 2012, and many Labour Back Benchers signed my early-day motion on the subject. I support the relief that a temporary price freeze would bring, so I shall vote in favour of the motion, but we also need a much more ambitious, far-reaching and coherent response. I hope that today the Opposition parties will be able to unite behind calls for a radical reform of the energy market as well, because I believe that that is the only way—and a permanent way—in which to tackle high energy bills, and I hope that they will get behind effective measures to break the stranglehold of the big six.

As Fuel Poverty Action says:

“Freezing prices at their current level won’t help the thousands of people who already die each winter due to fuel poverty: our bills are already at deadly highs”,

so I want to set out five practical, positive and powerful policies to tackle fuel poverty this winter and for winters to come.

First, the only permanent solution to the Energy Bill crisis is to make all our homes much more energy-efficient, so I am disappointed that there is no mention of energy-efficiency in the motion, especially as the green deal barely scratches the surface. Under the energy company obligation, at current rates it would take about 32 years to insulate all fuel-poor homes. Insulation rates are plummeting when they should be rocketing, and energy-efficiency businesses, often SMEs, are struggling when they should be flourishing.

That is why a huge coalition of organisations representing consumers, families, faith groups and others all back the Energy Bill revolution campaign. It calls for revenue from carbon taxes, which currently disappears into Treasury coffers, to be recycled into a nationwide programme to make all homes super energy-efficient, with full insulation, modern boilers and renewable energy such as domestic PV, solar hot water and biomass heating. That could bring nine out of 10 homes out of fuel poverty, lower people’s bills, deliver four times more carbon cuts than current schemes and create 200,000 jobs. I again ask both the Government and the official Opposition why they will not support it.

Mandatory efficiency standards are crucial, too. Some 70% of Britain’s fuel-poor live in properties with bottom of the barrel energy-efficiency ratings of E, F or G. A genuine fuel-poverty strategy must, at the very least, commit to lifting all these properties to band D standards by 2020 and raising the rest of our housing stock to today’s new-build standards by 2030.

Secondly, we need ambitious fuel poverty eradication targets. I want to highlight a coalition amendment that was sneaked in during the Lords Committee stage of the Energy Bill. Astonishingly, Ministers are trying remove the statutory duty on Government to eradicate fuel poverty. They are replacing it with a vague provision to do something at some point merely to address the situation of those in fuel poverty, and all in secondary legislation, thereby reducing accountability and scrutiny. As the fuel-poor prepare for the onslaught of the cold and avoidable winter deaths, I trust the Minister and the Opposition will rethink their position and give strong cross-party support to the fuel-poverty amendment tabled by Lord O’Neill of Clackmannan when the Bill returns to this House.

The Committee on Climate Change has confirmed that by far the greatest contributory factor to higher energy bills has been the rising price of gas. That makes the Government’s dash for gas deeply irresponsible. It will increase our dependence on gas with higher energy bills, as well as fatally undermine our hopes of tackling climate change. That is the third area where we need urgent action. This also makes Labour’s position of conditional support for shale gas inconsistent with its enthusiasm for a 2030 decarbonisation target and its rhetoric on affordable energy.

There is an alternative to gas. Renewable energy can go hand in hand with affordable energy and can help cut our exposure to high and volatile fossil-fuel prices. While fossil fuels are on an upward cost trajectory, renewable technologies have seen dramatic price falls in the past few years. So if we are serious about creating an affordable energy system, we should be going all out for renewables and energy-efficiency.

Fourthly, we should be doing much more to end the big six’s control over power generation and supply, not regulating them better, not just erecting a paper wall between their generation and supply businesses, not just requiring them to sell their power through a different structure. If we are serious about diversity in the energy market and cutting costs by allowing renewables to push down wholesale peak prices of power, we need to ensure renewables are given priority access to the grid.

We have an opportunity to create a radically different energy system, where co-operative and community and independently-owned local renewable energy schemes flourish. In those circumstances, local people benefit from the energy created. The Belgian co-operative Ecopower provides energy for over 30,000 members. Denmark guarantees that 20% of all energy projects are open for community financing. In Germany over half of all the installed renewable energy capacity is owned by private citizens and co-operatives. That is the sort of transformative scale of community power we should be aiming for here, too. It is where the greatest wins for households and business energy bills can be secured. Projects such as the Brighton Energy Co-operative in my constituency provide a glimpse of an incredibly positive alternative energy future where people are active producers rather than just passive consumers.

Community energy should be central to the debate about energy bills. Words alone will not deliver, however; we need policies and action. For every community to generate its own electricity, we need a regulatory framework that allows communities to buy the electricity they generate at wholesale costs, freeing them from the rip-off retail market.

[Mr Weir]

I am very interested in what the hon. Lady is saying. Does she agree that the Government’s obsession with nuclear—in particular, the strike price agreed for Hinkley Point—shows that they are going totally in a different direction?

[Caroline Lucas]

I thank the hon. Gentleman for his intervention, because it makes exactly the point that I want to move on to. For as long as both the Opposition and the Government are committed to these huge subsidies that are going to be behind nuclear power, their outrage at energy bills sounds a bit thin—it beggars belief. The size of the subsidies that will go to nuclear power will lock us into extremely long periods of paying over the odds to companies such as EDF. The rate of return on investment reportedly given to EDF is a whopping 10%—that is 10% profits, guaranteed for decades, going from our constituents to EDF, one of the big six. Why is it acceptable for UK bill payers to be fleeced in order to provide a rate of return to EDF that is double that which Ministers have said they see as fit for renewable projects—schemes that could be owned by communities themselves? Let us not forget that Hinkley Point C will not boil a kettle until the early 2020s, at best, by which time many renewable energy technologies will be a much better deal when it comes to keeping energy costs down.

[Mr Weir]

Hinkley Point C will start boiling a kettle on that date only if it is built on time, and no nuclear reactor has yet been built on time or on budget.

[Caroline Lucas]

I thank the hon. Gentleman, who must have been looking over my shoulder, because these are exactly the points that I would make. When we compare nuclear with renewables, we see that in some cases renewables are already cheaper. They are also asking for a strike price of £91 by 2018, which is substantially less than what we are going to be giving to nuclear.

Consumer Futures said that the Hinkley deal

“moves the risks of future variations in wholesale prices from investors onto consumers, will likely see household bills increase and will distort future investment in electricity generation.

Consumers will again feel that the energy market is stacked against them.”

I just cannot understand why there is not greater outrage at the way in which we are allowing ourselves to be locked into these long contracts with EDF, paying over and above market prices for decades to come. I repeat that it is hard to take seriously the crocodile tears we are seeing from hon. Members on both sides of the House while we are suggesting paying hand over fist to the nuclear companies, which will be laughing all the way to the bank.

In conclusion, I welcome the greater focus on the problem of high energy bills that we have seen in recent months. It is a massive issue in all our constituencies; people come to us on a daily basis worried about how they are going to be able to survive the winter. It is a matter of life and death, not just of discomfort; we are talking about people who are going to be suffering from radically ill health and about the premature deaths associated with fuel poverty. So I welcome this debate, but I regret that most of the solutions put forward do not fully address the root causes of fuel poverty and high energy costs. A fundamental shift should be at the heart of energy market reform. I am worried that we have heard much more about tinkering around the edges of a system that keeps the big six in power and far too many people in fuel poverty, rather than about much more radical energy transformation, which we are beginning to see in other countries. There is a precedent and we could be following it here—if the political will existed.

[Madam Deputy Speaker (Dawn Primarolo)]

I call Christopher Pincher. [Hon. Members: “Hear, hear.”]

18:27

[Christopher Pincher (Tamworth) (Con)]

I thank you, Madam Deputy Speaker, and my legion of fans. I apologise for not being here for the opening exchanges of this important debate, but I had to attend a funeral. I congratulate the Opposition on tabling this motion but, in as much as we are discussing long-term structural energy issues, as much as it is a challenge to the Government, it is also an admission by the Opposition of their failure during their 13 years in government, when they had the time, the money and the majorities to make changes but did not do so.

The shadow Secretary of State said, with characteristic chutzpah, that we need to develop more home-grown energy. Of course, she is right, but the question then must be: why during 13 years of Labour Government was no new nuclear power station opened? The last to open was in 1995 and the next will be opened under a Conservative-led Government in the future. Labour also had no keenness to explore shale gas. These things the Labour Government failed to do. Labour Members have said that we need greater competition in the energy market—

[Dr Whitehead]

rose—

[Christopher Pincher]

I will not give way, because I am on borrowed time—[Interruption.] In a parliamentary sense. In addition, both the Opposition spokesman and the and Treasury Bench spokesman need to speak.

The Opposition have said that we need greater competition in the energy market. They are right, but the energy market as it stands—the big six—is Labour’s creation. The right hon. Member for Oldham West and Royton (Mr Meacher) called it an oligopoly, but it is Labour’s oligopoly and the Opposition must take some responsibility for that, as the hon. Member for Blaydon (Mr Anderson), who is now shaking his head, said in his speech.

The Opposition have now suggested that we should fix prices under a price freeze for a period of time so that we can right the market. If something looks too good to be true, sounds too good to be true and smells too good to be true, most right-thinking people would say that it is too good to be true. A price fix is too good to be true.

Fixing prices, as many experts have said, will only mean that the energy companies will hike their prices in anticipation of that fix. That means that people will be paying artificially high prices, particularly if the wholesale price falls during the period of the freeze. It is not just me who is saying that; Professor Dieter Helm is saying it, too.

The Opposition also say that we need to get more competition into the energy market, but if we listen to Steve Fitzgerald, the darling of the Select Committee who ran rings around some of the players from the big six at that meeting, or to First Utility, the Leader of the Opposition’s provider of choice, we hear them say that a fix will make it more difficult to operate in the market. It will not allow small players in and will entrench the position of Labour’s big six. The Labour party ought to admit that.

The Opposition also say that investment will flow into our infrastructure anyway. I do not believe that is true. We need to spend at least £110 billion in the next 10 years on our power stations, our pipes and our pylons to keep the lights switched on and we need much of that investment to come from private companies. The hon. Member for Southampton, Test (Dr Whitehead), who made a thoughtful speech and is my colleague on the Energy and Climate Change Committee, said that he does not believe that the energy companies will invest that sort of money. We learned in the Select Committee inquiry just a week ago that E.ON alone has invested £7 billion in its generating capacity over the past five years. If we extrapolate that over the big six, that would suggest that they are spending some £40 billion on the infrastructure we so desperately need.

If the investment dries up because of a price freeze that sends the wrong message to the markets, the poor old taxpayer—the van driver, the nurse, the doctor, the teacher and the pensioner—will have to pick up the tab. That is why I think the Opposition’s proposal is a con. It is a scam. It is a swizz. It is voodoo economics. It is political charlatanism. They know it and the electorate can see it, too. What we need is not some artificially high price freeze in the future but price cuts now. That is what our electorate want and what our constituents tell us. If we roll back some of the green levies that account for some £112 on the average dual fuel bill, if we make it easier to switch, saving people some £200, and if we get people on to the lowest tariffs, saving them about £158, we can reduce bills now for hard-pressed consumers. That is the way to deal with our energy challenge.

The proposals made by those on the Labour Front Bench might look good and might sound good on television, but we and our voters know that they are not going to wash.

18:33

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

We have had a good and interesting debate this afternoon, with many speeches from right hon. and hon. Members, particularly those on the Labour Benches, that have highlighted the importance of rising energy prices to many hard-pressed families and struggling businesses.

Let me address the thrust of the lengthy and at times tortured speech made by the Secretary of State. It is a shame that he is no longer in his place, but he explained that he would have to leave and I am sure that the Minister of State, Department of Energy and Climate Change, the right hon. Member for Bexhill and Battle (Gregory Barker), will report back to the Secretary of State the comments made this afternoon. The Secretary of State started by mentioning consensus on the Energy Bill. As the Minister knows—and as his colleague, the Minister of State, Department of Energy and Climate Change, the right hon. Member for Sevenoaks (Michael Fallon), who is now in his place, will recall from his involvement in the final stages of the Energy Bill, after his two predecessors started the process—we scrutinised the Bill and, on balance, supported many of the measures contained in it. However, on Second Reading—the Minister, the right hon. Member for Bexhill and Battle, can check Hansard and pass this on to the Secretary of State; we said it then and again afterwards—my right hon. Friend the Member for Don Valley (Caroline Flint) warned that the Energy Bill

“fails to include direct measures to increase transparency, competition or liquidity or ensure that the energy market is properly regulated and works in the interests of consumers.”—[Official Report, 19 December 2012; Vol. 555, c. 906.]

Both my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger), who spoke in the debate, and I have said that many, many times, and I am sure that the Minister heard it, as did other members of the Energy Bill Committee. This is not new: we have been saying this, and raising aspects of the problem, for at least a year, and raising some aspects for nearly two years. The Secretary of State said that he wanted consensus back. We have consensus on some of the measures in the Energy Bill, but we said at the outset that there were things missing from the Bill. That is what our policies aim to rectify, and if Ministers could get over themselves a little bit they could introduce those reforms, and consumers and other people would be in a much better position.

The hon. Member for Wealden (Charles Hendry), one of the Minister’s predecessors, discussed long-term signals and the importance of securing investment in energy infrastructure. That was the focus of the process called electricity market reform, which became the Energy Bill. There is also an important point about consent. If we expect investment to happen, people who pay energy bills need to know that the market functions effectively and that they can trust their energy supplier. That necessitates changing the retail market to make it clear, fair and transparent.

[Charles Hendry]

In her speech, the right hon. Member for Don Valley (Caroline Flint) was asked two questions. First, she was asked whether she had heard from energy companies saying that they were more likely to invest as a result of Labour policies, but she did not answer. She was also asked if she had heard from anyone saying that they would be less likely to invest, and she would not answer that one. Can the hon. Gentleman answer on her behalf?

[Tom Greatrex]

I can tell the right hon. Gentleman—[Interruption.] Sorry, I can tell the hon. Gentleman—I am promoting him; that is the regard in which I hold him—that in the period immediately after the conference speech by the Leader of the Opposition and since I have had a number of discussions with energy companies, with big suppliers, with small suppliers, with people in the supply chain, and with a whole range of people across the sector, and they have made it clear that they want a situation in which they can be trusted. They want transparency in the market. Indeed, some of the small suppliers that have been prayed in aid in speeches by Government Members have said that the most important thing is to have an open and transparent system in the energy market, which is what our reform is about. Then we will be in a position where we can have a fair debate about these issues and ensure that investment can flow, because people can understand and trust the system that will be in place.

[Gregory Barker]

Will the hon. Gentleman give way?

[Tom Greatrex]

I will not, because I am short of time, and I need to be able to respond to comments from other hon. Members.

My hon. Friend the Member for Glasgow Central (Anas Sarwar) highlighted a reluctance to address these issues and to challenge the fact that they exist in Edinburgh as much as in Whitehall. The hon. Member for Wealden referred to the rather ridiculous claims about blackouts, which were made immediately after the proposals were first outlined, and he will be interested to know that every single energy company that I have since spoken to has dissociated itself from those comments made by the trade body and, indeed, from the comments of the Secretary of State and the Minister on Twitter immediately afterwards. I am sure that he will heed the warning on Twitter that the Prime Minister issued some months ago.

The problem also exists in Edinburgh, where the only person sticking with those comments and repeating the ridiculous comparison with California in 2000 is the Scottish National party energy spokesman in the Scottish Parliament. We will stand up to those issues, because we want a market that works. My hon. Friend and constituency neighbour, the Member for Lanark and Hamilton East (Mr Hood), made an important point about the duties of government and discussed the legacy of the former Prime Minister, Margaret Thatcher. Another aspect of her legacy, Sir John Major, said a couple of weeks ago that if markets did not work and companies behaved badly, Governments stepped in. That is precisely what we are outlining in the policies that we are debating.

Another legacy of John Major was the system where the companies could integrate. Government Members referred to Labour’s big six. The Minister, the right hon. Member for Sevenoaks—I know that he was on a career break at the time, but was a Minister in John Major’s Government and has been around for a considerable time—will know that the first of those acquisitions was Scottish Power acquiring Manweb in 1995. The hon. Member for Warrington South (David Mowat), who is unable to be in his place, could not describe, when challenged, why prices have gone up. My hon. Friend the Member for Blaydon (Mr Anderson) made a related point. That is precisely why we need transparency in the market.

When SSE put up its prices recently, it tried to quantify the cause of the increase. It attributed 4% to wholesale costs, 10% to network costs, 13% to Government policy costs, 8% to VAT, which adds up to 80%, leaving 20%. That additional 20%, which was not in SSE’s press statement but was in the small print and in conversations with the markets afterwards, was to increase its profit margin. That is what is happening in the market, and not just in the case of SSE—npower did something similar. I recommend that Members who want to see just how complicated and opaque the market is read the most recent edition of Private Eye, in the City column, about the structures around Centrica and particularly the trading arm of Centrica and the way in which profits are moved around different parts of what is essentially the same company.

My hon. Friend the Member for Ynys Môn (Albert Owen), a distinguished member of the Select Committee, made the important point about ensuring that off-grid customers are protected. The hon. Member for Wells (Tessa Munt) repeated the comment from First Utility, but she neglected to mention that when interviewed on “You and Yours” a couple of weeks ago, Ian McCaig, the chief executive of First Utility, said that the most important reform needed was openness and transparency in the market. That is exactly the reform that we propose in the motion before the House.

My right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr Clarke) has a distinguished record in the House of campaigning for the fuel poor, and indicated how long he has been campaigning. My hon. Friend the Member for Rochdale (Simon Danczuk), as well as mentioning some of the issues that he has encountered in dealing with energy companies, made the important point that the proposed measure would save small businesses £5,500 and medium-sized businesses £32,900 based on their previous bills.

The hon. Member for Angus (Mr Weir) talked about the reviews. He will know that the one announced by the Government is the 18th review since 2001. He spoke about the measures announced at the Scottish National party conference for a separate Scotland to reduce bills by £70 by moving ECO from consumer bills on to the tax bill. He neglected to mention that the pooled support for renewable energy for Scotland, which is paid across the whole of Britain, would not exist in the same form. Scotland has 8% of the population and more than a third of that support, which is spread across all the bill payers in Britain, as he well knows.

The hon. Member for Chippenham (Duncan Hames) asked me a number of questions, first about how the measures would be introduced and whether emergency legislation would be used. I am not sure whether he was present for the speech from my right hon. Friend the Member for Don Valley at the start of the debate. She made it clear that we would introduce specific legislation quickly—he might call it rapid or emergency legislation—to do one simple thing: to enable the Secretary of State for a fixed period to amend the licence conditions to allow the freeze to take place while we make the wider reforms.

[Duncan Hames]

rose—

[Tom Greatrex]

I shall respond to the other points that the hon. Gentleman made during the debate, and I am conscious of time. He referred to the issues for small companies. I say again that every small supplier that I have spoken to in the past few weeks has made it clear that what is needed most of all is an open, fair and transparent market where energy is traded openly and suppliers can compete and get a better share of that market in order to build their customer base. That is what Labour’s reforms would deliver. The price freeze would enable those reforms to be put in place.

My hon. Friend the Member for Southampton, Test (Dr Whitehead) shot a number of ducks and set out cogently and coherently the point of resetting the market. With his expertise and as a member of the Select Committee and the Bill Committee, he will know that we have been talking about these issues for a considerable time, and to suggest that they are something new or emerging today, as the Secretary of State implied, is utter nonsense.

My hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) talked about the impact on health. My hon. Friend the Member for Chesterfield (Toby Perkins) referred to the Prime Minister’s announcement on green levies, The Prime Minister made his announcement. The Energy Minister, who is in his place, told the Environmental Audit Committee a couple of weeks ago that the Government were looking at each of those levies. I asked a parliamentary question on which levies they were looking at and received a response today from the Secretary of State. It stated that they are looking at investment incentives, but not for the renewables obligation, contracts for difference or feed-in tariffs. The Prime Minister said earlier today that they were looking at every subsidy and every levy. There is complete confusion at the heart of the Government about what is and is not in scope for the review. If they are concerned about the impact on confidence and investment, they need to look at the shambles of their own policy over the past couple of weeks.

My hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) made a heartfelt speech detailing her own experience of growing up in fuel poverty and her concerns about her constituents and others in the same situation. My hon. Friend the Member for Blaydon (Mr Anderson) made a similar case. My hon. Friend the Member for Edinburgh North and Leith (Mark Lazarowicz) also dealt with the reality of the cost of living crisis, of which energy costs are just one aspect. My hon. Friend the Member for Wansbeck (Ian Lavery) talked about the issues facing ordinary people. All those contributions made it clear why we need complete change in the market, and we need a price freeze to enable that change.

The motion before us is about a price freeze, but it is also about ensuring that there is a level playing field for other companies and that companies cannot abuse their position in future. It is about fixing a broken market and standing up for consumers and businesses. It is about making the market fair, clear and transparent in the interests of consumers, industry and the country. I commend the motion to the House.

18:46

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

We have indeed had a good and lengthy debate. We on the Government Benches relish the opportunity to debate with the Opposition our wide-ranging actions to help with the cost of living and our ambitious plans to get a better deal for energy consumers and to secure our energy future.

We heard contributions from the hon. Member for Glasgow Central (Anas Sarwar), my hon. Friend the Member for Wealden (Charles Hendry), the right hon. Member for Coatbridge, Chryston and Bellshill (Mr Clarke), my hon. Friend the Member for Stroud (Neil Carmichael), the hon. Members for Oldham East and Saddleworth (Debbie Abrahams), for Chesterfield (Toby Perkins) and for Angus (Mr Weir), my hon. Friend the Member for Chippenham (Duncan Hames), the hon. Member for Rochdale (Simon Danczuk), my hon. Friend the Member for Morecambe and Lunesdale (David Morris), the hon. Member for Ynys Môn (Albert Owen), my hon. Friend the Member for Wells (Tessa Munt), the hon. Member for Lanark and Hamilton East (Mr Hood), my hon. Friend the Member for Warrington South (David Mowat) and the hon. Members for Brighton, Pavilion (Caroline Lucas), for Wansbeck (Ian Lavery), for Edinburgh North and Leith (Mark Lazarowicz), for Washington and Sunderland West (Mrs Hodgson) and for Liverpool, Wavertree (Luciana Berger), the right hon. Member for Oldham West and Royton (Mr Meacher) and the hon. Member for Blaydon (Mr Anderson). We heard excellent interventions from my hon. Friends the Members for Ipswich (Ben Gummer), for Gillingham and Rainham (Rehman Chishti) and for Selby and Ainsty (Nigel Adams). I apologise if I do not have time to mention all the contributions.

We can sum up our mission: cheaper energy and cheaper bills. The coalition is fairly and squarely on the side of the consumer. Unlike the Labour party, we are not trying to kid the public that there is a simple, silver-bullet solution. Unlike the inertia and complacency that were that hallmark of 13 wasted years, our approach to energy is ambitious, radical, urgent, practical and, most of all, honest. We are delivering. There has been £35 billion of new investment in power generation in the past three years. The coalition is building for the future. [Interruption.] We know that the greatest help of all for consumers is to roll out ambitious energy efficiency retrofits. That is the long-term solution—something that was completely missing from the Opposition’s motion. [Interruption.] It is really interesting that they did not mention that at all. [Hon. Members: “Give way!”] We know that Labour wants to knock the green deal, run down the energy company obligation and go back to old-style—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. That is enough. Members will listen to the Minister just as they listened to every other speaker. He will decide when he wants to give way.

[Gregory Barker]

Thank you, Madam Deputy Speaker. The fact is that Opposition Members make a lot of noise because they abhor the market, consumer choice and the fantastic SMEs that are rising to the challenge. Labour wants to go back to expensive state monopolies, close the door on innovation and close the door on SMEs, and hand it all to the big six on a plate.

Sadly, as has been demonstrated in spades in the Chamber today, Labour Members, while tapping into the genuine public concern about the cost of living—a concern we all share right across this House—have responded to that concern with political trickery, cheap soundbites, and policy that, sadly, is just a con: a price freeze con. It was very telling that despite repeated questioning neither the shadow Secretary of State nor the shadow Minister could name a single independent energy supplier that supported their price freeze con—not a single one. As Member after Member has pointed out, not only do Labour Members know they cannot guarantee to deliver such a freeze, but the long-term net impact of trying to rig the market with clumsy, 1970s-style state intervention would be to hurt—

[Huw Irranca-Davies (Ogmore) (Lab)]

rose—

[Gregory Barker]

The hon. Gentleman did not actually speak in the debate.

The net impact would be to hurt the fuel-poor, to hit hard-working people, and to clobber families and pensioners on tight budgets. We are not in this for 20 months; we are in it for the long term. For the first time in 13 years, we have a Government who are planning and taking decisions in the long-term interests of British consumers.

[Duncan Hames]

rose—

[Gregory Barker]

I give way to my hon. Friend, who made an excellent speech.

[Duncan Hames]

We have heard from the Opposition that they believe that legislation would be necessary to introduce this price freeze. Even if this Government were to table such legislation tomorrow, what would stop energy companies hiking their prices before it became law?

[Gregory Barker]

They have hiked them before and they could hike them afterwards.

The long-term impact of the freeze would be to decimate investment and to drive away consumers. The very-long-term secure energy supply we are trying to build would vanish at a stroke, and the poorest and the most vulnerable would pick up the price tag. We know that Labour Members cannot freeze prices—it is a con to suggest that they can—but, as we heard again and again today, they would succeed in freezing out competition, choice and investment.

[Huw Irranca-Davies]

Will the Minister give way?

[Gregory Barker]

No, I will not.

For 13 years, Labour Members presided over the energy sector. For 13 years, they dithered and delayed over crucial investment. In the previous Parliament, fuel poverty rose every single year—something we did not hear from the Opposition Benches. For 13 years, they presided over unprecedented corporate consolidation, creating the real lasting Labour legacy—the big six. It is a cheek for Labour Members to say that we are the friends of the big six when in fact they picked their ministerial team from the big six. Is it not a fact that the leader of the Labour Front-Bench team in the House of Lords is the former head of government affairs at SSE—its top lobbyist? Labour Members are not just friends of the big six and they did not just create the big six—they recruited their team from the big six, so we will hear no more from them on that.

For 13 years, Labour Members let real competition wither while consumers were bombarded with a blizzard of tariffs that, under their watch, grew to over 400. For 13 years, they failed to simplify bills and increase transparency. For 13 years, they failed to build the foundations of a safe, clean energy future. For 13 years, they failed to build a single nuclear power station or get an agreement to do so. For 13 years, they saw Britain languish at the bottom of the European league table for deployed renewable energy. Labour Members stood by and watched British energy go bust. Now they want another go, but we have not finished undoing the damage they did last time.

[Albert Owen]

The Minister mentioned tariffs. The Prime Minister has promised this House and the country that people will be put on the lowest tariff. Will the Minister now tell the House, at this late stage, how much less they will pay for their bills under that policy—or will they go up? Which one will it be?

[Gregory Barker]

It will be different for different people, but from December people will get a much better deal out of this Government, putting them on to the cheapest tariff—something the Labour party did not do in its 13 years in government.

We continue to undo the damage that Labour did to consumers’ bills. We have taken Labour’s renewable heat incentive off energy bills, saving consumers £179. The right hon. Member for Don Valley (Caroline Flint) said in our last debate or at questions that £100 was not very much. I have to tell her that Government Members know that, for a lot of families, £100 is a great deal: that £179 on people’s bills was not welcome.

[Caroline Flint]

Did I not make the point that the way in which the Government have used green levies misses the point? The point is that wholesale prices have been flat, but the energy companies have marked up their prices and charged us more in our bills. That is what the Government should be addressing, rather than playing around and blaming green levies.

[Gregory Barker]

If that is the point that the right hon. Lady was trying to make, I accept that, but what Government Members heard was her dismissing £100 as not a great deal of money. We know that for hard-working people it is a great deal of money.

That is why we acted quickly to slash the over-generous subsidies that we inherited from the Labour party for solar and other technologies. The Labour party opposed those cuts. While we have been standing up for consumers, Labour has been sitting down with vested interests.

This debate has been dominated by the systematic demolition of Labour’s price freeze con. However, the most effective critique comes not from MPs, but from the smaller, independent generators that are keen to break into the market dominated by the big six and created by Labour. It is those new entrants that can provide real consumer choice again. They are entrepreneurs who want to compete for the business of our constituents with better prices, better offers and better service.

[Ian Swales (Redcar) (LD)]

Does the Minister think that the Opposition’s policy will make it more or less likely that the three independent power producers who want to build power stations in my constituency will invest?

[Gregory Barker]

The political risk and regulatory uncertainty that the Labour party is introducing into the energy sector is already raising the cost of capital. God forbid it was to form a Government—that would be a hammer blow to investment in the energy sector, a hammer blow to jobs and a hammer blow to consumer prices. It would spell long-term decline for the energy sector.

Labour’s lurch back to the 1970s would entrench the big six. Our vision for the UK energy market is one of fierce competition, dynamic new entrants and a far more decentralised, innovation-rich economy. Thanks to exciting new technologies, commercial, industrial, public sector, community and home generation are taking off all over the country. Although I disagree with many of the points made by the hon. Member for Brighton, Pavilion, I share her enthusiasm for community energy, which is really growing legs under this Government.

[Mr Hood]

The Secretary of State has 7,727 constituents who are over 75. The Minister has 14,080 constituents who are over 75. Can he tell us how many of them have switched?

[Gregory Barker]

No, I cannot off the top of my head. Can the hon. Gentleman name a single independent generator that supports Labour’s big freeze? Perhaps he will write to me with that information. I will write to him with the information that he has requested.

I pay tribute to my hon. Friend the Member for Wealden, who made a heavy hitting and thoughtful speech. He pointed out that Labour’s plans are already undermining investment, forcing up costs and increasing the political risks. He has estimated that the cost of Labour’s price freeze to consumers’ bills will be £1 billion.

[Christopher Pincher]

We have just heard an exchange about tariffs. Is the Minister aware that under Labour there were more than 4,000 tariffs on offer? Is it any wonder that people did not switch when they had no idea which tariff to switch to?

[Gregory Barker]

There was no real consumer choice under Labour, but we are getting it right and delivering for British consumers.

[Ms Rosie Winterton (Doncaster Central) (Lab)]

claimed to move the closure (Standing Order No. 36).

Question put forthwith, That the Question be now put.

Question agreed to.

Main Question accordingly put.

18:59

Division 118

Ayes: 237

---

Labour: 228
Democratic Unionist Party: 6
Social Democratic & Labour Party: 1
Green Party: 1
Conservative: 1

Noes: 295

---

Conservative: 248
Liberal Democrat: 44
Independent: 2

Business of the House

Motion made, and Question put forthwith (Standing Orders Nos. 15 and 41A),

That at this day’s sitting, the Motion relating to Explanatory Statements on Amendments to Bills may be proceeded with, though opposed, until any hour.—(Mr Evennett.)

Question agreed to.

gambling (licensing and advertising) Bill (Programme) (No.2)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the Order of 5 November 2013 (Gambling (Licensing and Advertising) Bill (Programme)) be varied as follows:

(1) Paragraphs (2) and (3) of the Order shall be omitted.

(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Tuesday 19 November 2013.

(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.—(Mr Evennett.)

Question agreed to.

Amendments to Bills (Explanatory Statements)

Wednesday 6th November 2013 Commons Chamber

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I inform the House that Mr Speaker has selected the amendment in the name of Caroline Lucas.

19:14

[Mr Charles Walker (Broxbourne) (Con)]

I beg to move,

That this House approves the recommendation contained in paragraph 21 of the Procedure Committee’s Fourth Report of Session 2012-13, Explanatory statements on amendments, HC 979, noting that the Public Bill Office will assist Members as required in the preparation of such statements.

The motion stands in my name and that of my right hon. Friends the Leader and Deputy Leader of the House of Commons, the shadow Leader of the House and the shadow Deputy Leader hon Member for Dunfermline and West Fife (Thomas Docherty) and my predecessor, as Chair of the Procedure Committee, my right hon. Friend the Member for East Yorkshire (Sir Greg Knight).

I note that I may detain the House into the small hours of tomorrow morning if I so wish. That is a tempting proposition, as I have lots of scores to settle with many colleagues. However, as I quite like getting elected to things I will not, on this occasion, detain the House for long and will make a very short speech. I hope that colleagues will make very short speeches too, and that we can wend our way into the night for an evening of fun, frolicking and frivolity.

The report “Explanatory statements on amendments” is a serious piece of work undertaken, in the main, by my predecessor, and I was lucky enough to inherit it in October last year. The Committee is saying that explanatory statements to amendments are an extremely good thing: they allow for informed debate, and for people to have an understanding of what those tabling amendments are trying to achieve. We have, however, taken a permissive, rather than a prescriptive, view. We believe that the Government, if given the opportunity to do so, will want to do the right thing, and that the right thing is to put forward explanatory statements to amendments. I look at the Chief Whip and the Deputy Leader of the House and see two people totally committed to doing the right thing. They have done the right thing throughout their parliamentary careers—one of those careers has lasted for more than 40 years—and I am certain that that will continue to be the case for what remains of their illustrious parliamentary careers. I note that the Chief Whip is not smiling too much, so I will move on.

[Sir Greg Knight (East Yorkshire) (Con)]

Does my hon. Friend agree that when considering changes to our procedures we should never do anything that might discourage scrutiny? Does he share my concerns that the amendment to the motion, if passed, could act as a deterrent to some amendments being tabled?

[Mr Walker]

One reason for not taking a prescriptive approach is that a disorderly explanatory statement attached to a reasonable amendment—perhaps one tabled in a short amount of time—might lead to it not getting on to the Order Paper, thus restricting debate.

To return to my central point, I believe that Members of Parliament, the Government and the Opposition should want to do the right thing, and I am hopeful that they will do the right thing. If they do not do the right thing, it would be reasonable for the House and the Procedure Committee to revisit the issue in the not-too-distant future.

[Caroline Lucas (Brighton, Pavilion) (Green)]

I am disappointed by the weakness of the hon. Gentleman’s argument so far. I hope it is going to get a bit better. How can explaining one’s amendment possibly be a deterrent to debate? His confidence in his colleagues’ willingness to do the right thing is somewhat undermined by the fact that they did not do that when there was a pilot. If, as he says, he wants people to do this, why does he not make it mandatory, rather than just hoping they will do it despite evidence that they will not?

[Mr Walker]

I think the hon. Lady has indicated that it was not the case that the Government tabled amendments in the pilot, but at the Committee stage of the Small Charitable Donations Bill 42 amendments were tabled by Back Benchers, the Government and the Opposition, and 40 of them had explanatory statements. On Report, all 37 amendments had explanatory statements. If I am misreading that, I apologise.

I have more faith in this place than the hon. Lady. I have faith in my colleagues and believe that, given the opportunity to do the right thing, they will do the right thing. The fantastic thing about the Procedure Committee and about bringing reports to the Floor of the House is that it is open to the House to amend them. This is a vehicle for change. I note that she and colleagues have tabled an amendment, and it will be for the House to decide the way forward, not me, as Chairman of the Committee, or its other members. I will not detain the House much longer. I am sorry that the Committee’s report comes as such a disappointment to a number of colleagues, but I repeat that it is within their gift to amend it, and I hope that they do.

In conclusion, I would simply add that a team of Clerks are champing at the bit to help Back-Bench colleagues attach explanatory statements to their amendments. They are ready, waiting and willing to do these things. I also hope that there is an army of Whitehall civil servants wanting to seize the day and impress their Ministers with their diligence and brilliance. I look, too, at the Opposition, in all their glory, and know that, despite our living in straitened times with limited resources, they will turn to their researchers and their special advisers—they are not really special advisers, but that is what they are called—and will demand that they step up to the plate and provide explanatory statements. I appreciate that it will not be possible on all occasions, but let us make this a new beginning for the way we conduct business in this place. If the House does not take this opportunity, however, the Committee will revisit the matter and bring forward more prescriptive recommendations.

19:21

[Caroline Lucas (Brighton, Pavilion) (Green)]

I beg to move, amendment (a), leave out from “House” to noting and insert

‘notes the recommendation contained in paragraph 21 of the Procedure Committee’s Fourth Report of Session 2012-13, Explanatory statements on amendments, HC 979; and resolves that explanatory statements on amendments be mandatory, subject to guidelines to be issued under the authority of the Chair’.

Today, we have the opportunity significantly to increase transparency and transfer just a little bit of power from the Whips to Back-Bench MPs. When I first arrived here, I was immediately struck by how difficult it was to work out what all the amendments tabled on the Floor of the House actually sought to do; and I did not seem to be alone, so I joined with others who also wanted a brief explanation of amendments so that everyone could know what they sought to achieve. At the moment, as we run from another meeting, we look to see what we are voting on and find something like: “Clause 1, page 1, line 5, leave out subsection (1)”. So then we need to consult several dense documents to work out what that and many other multiple amendments actually mean.

It is quite right, of course, that MPs should, as much as possible, listen and contribute to debates in the main Chamber, follow all those debates and then be enlightened on the effects of every single amendment, but as hon. Members know, being an effective MP involves many other tasks, including responsibilities to undertake work in Committees, to attend Westminster Hall debates and to chair and attend meetings. As a result, colleagues frequently cannot sit in the Chamber all the time a debate is going on. There are many talented Back Benchers in this place who want to scrutinise, and they should not be treated as Lobby fodder.

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

We have checked with the Vote Office and our e-mails and we cannot find an explanatory statement for the hon. Lady’s amendment. Given that she did not table one with the Vote Office or circulate one to colleagues, surely she is defeating her own argument.

[Caroline Lucas]

I am glad the hon. Gentleman raises that matter, because I actually sought some advice on it. We were allowed to table explanatory statements during the pilot, but as I understood it, we were not allowed to do it now, otherwise I would have done it, precisely to make that point.

[Thomas Docherty]

But the hon. Lady could have circulated one to colleagues. There was nothing to prevent her from using the e-mail system—the green way of doing it—to send an explanatory statement to all 650 colleagues. Why did she not do that?

[Caroline Lucas]

I want to make it mandatory for everybody. It is very nice to do it voluntarily, as we would have done had we been allowed, but we were not. [Interruption.] Instead of smirking in that rather irritating fashion, the hon. Gentleman should focus on the debate in hand.

I was making the point that MPs should not be treated as Lobby fodder. After two pilot schemes, everyone seems now to agree that 50-word explanations are a good thing, so the motion from the Procedure Committee to make possible explanatory statements to amendments to be discussed on the Floor of the House is very welcome. I wish it was possible all the time; it is a pity that we have to get special permission even to make it possible. On those two pilots, it was possible.

I also welcome statement in the Procedure Committee’s report that it wants the statements to

“become an accepted norm of the legislative process.”

If that is what the Committee wants, why not make the statements mandatory, rather than just talking about an aspiration or a wish? The hon. Member for Broxbourne (Mr Walker) rightly said that the Government did indeed issue explanatory statements on that occasion, and that the Opposition did not do so. It is not beyond the bounds of possibility that, one day, the Government will become the Opposition and find it less convenient to produce them in future. If we want it to become as natural to issue an explanatory statement as it is to sign an amendment, we have the opportunity tonight to make them mandatory.

A cross-party group of us, including senior colleagues, who are working on parliamentary reform have tabled amendment (a) because we would like the explanatory statements to be mandatory, to ensure that the Procedure Committee’s wish for the statements to become the norm becomes a reality. To clarify, in calling for the statements to be mandatory, we envisage guidelines to include dispensing for the need for them in relation to self-explanatory or consequential amendments. Actually, that is a good reason for not having circulated an explanatory statement on amendment (a), as the hon. Member for Dunfermline and West Fife (Thomas Docherty) was tempting me to do: it is surely, even to him, self-explanatory.

Unless we have a mandatory scheme, as amendment (a) proposes, there is a danger that the statements would not become part of the culture of this place, and that they would be submitted only when it suited Members to do so. As we all know, the Executive do not behave within the spirit of the legislative system at all times, and we need a system that will ensure that, when they are substantially amending their own legislation—on Report, for example—they have to explain why.

The recent pilot taught us that the Whips pick and choose. The official Opposition did not bother to submit statements on the first Bill, the Electoral Registration and Administration Bill, which was a great shame. However, they appeared to have a change of heart, and were prepared to submit them on the relatively uncontentious Small Charitable Donations Bill. I do not accept that they did not participate on the first Bill because of a lack of resources. Sometimes it is more convenient not to explain, and frankly that is not good enough. That is why we need the statements to be mandatory.

[Wayne David (Caerphilly) (Lab)]

I thank the hon. Lady for giving way, and I will try not to smirk. Does she not accept the valid point that the Opposition party and, particularly, Back Benchers do not have sufficient resources to submit explanatory statements as well as putting in the time and effort required to table the amendments themselves, especially on an extremely detailed and complex Bill?

[Caroline Lucas]

No, I do not accept that point. If the hon. Gentleman has thought enough about an amendment to table it, he must have thought about what he is trying to achieve with it. If he cannot summarise that in 50 words, why is he tabling the amendment in the first place? He could also call on the Public Bill Office to help him with the statements.

[Wayne David]

I want to ask the hon. Lady a simple question. Has she heard of probing amendments? If she has, she will know full well that their purpose is to elicit information and commitments from the Government, and not necessarily to declare a position.

[Caroline Lucas]

I think that the hon. Gentleman misunderstands the point of the explanatory statements. They would simply make the aim of an amendment clear. If that aim is to seek information from the Government, that could be made perfectly clear.

I should like to move on to costs and resources. Hon. Members will have noticed that the Procedure Committee did not recommend a mandatory approach partly because it thought that that could take up time and resources, and that it could therefore restrict the ability of the Opposition and Back-Bench Members to table amendments. It feared that that could be damaging to the House’s ability to scrutinise legislation. I believe that there is a strong case to be made that the opposite is true, and that mandatory statements would save time and improve scrutiny.

The evidence from the Public Bill Office is clear on the question of resource implications. It stated that, where assistance was given with the drafting of explanatory statements,

“this took little time (no more than five minutes per amendment), and usually saved time elsewhere by establishing a verifiable shared understanding of what amendments were intended to achieve.”

So the idea that this would create a burden for the Opposition and Back Benchers is not supported by the Public Bill Office, which has made it clear that the statements typically save time.

The Public Bill Office also stated:

“It is not that difficult to draft a brief explanatory statement, and a Member seeking to table an amendment might want to think again about doing so if they were unable to explain briefly what it would achieve.”

This brings us to the nub of the issue. Do we want Back Benchers to participate or not? Do we want our constituents and our local press to be able to follow what is going on? Do we want this to be possible at all times or only some of the time, and who gets to be the judge of when people should or should not necessarily get to receive these explanations? If we want scrutiny, surely we have to make sure that those who might scrutinise are properly assisted to do so; otherwise, one might ask what is the point of the amendments at all.

Still on resources, the Clerk of the House produced a helpful memorandum pointing out that there would be no extra costs to the PBO, but there could be some printing costs. However, once self-explanatory and consequential amendments are discounted, the printing costs would clearly be very low. In the context of the entire printing costs of this place, the likely cost for this is tiny—less than 0.00005% of a £7 million annual spend on the printing of procedural publications.

For that minimal cost, we would get something valuable—information, and information being given to those who should have it as they vote on legislation that affects us all. When the bell goes, we should all know why. Brief explanations would not only allow Members to check what they are voting on when the bell goes, but allow us to see in advance what Members seeking to amend legislation are attempting to do. This would enhance scrutiny and might even increase participation in the Chamber, as Members could easily see in advance what an amendment was for.

In conclusion, I hope hon. Members will agree that this is more than procedural housekeeping. I think our constituents would be shocked if they knew that their MPs often did not know what they were voting on. When I run down the escalator from Portcullis House at the same time as many other colleagues, I often hear people saying “What are we voting on; what are we voting on?” I am not whipped, so I have to find that out myself, but many colleagues do not necessarily have that information, and I think that they should. This is not a criticism of colleagues. I have no doubt that MPs do not like trying to find out what the vote is on as they run down the escalators. The point is that this information is not being properly provided. It is good that the Procedure Committee is calling for a scheme to make explanations possible, so let us make sure that everyone uses it.

[Mr Charles Walker]

I have some sympathy for the hon. Lady’s argument. The problem we all have is that we are sent here to legislate, but we fill our time with so many other things that we actually forget our primary role, which is to pay attention to what is going on in this place and to scrutinise the Government. One reason why we often do not know what is going on is that we choose—we make the choice—not to know what is going on.

[Caroline Lucas]

There is some truth in what the hon. Gentleman says, but if the conclusion of what he said is that he genuinely expects 650 Members to be in this Chamber—day in, day out—to scrutinise all legislation, I think he is more optimistic than I am, because I do not think that is likely. I believe we also have other important roles, such as providing scrutiny through Select Committees, which are every bit as important as at least some of the debates in this Chamber. It is a realistic assumption that not everybody can be here.

In conclusion, I hope hon. Members will vote for amendment (a) to give Back Benchers and the public a right to explanations of what we vote on in this House. We have an opportunity tonight to restore trust in what we do, to show that we want to scrutinise and to make the way in which this place operates healthier and more transparent, so let us take it.

19:32

[Jacob Rees-Mogg (North East Somerset) (Con)]

It is a great pleasure to follow the hon. Member for Brighton, Pavilion (Caroline Lucas), and it is one of my parliamentary ambitions that, one day, when speaking after her in a debate, I shall actually agree with her. Sadly, that day has not yet dawned.

There are extremely good arguments for requiring the Government compulsorily to make explanatory statements. The Government have legions of civil servants who are able to draw up their explanations; they have all the resources of a Rolls-Royce Whitehall system that is able to provide the explanations to everything that goes into legislation. Crucially, the amendments proposed by the Government usually do end up in legislation, so not only are the resources there, but an invaluable purpose is served in making clear what the Government are trying to do.

If the hon. Lady’s amendment (a) had said that the Government always and invariably had to put down explanatory statements, I would have agreed with it, because that would have enhanced our ability to legislate. When, however, it comes to requiring every Member to do so and to giving exceptional discretion to the Speaker or the Speaker’s deputies to decide whether these explanatory memorandums are sufficiently in order, I cannot agree. Let me explain why briefly, because I know many want to go off and have their dinners or conduct Adjournment debates and things like that—the Adjournment debates are probably more attractive than dinners for most of us.

[Mr Nigel Dodds (Belfast North) (DUP)]

The hon. Gentleman is making a compelling case for attaching explanatory memorandums to Government amendments. Does he think that the same should apply to official Opposition amendments, and that a distinction should be made between amendments in those categories and amendments tabled by individual Back Benchers?

[Jacob Rees-Mogg]

No, I would not go as far as that. One of the great divides in parliamentary life is represented by the fact that the Government always have officials beside them. We see in the Box this evening three extremely distinguished gentlemen who are there to advise the Government and help them to plan their legislation. The Opposition have some Short money, which helps them with their parliamentary activities, but, unlike the Government, they do not have the depth of resources that would enable them to provide the explanations that might be needed.

It is assumed that we live in a perfect world in which legislation is presented after pre-legislative scrutiny and there is much time for consideration and deliberation, but that is unfortunately not true. A great deal of legislation is quite rushed, and comes to the House at quite a late stage. The Opposition sometimes have to trawl through many hundreds of clauses in a Bill, and, while they may have just about enough time to write out their amendments, even if each amendment takes only five minutes to explain, 100 Opposition amendments will mean 500 minutes that Opposition Members may not have when a Bill is due to begin its Committee stage within a week or two—or sometimes a day or two—of being presented to the House. I therefore think that the burden placed on the Opposition would be unfair and disproportionate.

Given that I am speaking partly from personal experience as a Back-Bench Member of Parliament, I want to pay particular tribute to the Clerks of Legislation, who are incredibly helpful and patient in explaining to Back Benchers how to formulate an amendment so that it is in order. However, to ask them then to write an explanatory memorandum when so many hundreds of us could be calling on their time would be to place an unreasonable burden on them. Their patience, courtesy, capability and knowledge of the history of Parliament are an absolute joy to behold, and every dealing that I have had with them has been a real pleasure, but I do not think that it would be reasonable to impose that extra burden on them.

This takes us to the heart of the way in which the Government are held to account through the legislative process. Those of us who table amendments know that our amendments will almost certainly not pass into law. Indeed, on most occasions when I have tabled amendments I have not pressed them to a Division, because I have known that the massed serried ranks on the Government Benches will not be sufficient to get one Back Bencher’s amendment through, however well thought out it may—or may not—have been.

Members table amendments to ensure that the issue is debated, that the Minister is able to think about it, and that it is considered in proper detail by the Minister and the Minister’s officials. The Opposition do exactly the same, in the knowledge that the points that they raise will be considered during the overall process. That process would be weakened and made more difficult if the explanatory memorandums were compulsory. If they were compulsory, the Opposition would perforce table fewer amendments, and Back Benchers would be deterred from tabling amendments because of the extra burden that it would place on them, and because of a certain diffidence about putting more pressure on the Clerks of Legislation.

In an ideal world, everything would be spelt out and there would be a few more pages of printing. I am delighted that the Greens seem to be in favour of that: it appears now to be their official policy. Normally a desire for more printing reflects my view of the world rather than theirs. The reality of legislating, however, is that it is often done in a hurry because the necessary time is not available. It is a matter of holding the Government to account, and anything that obstructs that process makes it harder for Members to do their jobs.

19:38

[Mr Michael Meacher (Oldham West and Royton) (Lab)]

Not for the first time, I find myself in complete disagreement with the hon. Member for North East Somerset (Jacob Rees-Mogg). I shall endeavour to explain why, but let me first express my genuine appreciation to the hon. Member for Broxbourne (Mr Walker), the Chair of the Procedure Committee, who has brought a breath of fresh air to the important issue of reform of parliamentary procedure.

I support amendment (a). Despite what I have just said, I believe that the Committee’s modest position represents a major missed opportunity, in that the gain from making brief explanatory statements mandatory is enormous, while the extra effort required to achieve it—and here I strongly disagree with the hon. Member for North East Somerset—is minuscule. At present, particularly on Report, Members who have not participated in Committee often do not know, and have made little or no effort to find out, what precisely they are casting their vote for. Anecdotal evidence suggests the proportion could be as high as seven or eight out of 10. This is of great significance because, particularly if the Government Whips have exercised a tight leash over Committee stage, the Report stage is often the only real opportunity for the House to modify the content of the Bill. The debates on Report are usually focused on important issues where strong views are known to be held by the public. Echoing what the hon. Member for Brighton, Pavilion (Caroline Lucas) said, it is a reasonable assumption that if the public were more widely aware that these matters of considerable importance to them were treated in such a cavalier fashion by many, if not a great many, Members who often vote blind—and I confess that I am one of them occasionally, because of the difficulties of finding out exactly what we are voting for—there would be a huge outcry that Parliament was abusing its proper functions.

Currently, if a Member is diligent—and many are, of course—they will need to obtain a copy of the Bill, a copy of the list of amendments and, on the day, a copy of the grouped amendments selected by the Speaker. A number of Members with a particular interest will undoubtedly do this, but in most cases I submit it will be a minority. In the absence of obtaining the necessary documentation and reading it in order to understand the point at issue and reaching a considered view, the default position, as we all know, is for Members to follow their Whips on arrival in the Chamber.

Even if a Member did take the trouble to get and read the relevant documents, it is often quite difficult for someone who has not been following a Bill closely to understand what precisely the amendment is designed to do. This adds up to quite a serious flaw in the whole process of scrutiny of Government legislation, which is the central function of Parliament. It can be so easily remedied by requiring that a short statement of no more than 50 words explaining the purpose is attached to every amendment on the Order Paper and reproduced on the television monitor.

What are the objections? Here I come to the points made by the hon. Member for North East Somerset. I chair the all-party group for reform of parliamentary procedure, and the only objection raised with us is that while the Government have their civil servants to deal with amendments and provide explanatory statements, the Opposition do not have the same resources and adding the requirement for explanatory statements would impose too great a burden.

I simply do not accept that that objection is tenable. Speaking as someone who in my 43 years has taken many Bills through the House, I know that it certainly takes a huge amount of time to get to grips in particular with a large Bill—to consult outside experts over all its detailed aspects, to identify areas where modification needs to be sought and to draft amendments in an appropriate parliamentary form. Once hundreds of hours have been expended on doing that, however—that has to be done by any responsible Front Bench—adding a short statement distilling the essence of an amendment would take less than half a minute.

There is already evidence that a large majority of the House is in favour of this proposal Many hon. Members have indicated how helpful they found the two recent pilots when the Government introduced this reform for two recent Bills. In addition, Parliament First—that is the name of our all-party group—carried out a survey of all Members seeking their reaction to six proposed reforms of the House procedure, including explanatory statements. I have the results here and I will show them to anyone who cares to look. The response rate was more than 20%, which is not bad for parliamentarians. Of those respondents, 87% were in favour of explanatory statements, and there was very little difference between the two main parties.

This is a modest reform. The gain to everyone would be enormous and the effort to bring it about in practice is relatively tiny. I hope that, for those reasons, the House will support amendment (a).

19:45

[Mr David Heath (Somerton and Frome) (LD)]

Those hon. Members who recall that I used to sit where my right hon. Friend the Deputy Leader of the House now sits, long into the night discussing similar matters, may think it an act of sublime masochism for me to be standing here prolonging proceedings this evening, but I feel strongly about this issue. I do not want to detain the House for long, but I wish to express my support for the position of the hon. Member for Brighton, Pavilion (Caroline Lucas), because I simply do not recognise the arguments adduced against what has been suggested. I well recall the pilots, because I was the Deputy Leader of the House who proposed the pilot scheme. I was also one of the Ministers for one of the two Bills—the Electoral Registration and Administration Bill—involved in the pilot. On the part of Government, I did not see it as an excessive burden, and nor do I believe that the civil servants who supported us found it an excessive burden simply to state the purpose of Government amendments for that Bill.

[Zac Goldsmith (Richmond Park) (Con)]

I am not surprised to hear that my hon. Friend supports the amendment, which I will also be supporting if it comes to a vote. Does he agree that even if it does add an extra burden and its requirement leads to extra work, it is a small price to pay for improving the legislative process? The one thing we are all paid to do here is to legislate, and people often have no idea what they are voting on. Surely that is a scandal and it requires a bit of investment to address it.

[Mr Heath]

I am grateful to my hon. Friend for that. I agree that it is better to have clarity, so that not just Members in this House but others looking at our proceedings can understand what we are debating.

There are other benefits to be had. I have always had this romantic view that we can improve the procedures of this House and do things in a more effective, focused and timely way. That would help everybody who has come to a debate on amendments and found that the purpose of the proposer of an amendment was quite different from what they had imagined when they first read it. That applies not only to Back Benchers, but to the Government. Very often Ministers have learned screeds of paper telling them what the civil servants who support them in the Bill believe the Opposition Member was intending by their amendment, only then to find that that was absolutely a wrong guess.

[Wayne David]

Inadvertently, the hon. Gentleman has made an astute point, because it is wrong to believe that all amendments have an objective truth about them. Amendments, particularly those from the Opposition, often have different interpretations attached to them. He mentioned the Electoral Registration and Administration Bill, which is a good example of when our interpretation of what we were putting forward was objectively different from that of the civil servants. The essential clarification often is provided through debate, not by declamatory written statements.

[Mr Heath]

The hon. Gentleman will find that I make many astute comments and they are never inadvertent. No, that is not the tension we want in the House; we want understanding, and we want sensible debate focused on the issues at stake, not guesswork as to what those might be. It does not matter whether it comes from the official Opposition, a Back-Bench Member or the Government: clarity is an addition and support to the value of our debate in this House. I find it difficult to understand why anyone would take a different view.

I know that whichever way the debate goes this evening, the Government will produce an explanatory statement every time an amendment is tabled. I have no confidence, I am afraid—for the reasons exemplified by the approach of the hon. Member for Caerphilly (Wayne David)—that the Opposition will do the same. I am afraid that the argument that they do not have the resources to produce such statements is a canard. First, as the right hon. Member for Oldham West and Royton (Mr Meacher) said, it takes very little resource to do so. Secondly, let us explode the myth that every Member who tables an amendment writes it himself or herself. That is not the case. Amendments are often prepared by well-resourced outside bodies that would have no problem whatsoever providing an explanatory statement. If all else fails, the official Opposition have something called Short money—a considerable amount of money to support their parliamentary activities, including the tabling of amendments. What is the problem?

I believe that the amendment is sensible and I will support it this evening. Let me finish on one specific point. I note that the Chair of the Procedure Committee has been supported in a remarkable act of solidarity by the Leader of the House, the Deputy Leader of the House, the shadow Leader of the House and the shadow Deputy Leader of the House. Although I am glad that they can provide that support to the Procedure Committee, I wonder whether that is appropriate on what is essentially a House matter concerning our procedure. It appears to oblige the payroll vote to support the original motion rather than to vote according to what those Members consider to be the rights and wrongs. I am afraid that I think that this is a matter on which the House should decide, not the Government.

[Mr Charles Walker]

May I reassure the hon. Gentleman that in the past three and a half years I have never sought the support of the Executive in any way, as demonstrated by my voting record? If they want to support a recommendation made by the Procedure Committee, that is entirely down to those on the Front Bench, but it is not something that I have sought or would ever want to see.

[Mr Heath]

I absolutely accept that statement and it doubles my admiration for the solidarity expressed by those on the two Front Benches in supporting the hon. Gentleman. However, as a consequence of that, many members of the Government are sitting watching monitors wondering whether this chap will ever shut up so that they can move towards a vote. They are obliged to stay here to ensure that a rebel amendment tabled by the hon. Member for Brighton, Pavilion does not succeed. I regret that, but I hope that we will have a sensible debate and that whichever view prevails this evening, every amendment will eventually have a short explanatory statement stating what the devil it is for.

19:52

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

I am grateful for the opportunity to speak in what I am sure will be a short debate. It is perhaps worth clarifying one point for the benefit of the Chair of the Procedure Committee, on which I have the privilege to serve. He referred to those who had signed the motion and I think he perhaps inadvertently suggested that I was the shadow Deputy Leader of the House. I do not have that great privilege; that more august position is held by my hon. Friend the Member for Penistone and Stocksbridge (Angela Smith). I think that reference was probably an oversight on his behalf.

The debate so far has been fascinating and great passion has been expressed about clarity and resources. Like other colleagues, I have the highest admiration for the House and the House service. I am always in bewildered awe at the great education that our Clerks have had compared with ours. As colleagues who have tabled amendments over the years will know, we are often up against tight timetables. There are archaic rules about when amendments must be tabled by and I think it places an undue burden on the House service to expect that when someone comes in up against the deadline—[Interruption.] The hon. Member for Somerton and Frome (Mr Heath) chunters from a sedentary position, as ever, about short deadlines. I cannot help but recall the number of amendments he tabled at the very last minute when he was a Minister, yet he criticises those colleagues who are forced to wait until the very last minute. The notion that we would rule out a perfectly reasonable and well thought-out amendment because it did not have an accompanying explanatory statement is anti-democratic. I am disappointed—I genuinely have great respect for the hon. Gentleman.

[Mr Heath]

I am puzzled by what the hon. Gentleman is saying. Is he saying that the procedures of the House really do not matter, and that we do not have to be in accordance with them when tabling an amendment, provided that it is a really important amendment, or does he accept the fact that the rules are there to aid debate, and that there is a back-stop provision, as the Chair can always rule something in order, as they do frequently with manuscript amendments?

[Thomas Docherty]

I am grateful to the hon. Gentleman for making that point, which leads me nicely to the point that I was going to make about “Erskine May” and the discretion of the Chair. You are a wonderful Chair, Mr Deputy Speaker, held in the greatest regard by Members on both sides of the House. The whole House has the highest regard for your observations and the way in which you guide us through difficult debates. “Erskine May” makes it clear that colleagues should not read out speeches, but with great discretion, Mr Deputy Speaker, you allowed the hon. Member for Brighton, Pavilion (Caroline Lucas) to read her speech. The House rules would say, following the intervention of the hon. Member for Somerton and Frome, that that would not be allowed. The notion, Mr Deputy Speaker, that we would expect you to overrule the consensus of the House is probably unfair on you, and the hon. Gentleman has therefore placed too great a burden on your august shoulders. It is wrong to place the Chair in that position.

[Mark Durkan (Foyle) (SDLP)]

My hon. Friend seems to labour under the apprehension that the Chair will be put in an undue position of power over selection, and will have power that they do not already enjoy. However, has he not noted the point made by the Public Bill Office on page 10 of the report that

“An alternative would be to allow orderly explanatory statements to be tabled on the day after the deadline for tabling the amendments themselves. It would, of course, be for the Speaker or Chairman of Ways and Means…to select an amendment”

afterwards? That would overcome the problem that my hon. Friend raises that Members should not be expected to provide an explanatory statement before the deadline.

[Thomas Docherty]

I am always grateful to my hon. Friend, who is a genuine parliamentarian. However, as I have said, this is about putting a greater onus on the Chair of a Bill Committee or the Chair in the Chamber. I do not think that we want to add to those burdens. We have some wonderful Chairs who chair proceedings with a light touch. I fear that there would be complaints from the Government, the Opposition, the minority parties and Back Benchers saying, “Why has that one been allowed in, when an explanatory statement was not scheduled in time?” We have seen too often that, because the Government have tended to introduce Bills at the last minute—I am thinking of the gagging Bill in September—it would be difficult for my hon. Friends to table amendments, then produce explanatory statements.

I genuinely welcome the fact that the Government have made it absolutely clear that they intend all their amendments to have explanatory statements whenever practicable—I take their word on that. I had a slight exchange with the hon. Member for Somerton and Frome, who said with some justification, to be fair, that when he was a Minister explanatory statements were produced for all his revisions. I suspect that his civil servants had a hand in the drafting of those statements, but that is not a luxury that the Opposition or, indeed, Back Benchers enjoy. If the Government wish to expand the resources available—

[Wayne David]

Does my hon. Friend accept that there could be a strong case for mandatory explanatory statements if the Opposition had exactly the same resources at their disposal as the Government?

[Thomas Docherty]

That is a fair point. I do not think that I am giving away anything when I say that that was one of the discussions that the Procedure Committee had with the Front-Bench team and the House service. Regrettably, however, in these austere times, that is not on the table. If it were, I would wholeheartedly support the amendment, with the caveat that Back Benchers should be given greater resource.

It is something of an insult to parliamentary colleagues to maintain the myth that Members of Parliament are confused or vote the wrong way. I am conscious that Liberal Democrats may see that as a good excuse at the next general election to explain why they voted for a series of measures—“I am very sorry. I didn’t realise what I was voting for”—but I am not aware of a single case where a Liberal Democrat MP will argue that they voted to increase tuition fees or break their other promises because they were confused about what the motion or amendment meant. Perhaps the hon. Member for Somerton and Frome will correct me. The idea that the hon. Member for Brighton, Pavilion is promoting that Members are confused about what they are voting for is utter nonsense.

[Mark Durkan]

I thank my hon. Friend for giving way again. He must recall that friends of his in the House were perturbed to find that they had voted a particular way on an amendment to the Succession to the Crown Bill without realising, they said, that it had implications for religious equality—something for which they would not have voted. If explanatory statements had been required on all amendments to the Succession to the Crown Bill, Members would have known exactly when they were voting to keep sectarianism in the British constitution and when they were not.

[Thomas Docherty]

I will not comment on how many friends I have in the House.

In conclusion—

[Zac Goldsmith]

Will the hon. Gentleman give way?

[Thomas Docherty]

I want to wind up to let others get in.

A Select Committee has considered the issue at great length and brought forward a procedure. It is slightly ironic that we are now hearing so-called Parliament First parliamentarians saying that we should reject the wishes of the Select Committee which was tasked with examining the issue. I look forward to hearing other views.

20:01

[Mr David Nuttall (Bury North) (Con)]

There are essentially two issues before us this evening. The first is whether explanatory statements are a good thing or a bad thing. There is pretty much agreement on both sides of the argument that they are a good thing. The second and more difficult question is whether explanatory statements should be compulsory. My view is that they should not be compulsory. I think they are a good thing and I congratulate my hon. Friend the Member for Broxbourne (Mr Walker) on the way that he opened this short debate. I thank, in his absence, my right hon. Friend the Member for East Yorkshire (Sir Greg Knight), who was the previous Chairman of the Committee.

Opening the debate, my hon. Friend the Member for Broxbourne made clear the view of the Committee that, having considered all the evidence, we felt that on balance a permissive regime was better than a mandatory one. I accept that the argument is very finely balanced. My own view is that, although it is easy for the Government to table explanatory notes, as they do in the case of a Bill, which is entirely right, it should not be made mandatory for a Back-Bench Member to do so. However, any Back Bencher who takes their amendment seriously and wants to persuade the House of its merits will want to table an explanatory note, but it may be that, for whatever reason, they do not wish to do so. They may prefer to inform Members of the merits of their amendment by circulating a letter to colleagues, circulating an e-mail, holding a briefing meeting or even establishing a website or tweeting about the amendment. They may have other ideas about how to do it. I do not think that they should be precluded from tabling an amendment just because they have not filed an explanatory statement.

I am conscious that it is late and Members have other engagements, but I wanted to place on the record my view on the matter. I support the substantive motion and oppose the amendment.

20:05

[Dr Sarah Wollaston (Totnes) (Con)]

I think that this is quite straightforward: if a Member cannot explain the purpose of their amendment, why did they table it in the first place? Perhaps my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) would find that his amendments had greater support if their purpose was set out clearly for Members to see. Many Members have referred to the extra costs that might be involved, but surely they are nothing compared to the costs of poorly drafted legislation. As for the cost in trees, not a single extra tree would have to be felled if the House moved towards the 21st century and had all amendments and explanatory notes delivered to Members’ iPads so that they could be absolutely clear about what they are voting for. I see no excuse for not moving towards such a system, which would improve the quality of legislation. I hope that Members will support the amendment.

20:06

[Zac Goldsmith (Richmond Park) (Con)]

Thank you, Mr Deputy Speaker, for allowing me to make a very short speech in support of the amendment tabled by the hon. Member for Brighton, Pavilion (Caroline Lucas). There is no job description for Back-Bench MPs, but if there was it would be to hold the Government to account on behalf of their constituents. That is very hard to do, given the busy schedule, with Select Committee meetings and all the other obligations MPs have, if the likelihood is that when the Division bell rings we will not know what the amendment we are being asked to vote for actually represents. I would be interested to hear whether the hon. Member for Dunfermline and West Fife (Thomas Docherty) can tell us honestly—he is welcome to intervene—that he has never voted for an amendment that he did not understand. I would be very surprised if he can.

[Thomas Docherty]

I have never voted for an amendment and later regretted doing so.

[Zac Goldsmith]

That sounds more like luck than anything else. If he did not know what he was voting for, there is every chance that afterwards he might have regretted it, so he is very lucky that has not happened.

[Dr Wollaston]

Does my hon. Friend agree that it would be very interesting to call a Division now to see how many Members arriving in the Chamber could tell what they were voting for?

[Thomas Docherty]

rose—

[Zac Goldsmith]

I give way to the hon. Gentleman.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. One at a time. I do not know whether the hon. Gentleman wants to respond to the hon. Member for Totnes (Dr Wollaston) first.

[Zac Goldsmith]

My hon. Friend makes an interesting observation. It would be a beautiful irony and I would love to see it happen.

[Thomas Docherty]

I do not want to detain the House, but I should make it clear that if I have ever been confused in advance, I have asked one of my parliamentary colleagues, or perhaps those friendly Whips, about what was going on. Also, it would have been really helpful if there had been an explanatory statement for this amendment.

[Zac Goldsmith]

I take the point. There have been many occasions in the short time I have been in the House when I have had to seek advice on votes I was being asked to cast. I have asked many Back Benchers on both sides of the House and the Whips but have still been unable to understand them or get any kind of clarity. I have had to abstain in Divisions because I simply did not know what the amendments I was being asked to vote for were about.

[Wayne David]

Is the hon. Gentleman confident that he understands every explanatory statement he reads?

[Zac Goldsmith]

I think that we would stand a much better chance of understanding what we were voting for if the amendments had explanatory statements.

I reject the argument that this would place an undue burden on Back Benchers. I accept up to a point that an extra burden would be placed on Opposition parties because, as my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) said, for Members tabling 100, 200 or 300 amendments that amounts to quite a lot of minutes, but I believe that they should be given the administrative support they need to achieve that. However, that does not apply for Back Benchers, because they rarely table more than a small handful of amendments, unless they have set out to become parliamentary pests. They will have spent a lot of time understanding how to table them, so the extra five, 10, 15 or perhaps 30 minutes required to explain them is not much to ask. If a Back Bencher is not willing to invest those 30 minutes in the explanatory notes, perhaps they ought not to be wasting our time with the amendments in the first place.

This is a very small measure—a very small price to pay—that would undoubtedly, unavoidably and unarguably improve the legislative process in this place. I believe that people are appalled by some of the things that have happened here over the past few years, not least the expenses scandal and the more recent issue relating to fuel, which could be described as a scandal. The far bigger scandal is the fact that the one thing we are paid to do, we do not, on the whole, do anything like as well as we should, because we often simply do not know what we are doing. That is a scandal that can be rectified so easily with this small measure proposed by the hon. Member for Brighton, Pavilion.

20:10

[Angela Smith (Penistone and Stocksbridge) (Lab)]

Let me place on record my thanks to the Procedure Committee for all its work on this important issue— not just on this report but on previous reports. I particularly thank the Chair of the Committee, the hon. Member for Broxbourne (Mr Walker), for the work that he has done and I know will continue to do on matters relating to House business. We welcome the recommendations made by the Committee and the commitment in the motion to ensuring that the resources of the Public Bill Office will be made available to Members to assist in the preparation of explanatory statements.

We have had a very good and robust debate, but one point that has been overlooked is the actual wording of the motion, which corrects an anomaly in the current system that we have enjoyed so far in the pilots whereby it has not always been possible to call on the Public Bill Office to support the work we are doing in tabling amendments and making sure that explanatory statements are available. We are pleased that the Committee is recommending a further period in which to allow this innovation to embed itself, because more time is needed to test the process further—this time in a context whereby the practice of tabling explanatory statements is used more extensively by Members.

There are two reasons, as we see it, for supporting this approach. First, it is important for the House to bear in mind that the official Opposition, who of course have to take a comprehensive approach to the scrutiny of legislation passing through this House, would face a significant extra burden through engaging in the business of drafting explanatory statements to all amendments that they wish to table for discussion in the Chamber. Much of the legislation we deal with is very complex and requires careful consideration on a political and a technical level, and we have to bear this in mind if we want to avoid a situation in which we actually deter effective scrutiny of legislation because we have, in practice, restricted the number of amendments that can realistically be tabled by the Opposition. It is probably the first time I have been able to say this, but I agree with the hon. Member for North East Somerset (Jacob Rees-Mogg) in the comments he made on this point.

Secondly, we need to test how the Government respond to any significant extension of the use of explanatory statements, in the sense that it could prompt serious questions about the timetabling of legislation in this House. The pressure on the official Opposition to develop their approach to scrutiny of Bills in Committee is, more often than not, intense, and an extra work load would make it even more incumbent on the Government to improve their scheduling to ensure that adequate time is made available for the development of Members’ approach to scrutiny. Having served with my hon. Friend the Member for Caerphilly (Wayne David) on the Bill teams for the Electoral Registration and Administration Bill and the recent gagging Bill, I can absolutely testify to the intensity of the process and the very short time frames that were made available, in both instances, to table the amendments and get them ready for discussion on the Floor of the House.

In our view, the permissive approach rather than the mandatory approach should be agreed by the House to ensure that any problems are teased out and, we hope, resolved. That is an important part of the process, and it should precede any decision to make explanatory statements mandatory. We think that explanatory statements are a positive innovation. We hope that Front Bench teams and other Members of the House adopt them as we work through legislation.

We are confident that the Procedure Committee, so ably led by the hon. Member for Broxbourne, will monitor progress and bring the issue to the Floor of the House to report on progress and make further recommendations if that proves to be necessary. That is the key point—if it proves to be necessary. We hope that the new system, whereby explanatory statements can be tabled for all legislation, will embed itself so successfully that we will not have to return to the issue. We must give it a chance to see how it works before we move to the more draconian measure of making such statements mandatory.

The Opposition support the motion but, for the reasons that I have outlined, do not support the amendment tabled by the hon. Member for Brighton, Pavilion (Caroline Lucas) and will vote against it if a Division is called.

20:15

[The Deputy Leader of the House of Commons (Tom Brake)]

The Government support the motion. I thank the Chair of the Procedure Committee, my hon. Friend the Member for Broxbourne (Mr Walker), for his thoughtful and charmingly concise opening comments, and for explaining to the House the reasoning and conclusions of his Committee. I will set out a little of the history that has led to this debate, although I am a little disappointed that my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) did not do so. I will then explain why the House should support the motion and reject the amendment.

The report to which the motion refers was published by the Procedure Committee on 25 February 2013 and the motion appeared on the Order Paper before the summer recess, but consideration of this issue can be traced back to Modernisation Committee report in 2006 recommending that the Procedure Committee draw up a set of rules governing the tabling and publishing of explanatory statements on amendments to Bills on an optional basis during Committee stage. That followed evidence from the team on the Health Bill that was introduced in 2005, which said that such statements would help to ensure that

“when we are briefing our ministers and advising them how to respond, the issues the Member really wants debated are covered and we really are responding to the queries or concerns that are being raised.”

It is of assistance to Ministers, Members and the public if there is clarity about amendments, if debates are informed and if scrutiny is as effective as it can be.

Following the report, several pilots were conducted. Although the Procedure Committee concluded that explanatory statements were useful, take-up of the facility was disappointing. The overall assessment of the value of explanatory statements was inconclusive.

Following discussions in this Parliament between the Procedure Committee and the Leader of the House, it was decided that a further pilot should take place on two Bills, the Electoral Registration and Administration Bill and the Small Charitable Donations Bill. Criteria for evaluating the pilot were agreed and the Public Bill Office was tasked with preparing a memorandum evaluating the pilot. That was published as part of the Procedure Committee’s report, so I will not attempt to summarise it. The memorandum led the Procedure Committee to recommend a system of voluntary explanatory statements for all Bills at the Committee and Report stages. The Procedure Committee concluded:

“The evidence from the pilot suggests that there are few downsides to a permissive approach.”

I agree with that.

The amendment asks the House to resolve

“that explanatory statements on amendments be mandatory”.

After a playful intervention by the hon. Member for Dunfermline and West Fife (Thomas Docherty), the hon. Member for Brighton, Pavilion (Caroline Lucas), who moved the amendment, said that he was smirking in an irritating way. I know the hon. Gentleman well and he does not smirk in an irritating way. I would describe it more as an impish smirk. I accept that there is sense behind the amendment, particularly given the argument that it is easier to instil a cultural shift by making something mandatory and that a failing of previous pilots was the low take-up of the facility. However, I hope that I will be able to persuade supporters of the amendment not to press it to a vote, but to join those of us who want explanatory statements to become

“an accepted norm of the legislative process.”

The publication of explanatory statements will not guarantee that a Member understands the Bill. A Member who looks at the explanatory statements in isolation and does not have an understanding of the Bill will not be guaranteed to understand the amendments. If explanatory statements are published, it will require Members to read them to understand their implication. As the right hon. Member for Oldham West and Royton (Mr Meacher) said, according to a statistic he has, seven out of 10 Members apparently vote without knowing what they are voting on. I am therefore not sure I have full confidence that if explanatory statements were put on a mandatory basis, each and every Member would read them and be fully informed about the purpose of the Bill.

There are good reasons to argue for a permissive approach, and I thank my hon. Friend the Member for Bury North (Mr Nuttall) for his support in that respect. The Procedure Committee argues that a mandatory requirement would restrict Opposition Back Benchers in tabling amendments. I am afraid I have to disagree with my hon. Friend the Member for Somerton and Frome (Mr Heath)—a gamekeeper turned poacher in this respect. He referred to Short money being available to the official Opposition. That is true, but he will remember that when we were in opposition, even with Short money, there was difficulty dealing with the volume of amendments. I am sure he will also acknowledge we are now in a coalition Government, and Short money is not available to the coalition partners. In fact, in many cases when one of the parties seeks to table an amendment, there is no support for that at all. I must therefore disagree with my hon. Friend, as I do with the hon. Member for Richmond Park (Zac Goldsmith), who must acknowledge that simply producing explanatory notes is no guarantee that a Member of Parliament will read them—although clearly I hope that that would be the case.

It is accepted, I think, that the burden would fall heavily on Her Majesty’s official Opposition, who table a significant proportion of amendments. It is always best to proceed in this area of parliamentary reform on the basis of consensus. I am surprised that the hon. Member for Brighton, Pavilion, and others who support the amendment, do not want to proceed on the basis of consensus. Of all Members in this House I would have thought the hon. Lady favoured the idea of proceeding on that basis.

Should the House decide to go down the mandatory route in future, it would be free to do so, but it should be on the basis of a fuller consideration of the burden— perhaps with a further pilot on a mandatory basis—and full consideration of some issues not fully addressed in the report. Those could include, for example, whether an amendment would be refused for tabling by the Public Bill Office if it were not accompanied by an explanatory statement, or if that statement was felt to be in some way disorderly—that could certainly put the Public Bill Office in a difficult position. If explanatory statements were made mandatory, more thought would need to be given to what constitutes adequacy and accuracy in explanatory statements, and who would rule on such issues. Those issues could be considered by the House in the future, but it should not be left to the Chair to consider and rule on such procedural reforms in the way proposed by the amendment to today’s motion.

I am grateful to those in the Public Bill Office, in particular the Clerk of Legislation, for the assessment of the pilot, and for confirmation that they would be happy to consider further the issues we have discussed today if that is felt necessary. I am extremely grateful for the positive commitment they have made to assist all Members in preparing explanatory statements—the hon. Member for Broxbourne referred to the fact that he could hear them champing at the bit, and if we listen carefully I think we can hear them champing right now to assist Members in preparing explanatory statements. That commitment is noted in the motion before the House and will help encourage the facility to become part of the culture of the House.

As with the pilots, I expect Government Departments to play their role and actively participate in the new arrangements. Should the House agree the motion tonight, I expect the Government to table explanatory statements on amendments for Bills introduced to this House after 1 January 2014. The Cabinet Office will produce guidance for Departments on the issue, and I am happy to commit to deposit that in the Libraries of the House for the convenience of all Members.

I am sure Her Majesty’s official Opposition, with the assistance of the House authorities, will also up their game from the pilots. As the Procedure Committee said, a more widespread use of explanatory statements “should underline their utility”. I thank the Procedure Committee for its work on this issue. I urge colleagues not to press the amendment to a vote and for us to push forward on a consensual basis, and I commend the motion to the House.

Question put, That the amendment be made.

20:24

Division 119

Ayes: 23

---

Democratic Unionist Party: 5
Liberal Democrat: 5
Conservative: 5
Labour: 5
Scottish National Party: 2
Social Democratic & Labour Party: 1
Green Party: 1

Noes: 142

---

Conservative: 94
Labour: 35
Liberal Democrat: 13

Main Question put and agreed to.

Resolved,

That this House approves the recommendation contained in paragraph 21 of the Procedure Committee’s Fourth Report of Session 2012-13, Explanatory statements on amendments, HC 979, noting that the Public Bill Office will assist Members as required in the preparation of such statements.—(Amber Rudd.)

Business without Debate

Wednesday 6th November 2013 Commons Chamber

delegated legislation

Wednesday 6th November 2013 Commons Chamber

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Representation of the People, Northern Ireland

That the draft European Parliamentary Elections (Northern Ireland) (Amendment) Regulations 2013, which were laid before this House on 18 July, be approved.—(Amber Rudd.)

Question agreed to.

The Bittern

Wednesday 6th November 2013 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Amber Rudd.)

20:36

[Mr John Denham (Southampton, Itchen) (Lab)]

I am grateful to have the opportunity to open the debate, and I pleased to speak for the first time under your chairmanship, Madam Deputy Speaker.

I should perhaps explain to any bemused constituents who might be watching that Adjournment debates are applied for in advance, without any knowledge of the day’s news. Some of my constituents might wonder why I am talking about a pub and not about the loss of 1,000 jobs in Portsmouth, which affects many of my constituents. None the less, I hope people will see the importance of this local issue.

At one level, the debate is about one pub and one community, and about their struggle to keep their pub open. In fact, they do not want to just keep it open. They want to go one stage further: they want to buy it for the community and run it as a community pub. That pub is The Bittern on Thornhill park road in Southampton, but what has happened at The Bittern has an echo in pub campaigns across the country. In brief, the point I wish to put to the Minister is that legal loopholes mean that the intentions of Parliament, which are supported on all sides of the House, are being thwarted. I will put three practical proposals to the Minister for the action he could and should take to rectify the problems.

The Bittern is a popular community pub on a busy road between two council estates, in Southampton—Thornhill and Harefield. The next nearest pub is two thirds of a mile away; and most other pubs are well over a mile away and serve very different communities. Let me be clear that The Bittern is not a picturesque country pub; nor is it a bijou eatery with a bar hoping for its first Michelin star.

Architecturally, it is an attractive building, which was built in 1933 to an original art deco design. Both its interior and exterior are in need of refurbishment, but it remains largely as it was when it was built. The distinctive and original Crittall windows are still in place and functioning, but there are not quite enough of the original features in place for it to be listed. Yes, the pub could do with a lick of paint and some sprucing up, and it might not be the pub of choice of all my constituents, but it is a pub that many local people use and like. Some pubs which serve local communities become closed, unfriendly, and unwelcoming, but not The Bittern. It feels like pubs used to feel: warm, friendly and welcoming.

Earlier this year, rumours began that the owner, the giant pubco Punch Taverns, was not going to renew the landlord’s lease and wanted to sell to McDonald’s. It was no surprise to me that the community wanted to do everything it could to hang on to its pub. Taking advantage of new legislation, it decided to get its pub listed as an “asset of community value”. As the Minister will know, under the Localism Act 2011, the community would then have the right to exercise the new community right to bid to try to buy the pub if and when it came on the market. As he might also know, the idea of the community right to bid was first put forward when I was Secretary of State for Communities and Local Government, so I am quite attached to the idea of communities being able to buy and run their own pubs. I was delighted, therefore, when the new Government took those ideas forward and developed them more fully in legislation.

Earlier this year, the community bid was put together, submitted and supported by the necessary 21 local residents and with a great deal of support from local councillor Mary Lloyd. It was submitted to Southampton city council on 22 May. To be listed as an “asset of community value”, a pub needs to be more than a boozer, and the application stressed the pub’s consistent fundraising for charities—this is largely a community with more warmth and generosity than money, but still it regularly raises money for bereavement charities, cancer research and others—and the fact that it was a popular and inexpensive venue for christening parties, wakes and wedding receptions, and had the support of the vicar of St Christopher’s church.

After considering the application, and when deciding to list The Bittern, Southampton city council said that the application

“demonstrates a high level of community support for an asset with mixed use, combining both a pub and a community and cultural focussed facility considered to be of significant value to the local community. The community-based activities that take place at The Bittern, and have taken place for several years, could not easily be replaced elsewhere in the locality, and could not provide the central community hub provided by The Bittern”.

That was a good judgment, and The Bittern was listed on 24 July.

The intention of the community right to bid is that, once listed, the community has the chance to raise the money to bid for the pub when it is placed on the open market. The process does not guarantee success—it does not force the pub to be sold to a particular buyer—but it gives people a fair chance to bid and to bring a new community-owned pub business into play. The reason for this debate is that that might never happen for The Bittern. The listing process is rightly public and owners have to be consulted. As the city council told me, the process has to meet good standards of transparency, audit and reasonableness and meet the necessary legal requirements. From the outset, the council’s officers took a positive view both of the principle of the legislation and of the application they were being asked to consider. They had to consider it objectively, but this was not a situation, like those I have heard of, where the local authority was resistant to the idea of listing assets or wanted to make it as difficult as possible. I will come back to that in a moment.

The problem is that in order to evade the right to bid, Punch Taverns entered into an agreement to sell to McDonald’s on 19 June, less than a month after the listing process began. Even if the council had been able to move faster—this was the first application it had received under the Localism Act—it would have had to move with unrealistic speed to list the pub in the short period between its receiving the application and an agreement being reached to sell the pub. Unfortunately, the law is clear about the position created by Punch Taverns and McDonald’s. There is an exemption from the community right to bid in the case of

“an option to buy...entered into before the land was listed”.

Once the sale had been agreed, McDonald’s placed a unilateral notice on the land title. That effectively prevents the sale of the pub to any third party, including the Save the Bittern campaign and the community. In other words, the whole intent of the community right to bid has been thwarted.

Emerging evidence up and down the country shows that there is a string of pubs—including the Tumbledown Dick in Farnborough, which is also being sold to McDonald’s, and the Golden Harp at Maidenhead, where Tesco is involved—for which communities have achieved listing status but cannot bid because of prior agreements to sell. There are examples of sales to developers who then offer to sell back to the community at a far higher price.

The Plunkett Foundation, which the Government have commissioned to provide support to community groups, tells me that about 60% of community groups seeking the listing of assets of community value are dealing with an unwilling seller. I want to put on record my thanks, and those of the community, to the Plunkett Foundation for the advice and support that it has given us throughout this process. It is very helpful to have an independent organisation that is able to steer community groups—and, indeed, Members of Parliament—through the complexities of the legislation.

This situation, in which members of the community are able to get their pub listed as a community asset but are then unable to bid, is a real disappointment, because there is no doubt that the listing of community assets has been a real success, and I do not want to take anything away from that tonight. The Campaign for Real Ale tells me that more than 200 pubs have been listed. The Plunkett Foundation says that more pubs have been listed than any other class of community asset. This shows that there is a huge demand out there for making a real success of the legislation and the intentions of Parliament.

Those organisations also point to problems, however. Some councils have, unlike Southampton, tried to gold-plate the requirements, imposing a level of formal and legal status for community bids that is not required by the legislation. Other cases, such as that of the Albert Inn in Wyke Regis, have been rejected on the erroneous ground that there is another pub 700 metres away. CAMRA is also concerned that the right to bid can be evaded if a pub is sold as a going concern, even if the purchaser has no real intention of retaining the pub. There is no ability to freeze the legal status of a pub when the listing process begins; nor is there any requirement to sell to the community. There could not be any such requirement to sell to a particular bidder. Those provisions do not exist in the law at the moment. Councils may use listing status as a relevant planning consideration, but many do not do so. Other loopholes are also becoming widely known, including the leasing of a pub for a period of time in order to evade the provisions of the law on the community right to bid.

Almost inevitably, many attempts to get a pub listed as a community asset begin only when it is realised that a pub is under threat, and the process gives too wide a window for owners to evade the intentions of the law. It is not a fair fight when a community such as mine in Southampton finds itself up against Punch Taverns and McDonald’s, and something needs to be done to even things up. Even where a council is as supportive as Southampton was, the onus is on the community group to get everything right. The owners have the right to see due process from the council, but they can use the listing time to evade the intentions of Parliament.

I hope the Minister will agree to an urgent review of the working of the Localism Act to see whether there are practical ways of closing this loophole. Perhaps it would be possible, when there is a particular threat, to place a freeze on the legal status of the pub for a few weeks, to enable the listing to be considered and to avoid a sale agreement being entered into. There might be other ways of solving the problem as well. I have been in Government, and I know that the temptation is often to wait until the evidence is overwhelming before stepping in, but the Minister would be well advised to have a look at this matter now; otherwise, too many community groups will put their efforts into campaigns that are ultimately fruitless.

The sale of The Bittern has not yet been completed. We cannot be sure, but a reasonable assumption is that McDonald’s has agreed to buy, subject to the building or site getting the necessary planning permission. This actually leaves the one hope that the Save the Bittern campaign can hang on to. No planning application has yet been made, although McDonald’s told the Southern Daily Echo in August that it had submitted a pre-planning application. Perhaps there will be legitimate grounds for planning permission to be rejected. If that happened, perhaps McDonalds would withdraw, and if it did, it would presumably open the door to the community bid once again. At this stage, we can only speculate and hope.

That brings me to the second issue. One thing is certain: the change of use itself—from pub to fast-food restaurant—does not need planning permission. That issue has been raised repeatedly by MPs in debates over the years and by the all-party save the pub group, whose chair, the hon. Member for Leeds North West (Greg Mulholland) is unfortunately abroad—otherwise, he would have been in his place this evening. The inability of local authorities to block a change of use is the biggest single factor encouraging the sort of links between major companies such as Punch Taverns and McDonald’s, or between the pubcos, including Enterprise Inns and Tesco, Sainsbury’s and other supermarkets, which have cost the country so many pubs in recent years. I urge the Minister to consider again changing the planning laws so that local authorities can determine a change of use.

I know Ministers have suggested that councils should use article 4 directions, which effectively require all use changes to have planning permission. I believe Ministers have promised simple guidance on the use of article 4 directions, but will the Minister clarify whether that has been produced or will be produced? Will he confirm whether an article 4 direction can be used for an individual pub? Will he confirm that the local authority would need to give a year’s notice of its intention to use article 4 powers, thus creating another huge window to evade the community right to bid? Will he confirm, too, that the use of article 4 exposes a local authority to significant costs—for example, paying the planning application costs for the developer—and risks of compensation?

I am an open-minded person, and if there were ways of dealing with this issue other than changing the planning legislation, I would always consider them, but it seems to me that the overwhelming evidence suggests that a change in planning laws on the use-class issue is necessary to support pubs such as The Bittern.

Finally, I turn briefly to the relationship between Punch Taverns and McDonald’s, and similar relationships between pubcos and major developers. As I have said, the listing process for assets of community value is open and public, so the community group at The Bittern had nothing to hide. Indeed, when the listing proposal was put together, it was agreed that I should write on its behalf to Punch Taverns asking to open direct negotiations. Punch politely, but firmly, declined, saying:

“In the case of the Bittern we carefully considered all opportunities but came to the decision that a sale was most appropriate”.

The interesting point about that is that that is what the community wanted—to buy the pub—so why did Punch insist on going ahead with a sale to McDonald’s when it had the opportunity to get a market price from the local community organisation?

Punch tried to tell me that whatever happened would be an “asset to the community”, but not many of my constituents would regard yet another McDonald’s as such an asset. Building a fat-inducing takeaway on the main walking route to the local secondary school is anything but, although McDonald’s has tried to tell me how wonderful it would be. It pointed out in a letter that if it opened a fast-food restaurant, it would then be able to work with the local community to organise litter picks! I suppose that is true, but it is not quite what people are looking for.

Most odd, then, is why Punch simply declined the chance to sell the pub at a proper market price to the local community. By definition, Punch and its shareholders would not lose out, yet it declined the offer. I think the only sensible interpretation is that Punch is working strategically with major developers on the disposal of pubs and that individual sales to local community organisations would disrupt that cosy relationship and cause it some unnecessary hassle. With over 200 pubs converted into supermarkets over the past two years, it is pretty clear that something similar, even larger in scale, is going on between the pubcos and the major supermarkets. I was struck by the words of the chairman of all-party save the pub group when he described Punch Tavern and Enterprise Inns as

“zombie companies that do not pay dividends, and they have no growth plan or export potential”,

going on to say that these companies

“just about pay the cost of their debt by selling off their assets.”—[Official Report, 14 October 2013; Vol. 568, c. 573.]

That is what is happening now.

If big companies are getting to together to close the market and deny opportunities to new independent businesses owned by local communities, they are acting both against the public interest and in an uncompetitive manner. That should be investigated, and I hope that the Minister agrees that an inquiry by the Competition Commission would be appropriate.

The supporters of The Bittern have not given up. We may have been thwarted for the time being, but who knows what will happen? Perhaps there will be valid planning grounds for opposing the change of use. Perhaps McDonald’s will realise that there are only so many occasions on which they can ride roughshod over a local community. For now, the pub is still trading, months after it was expected to shut. Perhaps Punch Taverns will respond to this evening’s debate by opening negotiations. It is certainly far too early to admit defeat.

20:54

[The Parliamentary Under-Secretary of State for Communities and Local Government (Stephen Williams)]

I congratulate the right hon. Member for Southampton, Itchen (Mr Denham) on securing the debate. I also congratulate him on the constructive way in which he has spoken this evening, and the constructive way in which he engaged with us on an informal basis beforehand. I fully understand both his own frustration and the frustration that he has expressed on behalf of his constituents, and I can say to him, as one constituency Member of Parliament to another, that I understand that frustration for a very good reason. A similar issue arose six years ago in my constituency involving the Ashley Court hotel in St Andrews. Although the local Member of Parliament, both the local councillors and the entire local community did not want the pub to close, they were powerless to prevent it from being sold to a property developer. It was subsequently demolished, and is now a block of flats.

I want to describe some of the work that the Government are doing in recognition of the important role that pubs play in the community, to which the right hon. Gentleman referred several times, but let me first echo his thanks to my hon. Friends the Members for Leeds North West (Greg Mulholland) and for Burton (Andrew Griffiths), both of whom do a great deal of good work with Members on both sides of the House in raising the issue of pubs in the community—and, indeed, the price of beer. As always, that subject featured on Budget day, when the Chancellor scrapped the beer duty escalator as well as cutting beer duty, shaving 4p off the average pint. The right hon. Gentleman will know how difficult negotiations with the Treasury can be, but on this occasion even the Treasury was helpful to pubs.

The Government have also made it easier for pubs to host live music performances, so that they can provide the entertainment which, the right hon. Gentleman told us, takes place in The Bittern, and have extended the doubling of small business rate relief from October 2010 to March 2014.

The main issues raised by the right hon. Gentleman concerned the rights conferred by the Localism Act 2011. I am grateful to him for paying tribute to the Government for implementing ideas which I understand that he may have supported when he was Secretary of State for Communities and Local Government three or four years ago. These are early days: the Act is still very new, and the community rights conferred by it have existed only since September last year. However, as I told the House on another occasion when dealing with a similar issue relating to high streets, more than 550 assets have so far been listed by communities across England as assets of community value, and I know that the list is growing daily. I do not know whether the right hon. Gentleman follows his former Department on Twitter, but if he were to do so, he would see that nearly every day another asset is added to the local register. The Department is pleased to acknowledge the work that is being done by communities throughout the country.

The Campaign for Real Ale, to which the right hon. Gentleman referred, has been very active in this regard. Yesterday I met representatives of CAMRA and other organisations with which the Department wants to work in order to promote community rights such as this. CAMRA has produced its own leaflet explaining how to help communities that want to promote their local pubs as an asset of community value, and I commend it for doing so. Many pubs have exercised these community rights. The first asset to be listed was The Ivy House pub in Nunhead, which is in the constituency of the right hon. and learned Member for Camberwell and Peckham (Ms Harman). There are many other examples. There is a long list on the CAMRA website. The Rose and Crown in Slaley in Hexham has now been purchased by the community. Not only was it registered as an asset, but it has gone on to be purchased. The Anglers Rest in Bamford in the Peak district is now a community-owned pub. Across the country communities have been able to take advantage of this legislation, not only to preserve the pub in their community but to take on the ownership and management.

The Government have given real practical support to bring this about. There is not just legislation. We have put £19 million on the table to support partners such as Pub is the Hub and the Plunkett Foundation, so they can engage with communities and make sure they know what these rights are and how to exercise them.

This right has to balance the rights of the community with those of the owners of the property. Getting something on to the register does not automatically give communities the assets they want. Indeed, this was never the Government’s intention. Judging by the right hon. Gentleman’s remarks, he understands that in a free society we cannot completely fetter the property rights of someone who owns the pub, however objectionable we might think their business practices are. The community rights bid does give communities a better chance to bid for an asset they value in their local community, however. The scheme does not restrict what the owner can do with their property even if it has been listed.

The right hon. Gentleman talked about planning policy, and he mentioned change of use. The Government have set out a clear and consistent set of objectives for planning reform. We want local communities to exercise power and to promote sustainable development, but permitted development rights have existed in the planning system for a long time. As a councillor in Bristol for the city centre district in the mid-1990s, I campaigned for a reform in the planning use classes at that time, when pubs and restaurant were together in the A3 use class. Fortunately, later on that use class was divided into A3 and A4, and pubs sit in the A4 use class. That means that under permitted development rights pubs can go up from A4 to A3—and I believe McDonald’s would be classified as a restaurant—although planning permission may be required for associated building works.

The right hon. Gentleman referred several times to article 4. Local planning authorities can achieve objectives outside the use class system by bringing forward an article 4 direction, and this can be used to protect community assets such as public houses. In the last year three planning authorities have made directions under article 4 specifically to control the development of public houses. Two of these directions have been used to prevent demolition, and the third is in regard to a change of use.

The right hon. Gentleman asked about the geographical extent of an article 4 direction. It can be as specific as a single piece of land and a single building, or it can be across the entire local authority area—Southampton in his case. He also asked about costs that might be visited upon the planning authority. Because an article 4 direction reduces the normal planning rights of a property owner, if they subsequently have to apply for planning permission because of an article 4 directive, they do not have to pay a planning fee. To that extent, there is indeed a cost to the local authority.

Thirdly, the right hon. Gentleman asked me whether compensation would be payable. The advice I have for him is that that possibility can be mitigated if a planning authority gives sufficient notice. Indeed, Bristol has recently brought in an article 4 direction to control the spread of houses in multiple occupation and it gave 12 months’ notice. Over the past two years, 270 article 4 directions have taken place. He also asked about guidance on article 4, and the Department has been moving on that. A review of guidance was undertaken by Lord Taylor of Goss Moor and that has been published online for comments. The period for those closed in October and the Department is considering what more to do.

I entirely sympathise with the points that the right hon. Gentleman was making. I was glad that he paid tribute to the community rights that have been put in place, and I am sorry that on this occasion they were not able to help his constituents. However, the Government do want to work with organisations such as CAMRA and others that want to protect the use of the pub and other community assets. Our message is not to wait for a threat but to move now. That is what CAMRA is advising its members up and down the country to do. We are saying, “Do not wait for a threat. Move now to list your asset of community value.” That will provide the protection that the Localism Act affords.

Question put and agreed to.

21:06

House adjourned.

Ministerial Correction

Wednesday 6th November 2013 Ministerial Corrections

Wednesday 6 November 2013

Mohammed Ahmed Mohamed

Wednesday 6th November 2013 Ministerial Corrections

The following is the answer given by the Secretary of State for the Home Department, the right hon. Member for Maidenhead (Mrs May), to the right hon. Member for Leicester East (Keith Vaz) following her statement to the House on Mohammed Ahmed Mohamed on 4 November 2013.

[Keith Vaz (Leicester East) (Lab)]

I welcome what the Home Secretary has said about the burqa. This is not a case where the burqa is responsible. I urge her to look at the role of G4S and the tags that have been provided. As she knows, last week a number of cases were dropped after the police found out that there was a suggestion that tags had been tampered with; in fact, it was a question of wear and tear. Will she please investigate this again, rather than just accept that assurance? Was Mr Mohammed Ahmed Mohamed a British citizen? If he was, when did he acquire citizenship, bearing in mind the fact that he was a support of al-Shabaab, and does she have his passport?

[Mrs May]

On the last points, Mohammed Ahmed Mohamed is indeed a British citizen. I do not have his passport, but the police do. I know the right hon. Gentleman raised the same issue over the Magag case. On tags, as I said earlier, the police believe that, in this case, the tag functioned exactly as it should have done. He referred to the court case. The issue there was not about the effectiveness of the tags, but about reaching the evidence threshold for taking a criminal prosecution in relation to the operation of the tag.

[Official Report, 4 November 2013, Vol. 570, c. 27.]

Letter of correction from Theresa May:

An error has been identified in the answer given to the right hon. Member for Leicester East (Keith Vaz) on 4 November 2013.

The correct answer should have been:

[Mrs May]

On the last points, Mohammed Ahmed Mohamed is indeed a British citizen. I do not have his passport, Mohamed was not in possession of his British passport when he returned to the UK so there was no passport for the police to seize. I know the right hon. Gentleman raised the same issue over the Magag case. On tags, as I said earlier, the police believe that, in this case, the tag functioned exactly as it should have done. He referred to the court case. The issue there was not about the effectiveness of the tags, but about reaching the evidence threshold for taking a criminal prosecution in relation to the operation of the tag.

Petition

Wednesday 6th November 2013 Petitions

Wednesday 6 November 2013

Rural Fair Share Campaign

Wednesday 6th November 2013 Petitions

The Petition of residents of Yoxford Parish Council,

Declares that the Petitioners believe that the Local Government Finance Settlement is unfair to rural communities; notes that the Rural Penalty sees urban areas receive 50% more support per head than rural areas despite higher costs in rural service delivery; and opposes the planned freezing of this inequity in the 2013–14 settlement for six years until 2020.

The Petitioners therefore request that the House of Commons urges the Government to reduce the Rural Penalty in staged steps by at least 10% by 2020.

And the Petitioners remain, etc.—[Presented by Dr Thérèse Coffey.]

[P001237]

Westminster Hall

Wednesday 6th November 2013 Westminster Hall

Wednesday 6 November 2013

[Mr Philip Hollobone in the Chair]

UK Coal Operations Ltd

Wednesday 6th November 2013 Westminster Hall

Motion made, and Question proposed, That the sitting be now adjourned.—(Mark Lancaster.)

09:30

[Sir Alan Meale (Mansfield) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. We have known each other for a long time, and I am grateful to you for being here today. I am also grateful for the opportunity to hold this debate on a matter that causes acute concern in my constituency and many other mining constituencies across the length and breadth of Britain. Many Members either have a direct interest in the people and the pits concerned, or represent people who have moved to their constituencies from mining towns.

Before I begin, I want to make a complaint. Yesterday morning, I was contacted by the BBC about the debate. I was told that the BBC wanted to cover the whole issue on television and radio, and that someone would contact me later in the day, which they did. The problem was that they rang up late last night and changed the whole basis of the programme, and I was told that it would now cover energy prices, MPs’ expenses and concessionary coal, which are entirely different matters. It is appalling that the BBC has not treated the matter as seriously as it should have done, and I want to put that on record.

Let me set out the background to this debate. Since the collapse of UK Coal—the company that the Government chose to run the coal industry—after a fire in Daw Mill pit a few months ago, most of the mining jobs have been lost and the liabilities are at risk, which are both very serious. That occurred because during the nationalisation of the coal industry, liabilities were transferred from the public sector to the private sector under TUPE arrangements. As I recall, my hon. Friend the Member for Bolsover (Mr Skinner), and my hon. Friend the Member for Wansbeck (Ian Lavery), who is sitting next to me, warned some months ago of the collapse of the company and the subsequent fallout. They predicted that unless immediate action was taken, the scenario that we have seen would come about. I am grateful to them for that prediction, but it is sad that they have been proved correct.

I remind the Minister that when the Government privatised coal mining in Britain—against the wishes of those who worked in the industry, retired from it, or lived or ran businesses in communities around it, and against the wishes of the vast majority who expressed an opinion on the matter—they promised to honour all obligations and to guarantee them after the transfer, so that the obligations were at no risk whatever. It is clear from debates at the time that they were regarded by the Government as obligations governed by collective agreements established since nationalisation in 1947, but particularly negotiated in the ’60s, ’70s and ’80s. Indeed, it can be argued that some of the agreements date back to the beginning of the last century, and I will provide some examples of that later.

Many people say that the obligation to provide concessionary coal represents a benefit in kind, but it is no such thing. It is a negotiated arrangement by which a portion of the coal dug was pooled for concessionary coal deliveries, both at the time and in the future, to anybody who had worked in the industry for more than a specified number of years. People sometimes speak of the concessionary coal purely as a benefit when it has, in fact, already been earned.

I realise that the Minister is likely to argue that his Department has no legal obligations to UK Coal or the individuals concerned, but I fervently dispute that. I believe that the Department has a moral and financial responsibility to those who were promised concessionary fuel as part of their employment package, and who now find themselves at sea. The national concessionary fuel scheme for employers was never designed to be put at risk. No agreement on privatisation would have been reached in this place if Members had thought that the arrangements might ever be put at risk. That is why the Government made it perfectly clear in Bill Committee and on the Floor of the House that they regarded that obligation as an essential part of the privatisation arrangements. I do not think that anybody who was involved in that would assert anything to the contrary.

Members on both sides of the Chamber want to participate in the debate, so I will be fairly brief, but I want to look at the facts. More than 2,000 ex-mine workers and their widows have lost their historical entitlement to concessionary fuel, or cash in lieu of fuel.

[Heather Wheeler (South Derbyshire) (Con)]

I congratulate the hon. Gentleman on securing this important debate. Constituents from Swadlincote, Woodville and Netherseal have contacted me about this issue. We have had meetings with the Minister, and letters have gone backwards and forwards. The hon. Gentleman makes a really important point about the fact that the resources have been set aside for future payments. The workers did not take that as pay at the time; it was set aside, and the coal would be there, or they would receive cash in hand, later on. Some of my constituents live in properties with coal-fired central heating. They do not have gas, and there is no other way of heating their property, so what are they supposed to do? The situation is costing my constituents £1,300 a year, which is an awful lot of money.

[Sir Alan Meale]

The hon. Lady is perfectly correct. We are talking about entitlements, and the amount of money that is being taken away from those people is absolutely outrageous. In any other industry, there would be uproar throughout the community. I am grateful to her for expressing her view.

About 400 of the 2,000 mineworkers retired on the grounds of ill health, either because of injuries that they sustained while working in the coal industry or as a result of pneumoconiosis, emphysema, silicosis, asbestosis, chronic bronchitis or a range of other serious illnesses. If hon. Members have ever seen anybody who is chronically disabled by those diseases, they will understand why concessionary fuel and other arrangements—particularly those concerning pensions—are so important.

I will not make too much of this, but I know about such illnesses because my grandfather died of pneumoconiosis when I was six years old. He had to be taken away from his home because he was in such pain, and he lived for about six weeks in hospital care before he died. He drowned in his own blood; his lungs collapsed. We are talking about not one miner, but hundreds. We can see the seriousness of the issue from the fact that among the 2,000 mineworkers that we are discussing, there are an awful lot of widows. The proportion of widows is much higher than it would be if we were talking about any other industry. Mineworkers die on the job; their lives are shortened by the work that they do, and we should be proud of them and support them in their old age. We should not think of trying to remove any entitlement that they have gained through their work.

The Minister can and must try to resolve the matter. It is not acceptable for him to do nothing to change the situation. He can change it, and he knows that. He can use section 19 of the Coal Industry Act 1994, which states:

“The Secretary of State may, out of money provided by Parliament, make such payments to such persons as he may think fit for the purpose of securing…supplies of concessionary coal…made on and after the restructuring date to persons who would have received such supplies from the Corporation under relevant arrangements if those arrangements had not been affected by steps taken in connection with the restructuring of the coal industry”.

The reality is that he can do it.

What are the costs of the scheme? The Government are getting away with this cheaply. In 1994-95, they received £800 million from the private sector in the privatisation of the coal industry. There are surpluses in the miners’ pension scheme and the British Coal staff superannuation scheme. I was a Minister in the Department of the Environment, Transport and the Regions, and every year we talked about how much the surplus was worth. We formed and built the Coalfield Communities Campaign out of some of the reserves. There are hundreds of millions of pounds of surplus every year. The Government have taken that, both before and after privatisation, and that is a scandal, because that money should be paid to the miners who earned it, although that is another matter. The Government should make arrangements to settle the matter from that money. The estimated cost of picking up the concessionary fuel liability in its entirety is £34 million. If we are talking about hundreds of millions of pounds every year and the Treasury gaining £800 million from the denationalisation of coal, a mere £34 million is not very much. The Minister knows that the administrative structure is already in place, so no additional cost is attached to sorting this matter out.

I know that this does not directly come under the subject that we are discussing, but workers have also lost 10% of their pension because of the demise of UK Coal. Now their concessionary fuel will be lost. Either loss is too much. Many of them had previous service in the nationalised industry. Some worked loyally for the Conservative Government during the strikes of 1984-85. I did not agree with that, but they did not stand idly by; instead, they supported the Government in keeping the pits open. Many of the people involved in this matter are the same people who were involved then. A lot of them are thankfully in a different organisation now, but they showed loyalty to the Government, and the Government should begin to think about how they can reward that.

I will help the Minister: it is not just the 1994 Act that he can use. The European Council made a decision on 10 December 2010 on state aid to facilitate the closure of uncompetitive coal mines. That allowed the Government to make provision to ensure that key liabilities were transferred from past employers to any new entity, and were funded, so that UK Coal’s former contractual obligations were met, including those on pensions and concessionary fuel. It is therefore not true that nothing can be done. The EU decision allows the Government to make the payments outside the statutory system. The question is whether they will. It is possible, legal, just and fair. Let’s do it.

[Several hon. Members]

rose—

[Mr Philip Hollobone (in the Chair)]

Order. It is my firm intention to ensure that everyone who wants to speak in this debate gets to do so. At 10.40 am, I will call the Front Benchers, although we might get to them before that. The running order that I propose is Mr Mark Spencer, Ian Lavery, Mr Marcus Jones, John Mann and then Mr Kevin Barron. Sporting an early entry for Movember, we start with Mr Mark Spencer.

09:44

[Mr Mark Spencer (Sherwood) (Con)]

I am grateful for your compliment, Mr Hollobone. It is a pleasure to serve under your chairmanship. I pay tribute to the hon. Member for Mansfield (Sir Alan Meale) for calling this most important debate. While I am doing my thank yous, I should also thank the Union of Democratic Mineworkers, which has been active in pursuing this issue and is based in the hon. Gentleman’s constituency.

Before we get to concessionary coal, it is worth reflecting on where we are and how we got here. We could be debating the tragic loss of 2,000 jobs, not only in my constituency but also at Kellingley colliery in Yorkshire, and that would be an entirely different debate. That loss has caused enormous financial distress in my constituency and in other parts of Nottinghamshire and Yorkshire.

It is worth giving credit to the Minister for his work and support when the Daw Mill colliery caught fire and the pit got into difficulty. It is also worth paying tribute to the work of the Minister without Portfolio, my right hon. Friend the Member for South Holland and The Deepings (Mr Hayes), who was the Minister’s predecessor and who played an active role. It was a tragic position with enormous financial pressure on UK Coal. There was a moment when I worried that we were about to lose all those jobs, and the implications of that would have been enormous. Thankfully, with the support of the ministerial team and the work of UK Coal and a number of others, we were able to secure those jobs.

We should reflect on the implications for those who find they are losing the benefits they have built up. I hesitate to use the word “benefits”, because the hon. Gentleman said we should not call them that, but the scheme was part of the terms and conditions of working down a colliery. It was not only a perk, but part of the employment contract. While working in a pit, the person could see that their family was secured for life for energy provision.

The Government often say that we should support hard-working people who do the right thing, and no career is harder than working in a coal mine. Anyone who has had the opportunity to go down a mine will understand how difficult and hard the work is. These people worked hard and they did the right thing. We have a moral obligation to assist those who worked in the mines, as well as their spouses who might be widowed and find themselves under enormous pressure. As my hon. Friend the Member for South Derbyshire (Heather Wheeler) pointed out, many of these people have coal-fired central heating systems, and the financial cost of moving to another energy source and installing a gas boiler is way beyond their means.

I had the opportunity to go round to some of my constituents with Newark and Sherwood Homes, which is a local authority housing provider. Some of its tenants use the free coal to heat their homes. Newark and Sherwood Homes said that it had given some of its tenants the opportunity to change to gas-fired central heating at the cost of the housing provider, but one of the tenants said to me that he did not want to do that, because his whole lifestyle revolved around getting out of bed in the morning, lighting the fire and heating his water. His reason for getting out of bed in the morning was to light that fire. To understand how these things operate, people have to live in a coalfield community.

[Heather Wheeler]

I put on the record again that some of my villages do not have gas, so they do not have another way to heat their properties. If we could change them to gas, I am sure that we would have done. I thank my hon. Friend for stressing that it is a lifestyle choice for some people, but for others there is no choice.

[Mr Spencer]

I am grateful for that intervention. We are fortunate in north Nottinghamshire to have gas to most properties, but some of my constituents will be in the same position, and it is worth making that valid point.

While I have the floor, I will abuse your good will, Mr Hollobone, to a certain degree. I draw attention to the future and how we will move forward in this fantastic industry. I am conscious that Thoresby colliery, in my constituency, has a lifespan that will end sometime between 2016 and 2018. We need to think about how we will accommodate those employees and continue to provide our great nation with home-produced coal.

Just over the border in the constituency of my neighbour, the hon. Member for Bassetlaw (John Mann), is Harworth colliery, which is currently mothballed. I hope that the Government are considering how to reopen it at some point, if it becomes economically viable, and I will continue to discuss that with the Minister.

I implore the Minister to continue to talk to the Treasury about how to accommodate people in this very difficult position. I know that he has given the matter great thought. I hope we can soon accommodate those hard-working people who have done the right thing and should be supported by the Government.

[Mr Philip Hollobone (in the Chair)]

I understand that Ian Lavery is the chairman of the miners group of MPs, so he is the next speaker.

09:50

[Ian Lavery (Wansbeck) (Lab)]

As ever, it is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Mansfield (Sir Alan Meale) on securing this important debate.

I want to place on the record my thanks to the National Union of Mineworkers, which has done a tremendous job in highlighting the very difficult situation, and to people in the communities who have been constantly on the phone, concerned that, having spent a lifetime in the industry, they do not now have what was promised on the day they joined it.

We need to look at several things, but we must understand that the concessionary fuel arrangement is not, as many people suggest, a benefit; it is a hard-earned entitlement. It is not a free gift—it is not free coal or free fuel—but part of working underground. When people started work at the pit, they immediately got concessionary fuel, if they had a house and no one else in the house had the entitlement. They got fuel immediately, but we are talking about a lifetime entitlement. It had to be earned through years of service, so that when they finished work—many miners finished young, in their 40s and 50s, not too long ago—they had at the back of their mind their entitlement to fuel because they had worked the required amount of years listed in the national concessionary fuel agreement. This is from years ago, so I might be wrong and the situation might have changed, but I think that the required number was 15 years in the industry, with five of the last 10 years being continuous.

The right was hard earned, and yet we hear some people say, “Free coal bemuses me, by the way”. It was not optional or something that people had to go and ask the bosses for; it is deferred wages, as part of their employment package or their contract of employment. That has been disputed, but there is no doubt that the law clearly states that something not in people’s normal contract is an implied contractual obligation. “Law at Work” simply states:

“If terms have not been expressly agreed, they can be ‘implied’ through conduct or custom and practice.”

We cannot get much more “custom and practice” than people starting employment and getting fuel every week or month, or whatever the cycle was, to the time they finished work. It is not even in dispute: if it is not in people’s contracts but is an arrangement, it is an implied contractual obligation.

[Mr Spencer]

The hon. Gentleman is making an impassioned speech. Morally, he is absolutely correct, but the difficulty is that the employer, UK Coal, has gone into liquidation and so has side-stepped that obligation. The question is whether the Government should step in to fill that moral gap if there is no legal necessity to do so.

[Ian Lavery]

I understand exactly what the hon. Gentleman is saying, but I think that there is a moral obligation. I will come to why I think there is more than a moral obligation.

Some 1,600 to 2,000 people will be affected, including widows—women whose husbands died underground—and, as my hon. Friend the Member for Mansfield explained, those who left the industry under ill-health retirement. For some of the people who had accidents and retired, the judge agreed that they would have compensation, but that was sometimes reduced to the amount of concessionary fuel they would receive well into the future. All those things need to be looked at.

[Nigel Adams (Selby and Ainsty) (Con)]

A few seconds ago, the hon. Gentleman hit the nail on the head. We are talking about 1,600 to 2,000 people in this country, so the scale is not enormous. The amount of money could be found, and I am hopeful that it will be found. I passionately believe that the Government have a moral obligation to step in and right this wrong.

[Ian Lavery]

I sincerely hope that the hon. Gentleman is right, because, as the Member who represents the former Selby coalfield, I have in my constituency more men, women and, potentially, widows, than any other area in the national coalfield.

We must consider the moral obligation. No Government of any political persuasion or colour should have any problem with giving hard-working people what was agreed when they started employment. That is the issue. Some people suggest that there is an obligation to the taxpayer—there is, but that can easily be overcome.

[Sir Alan Meale]

My hon. Friend is touching on the responsibility of the Government. If we go back to the 1947 legislation relating to the nationalisation of the coal industry, we can see that some private mining companies had concessionary coal agreements with their work force, and those obligations were taken on by the nationalised industry. The Government therefore have a legal and moral responsibility to try to keep the arrangement going.

[Ian Lavery]

I sincerely agree with my hon. Friend’s comments, and I want to turn to how the Government could approach this important issue. I intended to read out section 19 of the Coal Industry Act 1994, but my hon. Friend has already done so. It clearly begins:

“The Secretary of State may, out of money provided by Parliament, make such payments to such persons as he may think fit for the purpose of securing any of the following, that is to say—”

I will not ramble on, as the provision has already been placed on the record, but it is from the Coal Industry Act, and we have to ask why it is there. It is there for a reason—to tackle the problem we face today. It is not there for any other reason. It is not there because it was thought that things would not happen, but because of the debate that was had at all stages of the privatisation of the coal industry in 1993-94. I urge the Minister to look at the situation and take advantage of what the Secretary of State is allowed to do in accordance with the 1994 Act. The matter was discussed at great length, and it is very interesting to read. People should take the opportunity to read Hansard at all stages to see how much of the debate was taken up by this issue, which is very important for many miners.

If the industry had not been privatised, such a situation would not have arisen. The only people who are suffering are those who have worked hard in the industry. It is not the Government who will suffer and it is not UK Coal, which has moved on to pastures new, that will suffer— it is the 2,000 people in the mining communities. As politicians, we have a responsibility to try to help those people.

We have already discussed the vulnerable people in the community—the widows and the elderly people—who have served a lifetime in the industry. They do not have any ability to earn in the future. As the hon. Member for South Derbyshire (Heather Wheeler) mentioned, many of those people live in remote communities. They have only coal-fired power; they do not have gas. How will they afford to renew their heating systems and, on top of that, pay the horrendous hikes in prices for gas and oil, which we are discussing later today in the main Chamber? It is just impossible for them. We should not be putting such a burden on to people who have given their lives not just for the coal industry but for the people in this country.

People face a dilemma: do they get gas, oil or electricity? The price is all that they can look at—and whether they can afford it. We have problems with miners who, having started at the pit on the same day and worked side by side, have finished work under different circumstances. They have all put in exactly the same amount of time, and, under the national concessionary fuel scheme, had a lifetime entitlement to coal. Now, because of UK Coal’s failure, some people have that allowance and some people do not. It is discriminatory to say the least. How can UK Coal get away with creating such social destruction? It abandoned the coal industry one day and moved on to pastures new, leaving carnage behind. It left people in the mining community to pick up the pieces from big business, and they will fail. As politicians, have we not got the common decency to put that right?

A number of firms in the north-east are owed huge amounts of money by UK Coal, which moved on the next day to secure Thoresby, Kellingley and up to six open-cast mines. That was welcomed, but we should not look at that and say it was brilliant and leave the other people behind to pick up the pieces. That is just not acceptable.

UK Coal owes lots of money to companies in my area. It owes M J Hickey, a plant hire firm, £30,000; that could put the company out of business. It owes Northumberland county council £620,000, which will put huge strains on the local community. This is not good enough. I agree with what the hon. Member for Sherwood (Mr Spencer) said; of course we wanted to secure up to 2,000 jobs. I compliment the Minister on his assistance in that regard, because it is just so, so important. However, we must look at what is left behind.

[Nigel Adams]

I could not agree more with the hon. Gentleman. Lots of companies have been left with huge debts following the restructuring of UK Coal. Perhaps we need time to look at the pre-pack administration and the way in which large companies restructure following failure. A cleaning contractor in my constituency is thinking of getting out of the business because UK Coal at Kellingley has left unpaid a debt of several thousands of pounds, which will cost many, many jobs. The time has come for the Government to look at how companies can be operating one day and then be collapsing the business, going into pre-pack and reforming the following day.

[Ian Lavery]

Absolutely. That is the point I was making, so thanks for that. With regard to UK Coal, our fear is that there will be pennies left for people left behind. At the same time, as the hon. Gentleman has said, UK Coal is forging ahead under a new name, with the directors making fortunes and the company earning profits. It just cannot be right.

With regard to the obligation to the taxpayer, I have a letter from the Minister who wrote to my hon. Friend the Member for Barnsley Central (Dan Jarvis) about the concessionary fuel. He said:

“I do not believe it would be fair to expect the tax payer to meet these additional liabilities on an ex gratia basis.”

That is terrible and it is not acceptable. The Treasury has creamed off—some people say stolen—up to £4 billion from the pensioners in the mineworkers’ pension scheme and other pensions from the surpluses that have been generated since privatisation. Is that not good value for the taxpayer?

I am talking about £4 billion, and it is rising as we speak. If we think that it is good enough for the taxpayer to continue to get a feedback in financial incentives from the mineworkers’ pension scheme, surely consideration should be given to paying 2,000 members concessionary fuel, which was part of their arrangements when they started work. I had said that the Government should get £2 billion from the pension schemes. That figure is now £4.4 billion.

As I am sure the Minister is aware, UK Coal was fined £200,000 only two weeks ago for an underground accident that killed an individual. It was also fined £50,000 for failing to prevent an underground explosion. Those moneys will be paid by the administrator, but what it means, if this goes to the nth degree, is that the people on the list—the 2,000 beneficiaries who hope to get something from the administrator—will be put into the same pot as the £200,000 fine for killing somebody and for an underground explosion.

What people need to realise is that the widow of that miner who was killed—the reason why UK Coal was fined £200,000—could suffer as a consequence. She could get reduced finances from her benefits to cover those fines, which were imposed for killing her husband. That cannot be right, can it? I hope that people understand exactly what I am saying. If not, I will try to explain it in more detail later. Basically, the situation is so perverse it is unreal.

The Government have an option. They have a responsibility under the Coal Industry Act 1994 to take care of those who are set to lose out and to correct an unjust situation that could cause financial problems for more than 2,000 people. I take solace from the reply that the hon. Member for Selby and Ainsty received from the Chancellor yesterday. The Chancellor said that he understood the situation—I cannot quote him exactly—and that he hoped that there would be good news soon. I hope the Minister can tell us what that good news is or at least what we can expect.

In summary, we have been talking about not free coal but an entitlement. It is an implied contractual obligation and an arrangement agreed and forged over generations of coal miners. I ask the Minister to urge the Government to treat those individuals fairly and in the spirit intended in the Coal Industry Act.

10:09

[Mr Marcus Jones (Nuneaton) (Con)]

I congratulate the hon. Member for Mansfield (Sir Alan Meale) on securing this important debate. It is extremely important to many of my constituents, who worked at Daw Mill colliery, which is right on the boundary of my constituency and the constituency of North Warwickshire. We have talked about the number of people who are suffering because of the loss of the concessionary coal allowance. We are probably talking about the best part of 2,000 people, and I suspect that about 20% of them live in my constituency, so people can see from that how important this issue is for many of my constituents.

My hon. Friend the Member for North Warwickshire (Dan Byles), who unfortunately cannot be here today, and I have spent a great deal of time addressing the issue of Daw Mill in recent months and, indeed, throughout the past year or so. I do not want to recite the issues about the fire at Daw Mill, the restructuring of UK Coal and so on, but during the past year, my hon. Friend and I have met many miners from Daw Mill, as well as many of their wives, girlfriends or partners, and we know from those meetings how devastating this situation has been for many of our constituents.

There is probably a list of issues that have emerged from the Daw Mill closure and the redundancies that have subsequently been made. The concessionary coal allowance only forms part of the challenges that many of my constituents face, but it is a very important part—not only for those who have just been made redundant, but for those constituents of mine who retired from Daw Mill since privatisation took place in the 1990s.

The crux of the issue is fairness. I represent many ex-miners, some who retired before privatisation happened in 1994, some who retired after 1994 and some who have just been made redundant. From my experience of discussing these issues with them, I know that most of them have spent all their lives since school working in the mining industry. In fact, many of those who have just been made redundant started working in the industry well before 1994, and many of my constituents who have been affected were members of the Union of Democratic Mineworkers. They were the miners who, in 1984, ignored the calls from Arthur Scargill to try to hold the country to ransom; they supported other people across the country by crossing picket lines; and they went into work and got coal out of the ground in Warwickshire.

Those people who left the industry before 1994 have statutory protection; they are still receiving their coal allowance or, if they decided to trade in that coal allowance, their fuel allowance. However, all the people whom I represent who either retired from the mining industry after 1994 or who have recently been made redundant have now stopped receiving their concessionary coal allowance or concessionary fuel payments. We need to bear in mind that many of them are pensioners on fixed incomes who rely heavily on the allowance to heat their homes. As hon. Members have already alluded to, many of them still have coal-fired heating systems and, indeed, many of them live in ex-pit houses, many of which are not the best insulated properties and it therefore probably costs more to heat them than many modern properties.

There is an issue of fairness: the inequity between the people who left the industry before it was nationalised and the people who subsequently left it. Despite some of the arguments that have been made by Labour Members, there is clearly no legal obligation, but there is clearly a moral obligation on the Government to do something to help my constituents who are now struggling to pay their energy bills, through no fault of their own and despite the fact that they worked for many years in a very hard industry, with the expectation that they would receive the coal allowance.

Having spoken to my right hon. Friend the Minister, I know the work that he did in relation to Daw Mill, and I commend him for it. Unfortunately, from my constituents’ point of view, many of them have been the losers in all this, but many of them understand why jobs needed to be secured elsewhere. However, I implore my right hon. Friend to listen to this debate carefully and to speak to our right hon. Friend the Chancellor. My right hon. Friend the Minister knows that I and several other Conservative MPs have already spoken at length with our right hon. Friend the Chancellor about this issue. Seemingly, he is sympathetic, but it might be a good thing if my right hon. Friend the Minister could raise the issue on behalf of my constituents who are affected, and I sincerely hope that when our right hon. Friend the Chancellor is able to make his next mini-Budget—the autumn statement—later in the year, we can see some light at the end of the tunnel for these people, who have suffered badly following the demise of Daw Mill and UK Coal.

10:16

[John Mann (Bassetlaw) (Lab)]

I congratulate and thank my near-neighbour, my hon. Friend the Member for Mansfield (Sir Alan Meale), for calling for and securing this timely debate. I hope that the Minister, who is listening hard to his party’s MPs, is already mulling over how the Government’s commitment to abolish green taxes will only mean anything in reality when Harworth colliery is reopened and re-mined. The coal there—there is enough for at least 30 years, and the possibility of more, if more shafts are sunk in the mine, which is on my constituency’s Lincolnshire border—would provide him with the perfect opportunity to demonstrate that the Government are serious about that commitment.

I hope that we will not have to take legal action for one sub-group of those affected by the issue that we are discussing—the former miners who have had accidents, and the widows of those who died in accidents. There are up to 2,000 of them; my hon. Friend the Member for Wansbeck (Ian Lavery) has already spoken about them. Some legal settlements relating to accidents incorporated the issue of concessionary coal, and therefore the obligation for that sub-group or subset will almost certainly fall legally on the Government. That is because those people who had accidents—by definition, through no fault of their own—including some of my constituents, settled for an amount from the National Coal Board based on concessionary coal being part of their compensation. For that subset of people, the Minister has no choice. I hope that common sense will be used, and that they do not have to waste our time and his, or pay legal costs to pursue compensation through the courts.

I will leave some time for my right hon. Friend the Member for Rother Valley (Mr Barron) to speak. However, I must mention the issue of gas. In Bassetlaw, which is in north Nottinghamshire, 6,000 properties are without access to gas, so using gas is not an option for their owners. Indeed, some of those properties, which include terraced properties, could not safely have oil either. With fuel poverty, sometimes a calculated choice is made, but often there is no choice at all. Indeed, I and others have battled to get gas to particular streets, in order to provide that choice for those who want it, but the costs involved are prohibitive, because installing a gas main is not the cheapest thing in the world, and villages may be many miles away from other places. For many, when it comes to fuel poverty, there is no choice. The most vulnerable, and the most vulnerable to fuel poverty, are among my constituents.

Further clarification is needed, because the term “concessionary coal” suggests a give-away or perk, but the coal is part of the employment conditions and part of the pension. A good comparator would be Ministers and Members of Parliament who require remuneration for a second home. They need a second home to do the job and rightly are not taxed—indeed, they get the money back—on something that is legitimately used to do the job. It is right and proper that that is not a taxable benefit. There are many other areas of life where there are similar comparators. Exactly the same applies to concessionary coal. It is not a perk; it is part of the retirement pension.

I have only two more things to say, but one will take a little time. First, though, I want to refer to the letter recently received by my constituent, Mr Philip Hall of Manton, who is one of those affected. Mr Hall has received what has twice been described by the administrator as a “generous offer”. He is being offered two sacks of coal—not a week, a month or a year, but two sacks of coal for the rest of his life. He wants me to make the point that he does not feel that that is reasonable or generous. He feels that it is an insult.

[Nigel Adams]

The hon. Gentleman makes a very good point. I, too, have been made aware by one of my local retired miners that they have been contacted, I understand, via UK Coal and offered coal at a price that is higher than they would pay if they went down the local coal merchant’s to buy it. It seems a rum do, if the hon. Gentleman does not mind my saying so.

[John Mann]

No wonder the administrators are calling Mr Hall’s offer generous. By comparison it is, but a country in which people living in fuel poverty are given two sacks of coal for life, for their pension, is not the kind of country that we aspire to have, or that the Minister aspires to have. I am sure that he would not want that to be part of his legacy as a Minister.

The second and final issue of substance that I want to raise is a matter that I have referred this week— the Minister has been copied in to the letter; it will be arriving—to the Serious Fraud Office. I hope that the Minister, not now but in the next few days and weeks, will investigate this fully. I do not believe that the splitting up of UK Coal has been done properly. I am not referring to the old logo being used in adverts at the moment, because that is peripheral. The company was split in two on 10 December. The land assets were put into a separate company called Harworth Estates Property Group Ltd, and that is where the value is—the huge value of those land assets—because this Government and Her Majesty’s Opposition are keen on house building, and they want the houses built in places such as Harworth. These are former coal sites, brownfield sites. There would be consensus, if the relevant Ministers were here, on building housing in these places. They would be saying, “Yes, this is exactly the kind of land on which we want to see lots of houses.” It is a huge asset—a fortune—that this company is sitting on.

I am not an expert on the legalities of splitting up companies, which is why I have referred the matter to the Serious Fraud Office and to the Minister, but I am pretty sure that people have to be honest about the values of companies. On 10 December, the company was split. I have with me a planning application dated 14 December. The planning application is from UK Coal Mining Ltd—a company that does not appear to exist any more or, if it does, is the one that we are talking about today, which owes the miners the money and the coal. The application is dated 14 December—four days later. This was over a weekend, so it was even fewer working days later. It is a planning application to Bassetlaw district council for 996 houses and other employment opportunities that was put in by this company. The profit on just this one piece of land is worth more than the money required for these miners and widows for the rest of their lives, and the application was put in a few days later.

The reason why I have referred the matter to the SFO is that things have to be done in the open when company changes are taking place, as far as I am aware, and I see on the application that the box has been ticked, and the officers have been named, for pre-planning application discussions. A little fee has been paid to Bassetlaw council, and there have been discussions with three named officers. Documents that I have seen demonstrate that the applicants are told that they will get approval. They know that the council, which is required by Government to have housing, wants housing built in that place. These people put the application in, having split up the company.

Which half of the company will see the profits from this when the application is in the name of UK Coal Mining Ltd? This seems to me very straightforward, and this is where we will need Government intervention. It will need to be the bit that owns the liability, because it seems to me that that is the name in which the application has gone in. It is the basis on which these people split the company up, and the basis on which they approached people, including me, to argue the case for developing the land assets in order to allow the mining operations to continue.

I went to my council of many years and persuaded it that what we want is not just a coal mine in Harworth. We want the land used for industry and for housing. We want a deal doing to allow the industry to survive, and to ensure that it is meeting its proper obligations to the retired. That is exactly what I did, in exactly those terms.

The company restructured just before it put in the application. I have a redacted copy of the application, but I see that it was put in by the applicant just days after the split-up. If that is not fraud, I do not know what is. These people have split a company up, knowing that there is a hidden value there—because they have had the discussions with the council—that needs to be built into the calculations. That value should be with the part of the company with the liability. They should not be allowed to get away with this. I am looking forward to hearing how the Minister will tackle his obligations and give the guarantees, in the language and detail that the Chancellor of the Exchequer used yesterday, and also how he will hold to account these people, who have stolen this asset from the taxpayer, miners and former miners, and ensure that they do not get away with it.

[Mr Philip Hollobone (in the Chair)]

We will now hear from an ex-miner, Kevin Barron.

10:29

[Mr Kevin Barron (Rother Valley) (Lab)]

It is a pleasure to be here under your chairmanship, Mr Hollobone. I thank my hon. Friend the Member for Mansfield (Sir Alan Meale) for obtaining this Adjournment debate at such an opportune time. You are right, Mr Hollobone: I am an ex-miner. I received an e-mail from an ex-miner in my constituency in July this year. His name is George Fowler, and he lives in the village of Maltby. He said:

“could you please advise me on the situation with UK Coal? I was retired on ill health in 1998. The UK Coal administrator I spoke to informed me I had lost my fuel. The previous letter left me with doubts for my pension. At this time my health condition has deteriorated and left me again unemployed.”

He goes on to say that “it’s hard times” living on the benefit that he is on. I know George quite well. Like me, he was an underground electrician at Maltby colliery, and he was my apprentice for a number of years. He is clearly not happy with the current situation.

I was around when this House discussed privatisation, which my hon. Friend spoke about. I looked through the archives in my constituency office a couple of weeks ago and found a Department of Trade and Industry publication called “British Coal: The Government’s proposals for concessionary fuel entitlements after privatisation”. I assume the Minister is familiar with that document, but I will tell him what the then Tory Government were saying. The introduction and summary says:

“The Government announced in the White Paper ‘The Prospects for Coal’ its intention to privatise British Coal as soon as possible to free the coal industry from the constraints of public sector ownership.”

Ironically, the last coal mine in my area closed earlier this year, which certainly freed the coal miners of Rother Valley. I have lost six mines since first being elected to this House.

The introduction and summary continues:

“The Government intends to bring forward the necessary legislation as rapidly as possible… The Government recognises the importance to past and present employees of British Coal, and their dependants, of their present concessionary fuel entitlements. The Government is committed to safeguarding their entitlements.”

Paragraph 18 of the document, which was published in October 1993, addresses arrangements for continuing employees:

“The Government will ensure that the responsibility for supplying concessionary fuel to continuing employees will pass to successor companies by whom they are employed. This will be achieved by means of transfer schemes under the privatisation legislation. There will be a contractual obligation on successor companies to honour the continuing concessionary fuel entitlements of those persons who transfer to their employment.”

I think the Government are obliged to honour that, too.

When I worked in the coal industry for many years, concessionary fuel was effectively negotiated as part of our annual income, as my hon. Friend the Member for Wansbeck (Ian Lavery) said. Concessionary fuel was taken into account, as were pensions, in the increase, or lack of increase, in our wages. Previous Governments clearly said to people such as George Fowler that they would be protected following privatisation.

I have a copy of an article from The Guardian, dated 12 May 2013, on the situation at Daw Mill. The article reports that the Minister told The Sunday Times:

“We are looking at whether the ownership of Daw Mill can be transferred back to the Coal Authority.”

If the transfer had taken place, there would be clear implications for the public purse, because the Coal Authority, as I understand it, is funded by central Government, although it also receives fees for planning and so on. The Guardian article continues:

“UK Coal is largely debt-free following a complex restructuring of its parent group Coalfield Resources last year. However, as part of the deal, large pension liabilities from across the group were ringfenced solely within the UK Coal unit, which is committed to a demanding schedule of pension deficit repayments… Earlier this month, UK Coal was forced to deny claims that it was seeking voluntary liquidation after HM Revenue & Customs turned down a request for a delayed tax payment. Fallon said: ‘The cross-government response, coordinated by my officials, has ensured that we have been able to respond to the company’s needs, and help facilitate its financial position.’”

A number of people have said today that they do not want to go into the restructuring of UK Coal, but I do. I have a copy of the directors’ remuneration report from the annual general meeting of the restructured UK Coal. The report was drawn up last year, and I understand that it has been accepted. It was given to me a few months ago; I am happy to give the Minister a copy if he wants one.

Page 2 of the report, which dates from the run-up to the restructuring, states:

“Executive Director remuneration (excluding the Chairman) comprises a base salary, an annual performance bonus, participation in a long term incentive plan or arrangement, a car or car allowance plus fuel card, pension contributions to a defined contribution pension scheme or a pension allowance, life assurance and health insurance. Bonus payments and benefits in kind are not pensionable. An appropriate balance is maintained between fixed remuneration and performance-related remuneration.”

The report then addresses four individuals. I have a few minutes left, so I will read it out:

“Following a review of executive salary levels, Messrs Brocksom, Williams and Michaelson’s base salaries were increased to £242,889, £240,350 and £236,900 respectively with effect from 1 January 2012.”

The report then addresses the annual bonus for executive directors:

“However in light of the planned restructuring the Committee agreed one-off bonus arrangements for 2012, which replaced the normal potential awards…in respect of Messrs Williams, Michaelson and Brocksom.

Messrs Williams and Michaelson had the opportunity to receive an enhanced bonus of up to 150% of base salary in the event of the restructuring plan announced on 14 March 2012 being successfully implemented. The first half of this bonus (of up to 75% of salary) would be payable at the end of 2012 for achievement of specific targets to improve the operational and financial performance of the business together with achieving key personal targets.”

[Ian Lavery]

Will my right hon. Friend give way?

[Mr Barron]

I do not have much time, and I want to get this on record. I will give way if I get the opportunity.

The report continues:

“The second half of the bonus (of up to 75% of salary) was to be paid on successful implementation of the restructure plan…but will be deferred until the end of 2013 and was conditional upon the continued employment of Messrs Williams and Michaelson.

As part of the restructuring…Messrs Williams and Michaelson transferred respectively to Mine Holdings and Harworth Estates. However, it was agreed and announced at the time of the completion of the restructuring that Mr Williams would leave the Mine Holdings business in early 2013. The Committee has determined that although Mr Williams broadly achieved the safety performance required, the operational and financial performance of the mines put the mines in such difficulties that they will not recommend to the directors of Mine Holdings that the bonus is payable (2011). Mr Williams also benefitted in 2011 from an award of 500,000 shares which will vest during 2013…The Committee reviewed Mr Michaelson’s performance in the year and will recommend to Harworth Estates that a bonus of £152,500 (2011: £114,900) is payable in respect of the operational and financial performance in the year.”

The company has serious problems, yet the report continues:

“In anticipation that Mr Brocksom would leave the business on completion of the restructuring, his enhanced bonus for 2012 was agreed at a lower level of 100% of salary, with no deferred bonus, following the successful implementation of the restructuring plan. He will receive this enhanced bonus of 100% of his base salary £242,888”.

I realise that I will have to sit down in two minutes, but the report states that

“Mr Cox, Chairman, was recruited on a base salary of £350,000 per annum on the basis he provided three days per week. In the light of the time Mr Cox was required to provide in 2012 in relation to the restructuring and on-going business, the Committee agreed to supplement Mr Cox’s base salary by £120,000 for 2012”.

That is for a three-day week, although I assume he may have worked a bit of overtime:

“However, this was not paid until the sufficient short term recovery of the mining business and the proposals for December 2012 restructuring were fully developed”.

I will sit down very shortly, but the report goes on to say that

“Mr Cox was granted the following awards pursuant to the authority contained in Listing Rule 9.4.2R(2):

A Long Term Award to acquire up to 2,800,000 ordinary 1 pence shares which will normally vest on 15 November 2013 (being the third anniversary of Mr Cox’s appointment)…An Award over 1,520,000 shares which was to normally vest on an annual basis in three equal tranches subject to Mr Cox’s continued employment”.

I also understand that UK Coal paid lawyers millions of pounds from the restructuring, yet George Fowler, and 2,300 others, have had their concessionary coal removed by the company. I do not know whether that is illegal, but it is obscene at a time when George Fowler and thousands of others have to suffer having the entitlements they worked for in the coal industry taken from them because of the scheme’s so-called liquidation. I hope the Minister will address some of those issues in the not-too-distant future.

[Mr Philip Hollobone (in the Chair)]

I call another Member who has made an impressive start to Movember: Tom Greatrex.

10:39

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

Thank you, Mr Hollobone. I was going to say that it was a pleasure to serve under your chairmanship.

I congratulate my hon. Friend the Member for Mansfield (Sir Alan Meale) on securing the debate. I should declare an interest, in that my grandfather was briefly a miner in a pit in my hon. Friend’s constituency, although I should reassure him that, as I have explained to my constituency neighbour, my hon. Friend the Member for Lanark and Hamilton East (Mr Hood), that was on my mother’s, not my father’s, side of the family, so it is just a coincidence that my surname is Greatrex.

The Minister has rightly been asked a lot of questions by Members on both sides, who represent constituents directly affected by the changes at UK Coal and who have a long and proud record of standing up for their constituencies and mining communities, so I will endeavour to speak for less than 10 minutes to give him the maximum opportunity to reply.

My hon. Friend the Member for Mansfield and others have set out the background, so there is no need for me to go over it. However, I would make the point that this issue garnered a lot of attention from the Minister’s predecessor, the right hon. Member for South Holland and The Deepings (Mr Hayes), following the fire at Daw Mill and the break-up and liquidation of UK Coal. During that time, the Minister’s predecessor, Members from across the House, representatives of the unions and others were involved in a number of discussions, which primarily focused on securing the jobs. As the hon. Member for Sherwood (Mr Spencer) said, we welcomed that, but issues were also raised about the liabilities and the potential effects on the people we are talking about.

It is worth reflecting on the point that this issue has been raised on both sides of the Chamber this morning, by people who do not necessarily normally agree with each other on a number of issues. However, given today’s comments, the Minister will be aware that there is a unanimous view that the situation we are discussing is unjustified and unfair for the people concerned.

I was looking at a written answer from the Minister from June, which demonstrated that the number of households in receipt of concessionary fuel under obligations on the Department of Energy and Climate Change fell from 132,158 in 2003 to 70,419 in 2013, for obvious reasons. However, between 2012 and 2013, it fell from 75,061 to 70,419, so the number of people we are talking about is approximately half the fall in the number of households in receipt of concessionary fuel under the current DECC scheme. It is worth making that point about the scale of what we are talking about, because the number of people entitled to concessionary fuel under the scheme as part of DECC’s obligations fluctuates and falls. DECC may well make projections of those numbers, but it may not be absolutely sure what they are, so if we are talking about 2,000 people, that should borne in mind in relation to DECC’s larger liabilities.

I have a couple of questions for the Minister. The first relates to a point made almost in passing by the hon. Member for Selby and Ainsty (Nigel Adams), and, in a different context, by my hon. Friend the Member for Bassetlaw (John Mann) and my right hon. Friend the Member for Rother Valley (Mr Barron), about some of the other liabilities and unpaid debts of the remaining parts of UK Coal, particularly to small and local businesses. That is an important point, although it does not relate directly to the concessionary scheme. Ministers would normally say that this is a matter for the Department for Business, Innovation and Skills, but given that the Minister is also a Minister in BIS, he can perhaps give us an answer.

Secondly, what assessment has DECC made of the impact of the loss of the national concessionary fuel scheme on ex-employees and on fuel poverty, because the Department has responsibility for those issues? As we have heard, a significant number of people are off the gas grid and have no alternative to the scheme. Their situation in relation to fuel poverty will be significantly affected by the liquidation of UK Coal and the ongoing issue we are dealing with.

I note that a written answer the Minister gave my hon. Friend the Member for Clwyd South (Susan Elan Jones) on 16 October suggested the Government had a pretty closed mind on this issue. I hope the response I heard the Chancellor give the hon. Member for Selby and Ainsty in the main Chamber yesterday, which my hon. Friend the Member for Wansbeck (Ian Lavery)referred to, is a sign that, although there are, as my hon. Friends have shown, potentially legal powers available to the Minister, as well as duties and responsibilities he can use, the Government recognise that there is a moral responsibility that goes beyond those issues. Ministers have to be careful when people start making arguments about moral responsibilities on the Government, but I underline that we are talking about a relatively small number of people.

[Sir Alan Meale]

My hon. Friend is talking about moral issues. The hon. Member for Nuneaton (Mr Jones) said he did not think there was a legal responsibility. Of the 2,000 people concerned, the majority are injured, ill or widowed. For those who are ill with silicosis, pneumoconiosis, emphysema and other such illnesses, the effects build up over a number of years. They would have contracted their illness in the period when the National Coal Board existed, so there is a legal responsibility, which could be challenged.

[Tom Greatrex]

I thank my hon. Friend for his intervention. I was about to say that a number of people have, as my hon. Friend the Member for Bassetlaw said, been forced, through no fault of their own, to leave work early, and the scheme’s provisions were part of their settlement. Therefore, there is—at least in some of those cases—almost certainly a legal duty, as well as a moral obligation.

To conclude, the Minister will have heard the strength of feeling. He will have heard about the legal opportunities open to him. He will also have heard the moral case. I hope he will take those points away, reflect on them and, in the further discussions he may have with the Treasury in the next couple of weeks, make it clear to the Chancellor and others that the message from both sides of Parliament—from every person who has spoken in this debate—is that there is a strong case for saying that he not only can, but should, act to ensure that people are not disadvantaged through no fault of their own.

10:48

[The Minister of State, Department of Energy and Climate Change (Michael Fallon)]

I thank all those who have contributed to the debate, which has been passionate at times, but none the worse for that. I certainly recognise that the consequences of the fire at the Daw Mill colliery have been deeply felt in the communities involved.

Before I turn to the specific issues around concessionary fuel entitlements, I want to report more broadly on our response to the events that followed the fire. The fire began on 22 February, but the colliery had been at risk of closure since March 2012, and its operators, UK Coal Operations Ltd, had previously stated that they anticipated production would cease, possibly on a temporary basis, in early 2014. Unfortunately, the severity of the fire accelerated that timetable, and, as colleagues know, on 7 March, the company felt forced to announce the colliery’s closure.

It was clear from the outset that UK Coal’s management wanted to identify a way forward to secure the ongoing viability of the remaining business within the parameters of the law and propriety. There was a role for my Department in proactively supporting—yes, supporting—the directors of the company and their advisers to find a solution and to safeguard as many jobs as possible.

Over nearly five months in which UK Coal required support, officials from my Department co-ordinated a cross-Government response, with nine Departments and agencies involved, including Her Majesty’s Revenue and Customs, the Department for Business, Innovation and Skills, the Shareholder Executive, the Department for Communities and Local Government, the Health and Safety Executive, the Coal Authority, the Insolvency Service and Jobcentre Plus. HMRC also worked with the company to help to manage its tax obligations.

We wanted to ensure that there was a fully joined-up approach at national and regional level, which would include ensuring that statutory redundancy entitlements were considered and, where appropriate, processed and paid as quickly as possible through the redundancy payments service; agreeing that the Coal Authority would put in place flexible arrangements on certain payments that the company was due to pay relating to its subsidence security obligations; and enabling the company to secure a rebate on its business rates from North Warwickshire borough council, following a revaluation of Daw Mill.

At local level, BIS West Midlands and Jobcentre Plus met local authorities and other local partners to bring about a response to manage the impact of the closure on employees, local businesses and the communities that were directly involved. As right hon. and hon. Members will know, that involved several tailored, employee-focused events, attended by large numbers of the Daw Mill work force. Jobcentre Plus also provided the work force and local businesses with advice on entitlements and alternative employment, including links to local and national information sources and resources. I firmly believe that, taken overall, the collective effort, nationally and locally, demonstrated cross-Government working at its best, to support the company and its employees while the directors worked with their advisers to identify a way forward to secure the future of the business.

Despite the fact that UK Coal underwent a major restructuring in 2012, it soon became apparent, following the Daw Mill closure, that a viable future for the remainder of the company and its employees would be achieved only through further substantial restructuring of the business. So while it was, on the face of it, disappointing when on 9 July the company announced that it had entered administration, it was clear to me that that was the only way the business could secure a viable way forward.

Subsequently, as part of the administrative process, the Daw Mill mine was disclaimed, which resulted in its transfer to the Coal Authority and to the Crown, under law. That approach is consistent with insolvency procedures and the terms of the licence. The Coal Authority, as it would with any colliery where the licence had been disclaimed, has assumed responsibility for securing the site and ensuring that there are no public safety implications. I reassure right hon. and hon. Members, with respect to the new fire that broke out last week at the colliery, that additional controls and safety measures have been put in place to contain it and disperse the smoke.

In addition, the authority is responsible for settling any future subsidence claims by way of security bonds previously lodged with it by the mining companies. As a result, about 2,000 jobs were secured at UK Coal’s two remaining deep mines at Kellingley and Thoresby and at six surface mining operations; an innovative plan was developed by the directors of the company with the Pension Protection Fund, which also provided PPF protection on accrued benefits for employees. That led to the remaining mining operations being successfully restructured and their assets held in individual companies owned by a new business, which now operates as UK Coal Production Ltd.

As part of the process of securing a viable way forward for the rest of the business and the majority of the work force, the directors and administrators had to take hard and, in many cases, unenviable decisions. It is obviously regrettable that job losses ensued and that many people continue to suffer as a consequence of those decisions, and I would not want to belittle that. However, I suggest that what happened was the “least worst” course of action to secure the future of the remaining collieries.

The hon. Member for Mansfield (Sir Alan Meale) asked me about closure aid. That can be paid only for mines that were pre-notified to the European Commission prior to the expiry of the coal state aid decision in 2010. Neither Daw Mill nor any other UK mines fell into that category. Several hon. Members mentioned pensions, and I am happy to debate the coal pension schemes. The taxpayer, of course, has benefited from surpluses in the past. However, scheme members have also benefited from above-inflation increases of more than 20% since privatisation. They continue to have a cast iron assurance that the cash values of those pensions will never fall.

The hon. Member for Bassetlaw (John Mann) wrote to me, but I have not yet seen his letter and I cannot pre-judge what the Serious Fraud Office might say about the issues he raises. However, I understand that the further restructuring this year involves much of the value of the group property being channelled precisely to support the pensions for employees and former employees.

As to concessionary fuel, it is important to understand the distinction between the national concessionary fuel scheme operated in my Department for the benefit of former employees of the British Coal Corporation, and private concessionary schemes operated by private sector coal companies, including UK Coal. Although they have a common administrator, they are governed by different arrangements. My Department’s obligations are governed by the national concessionary fuel agreements, which take the form of collective arrangements made between British Coal and the mining unions in the 1980s.

When British Coal was sold in 1994, the clear aim was to encourage a competitive industry to flourish free of the constraining influences of public ownership. It was therefore necessary to consider what, if any, of the corporation’s past legacy it would be reasonable and fair to expect private sector purchasers to bear. Among the things considered was the liability for the provision of concessionary fuel to former employees of British Coal and their widows or widowers who met the necessary criteria. It was decided that responsibility for those obligations should remain in the public sector, and they were therefore transferred to my predecessor Department in early 1995.

We currently service more than 69,000 beneficiaries, of whom approximately 57,000 are now in receipt of quarterly cash-in-lieu payments, while the remainder receive fuel. That has cost the Government some £1 billion of Exchequer funds. On the assumption that that will continue until 2050, we anticipate additional costs of some £450 million at today’s prices.

There is no obligation on the Government to fund private schemes that were the responsibility of private companies, and I do not accept that section 19 applies in the present instance. Our firm view is that, the liabilities having already been transferred to successor companies by the restructuring scheme, they cannot be transferred again through the same mechanism. I also have to consider not only the purposes and aims of privatisation but the wider context in which employees in other sectors regrettably lose entitlements to benefits on the failure of their former employer.

I fully appreciate, however, that the loss of concessionary fuel would have been a major blow to those originally supplied under the UK Coal arrangements, particularly when there is universal concern about energy prices. I understand, of course, that many of those affected are in poorly insulated houses or off-grid properties, as my hon. Friend the Member for South Derbyshire (Heather Wheeler) said.

It is correct that the Government should consider requests to support those who have suffered as a consequence of events. Right hon. and hon. Members will have heard the Chancellor’s response yesterday to my hon. Friends the Members for Selby and Ainsty (Nigel Adams), for Sherwood (Mr Spencer) and for Nuneaton (Mr Jones), who have been pressing the campaign, along with my hon. Friend the Member for North Warwickshire (Dan Byles). We are now carefully considering what we can do to help those who have lost their concessionary fuel allowances. I can, in the exceptional and extraordinary circumstances of the Daw Mill fire, confirm that we are considering the request for additional assistance. I hope to make an announcement shortly.

The Government support the coal industry and those who have, regrettably and through no fault of their own, lost their employment and some of the benefits that came with it. We are determined to consider the matter further.

Child Abuse (Northumberland)

Wednesday 6th November 2013 Westminster Hall

11:00

[Mr Ronnie Campbell (Blyth Valley) (Lab)]

When I first came to Parliament, a long time ago, one of the pieces of advice that I got was, “If you have an abuse case, tread very carefully.” Anyone who has read about Operation Rose knows what I am talking about, and I will try to develop that in my arguments.

To start, we should concentrate our minds on Operation Rose. I will come to Terry Priestner and his statement later. I was a young councillor when Operation Rose was going on. I do not think that it came to any real conclusion, but it cost £5 million and it deliberated for three years. Perhaps that was one of its failures—it did not get down to the business quick enough and trailed a bit. There was also a lot of anguish on the other side—the carers and teachers accused—but of course in such an operation the innocent sometimes have to suffer, which is unfortunate.

The police started a trawl, which involved them going to interview at least 1,800 children in Northumberland homes, trying to get some information. The teachers and carers accused the police of trying to put words into the children’s mouths, although of course they were middle-aged people by then. That is what the police were accused of, but in reality I do not think that that was the case.

Mr Priestner came to me six months ago. I listened carefully and I went to the police, but the police could not do anything for him. I went to Northumberland social services and met the director, but they knew nothing about Mr Priestner. He was, however, in homes at that time. He knew about Operation Rose, and when he wanted to contribute, he was told, “Those things happen—abuse happens. It happened in them days and that’s the way it is.” As we know now with the Jimmy Savile case, all that has arisen again—everyone thought Jimmy Savile was a man of the people, but we know now that he was not. Therefore, a lot of people—in their 50s and 60s now, but who were in the homes at the time—are now saying, “It happened to me, but nothing happened.”

As I said, the police were accused of encouraging false allegations, and people were talking about lies against innocent teachers and care workers. Trawling for evidence was the wrong approach, according to some. Dozens of professionals from the north-east were backed by MPs, who had, according to media reports at the time, lodged complaints about the “blunderbuss”—I gather that is a gun, although I did not know that before I looked it up—

“effect of the five-year Operation Rose that saw more than 200 people investigated but in the end only six convicted”,

and, of those convictions:

“A total of 277 residents and former residents made allegations against 223 care workers for alleged offences including rape, buggery, indecent assault and physical assault.

Of 32 people who were charged with a total of 142 offences, five were found guilty, one pleaded guilty, 12 were found not guilty, nine had cases withdrawn, four died before their cases were heard and one remained on file.”

At the time, Assistant Chief Constable John Scott defended the police, but acknowledged that the trawling system could trap innocent people—of course it could, and we know that it did. He said:

“We would conduct the inquiry in the same way, were we to do it again.”

So his recommendation was, basically, that trawling was the best idea, even though it could, and did, fetch in innocent people.

At the time, the carers and the teachers formed a group to defend themselves. The matter even came before the Home Affairs Committee, which was chaired by Chris Mullin, and he suggested that a new type miscarriage of justice had arisen from the “over-enthusiastic pursuit” of the alleged abuse of children in institutions. He said:

“The decision to conduct this inquiry was taken in response to a large number of well argued representations.”

There was therefore enough evidence to have an inquiry, but for us to know whether the inquiry was run correctly at the time, I suppose will need another inquiry. If some people think that the first inquiry was wrong, we need an inquiry to find out whether it was. It did take a long time to get through Operation Rose, and that has been said many times, but I do not know though whether another inquiry would be the right approach.

I have, however, secured the debate on behalf of my constituent, because he wants to bring it up—perhaps the Jimmy Savile and new abuses business that is going on has concentrated his mind. He argues that the abuse he suffered at the hands of Northumberland social services, because they put him in those care homes, is still on his mind. Whether that is right or wrong, only people can tell—the people he accuses might be dead, but we do not know.

I will go through Terry Priestner’s statement, because it is best if I read from what he says, rather than read what I would say. He was in Northumberland care homes from 1969 until 1976 and suffered physical and sexual abuse and neglect. First, he was in Fordley children’s home, in 1970; the abuse was physical and the abuser Mrs Evans. Next was Earsdon children’s home, in 1971; the abuse was neglect, according to case records of an allegation by his mother, Mrs Priestner, and the abusers were the house parents, whose names he cannot remember. At Hillbrow children’s home in 1974, abuse was sexual and the abuser was Mrs Allenby. At the same home, there was also physical abuse, and the abuser was Mr Green. I understand that Mr Green was an ex-Royal Marine.

Such allegations, Terry Priestner states, were

“the main allegations…but are not the only events which took place. I did mention everything at the time”—

Operation Rose—but he was told:

“That’s just what happened in those days.”

That cropped up once or twice with Mr Priestner. He was told several times, by several people, “Them things happened in them days”—as with our friend Jimmy Savile, “He was a lovely man; it just happened, didn’t it?” That is the same sort of argument.

After Terry Priestner had spoken to me, according to his statement he

“was contacted by Northumbria Police again, and once again told them what happened along with names, places…and was told by them, we cannot find anyone of the names you have given us, which I find…ridiculous”,

because they were there. The police again said that such things happened in those days—that phrase keeps cropping up—and dismissed them. He also went to see Northumberland council, which also turned a blind eye.

Mrs Allenby, whom Mr Priestner accuses of sexual misconduct, went to court and was told that she would not face trial for nine counts of indecent assault dating back 27 years and which she denied. The prosecution at Newcastle Crown court told Judge Maurice Carr that it would not be in the public interest for the trial to proceed because vital documents were missing. That is what was stated at the time. Although there was no evidence—as far as I am concerned, it had been tampered with because it was there one minute and gone the next—there was still a case.

[Sir Alan Beith (Berwick-upon-Tweed) (LD)]

That is not the only incident of a prosecution being withdrawn because documents had gone missing or the police had committed errors when collecting them.

[Mr Campbell]

I appreciate that, but when there are nine accounts of sexual abuse and vital evidence suddenly disappears, something has gone wrong. It would be silly to ask for an inquiry into an inquiry—I do not think that has happened before—but I sometimes wonder whether we should do that.

[Ian Lavery (Wansbeck) (Lab)]

My hon. Friend is brave to raise this matter. Child abuse cases are always difficult, but does he agree that all accusations and allegations of child abuse from sufferers should always be fully investigated and that no stone should be left unturned until a satisfactory conclusion, is reached for both sides?

[Mr Campbell]

That is right, and I do not know whether Operation Rose did that, but the attitude at the time was that such things happen in homes. Most people took that attitude, including the police. To mention Jimmy Savile again, it was also the attitude in the BBC. We must get a grip on that and get through the barrier for people like Terry Priestner. He wanted to raise the matter for publicity because other inmates with him in the homes were also abused. He knows them, but he does not know where they are, and he wants them to come forward. He is pleading for them to come forward with him, so that abusers such as Jimmy Savile and other celebrities, as well as people who worked for Northumberland council, do not get away with what they have done. Mr Priestner was in its care and he should have been looked after.

It is a minefield when there are also innocent carers. The report referred to innocent people whose lives were ruined, and it is awful if innocent people are accused. Many cases were dismissed, and only six or seven people went to jail. After everything, not many were convicted.

Terry Priestner made his point well. He never left my door. I thought he might go away, then the matter would have been out of my hands—we MPs do not like such matters—but he came back to me again and again, and as his MP, I had no option but to raise an Adjournment debate. I hope that I will receive a canny reply from the Minister.

11:15

[The Parliamentary Under-Secretary of State for Education (Mr Edward Timpson)]

It is good to see you back in the Chair, Mr Hollobone. I congratulate the hon. Member for Blyth Valley (Mr Campbell) on securing this important debate and on bringing the matter to the attention of hon. Members. As he set out in his forceful contribution, we are all too well aware that there continue to be shocking and appalling revelations of child abuse—particularly involving our most vulnerable children, who are unable to live with their families. My Department takes the issue extremely seriously. I had an adopted brother who was brought up in a children’s home in the late 1970s, so I am all too alive to the issues raised by some of those who were in residential care during that period.

I was saddened to hear that Mr Priestner does not feel that he has received the justice to which he thinks he is entitled following abuse that he has testified to and which was set out today. He experienced that abuse as a child living in children’s homes in Northumberland between 1969 and 1976. I am sure the hon. Gentleman will understand that I cannot go into a commentary on individual cases, and that the police investigation is an operational matter for Northumbria police.

However, I understand that the protecting vulnerable persons unit within Northumbria police’s crime department has investigated the allegations. I also understand that, following substantial inquiries, it has not been able to take any further action in relation to Mr Priestner’s allegations. I appreciate and understand that Mr Priestner must feel extremely frustrated about that. If he remains unhappy about how the police have handled his case, he can, of course, raise his concerns with the Independent Police Complaints Commission, who will independently review how the investigation of his case was carried out.

Ensuring that vulnerable children are protected is one of the state’s most important responsibilities, whatever the care setting. As hon. Members have said, any case of child abuse is completely unacceptable. When allegations are made, we should always follow the evidence, wherever it leads, and ensure that no stone is left unturned.

[Ian Lavery]

Where does that leave victims who decide to tackle the problem of the abuse they suffered if they go to court and the evidence no longer exists? It is no good having an investigation when the papers may have gone. It might be helpful in one way, but it does not help the individual who suffered abuse over a sustained period.

[Mr Timpson]

As my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith) said, unfortunately there are cases in which the veracity of the evidence presented to the court could have been greater than it was; some victims therefore feel let down by the efforts that the police made in good faith to bring the case to court with the highest possible level of evidence. We deal with that by ensuring that we have the best possible people and systems in place to carry out the investigation and to set out the case so that we do not miss the opportunity for convictions. In the past, there have been too many cases of failure to obtain convictions.

The fact that abuse occurred in the past makes it no less tragic. I am sorry that Mr Priestner has been living with that. The hon. Gentleman knows that, as a result of the terrible abuse that many children experienced in children’s homes, two major reviews into historical abuse were carried out in England and Wales. Sir William Utting’s report “People Like Us” was published in 1998. It was a comprehensive review of safeguarding for all children living away from home in England and Wales. Sir Ronald Waterhouse’s report “Lost in Care”, into historical abuse in children’s homes and foster care in north Wales, was published in 2000.

[Mr Ronnie Campbell]

If Mr Priestner gets his publicity and, let us say, a dozen other people come forward with the same allegations—people who were in the home with him and know the abusers—will we be able to investigate them again? Brick walls seem to be going up, and Mr Priestner is on his own. If all the people come together, will there be another inquiry?

[Mr Timpson]

In the first instance, it is for the chief constable of Northumbria to consider whether there is sufficient new evidence to reopen the inquiry. We have seen a similar train of events in north Wales, with Keith Bristow looking at the investigation that took place there in the 1970s. There is a process to look at any new evidence and for it to be considered by the chief constable, but the decision is for her to make.

Following the reviews that have taken place since the investigations, considerable reforms in how children homes are run have been implemented, including significantly improving safeguards to protect children in children’s homes. All such homes, fostering services and other settings where children live away from home are now regulated and inspected by Ofsted to meet national minimum standards set by the Government. The standards include specific measures, so children are safeguarded effectively.

Everyone working in or for children’s homes and all foster carers now have to undergo an enhanced disclosure and barring service check. They are carefully vetted and monitored to prevent unsuitable people from working with children. All children’s homes and fostering services must now have child protection procedures in line with Government guidance. They have to be submitted for consideration to the local safeguarding children board and to the local authority designated office for child protection.

At the heart of those procedures are that any complaints of abuse by children must be taken seriously and investigated in a timely way. Quite rightly, listening to children’s voices has to be at the heart of the process. The hon. Gentleman mentioned how the culture and climate seemed to be different in those days. One of the reasons for that was that children were not listened to. Local authorities now have a statutory duty to support children in care to complain if they are concerned about any aspect of the services they receive.

That duty extends to ensuring that children have access to independent advocacy. Each child’s personal independent reviewing officer has a legal responsibility to ensure that children know about the benefits of advocacy and are helped to access that when they need it, rather than when it becomes available. As part of the Government’s commitment to put the voice of the child at the centre of care planning, we are funding, over two years, the national youth advocacy service and Voice to provide an advocacy advice service for children in care and care leavers across the country, including children in residential care.

In 2002, the previous Government appointed a children’s rights director for England, who was given the statutory duty to carry out regular consultations with children in care about specific aspects of their care experience. The consultation includes questions on feeling safe, bullying and any other interaction they are having with professionals that they feel is inappropriate. The results are published in an annual care monitor report.

This year, we have revised the statutory guidance, “Working Together to Safeguard Children”. It sets out specific advice about safeguarding children in care. It includes guidance on how social workers and the police should act on allegations of abuse made by children. It is abundantly clear in that document what they must do and what their responsibilities are.

Underpinning the effective safeguarding of children are the safeguarding children boards. Every local board has a strategic responsibility for drawing together all the relevant agencies to work together to improve safeguarding outcomes for children and young people in their area, and to hold those agencies to account in respect of that work. Children in care, including those in care homes, are a priority group for LSCBs.

From the continuing unravelling of historical abuse cases, we know that there can be no scope for complacency. That is why my Department and I are absolutely determined to ensure that children in care are safeguarded effectively and that they can achieve their potential.

[Mr Ronnie Campbell]

One of the things Mr Priestner has said to me is, “Wait a minute. All these people have been coming forward from way back in the ’60s making allegations against this Savile man, and they are being dealt with. Now I am making an allegation against people who abused me in a children’s home, and yet I am hitting a brick wall. What’s the difference?”

[Mr Timpson]

As I have explained, the decision on whether to reopen the case is a matter for the chief constable of Northumbria police. If there is new evidence, or others want to come forward who previously did not or they did not have the opportunity, that is clearly a matter for her, and that will be looked at in the proper way.

If there is continuing concern about how Mr Priestner’s complaints were dealt with, he may, as I said earlier, refer the matter to the IPCC to look at in more detail. Recent cases have shown that new evidence and deep-rooted concerns about the conduct of an investigation can lead to the reopening of some investigations—for instance, in north Wales—so that we get to the bottom of exactly what went on and ensure that all those responsible are brought to account.

Shocking revelations about the exploitation of children by predatory adults in their community have demonstrated the particular vulnerability of children living in children’s homes. That is why this year we have been driving forward a significant programme of work to improve further the current regulatory framework for children’s homes. Those improvements will place greater accountability on children’s homes providers and local authorities to ensure that children are safeguarded effectively and provided with stable and good-quality care. That will be particularly important where children are placed in homes that are a considerable distance from their home. No child should be out of sight, out of mind.

In December, we changed the rules so that Ofsted can now share the names and addresses of children’s homes with local police forces, making it easier for the police to identify where vulnerable children are living in their area and to put in place strategies for protecting them. Many may wonder why that was not possible previously. When I discovered the situation, I wanted to get to the bottom of it. We have now changed the rules, and the information is now being shared as normal practice.

We have just carried out an extensive consultation on proposals for improving the effectiveness of safeguarding arrangements for children’s homes. The proposals in the consultation are intended to improve significantly co-ordination and close working between all the agencies responsible for children—particularly local authorities, children’s homes and the police. The consultation ended on 17 September.

We are also proposing to introduce new responsibilities for local authorities, so that a decision to place a child in care far away from home can be made only by a director of children’s services, and only after they are satisfied that the placement is in the child’s best interests and will meet their specific needs. We also want to put in place a requirement on local authorities placing children out of area to seek and exchange information with the area authority in which the child is to be placed, to assure themselves about the suitability of the care to be provided in the other area.

We are planning to introduce new rules for children’s homes, requiring them to have policies describing how they will prevent children from going missing, and to make monthly monitoring visits to children’s homes more independent of a home’s day-to-day management. The independent person visiting children’s homes will have a specific responsibility for assessing the effectiveness of each home’s safeguarding arrangements. The new rules also include a new requirement for children’s home managers to carry out an annual risk assessment of the area where their home is located. Where concerns are identified, homes must put in place clear strategies to protect children.

We are doing those things because I want to ensure that, in the future, only homes that can deliver high-quality care for our most vulnerable children will be acceptable, and that all homes will have a remit to strive for excellence in respect of the children in their care. My aim is to develop a revised framework for homes that is no longer based on meeting national minimum standards, but which requires them to set high aspirations for the children in their care. There is no greater responsibility for the state, as corporate parents, than to protect children.

No child who is placed in the care of their local authority and who is placed in a children’s home should ever have to experience poor-quality care. I am truly saddened that Mr Priestner experienced care in a number of homes that has clearly affected him deeply and that he feels he has not received the justice he needs. I am afraid that I am not able to set up an inquiry, as Mr Priestner has requested, but if he is unhappy with how the police handled his case, he may raise concerns with the IPCC. We are taking forward a comprehensive piece of work, which we hope will make a difference.

11:30

Sitting suspended.

Commonwealth Heads of Government Meeting

Wednesday 6th November 2013 Westminster Hall

[Mr David Amess in the Chair]

14:30

[Mr David Amess (in the Chair)]

Let me say at the outset that many hon. Members have taken the trouble to turn up this afternoon. If those who have not written in beforehand could quietly indicate that they wish to make a speech or just an intervention, that would be helpful. Obviously, I want to call everyone who wishes to speak.

[Several hon. Members]

rose—

[Mr Lee Scott (Ilford North) (Con)]

It is a pleasure to serve under your chairmanship, Mr Amess. Before starting on my main points, I would like to say something on behalf of the all-party group on Tamils, which includes the hon. Member for Mitcham and Morden (Siobhain McDonagh), whom I thank for all her help and support on this issue. The all-party group has always condemned and will always condemn any terrorism whatever. Various accusations have been made that are not correct, so I wanted to put that on the record.

This debate is about the loss of tens of thousands of innocent people’s lives. I believe that that is beyond any party politics, and it is not my intention to bring any party politics into today’s debate.

One of the most important things that everyone talks about is peace and reconciliation, but before there can be that there must be accountability and justice; the one cannot be achieved without the other. The all-party group contacted my right hon. Friend the Prime Minister and asked that the decision to attend the Commonwealth Heads of Government meeting next week be reviewed, but I have to base my words on the fact that the UK will be attending that meeting. In the light of that, it is vital that various points be raised, and I will raise them; I am sure that other hon. Members have important issues to raise as well. I welcome my right hon. Friend the Minister to his place.

Let us consider the various issues raised by me and other hon. Members. At the time of the conflict, many children went missing, as well as adults. We fear that we know what happened to those thousands of people, but is it too much to ask, for the dignity of the families concerned, that what happened to the children and adults who disappeared should be confirmed by the Government of Sri Lanka? I have been promised that on numerous occasions, including at meetings where the hon. Member for Mitcham and Morden was present, but we have never heard a word about it.

Sri Lanka has failed on many fundamental core values of the Commonwealth, such as democracy, human rights, freedom of expression, the rule of law, judicial independence and good governance; we have only to look at what has happened to members of the press and at what is happening with any protests that people want to take place during the Commonwealth Heads of Government meeting next week.

For the first time in the Commonwealth’s 64-year history, those core values were adopted into a Commonwealth charter, which was signed by Her Majesty the Queen, as the head of the Commonwealth, in March 2013—[Interruption.]

[Mr David Amess (in the Chair)]

Order. Let me say to those in the Public Gallery that no photographs are to be taken of our proceedings. Would the Doorkeepers kindly deal with the matter, please?

[Mr Scott]

Thank you, Mr Amess. I cannot think why anyone would want to take a photograph of me. None the less—

[Nick de Bois (Enfield North) (Con)]

It wasn’t you!

[Mr Scott]

Okay, it was not me.

The Channel 4 documentaries broadcasted many authenticated videos showing very significant evidence of war crimes and crimes against humanity during the end of the conflict in 2009. There is new evidence in the documentary shown recently, “No Fire Zone”; it shows the fate of a Tamil TV presenter in a stark reminder of the Sri Lankan Government’s cruelty in that period. Until now, they had insisted that she had died in combat during the final stages of the conflict. That has now been shown—not by me, but on TV—not to be the case. There are many unanswered questions about accountability during the last period of the conflict and war, when innocent Tamil civilians were brutally killed by the Sri Lankan armed forces. Again, it is not me making that claim; it has been shown in TV documentaries. It cannot be denied.

I would like to quote from a short story about one of the disappeared people. This is from The Daily Telegraph of 18 October:

“The abductors arrived in a white van shortly before midnight, stopping outside a modest home in a palm-fringed town on Sri Lanka’s north-western coast. Inside the house he shared with his uncle, Anton Saniston Manuel lay asleep in his sarong.

The men burst in and at the point of a gun the 24-year-old fisherman was led away. That was five years ago and nothing has been heard of Anton…since that night.”

Sometimes his family think that if they had killed Anton in front of them, that would have been better, because they could have buried him and mourned him. They would know what had happened.

The same pain is endured by thousands of families across Sri Lanka. As President Rajapaksa prepares to welcome the dignitaries who will arrive for the Commonwealth Heads of Government meeting, he is striving to portray Sri Lanka as a thriving democracy recovering from decades of civil war. If only that were true. I, like colleagues on both sides of the House, pray that there will be democracy, closure, justice and reconciliation, but have there been any signs of that? I am afraid not.

Let us consider some of the issues that have arisen and have been raised. I have various notes with me, but I am not going to use them. What I am about to say involves all of us, regardless of political party. In 2009, what was happening was known by some of us, and some of us said what was happening, but nothing changed and those lives were lost. That should never have happened. All of us, including me, owe an apology that at that stage, we did not do what needed to be done. For that, I say publicly that I am sorry. I know that colleagues will feel the same.

Tragically, we cannot bring back the lives of the innocent civilians, but what we can do is start today to tackle some of the issues that still exist, such as the violence against women and the massive increase in sexual crimes that is being seen not only in Tamil areas, but across the whole of Sri Lanka. We have to tackle these things. If we are to have reconciliation and justice, there is no point in trying to sweep things under the carpet.

I shall say what my fear is. My fear is that the Commonwealth Heads of Government meeting will go ahead and will portray Sri Lanka in a certain light—as the current Government wish it to be portrayed. I do not believe that that is the correct light.

I know that the Prime Minister, the entire delegation of Ministers and everyone else who is going to Sri Lanka do care, will visit the areas that I am calling on them to visit in the north of Sri Lanka, will seek unfettered access and will raise the human rights issues. I hope that that happens.

I cannot say what the Sri Lankan regime will and will not allow. That is not in my gift. But if we do not raise these issues, we will be having another debate in this Chamber or in the main Chamber, asking the same questions, year after year after year.

[Nick de Bois]

Does my hon. Friend agree that it would be a grave and serious mistake to restrict the freedom of the Prime Minister and any other delegates to roam where they wish?

[Mr Scott]

Yes. Of course it would be wrong to impose any restrictions. If we truly are to move things along, there must be free access for anyone—not only the British delegation, but any other delegation—to go anywhere, see anything, hear anything and speak to the people without those people being scared to say what they want to say.

[Mike Gapes (Ilford South) (Lab/Co-op)]

I thank my constituency neighbour and friend for giving way. I suspect that he is aware that the Select Committee on Foreign Affairs has called on the Sri Lankan Government to assure the Prime Minister that anyone he meets, and their families, will not subsequently be harassed or intimidated. We know that that happens regularly in Sri Lanka. If the Prime Minister meets figures who are critical of the Government, there is a risk that the situation may be serious for them after he and other Ministers have left.

[Mr Scott]

I agree totally with my neighbour.

I know that many other hon. Members wish to speak, so I will not continue for long. I have raised my concerns, but I raise one final point. Those of us who have spoken out for justice, reconciliation and peace for all in Sri Lanka should not be targeted and accused of being terrorists or of being wrong. That is unacceptable. Hon. Members on both sides only want justice, peace, reconciliation and accountability.

[Mr David Amess (in the Chair)]

The hon. Gentleman has set a splendid example. Other hon. Members should take no more than five minutes.

14:40

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

I do not want to beat about the bush: Britain should not attend the Commonwealth Heads of Government meeting in Sri Lanka later this month. It is disgraceful that our Government are heaping credibility on the Sri Lankan regime by doing so.

In just nine days, the Prime Minister and the heir to the throne will effectively bestow their blessing on the regime when they are photographed alongside President Rajapaksa, who is widely considered to be a war criminal. The images of a king-to-be and a Prime Minister with such a person will cause enormous distress to his victims. Worse, they will give succour to other potential war criminals and show just how easy it is to get away with it. As Amnesty said,

“By hosting CHOGM in Colombo, the Commonwealth is giving an extraordinary and ill-deserved seal of approval to impunity for human rights violations in Sri Lanka.”

President Rajapaksa is head of a regime that cluster-bombed its own people, many in the laughably titled “no-fire zone”. It killed at least 40,000 of its own citizens. Even now, nearly 150,000 Tamils remain unaccounted for. Yes, the Tamil Tigers were a cruel terrorist organisation, but according to the United Nations, the large majority of civilian killings were

“the result of Government shelling and aerial bombardment”.

There was systematic shelling of hospitals and civilian areas by Government forces, as well as restrictions on humanitarian aid.

Channel 4’s documentary “Killing Fields” drew the world’s attention to what the UN panel of experts called a

“grave assault on the entire regime of international law”.

The channel’s latest documentary, screened on Sunday, was almost too harrowing to watch. Mobile phone footage, authenticated by the metadata in each file, showed further evidence of what reporter Jonathan Miller called

“the worst…crimes committed this century…that is saying something, given what is going on in Syria.”

Sri Lanka’s own so-called Lessons Learned and Reconciliation Commission has totally failed to provide accountability. The UN panel of experts said that it was “deeply flawed” and called for an independent, international investigation into war crimes. Yet Sri Lanka continues to ignore even the most minor allegations, describing them as unsubstantiated or biased.

In the absence of accountability or reconciliation, the situation is getting worse. As the UN human rights commissioner, Navi Pillay, said just weeks ago,

“although the fighting is over, the suffering is not.”

For her, Sri Lanka is

“showing signs of heading in an increasingly authoritarian direction”,

with

“curtailment or denial of personal freedoms and human rights...and the failure of the rule of law.”

Amnesty also described

“a deterioration of human rights...violations continue, with the…Government cracking down on critics through threats, harassment, imprisonment and violent attacks.”

Journalists, the judiciary, human rights activists and opposition politicians are all targets of what Amnesty calls a

“disturbing pattern of Government-sanctioned abuse.”

Sri Lanka is now the most dangerous place in the world to be a journalist. Yesterday, I was lucky enough to meet Sandhya, the wife of Prageeth Eknaligoda, a satirist and journalist who disappeared in 2010. Earlier this week, the BBC screened an excellent documentary, “The Disappeared”, which was about the impact of abductions and secret murders in Ireland during the troubles. Even 40 years on, victims’ families are haunted by what happened, and their emotions are still raw. Mrs Eknaligoda’s husband disappeared just three years ago. The paramilitaries responsible for his disappearance cannot be dismissed easily as terrorists, as might have been the case with the IRA; they are agents of the Sri Lankan establishment.

The state of Sri Lanka has done next to nothing to help Mrs Eknaligoda to find her husband. When she reported his disappearance, the case was not investigated. Instead, she was locked up. Police officers called to court to account for what happened to her husband routinely fail to appear. Ministers refuse to answer letters about the case, other than to acknowledge receipt. Sri Lanka’s chief justice, Mohan Peiris, blithely told the UN human rights commission that Mr Eknaligoda had gone abroad, with absolutely no evidence to back up the claim.

Mr Eknaligoda is not the only one of Sri Lanka’s disappeared. Amnesty reckons that there have been thousands of disappearances, including at least 39 critics of Sri Lanka’s Government, since 2010. Many are not even Tamil; Mr Eknaligoda is Sinhalese. Every one of those disappearances is a tragedy, in a country that is well used to brutality.

What was so shocking about meeting Mrs Eknaligoda and hearing her story was how unsurprised I felt about it. Our Government’s complete failure to hold the Government of Sri Lanka to account is also no surprise. Indeed, although this was Mrs Eknaligoda’s first visit to Britain and hers is a cause célèbre around the world, the British Government refused to meet her.

Freedom from Torture says that Sri Lanka has replaced Iran at the top of the table of torture cases referred to it in the UK. Tamils continue to suffer owing to military controls in the north and east of Sri Lanka. The Foreign Affairs Committee has concluded that holding the Commonwealth meeting in Colombo was “wrong”. It told the Prime Minister not to go unless he received

“convincing and independently verified evidence of substantial and sustainable improvements in human and political rights.”

No such improvements have been seen, yet still the Prime Minister and the heir to the throne will go.

Our Government claim to be concerned about

“disappearances, political violence and reports of torture in custody”,

but for the next two years, Sri Lanka will chair every important committee of the Commonwealth, and President Rajapaksa will pose alongside our Prime Minister. If our Prime Minister seriously thinks that his presence alongside Rajapaksa will help the victims of disappearances or cluster-bombings, he clearly knows nothing about Sri Lanka.

[Mr Steve Reed (Croydon North) (Lab)]

My hon. Friend is making an incredibly powerful case. She is a strong champion of human rights in Sri Lanka. Does she share the sense of betrayal felt by British Tamils living in my constituency, hers and elsewhere in the country that our Government are lending credence to the Sri Lankan regime by insisting on attending the meeting?

[Siobhain McDonagh]

As my hon. Friend suggests, I find it unfathomable that a British Government of any political hue would choose to go to Sri Lanka for the conference.

[The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire)]

As far as I am aware, the hon. Lady was in this House in 2009, when the decision was taken in Trinidad and Tobago, under a Labour Government, to go to Sri Lanka. Will she tell the House how many times since then she has spoken out on the subject?

[Siobhain McDonagh]

I cannot, but hon. Members on both sides in the debate will know that at every possible opportunity—every debate, every event and every early-day motion—I have been making this point. I would be making it if the Government were Labour, Conservative, Liberal Democrat, Social Democratic and Labour or Democratic Unionist. It is of the utmost disinterest to me who is in power; what is of interest to me is the fact that this is happening. Although no one would regard me as the best friend of our former Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), he assured me that his Government would not go to Sri Lanka for CHOGM, and he respected that promise.

[Mr John Spellar (Warley) (Lab)]

Did not the then Labour Foreign Office Ministers argue in 2009 that Sri Lanka was not ready to host the 2011 CHOGM, so it was put forward to 2013 and should have been kept under review in the light of the evolving circumstances?

[Siobhain McDonagh]

My right hon. Friend is absolutely correct.

[Mike Gapes]

My hon. Friend is probably aware that the Foreign Affairs Committee report “The FCO’s human rights work in 2012” stated:

“The FCO objected to a proposal that Sri Lanka might host the 2011 CHOGM on human rights grounds but did not obstruct a proposal that it might do so in 2013… That approach now appears timid. The UK could and should have taken a more principled stand in 2009, and should have taken a more robust stand after the 2011 CHOGM in the light of the continuing serious human rights abuses in Sri Lanka.”

[Siobhain McDonagh]

If the British delegation is silly enough to go on the sanitised, Government-approved visits that are almost certainly lined up, how will that help the victims? The propaganda machine will go into overdrive, presenting Britain’s participation as giving credence to the regime. No doubt, the Government will claim that their attendance at CHOGM is an opportunity to raise dissidents’ concerns, but I hope that the Minister can assure us that the Government will not put anyone in danger by meeting them. After the UN met critics of the Sri Lankan regime earlier this year, there were terrible reprisals. I hope that the Prime Minister will not seek to assuage his guilt about CHOGM by putting the lives of those whom he meets at risk, and I hope that the Minister will guarantee those people’s safety long after the summit has ended.

The Government will not even guarantee the safety of Tamils whom they deport from Britain, however. According to Freedom from Torture, at least 15 Tamils whom Britain deported to Sri Lanka were tortured on their return, and they are only the ones who have managed to escape back to Britain to claim asylum again. Many others remain.

The truth is that Britain should not be going to Sri Lanka next week, because to do so will be seen as an endorsement of a Government who fired cluster bombs, white phosphorus and rockets on their own people. The Government may think that justice will be served by having President Rajapaksa pictured, all smiles, alongside our Prime Minister, but what will dictators such as President Assad think when they look at those pictures? Will they be put off? No, they will be smiling, just as President Rajapaksa will be smiling. That will send the message that human rights can be breached, people can be murdered, journalists can be disappeared and the Commonwealth and Britain will do nothing. For the sake of every future victim of a murderous regime, nothing but a boycott of this despicable summit will suffice.

[Mr David Amess (in the Chair)]

Order. Obviously, interventions lengthen speeches, but I am now beginning to worry about the time.

14:52

[Mr Henry Bellingham (North West Norfolk) (Con)]

It is a pleasure to serve under your chairmanship, Mr Amess, and to follow the hon. Member for Mitcham and Morden (Siobhain McDonagh). I congratulate my hon. Friend the Member for Ilford North (Mr Scott) on securing this timely debate. It is incredibly important, and we have heard two very moving speeches already. I take on board what my hon. Friend said about the need for peace and reconciliation, and I agree with him that before that can be achieved, there has to be justice and transparency. Although, in my humble judgment, significant progress has been made in the peace process and in all the work that has been done since the peace in 2009, there is still significant unfinished business and many questions remain unanswered. There is a vital need for justice, transparency and accountability.

I think it was a grave mistake to give the CHOGM the go-ahead to meet in Colombo. In 2009, I supported putting on hold the decision on whether the summit should go to Colombo, and having Perth as the venue for 2011 as an interim measure. That whole discussion should have continued apace. I would like the Minister to comment on the decision-making process within the Commonwealth, and particularly within the secretariat, which does the heavy lifting work behind the process of selecting the venues, because a similar situation may occur in the future. Not many Commonwealth countries are totally unsuitable for hosting a CHOGM, although one can think of a few, but it certainly should not be going to Sri Lanka.

Having said that, although the CHOGM should have been postponed—it should have gone to Mauritius this year, and the stream of work on whether Colombo was a suitable place to host it this year should have continued— since the Commonwealth has decided to go firm on Colombo, the Secretary of State, his Ministers and the heir to the throne are right to go; I disagree with the hon. Lady on that point. What would be achieved by the son of the head of the Commonwealth, and the Foreign Secretary of a country that is seen as central in driving the Commonwealth agenda, boycotting the meeting?

[Stephen Timms (East Ham) (Lab)]

Is there not a terrible problem, in that the Prime Minister will give a big propaganda coup to a Government who really ought to be brought to book?

[Mr Bellingham]

I certainly accept that, and it is one of the downsides. On the other hand, the signal must go out that the Commonwealth is an organisation that is growing in stature and strength, and becoming more relevant in the world. The Commonwealth is bigger than one country, one city and one President, which is why it would be a mistake for our Government to boycott next week’s CHOGM.

[Mr Scott]

Does my hon. Friend agree that one thing that the Commonwealth secretariat might do is take away the chairmanship of the Commonwealth from Sri Lanka?

[Mr Bellingham]

I will come on to that point. Since I started studying the Commonwealth, and indeed during my time as a Minister at the Foreign and Commonwealth Office, answering for the Commonwealth in the Commons —when he was a Foreign Office Minister, Lord Howell had responsibility for the Commonwealth, and my right hon. Friend the Minister has taken over his work—I have thought that the process is the wrong way round. The country that hosts a forthcoming CHOGM should be in the chair in the two years running up to it, rather than taking over the chair post-CHOGM. That would give it a chance to set the agenda and work tirelessly on some of the priorities that the Commonwealth needs to deal with.

I am concerned that the Sri Lankan Government will be far too defensive in their chairmanship of the Commonwealth, and that they may well use that chairmanship to deflect criticism of some of the appalling historical abuses discussed by my hon. Friend, which have not been accounted for or explained. We must try to implement a better mechanism to ensure that the chair of the Commonwealth drives the agenda that the members of the Commonwealth want.

The hon. Lady mentioned the UN panel of experts. I read their report, which is highly compelling. They suggested that there should be a new independent international investigation of the crimes; that would be a natural extension to the work done by the eminent persons group in the run-up to Perth. Would it not be an idea for the Commonwealth to carry out an independent international investigation of those crimes, as recommended by the UN panel of experts? Will the Minister put that suggestion to the Commonwealth? It would be a good way of ensuring that the Sri Lankan Government concentrated on things that matter, and their involvement in the process would be one stage removed, because the investigation would be carried out by the Commonwealth.

Finally, it is incredibly important that we take a positive view post-CHOGM, because the Commonwealth has an important future. It must concentrate more on trade, commercial diplomacy and the potential for foreign direct investment between Commonwealth members. After all, it is an organisation that encompasses a vast number of people—at the last count, in excess of 2 billion —and total trade between members of some $3 trillion. There is potential for increasing that trade, and using trade and business to break down barriers between communities; for underpinning peace processes; and, above all, for helping to bring about justice and reconciliation. Sri Lanka needs wealth creation and prosperity, but it also needs answers to the questions that have been raised. The Commonwealth can turn what I believe was a mistake into something that will be positive for the future.

14:59

[Simon Danczuk (Rochdale) (Lab)]

It is a delight, Mr Amess, to serve under your chairmanship. I congratulate the hon. Member for Ilford North (Mr Scott) on securing this important debate, and I am pleased to follow the hon. Member for North West Norfolk (Mr Bellingham).

My comments fall into three sections. First, I want to talk about the rule of law in Sri Lanka. Then I want to talk about my constituent, Khuram Shaikh, who was brutally murdered nearly two years ago while his girlfriend was gang-raped. Thirdly, I want to talk about the deterioration of the Commonwealth, not least because of its association with Sri Lanka and its President.

We know from the persecution of the former Chief Justice, from the murder of and attacks on journalists, which my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) mentioned, and from the attacks on human rights activists that the rule of law does not often apply in Sri Lanka, even though it is a key principle of the Commonwealth. For the next two years, we will have a chairman of the Commonwealth, President Rajapaksa, who has little or no regard for the rule of law.

We know from the case of Khuram Shaikh that the President of Sri Lanka puts political patronage and the possession of power well above the rule of law. Over the past two years, my office and I have come to understand Sri Lanka and how it works, or rather how it fails to work when it comes to Commonwealth principles. I have visited Sri Lanka twice in the past nine months. I have met Government Ministers, Opposition MPs, solicitors, senior police officers and soldiers, Sri Lankan diplomats, members of civil society and ordinary citizens. My office staff have flown to Moscow to meet Khuram’s girlfriend, who was raped. I have visited the scene of Khuram’s murder in Tangalle. We have spoken with Canadian and British witnesses who were present on the evening of the murder. We have facilitated meetings in Austria with DNA experts who are familiar with the case. We have had time to study the case in detail, and there is little we do not know.

There is an important point to make. We know the alleged murderers were arrested soon after the murder but were then released on bail. Little has happened since. Then, just two weeks ago—nearly two years after the murder—a senior prosecutor suddenly announced that a trial would get

“off the ground within the shortest possible time.”

That announcement was made just two weeks before the Commonwealth Heads of Government meeting. I apologise for my cynicism, but one cannot help thinking that the latest announcement is window-dressing for the CHOGM.

Let us be clear about why this is an example of the breakdown in the rule of law and why President Rajapaksa is not an appropriate person to chair the Commonwealth. One of the key murder suspects—the alleged ringleader at the murder scene—has already been connected to the murder by DNA reports. He is chairman of the local council in Tangalle and an active member of the ruling party. He was suspended from the ruling party, but he was quickly reinstated. People in the Southern province of Sri Lanka, including British nationals to whom I have spoken, will tell you that the key murder suspect is a creature of the President and delivers votes for the President’s party. Since no case has come to court, the suspect has become emboldened and, indeed, more violent in the area. He has nothing to fear, because he has the protection of the President. That is why a trial has not yet taken place.

I conclude with this final concern: the Commonwealth cannot allow the CHOGM to become just an opportunity for President Rajapaksa to showcase Sri Lanka. It also has to be used to shine a light on the failures of his regime and to push for change. We are not only on the verge of a British Prime Minister flying over 5,000 miles to shake hands with a President who is protecting the murderer of a British national; we are on the verge of the Commonwealth being led by someone who has no regard for the rule of law. That should worry all of us.

15:04

[Mr Nigel Evans (Ribble Valley) (Ind)]

It is a delight, Mr Amess, to serve under your chairmanship. It is the first time in three years that I have spoken in Westminster Hall.

I want to talk about one aspect of the Commonwealth Heads of Government meeting that is taking place this month, as opposed to citing all the aspects. I am listening with great interest to what other Members have said, and that will become apparent at the end of my speech. At the CHOGM, people will rightly talk about poverty alleviation, education, access to water and drugs, and meeting the millennium development goals, but one subject that does not get much attention is lesbian, gay, bisexual and transgender rights. In parts, the Commonwealth is failing on that.

Within the Commonwealth, 40 countries still criminalise aspects of LGBT life. Of those 40 countries, 14 are in Africa, eight in Asia, seven in Oceania and 11 in the Americas. One of them is Pakistan, where consensual same-sex relations carry a maximum penalty of death. Just think of that for a second: death. Alongside that, Bangladesh, Barbados, Guyana, Singapore and Uganda all have a maximum sentence of life imprisonment for consensual same-sex relations. That is in stark contrast to some Commonwealth countries that have made great strides. South Africa is one of them. Same-sex marriage was allowed there in 2006, which was well ahead of the United Kingdom, where same-sex marriage was allowed this year. Earlier this year, I watched footage of the New Zealand Parliament passing similar legislation. I had a tear in my eye when I saw people in the public gallery singing after that legislation was passed. That is in stark contrast to what is happening in many other Commonwealth countries. The final communiqué from the CHOGM of 2011 does not overtly refer to LGBT rights at all. One part urges members to consider becoming party to all major international human rights instruments, and to implement fully the rights and freedoms set out in the universal declaration on the human genome and human rights and so on. If we scratch the surface of that, we all know what that means. We also know that if there had been an attempt to put LGBT rights overtly in the communiqué in 2011, there would not have been a communiqué. We all know how it works; we have all been in international forums in which we have had to agree communiqués. I hope that the opportunity will be taken in 2013 to be far more overt about the progress that can be made in Sri Lanka.

One Commonwealth member state that is home to some of the strictest laws on same-sex relations is Uganda. Section 145 of the Penal Code Act 1950 is “Unnatural offences”, which states:

“Any person who has carnal knowledge of any person against the order of nature…or permits a male person to have carnal knowledge of him or her against the order of nature, commits an offence and is liable to imprisonment for life.”

I went to Uganda a couple of years ago with an Inter-Parliamentary Union delegation. We went to see the Speaker of the Uganda Parliament, and we spoke to her about a private Member’s Bill that would make the law even harsher. It was clear to us that we were making absolutely no progress. We were an all-party delegation and she finished by telling us, “Don’t tell us how to run our country.” We were given short shrift.

The Prime Minister spoke about the maltreatment of those who practise same-sex relations after the 2011 CHOGM. There was a failure to reach an agreement among the leaders at that summit. The Prime Minister threatened to dock some UK aid to nations that have discriminatory laws against those practising same-sex relations. It would be a mistake to punish the people of those countries for what their Governments are doing, but we need to look at how we can influence those Governments far better.

[Mr Bellingham]

Obviously one way of making that challenge is to withdraw direct budget support, which would mean that non-governmental organisations, other organisations and the people on the ground would not be affected.

[Mr David Amess (in the Chair)]

Order. Nine Members still wish to speak. We want to hear from Mr Spellar and the Minister, so I appeal to colleagues to be brief with their remarks.

[Mr Evans]

Thank you, Mr Amess. I will take your comment on board. We must look at the action the Government can take to influence Commonwealth countries while not penalising their people.

The Kaleidoscope Trust, a UK-based trust working to uphold the rights of LGBT people internationally, received reliable reports that LGBT activists in Sri Lanka had been threatened with arrest, and organisations had been warned that they could be closed down if they continued to advocate human rights for all. That is particularly poignant, given that Sri Lanka is hosting the Commonwealth Heads of Government meeting this month.

I will finish with two quotes I have been given by two friends. One is from Ben Summerskill of Stonewall. I spoke to him earlier today, and he said,

“There needs to be a commitment to decriminalise homosexuality throughout the Commonwealth. There is a shadow that is cast over the Commonwealth and its relevance in the 21st century unless it can make giant strides towards the elimination of this most hideous of discriminations.”

Matthew Todd of Attitude magazine said,

“In 2013, homosexual relations are still criminalised in the majority of nations of the Commonwealth. This is an unacceptable situation, which sees millions of people suffer hugely diminished lives and, in some cases, lives that are destroyed altogether. It is imperative that the Commonwealth supports and campaigns for the basic human rights of all its citizens, including those who are lesbian, gay, bisexual or transgender.”

I agree with both those comments.

The CHOGM in November 2013 has the opportunity to do what Ben Summerskill and Matthew Todd describe. Our Government must not miss this vital opportunity to speak up for a group of people who are denied their human rights by their Government. As the Prime Minister indicated in relation to the CHOGM 2011, it will take a journey for some Commonwealth countries to make progress on this issue. Well, the CHOGM 2013 in Sri Lanka is the time to start that journey, and we should start with the human rights that are denied to people who live in Sri Lanka.

[Several hon. Members]

rose—

[Mr David Amess (in the Chair)]

Order. I am sorry, but there is now a three-minute time limit on speeches.

15:09

[Barry Gardiner (Brent North) (Lab)]

In 2012, the FCO identified Sri Lanka as a country of concern in its annual human rights and democracy report, admitting there had been some “negative developments”. The report highlighted the number of abductions and disappearances, as well as the intimidation of human rights defenders, members of the legal profession and the media. Meanwhile, President Rajapaksa has repeatedly rejected demands for an international inquiry into alleged war crimes, including from the Prime Minister.

In August 2013, the UN High Commissioner for Human Rights, Navi Pillay, visited Sri Lanka and noted the country’s worrying “authoritarian turn”. What concerns me is that there is a sense of complicity on the part of our own Government with what is going on in Sri Lanka, where we see the deepening and embedding of corruption, injustice and violence. I say that because Freedom from Torture has claimed that, despite the Sri Lankan Government’s claims of new-found peace, the post-conflict torture of Tamils is ongoing. The UK Government appear to be complicit, because they have forcibly removed Tamils back to Sri Lanka, where they know those people have been met with torture and ill treatment.

Following a freedom of information request in February, the UK Border Agency now admits to granting refugee status to up to 15 Sri Lankans who had been forcibly returned to Sri Lanka and subsequently tortured or ill treated, and who had then come back to the UK. That is deeply worrying.

Furthermore, Home Office solicitors are suggesting to judges in our courts that evidence of torture—scars, wounds and broken bones—is actually self-inflicted. They are saying that to push the courts into agreeing that people should be deported from this country. That is desperately worrying.

I have a constituency case of a 24-year-old man whom I will call Mr P. He came to the UK in April 2013 on a student visa. He subsequently applied for asylum on 26 April. He held pro-Tamil separatist political opinions, which he expressed in Sri Lanka and in the UK. His asylum application was refused by the Home Office, but it was won on appeal in July.

Mr P is a journalist, and he had previously worked on a newspaper in Sri Lanka in a minor capacity. In April 2011, he was detained and assaulted. He was released with the help of the newspaper’s circulation manager. In November 2012, he was admitted to Jaffna general hospital with multiple soft-tissue injuries to his body, lip laceration and teeth fractures—he had been beaten with rifle butts. The medical-legal report concluded—

[Mr David Amess (in the Chair)]

Order.

15:14

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

I am grateful to my hon. Friend the Member for Ilford North (Mr Scott) for initiating the debate. I also endorse the remarks of the hon. Member for Ribble Valley (Mr Evans) about gay rights across the Commonwealth, where much work has still to be done.

I have a strong view—I have not changed it—that the Commonwealth Heads of Government meeting should not be in Colombo. With others, I have argued that case in the Liberal Democrat party and in the Government. We did not win the argument, and I understand, therefore, that the Minister appears before us committed to going with the Government’s decision. He has been courteous in receiving some of us and listening to the arguments we want the Government to make.

I want to put to the Minister again some of the arguments I have put elsewhere, including to him at our meeting. First, I hope the Prime Minister, the Foreign Secretary and the Minister will publicly argue for the independent inquiry into war crimes I believe still needs to happen. It is unarguable, on the basis of independent evidence, that there were war crimes.

I do not defend the Tamil Tigers—they committed terrible atrocities, too—but Governments have particular responsibilities, and they fail them dreadfully. The UN High Commissioner for Human Rights, who I think is visiting Parliament today, went to Sri Lanka in August. She was clear in her report that the situation was not improving, but getting worse. She said she feared that the country was becoming increasingly authoritarian and that, since the war had ended, democracy had been undermined and the rule of law eroded.

Secondly, I would be grateful if the Prime Minister and Ministers went to Sri Lanka equipped with a list, based on independent evidence, of the disappeared, those who have been killed and those who have been tortured or harassed. I would like them specifically to challenge President Rajapaksa and the Sri Lankan Government to tell us what happened to those people—particularly senior lawyers, newspaper editors and others who have simply been wiped out.

Thirdly, I hope we can address the structural need to change the way in which the Commonwealth works if it is not to become entirely disrespected over the next two years under the chairmanship of President Rajapaksa. The idea I have put to Ministers is that we should argue that, consistent with the Commonwealth charter, there should be a panel—a small group of, possibly, three people at any one time—whose job it is to be the Commonwealth’s human rights panel. They would make sure that, in future, the Commonwealth does not decide to go to countries that are clearly abusing the charter’s human rights requirements.

Lastly, I hope we make the strongest representations and engage in the strongest discussions to make sure the next secretary-general of the Commonwealth is much tougher and much more effective in standing up for human rights than the current incumbent.

15:17

[Heidi Alexander (Lewisham East) (Lab)]

I want to speak in the debate because two and a half weeks ago a delegation of seven Tamil constituents came to my constituency office. Two men sat in my office with tears in their eyes as they gave accounts of the torture they had recently been subjected to at the hands of the Terrorist Investigation Division.

Both men were asylum seekers who had come to this country hoping to find a safe haven. One had returned to Sri Lanka voluntarily; the other had been deported. One of the men rolled his sleeves up to show me the scars on the front of his arms, where he had been repeatedly burned with cigarettes. Another man told me how he had been abducted. When he left one of the camps in Sri Lanka, he was bundled into a white van and hit across the back with a steel rod. He also had electrodes placed on his head, and a bag covered in petrol was placed over his head in an attempt to suffocate him.

When the Minister and the Prime Minister are in Sri Lanka at the Commonwealth Heads of Government meeting, I want them to raise with the Sri Lankan leadership the torture that is happening. I would like to know what the Minister will say to the Sri Lankan leadership about the accounts that those of us with Tamil communities in our constituencies have heard first hand.

Will the Minister raise with the Sri Lankan leadership the horrific things that we saw on the documentary “No Fire Zone” on Sunday? There was individual witness testimony about the shelling of hospitals and food supply areas in the later days of the conflict; it said that the firing came from the Sri Lankan Government. What discussions has the Minister had about Sri Lanka not becoming automatically the chair of the Commonwealth? That is an honour that the country does not deserve to have bestowed on it. We risk endorsing not only what has happened in the past because of the actions of the Sri Lankan Government, but what is happening now.

The hon. Member for Ilford North (Mr Scott) said that we cannot bring back the lives of those who have been killed in the conflict; we can respect them, however. I would prefer it if the Prime Minister did not represent us at the Commonwealth Heads of Government meeting, but we need to take a strong stand there to respect those lives.

15:21

[Mr Aidan Burley (Cannock Chase) (Con)]

It is a pleasure to serve under your chairmanship, Mr Amess. I do not want to beat about the bush either, so I will congratulate the Prime Minister and Foreign Secretary on the Government’s decision to attend the CHOGM in Sri Lanka next week, despite the fact that there is huge pressure, as we have seen this afternoon, to boycott it. That pressure comes from parties who are more interested in furthering divisive politics and hindering efforts to bring communities together—especially Sri Lankan communities in the UK.

Of course, as the Minister has said, the decision that Sri Lanka would host the CHOGM this year was taken in 2009 under the Labour Government and reaffirmed at the CHOGM in Perth, Australia, in 2011. Changing that 2009 decision would have required a consensus among Commonwealth member states, and it is clear that there was no widespread support for a change of location. That is why I now believe that it is necessary to attend the CHOGM to support the Commonwealth as an institution that matters greatly to Britain, to try to ensure that there is a positive outcome to the meeting, and to put the situation in Sri Lanka firmly under the international spotlight, which I am sure everyone in the Chamber wants.

The future of the Commonwealth as an institution is more important than the location of any one meeting. We should support its development by participating in the meeting and promoting an ambitious outcome. The Commonwealth consists of 53 independent member states representing nearly one third of the world’s nations and more than 2 billion people. It has some of the fastest-growing economies, trading £3 trillion of goods and services each year. It is a valuable diplomatic and trading network for the United Kingdom, and our influence and role in it depends on our valuing it and taking part in discussions.

There has been positive progress in Sri Lanka, especially in the war-affected areas. The outcome of the Northern provincial council elections has given the opportunity for the Tamil National Alliance to represent the people in that region. Other developments include the clearing of nearly 1.5 million land mines, with the help of the British charity the HALO trust, which I saw when I visited the country last year; the resettling of nearly 300,000 people who were kept hostage by the Liberation Tigers of Tamil Eelam; the freedom for all people to move anywhere in the island without fear of suicide bombers; and the right of the Tamil people in particular to send their children to school without fear of abduction and conscription by the LTTE.

I know those things because I have bothered to visit the country; I have not, with the greatest respect to other Members who have spoken, just watched a documentary. Many of those who have spoken have not even visited the country. I spent eight days in Sri Lanka last year, travelling all over—to the north, south, east and west. I went to Jaffna and saw the chamber of commerce leaders. I visited resettlement projects in Ariyalai and saw mine clearance in Kilinochchi. I met the leader of the Opposition, Mr Sampanthan, and the President. I saw different communities, traditions and faiths living beside each other harmoniously, and rebuilding their lives after the horrendous civil war. I saw Sinhalese boys and Tamil girls playing together in the school playgrounds. The UK should help Sri Lanka to rebuild itself, and that includes attending the CHOGM.

15:24

[Jim Shannon (Strangford) (DUP)]

The number of hon. Members present for the debate shows how important it is. I am a firm believer in the Commonwealth and what it means. To be a member of the Commonwealth says something about a country and its core beliefs.

The Commonwealth charter sets out the core Commonwealth principles of consensus and common action, mutual respect, inclusiveness, transparency, accountability, legitimacy and responsiveness. It affirms belief in 16 principles including democracy, human rights, tolerance, respect and understanding, freedom of expression, and gender equality. Those are the things that the Commonwealth stands for. I am proud to be part of a group of countries who assert that they abide by those principles and it is incumbent on us all to ensure that the body that we sign up to plays its part in putting those principles into action on the ground.

There have been calls for the Government to abstain from attending the CHOGM and I understand the reasons for them. About a month ago, a post on persecution.org highlighted comments by the United Nations commissioner for human rights, Navi Pillay, who said that the Sri Lankan Government are playing down the issue of groups who spread hatred and violence against minorities, and protecting them. In her statement at the 24th United Nations Human Rights Council in Geneva, she said that she was “alarmed” at the recent surge in incitement of hatred and violence against religious minorities. She added that attacks on churches and mosques, and

“the lack of swift action against the perpetrators”

were disturbing.

The Sri Lankan authorities have rejected those assertions, but there is certainly cause for concern. Christian organisations assert that there has been an increase in violence and intimidation towards Christians and in the vandalising of church properties. As to the treatment of the Sri Lankan Opposition, I have carefully considered the evidence presented by the Global Tamil Forum, which is very compelling. That flags up to me a need for intervention, and that is where the CHOGM has a clear role to play.

It should be made clear that we seek change not from a simple international human rights perspective, but because it will benefit the people of Sri Lanka. My Parliamentary aide was married three years ago and went to Sri Lanka for her honeymoon; she talked about the friendly people and the scenery, and had many stories to tell. It is clear, at the same time, that all is not well in Sri Lanka, and that cannot be sugar coated or glossed over. It must be discussed, and changes must be made soon.

I approach the matter with caution; there should be an understanding that the CHOGM should be used not to pretend things are fine, but to emphasise how strongly the Commonwealth and the House feel that the Government of Sri Lanka have a lot to do to bring their standards up to Commonwealth standards, and that we shall be watching and waiting to see that that happens.

15:26

[Sheryll Murray (South East Cornwall) (Con)]

It is a pleasure to follow so many powerful speeches.

I want to read a quotation from Wikipedia, about what happened to

“the properties of the people involved in the uprising”.

The article describes how

“they killed all cattle and other animals, burnt homes, property and even the salt in their possession during the repression. Paddy fields in the area of Wellassa were all destroyed. The irrigation systems of the duchies of Uva and Wellassa, hitherto the rice-bowl of Sri Lanka were systematically destroyed. They also massacred the male population of Uva above the age of 18 years.”

That was a quotation about us, the British, during colonisation.

It is clear that Sri Lanka has had a difficult history and things have happened that today we judge as crimes. Change is beginning and I would like to see the intergovernmental conference as a key point in that change—a time when people go to Sri Lanka and say, “It is time for change. If you want to be part of a modern, inclusive world, then this must not happen again.”

We could sit back and take a view from 10,000 miles away, but then there would be little chance of our being heard. Instead we could go to Sri Lanka, meet its various people, and give the message that there is a better, democratic and inclusive way, which works. That is why I wish the Prince of Wales, the Prime Minister, the Foreign Secretary and my right hon. Friend the Minister a good and successful trip next week.

15:29

[John McDonnell (Hayes and Harlington) (Lab)]

I have some questions for the Minister. If he cannot answer today, I should be grateful for a response in writing.

First, what agenda of human rights issues in Sri Lanka has been prepared for the Prime Minister to raise? Does it reflect the debates in the House? Have the Government, indeed, put human rights in Sri Lanka on the agenda of the meeting? What opportunities have been identified to raise human rights abuses in Sri Lanka in the various sub-meetings, and what mechanisms have been identified for doing that?

What strategy do the Government have for raising those issues in the Commonwealth meetings following the CHOGM and what opportunities have been identified for the next 12 months? If Sri Lankan Government representatives accused of human rights abuses seek to attend meetings of Commonwealth bodies held in this country, will they be granted a visa? If anyone from the Sri Lankan Government accused of human rights abuses enters UK territory, will the Government seek to hold that person to account in law?

As has already been asked, will the Government support the call for a further UN investigation into human rights abuses with a view to seeking action by international judicial bodies to hold individuals to account? Will the Government review the policy of deporting Tamils to Sri Lanka in the light of the evidence of the arrest and torture of returnees?

Finally, I deeply regret that the Government are not following the Canadian example of refusing to attend the meeting. Initially, Canada conditionally refused to attend on the basis that there should be some improvement in human rights within Sri Lanka, and then declined to attend, as a result of the lack of improvement. I fully concur with the appeal by my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh). I repeat that, even at this late stage, I would like the Government to think again. If the Prime Minister attends, the message will go out that Governments can kill, maim and persecute with impunity.

[Mr Swire]

May I factually correct the hon. Gentleman? He is right to say that neither Canada’s Prime Minister nor its Foreign Minister is going to Sri Lanka, but Canada will be represented at the CHOGM by a junior Minister.

[John McDonnell]

It is extremely significant that a Prime Minister has refused to attend, and we should follow that example.

15:30

[Robert Halfon (Harlow) (Con)]

It is a pleasure to serve under your chairmanship, Mr Amess. I wish to make three brief points. First, despite the end of the civil war in Sri Lanka in 2009, we now know that there have been continued human rights abuses, particularly in the persecution of the Tamils. Secondly, we cannot ignore the violations of basic human rights, and I believe that we, as a country, can make a difference. Thirdly, there is no better time to take a stand against this rogue regime than during the Commonwealth Heads of Government meeting. I wish that we were not going to attend, but now that we are, we have an opportunity.

Since the ceasefire, some horrific things have gone on, including the arrest of journalists, as has already been documented this afternoon. The UN Human Rights Council has expressed its concern at continuing reports of

“enforced disappearances, extrajudicial killings, torture and violations of the rights to freedom of expression, association and peaceful assembly, as well as intimidation of and reprisals against human rights defenders, members of civil society and journalists, threats to judicial independence and the rule of law, and discrimination on the basis of religion or belief.”

[Mr Scott]

Does my hon. Friend agree that it is sometimes difficult for people—including, say, the chair or deputy chair of the all-party group—to visit a country when they are maligned and basically told that they are not welcome there?

[Robert Halfon]

My hon. Friend makes an important point. I have to say that I have not visited Syria, but I know that it has an evil regime. I have no plans to go to North Korea, but I know that it is also a pretty evil regime. Just because I have not been to a country, it does not mean that I cannot fight against what I see as injustice.

The United Kingdom has huge leverage in relation to Sri Lanka. In 2012, we imported more than £900 million of goods and services—a 13% increase on the previous year. We are Sri Lanka’s largest trading partner, its second largest investor behind China, and its main source of Western tourism, something from which I am sure one of my hon. Friends has benefited.

The UK holds a unique place in the Commonwealth, and we have to take the lead on this matter. The Commonwealth charter of values was mentioned earlier, and those values are incredibly important. I do not want people, for many years to come, to be reminded by this Commonwealth summit of the 1936 Olympics in Germany, which should never have taken place.

As we will be there, and as we have leverage, the Government should make specific demands: stop the persecution of the Tamils once and for all; take concrete steps completely to demilitarise the north and east; restore a proper justice system; and ensure that Tamils have basic human rights, including the right to life and freedom of expression, movement and assembly. The Government must ensure that the Sri Lankan Government publish a list of all prisoners and where they are held; that the International Committee of the Red Cross has access to all detention centres; that a neutral commission is appointed by the UN to safeguard property rights in Tamil areas, and all resettlement programmes; and that Sri Lanka’s Lessons Learned and Reconciliation Commission implements the recommendations made in its interim report more than a year ago. Above all, the Government should make sure that Sri Lanka complies with the recommendations of the UN panel of experts report, and arrives at durable justice for the Tamil-speaking minority. If the Government use the occasion to demand those changes, they will show real leadership and promote the universal Commonwealth values of which, as a nation, we are so proud.

I have very few Tamils in my constituency. There are no votes in this for me. I am arguing for this because I believe in justice and because I believe that we must help nations suffering from genocide. The Tamils have suffered injustice for far too long.

15:32

[Mike Gapes (Ilford South) (Lab/Co-op)]

My hon. Friend the Member for Brent North (Barry Gardiner) mentioned the Freedom from Torture freedom of information request and the UK Border Agency’s reply in February. In its 2011 “Human Rights and Democracy” report, the Foreign and Commonwealth Office referred to allegations of torture of people who had been sent back to Sri Lanka and were subsequently given asylum in this country, but stated that there was no substantiated evidence that people returned there had been tortured. Interestingly, neither the allegation nor such a statement appeared in the FCO’s 2012 “Human Rights and Democracy” report. The Foreign Affairs Committee has questioned that, but we got no answers from Baroness Warsi when she gave evidence to us. Our report recommended that the FCO

“state whether it still holds the view that there is no substantiated evidence of torture or maltreatment of people who have been returned by UK immigration authorities to Sri Lanka.”

Will the Minister short-circuit the process and give us an answer today? Do the British Government still hold the view that people returned to Sri Lanka are not tortured, and that there is no substantiated evidence, or is their view—given the increasing concerns, and the compelling evidence of my hon. Friend the Member for Lewisham East (Heidi Alexander) and others—that there is evidence that calls into question the UK Border Agency’s policy of returning to Sri Lanka people who we know have been mistreated since 2009?

In those circumstances, when the Prime Minister meets President Rajapaksa and his several brothers, who run the Government in Sri Lanka, will it not be time to make it clear that the British Government and British parliamentarians expect answers to our questions about people sent back from this country to Sri Lanka and then mistreated, and to the questions asked by my hon. Friend the Member for Rochdale (Simon Danczuk) and others about the mistreatment of British citizens in Sri Lanka?

[Barry Gardiner]

Is my hon. Friend aware that Judge Lobo has referred to the assistance offered by country guidance cases? In an appeal in the first-tier tribunal, he has said that the people at risk are those who have outstanding charges against them—journalists associated with publications critical of the Sri Lankan Government, and those who are aligned to pro-Tamil separatist movements and are working towards the destabilisation of the unitary state. That relates specifically to risks to people who are returned to Sri Lanka.

[Mike Gapes]

I am grateful to my hon. Friend, but I will not respond to his intervention.

Finally, it is all very well to say that the Government should be there—that the Commonwealth is so important that the British Prime Minister, the heir to the throne or the Foreign Secretary should attend the meeting—but let us look at the history of the Commonwealth and where it is now. Many years ago, the Commonwealth agreed the Harare declaration, which set out human rights values and how institutions should work. In the past, Zimbabwe, Pakistan and other countries have been suspended from or have walked out of the Commonwealth because human rights issues were raised.

I must say that I am extremely disappointed with the Commonwealth secretary-general—I know him personally, because he was previously the Indian high commissioner in this country—and the way in which he has run the organisation. There has been a downplaying of human rights issues under the current Commonwealth secretariat. I am not giving away any secrets when I say that the British Government tried to raise these issues in 2009 and subsequently. In a vote in the Commonwealth, 50 votes were in favour of going to Colombo and four were against. That is the problem that we have to confront in the organisation. If the Commonwealth does not change, it will become irrelevant.

15:40

[Nick de Bois (Enfield North) (Con)]

It is a pleasure, Mr Amess, to serve under your chairmanship. Obviously the debate is about the UK’s presence at the CHOGM. I can understand why so many Members feel frustrated about the situation, given the big question marks over the issue of human rights in Sri Lanka. Much praise has been heaped on Stephen Harper, the Prime Minister of Canada, who has decided not to attend the upcoming summit in protest at Sri Lanka’s human rights record. Instead, he is sending a Minister from his Foreign Affairs team. I read his sentiments and agreed with the main thrust of them. He argued that because the Sri Lankan Government had failed to uphold the Commonwealth’s core values, he should not attend the summit. On that point, I believe that he is wrong. Indeed, the Canadian opposition argue that whatever misgivings there are about the host country, the suggestion that the institutions of the Commonwealth should be sanctioned by Canada, and by withholding funds, would be misplaced. That is right. It would be making a false and disingenuous connection between the merits of a member state and those of the broader and more important Commonwealth institution.

Paul Dewar of the New Democratic party said that if Canada had wanted to send a stronger message, it could have moved to remove Sri Lanka from the Commonwealth until there were concrete improvements. I agree, but our Labour Government supported having Sri Lanka as the home country and ratified the selection. This Government inherited that decision. Whether or not Sri Lanka should have been chosen is clearly something that the Chamber wishes to debate, but Labour must answer for its decision. Despite the protestations that we hear from Labour Members now that they are in opposition, when they were in government, they brought about absolutely no change in the circumstances in Sri Lanka for the Tamil people.

For all the attention on Canada’s decision, the CHOGM will be well attended, and rightly so. As the Prime Minister of Australia said, we do not make new friends by rubbishing or abandoning our old friends. I know how difficult it might be for some of the Commonwealth countries, but the conference will proceed with full attendance. The symbolic absence of Commonwealth Heads of Government may deliver a sense of satisfaction to opponents of the Government, but is history not littered with political gestures—boycotts of sporting occasions, trades and summits? In the end, Governments must talk and then they must act; it is what they do best. Engaging in Colombo is better than disengagement.

I have acknowledged the many shortcomings in Sri Lanka and the humanitarian failings, and I am not hiding from them, but engagement is better than disengagement. I do not underestimate the search for justice, but it must be justice for all, and we must look forward and not back. We can learn lessons from the past and hopefully apply them to Sri Lanka.

15:43

[Martin Horwood (Cheltenham) (LD)]

I congratulate both the hon. Member for Ilford North (Mr Scott) on securing this debate and hon. Members on making such passionate speeches, including the hon. Member for Ribble Valley (Mr Evans), who raised the issue of lesbian, gay, bisexual and transgender rights across the Commonwealth. That is the subject of a major Liberal youth campaign this year, and I am sure that he will join me in welcoming that.

In 2009, we saw a time of relative hope in Sri Lanka. The civil war had just ended and the decision to host the CHOGM was optimistic, but understandable. As many of us now realise in retrospect and with hindsight, it was the wrong decision, but it is one that is impossible to reverse at this late stage. I also understand the Government’s reasons for wanting to attend the CHOGM. The Government argue that it is an opportunity to advance human rights and democracy, and the values set out in the Commonwealth charter, through dialogue and friendship. That is true, but the Government must understand the risk of undermining the credibility of the Commonwealth charter if Sri Lanka takes up the chairmanship of the Commonwealth over the next couple of years.

The Prime Minister has also argued that the summit is an opportunity to shine the spotlight on human rights issues. If that is the case, then he should certainly follow the suggestion of my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) that that spotlight should also shine very precisely on the issue of the victims of the violence who have disappeared.

In general, such a spotlight is also dependent on media access and transparency. I suggest to the Government that even at this late stage, we should question whether the Prime Minister should attend, and we should make that attendance conditional on four things. First, full and unhindered access to all parts of the country, including the north, is needed by not only Ministers and officials but the international media. Secondly, adequate safeguards and guarantees are needed for those who speak to international media, Ministers and officials. Thirdly, we need a rapid assessment of whether we think any progress at all is being made on, for instance, the recommendations of Sri Lanka’s Lessons Learned and Reconciliation Commission. The fourth condition is about whether the British Government should raise the issue of the chairmanship of the Commonwealth going forward to 2015.

My strong inclination is that the Prime Minister should not attend the summit if those conditions are not met. I urge the Government, even at this very late stage, to look carefully at the matter. We have heard from many hon. Members that there is evidence that torture, harassment and the curtailment of human rights are, if anything, increasing. In January, we saw the impeachment of the Chief Justice, Dr Bandaranayake, and in August, we saw Navi Pillay’s critical report. It is not too late, even at this late stage, to rethink the Government’s plans.

[Mr David Amess (in the Chair)]

Order. I am grateful to colleagues for their co-operation.

15:46

[Mr John Spellar (Warley) (Lab)]

It is a pleasure, Mr Amess, to serve under your chairmanship. I congratulate the hon. Member for Ilford North (Mr Scott) on securing the debate and on the way in which he introduced it. First, he paid tribute to my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) for all the considerable work that she has undertaken on the issue. Secondly, he rightly stressed, on behalf of us all, opposition to all forms of terrorism, because both state and non-state actors abuse human rights.

Today, we have very much focused on human rights and on the real concern of Members from across the House over state abuse—indeed, only last week the issue dominated Foreign Office questions. I was pleased that the Foreign Secretary said that he and the Prime Minister will be visiting the north of Sri Lanka to see for themselves what is happening. I also hope that they will take on board the recommendations of the Foreign Affairs Committee, which said in its recent report:

“We recommend that the Prime Minister should obtain assurances from the Sri Lankan Government that people who approach him to talk about human rights while he is in Sri Lanka to attend the CHOGM do not face reprisals or harassment by security forces.”

During the exchange in the House, my right hon. Friend the Member for Paisley and Renfrewshire South (Mr Alexander) asked the Foreign Secretary what issues he would take to Sri Lanka and what issues he had already raised. He referred to the answer to a written question in July in which the Foreign Office stated that it expected “progress” in human rights and post-conflict reconciliation in the run-up to the summit in November.

My hon. Friend the Member for Bristol East (Kerry McCarthy) wrote to the Minister, asking him what issues in relation to Sri Lanka had been taken up. She asked him to clarify

“which, if any, of these issues and other specific human rights abuses, the Prime Minister has raised directly with President Rajapaksa, or which he is intending to discuss?”

She went on to ask,

“could you confirm whether the Government would support the appointment of President Rajapaksa”—

that has already been raised in the debate—

“as Chairperson in Office and what commitments you would seek from him for his two years in the post?”

The Minister must accept that there is real concern, and mounting evidence, that Sri Lanka is heading in the wrong direction—not simply a steady state position, but actually heading backwards.

This month, the FAC criticised the scant evidence of progress in political and human rights. In August, the human rights commissioner said that Sri Lanka was heading in an increasingly authoritarian direction. Even a Government human rights and democracy report in 2012 warned of “negative developments”. It also talked of

“Restrictions on freedom and opinion…Attacks on and intimidation of journalists, legal professionals, human rights defenders and others…Lack of progress in post-conflict reconciliation and the absence of an independent, thorough and credible investigation into allegations of violations of international humanitarian and human rights law by both sides during the military conflict…Sri Lanka’s decision to reject a large number of recommendations at the UN Human Rights Council during its Universal Periodic Review in November 2012.”

Those are all matters of real and considerable concern.

In the light of that, it is very unfortunate that the Prime Minister did not reverse his earlier decision to attend the summit. If he had done so, he would have made very clear to the Sri Lankan authorities the extent of Britain’s concern. If he does so even at this late date, I assure him that the Opposition would support him.

In recent months, the Government have also failed to use the prospect of the Prime Minister’s attendance at the summit to force Sri Lanka to address the growing concern over human rights. That has been a misjudgment and a missed opportunity. Even now, the Prime Minister should join his fellow conservative—Canadian Prime Minister, Stephen Harper—and insist on immediate and tangible progress from the Sri Lankan Government before he flies to Colombo.

Such progress should include full implementation of the recommendations of Sri Lanka’s own Lessons Learnt and Reconciliation Commission. Whatever the deficiencies of that commission, it outlined some of the suffering that took place during the civil war and provided a starting point. The progress should also include an announcement of measures to prevent torture and ill treatment, including by the police, which are still taking place; much evidence has been given of that today.

There should be an introduction of legal safeguards for freedom of expression and protections for journalists, and Sri Lanka should establish the independence of the judiciary, following the impeachment of the chief justice in January. Sri Lanka should also unblock the BBC’s World Service, which has had to suspend its broadcasts in Sri Lanka because of the interference and interruption of Tamil broadcasting.

I hope that the Minister and the Foreign Secretary will advise the Prime Minister to reverse, even at this late date, the decision to attend the summit; to set out a clear UK action plan to support tangible improvements in human rights in Sri Lanka; to add his voice to the growing calls for an international UN-led independent investigation into alleged violations of human rights and humanitarian law in Sri Lanka; and to seek urgent assurances from Sri Lanka that it will respect the Commonwealth charter on human rights during the summit itself, and not use violent force to suppress protests. Doing these things would be good for Britain, good for the Commonwealth and very good for the long-suffering people of Sri Lanka.

15:52

[The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire)]

I am not sure whether I will be able to answer everyone’s questions in the eight minutes of the debate that I have been left, but I will endeavour to address them either now or in writing.

I thank my hon. Friend the Member for Ilford North (Mr Scott) for securing this debate. I recognise the valuable work that he and his group do for the Tamil community.

Before I respond to the points made by right hon. and hon. Members during today’s debate, I am sure the whole House will join me in expressing condolences to the family of Thavisha Lakindu Peiris, a Sri Lankan national who was murdered in Sheffield last Sunday. Two people have been remanded in custody on suspicion of murder. I have discussed this case and travel arrangements for the family with the Sri Lankan high commissioner this afternoon.

I recognise that the Government’s decision that Ministers should attend the forthcoming Commonwealth Heads of Government meeting in Sri Lanka is controversial. I know that many in this House and in the other place have suggested that we reconsider the level of our attendance, and that also appears to be the position of the Opposition party. However, it has not escaped some people’s notice that it was a Labour Government who made the decision with others, in Trinidad and Tobago in 2009, that Sri Lanka should host the CHOGM. It strikes some as slightly opportunistic that it is only in the last few weeks, as we are packing to go to the CHOGM in Sri Lanka, that Labour has suddenly announced that the Prime Minister should not be going.

I assure hon. Members that the decision to go to Sri Lanka was not taken lightly by the Government. As my hon. Friend the Member for Ilford North highlighted, as host of the CHOGM Sri Lanka will also become chair-in-office of the Commonwealth for the next two years. The decision for Sri Lanka to host the CHOGM was taken four years ago and there has been no widespread support across the Commonwealth to change it.

We have repeatedly said that Sri Lanka must make progress on reconciliation, accountability, political settlement and human rights. That is a message that my right hon. Friends the Prime Minister and the Foreign Secretary and I will take to the Sri Lankan Government.

All Sri Lankan people deserve a stable, peaceful country with universal respect for human rights. It is vital that the Government of Sri Lanka show firm commitment to implement all the recommendations of the Lessons Learned and Reconciliation Commission. Currently, they have accepted about half of the recommendations, but progress in achieving them has been slow. We also want to see the promised commission on the disappeared, and we continue to call for an independent investigation into other alleged abuses during the conflict to be implemented transparently and to meet international standards.

Allegations of war crimes, rape, sexual violence, enforced disappearances, impunity for attacks on journalists and human rights defenders, religiously motivated violence, detention without charge, the suppression and intimidation of civil society, constraints on the media and political interference with the judiciary must be confronted and fully investigated.

My hon. Friend the Member for North West Norfolk (Mr Bellingham) and my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) asked about an investigation. The British Government have consistently called for an independent, thorough and credible investigation into allegations of violations and abuses of international humanitarian and human rights law by both sides in the military conflict.

The film footage recently shown on Channel 4 was disturbing—I saw it on Sunday night, and no one who did could have failed to be repelled and moved by it in equal measure—and brings to international attention important information to support allegations of grave abuses. A credible investigation into the allegations is urgently needed to help to bring closure to the victims and their families.

Britain will not look away. We will continue to press the Sri Lankan Government for tangible action on all these points, and we will continue to pursue our objective through the United Nations Human Rights Council. My hon. Friend the Member for Cannock Chase (Mr Burley) talked about progress, and we do see some progress in Sri Lanka. Many, but not all, of the 12,000 ex- combatants detained in 2009 have been released. UK aid is supporting their reintegration.

Progress has been made on ridding the country of mines, which has been helped by funding from our Department for International Development. Last year, the UN Security Council’s working group on children and armed conflict removed Sri Lanka from its agenda following significant progress in rehabilitating and reintegrating child soldiers.

We have seen the resettlement of many internally displaced people. The first northern provincial council elections since the start of the conflict in 1983 were held in September, with the Tamil National Alliance winning 78% of the vote. Although it noted issues of concern in the pre-election period, the Commonwealth observer mission described the polls as largely peaceful, with high turnout across all the provinces. We now want elected representatives to be able to contribute meaningfully to regional governance.

It is because the British Government want greater progress and to maintain pressure that my right hon. Friends the Prime Minister and Foreign Secretary and I have said that we want to see the situation on the ground for ourselves while we are in Sri Lanka, and talk to all communities, NGOs and members of civil society to hear their stories first hand and learn more about how the UK can help.

We have already begun that process here in the UK. As my right hon. Friend the Member for Bermondsey and Old Southwark said, I have met members of the all-party group on Tamils, the Commonwealth Journalists Association and the Commonwealth Parliamentary Association. Tomorrow I will meet members of the British Tamil community to listen to their views. During the CHOGM, I will also meet relatives of the disappeared to hear their stories.

In addition, my right hon. Friend the Prime Minister has pledged to visit the north of Sri Lanka, where some of the greatest damage was done during the years of conflict, in what will be the first visit to the region by a foreign Head of Government since Sri Lankan independence in 1948.

I was concerned by the remarks made by the United Nations high commissioner for human rights following her visit to Sri Lanka earlier this year. She reported visits by the police and military officers to villages that she planned to visit, and intimidation of ordinary citizens who spoke to her. A number of Members have raised that very issue this afternoon.

We have urged the Sri Lankan Government to ensure that there is free access for all international and domestic media and NGOs at the CHOGM, and the freedom to travel around the country without hindrance. I have raised this issue repeatedly with the Sri Lankan Government—most recently with Foreign Minister Peiris on Monday and with the high commissioner this afternoon. They have repeated their assurances on this matter.

Equally, however, after the CHOGM, we want a better reporting environment for journalists so that they can go about their business without fear of intimidation, and we also want a firm commitment from the Sri Lankan Government to investigate reported attacks. In a country ranked 162 out of 179 in the Reporters Without Borders press freedom index, it will be important to bring the spotlight of public, media and international scrutiny to this matter.

By going to Sri Lanka, we will be putting the Sri Lankan Government under the spotlight on the international stage, and we can air our concerns. Debates such as this one, which I hope will be replicated in legislatures across the Commonwealth and the world, can only help to increase pressure on the Sri Lankan Government to address their own domestic issues. I am most grateful to my hon. Friend the Member for Ilford North for providing us with this opportunity, and to all Members for their contributions to the debate.

Family Annihilation

Wednesday 6th November 2013 Westminster Hall

16:00

[Jonathan Evans (Cardiff North) (Con)]

It is a pleasure to introduce this rather grim subject under your chairmanship, Mr Amess, given your committed support for family life.

Ten-year-old Ben Philpotts will always be remembered by his teachers at Trevisker community primary school in Cornwall with his hand eagerly in the air and with a beaming smile. Ben was a positive spirit, very popular and a much-loved member of his school community in St Eval, near Wadebridge. He was a boy who showed enthusiasm for everything that he undertook. He was a keen member of his local football team and was a natural sportsman.

Ben’s uncle, my constituent, Don Philpotts came to my constituency surgery a few months ago to tell me his tragic story. Ben’s short life ended on 18 January 2010 when his father, Harry, bludgeoned him to death with a sledgehammer, causing severe head injuries from which he quickly died. Harry had also murdered Ben’s mother, Patricia, and later set fire to the family home, resulting in widespread burns to himself, from which he died a few days later.

[Stephen Gilbert (St Austell and Newquay) (LD)]

I congratulate my hon. Friend on securing this important debate on a tragic event in Cornwall that horrified the local community. Does he agree that we must do everything that we can to protect vulnerable people from such incidents?

[Jonathan Evans]

I most certainly do. I pay tribute to my hon. Friend’s work on this case. Part of the family lives in my constituency, but the events took place in his constituency, so this is a classic example of working together.

For some time before the events, Ben’s father had been receiving treatment for mental health problems from Cornwall Partnership NHS Foundation Trust. During that treatment, Harry made threats against his wife and son, but those threats were not taken seriously by those treating him and were never communicated to his wife on the grounds of patient confidentiality. The case was later considered in a serious case review compiled by the local safeguarding children board in Cornwall. The report highlighted that Ben’s father had experienced mental health problems for two years and once had delusional thoughts about his son. The report concluded that no evidence could be found that mental health staff had considered the implications for Ben of his father’s return to live at the family home or considered that Harry’s co-operation with treatment to manage his delusional and paranoid systems was neither consistent nor maintained. On the contrary, no agency reported any child protection concerns regarding Ben or registered any concerns for his safety at the time of his death.

Although my constituent, Ben’s uncle, remains deeply dissatisfied with the failure to properly assess the risk to Ben and his mother, or to inform her of the delusional and paranoid thoughts that her husband had expressed to mental health staff, he is also anxious that there should be much more awareness of the public policy challenges of such cases. The issues cut across several areas of Government policy, and my aim today is to draw wider attention to some common themes that arise in such cases and to encourage the Government to consider a cross-departmental approach to understanding and responding to those issues.

Ben’s murder was front-page news in the media and daily newspapers. We can all recall cases that appear to have a similar theme. Richard and Clair Smith from Pudsey and their children, Aaron and Ben, were described as “the perfect family.” They similarly made news headlines two years ago when Richard stabbed and strangled his wife, before stabbing and suffocating his sons, aged nine and one. He then set fire to the family home, dying of smoke inhalation. Richard also had mental health problems. He was described as an obsessive and driven man who appeared to have been motivated by depression to seek the destruction of both himself and his entire family.

Just days before the Pudsey murders, another father reportedly turned on his family. Tobias Day, from Melton Mowbray in Leicestershire, had recently lost his job as a policeman. He killed his wife, Samantha, and seven-year-old daughter, Genevieve, and he tried to kill his two other children, Kimberly and Adam, before finally taking his own life. Just over a decade ago, Robert Mochrie murdered his wife and four children in Barry, South Wales, before calling the school bus operator to say that his 10-year-old disabled daughter would not be attending school that week; he also cancelled the milk. Later he hanged himself, surrounded by his murdered family. He had also been previously treated for depression.

“Family annihilation” is the generic term applied to such cases in the USA and has been adopted here. In essence, the cases are those in which a parent—almost invariably a man—murders his partner and his own children before going on to commit suicide.

Professor David Wilson and Dr Elizabeth Yardley of the centre for applied criminology at Birmingham City university have undertaken a historical analysis of such cases going back to the 1980s. Professor Wilson is also editor of The Howard Journal of Criminal Justice, which recently published some preliminary findings from his research. I am grateful to Professor Wilson for his guidance on this debate.

Professor Wilson and his colleagues examined 71 cases in England and Wales between 1980 and 2012—59 involving fathers and 12 cases in which the mother was the murderer. In almost all the cases involving men, the wife or partner was included in the murders, but in the cases where the mother committed the crimes, the husband or partner was not a victim. An example of the latter is the Donnison case in 2010 in Heathfield, East Sussex, which neighbours the Minister’s constituency. That lends weight to the proposition that family annihilation might predominantly be about a personal crisis of masculinity.

Professor Wilson’s team has suggested that there are certain similarities that subdivide such crimes into four broad categories. Anomic cases are those in which the family is seen as directly linked to the economic and financial success of the father. When that is threatened, the perpetrator responds by seeking to destroy himself, his home and his entire family. Self-righteous cases are those in which the murderer blames the mother for a family breakdown. The pre-eminent role of the father is viewed by the murderer as pivotal to his own image and concept of family, which causes him to obliterate his family. Disappointed cases are those in which the father believes the family have turned against him and, for instance, failed to follow his strictures on family life or religious matters. Finally, paranoid cases are those in which the offender harbours mental health delusions about his family.

[Mr Andrew Smith (Oxford East) (Lab)]

I congratulate the hon. Gentleman on securing this important debate. Is a distinction drawn in the research between the awful murders and more general, awful domestic violence, or is the former but the particularly ugly tip of the awful iceberg?

[Jonathan Evans]

The research shows that in a number of cases, although not all, there is a history of domestic violence, and I will develop that theme. The right hon. Gentleman raises an important point.

It must be acknowledged that the incidence of family annihilation is mercifully low. The National Society for the Prevention of Cruelty to Children reports that some 60 children a year in England and Wales are killed by their parents, which is equivalent to about two thirds of all child murders. The numbers may be small, but child murders still represent more than 10% of all murders in our country. Although mothers and fathers are later found to be equally responsible for such deaths, the circumstances and ages of the killers and of the children killed are markedly different. Mothers are typically responsible for the murders of very young children in the aftermath of childbirth, for instance, because of post-natal depression or post-partum psychosis. Parliament has long recognised that phenomenon and passed the Infanticide Act 1938. Older children, however, are much more likely to be killed by their father. We tend to take small comfort from the idea that such instances are very rare. We see them as temporary losses of sanity and done in the heat of the moment when someone snaps. That idea provides a reassuring framework to explain what would otherwise be incomprehensible. That may be convenient and reassuring for us, but in many cases it is just not true. Researchers show that family annihilations are virtually all premeditated and typically executed with a chilling calmness and sense of purpose.

The trigger for such attacks seems to be, usually, relationship breakdown or a dispute over children when a relationship might already have ended. The Birmingham studies have identified a significant rise in cases of family annihilation during August, in the school holidays, and at weekends, when children are perhaps being passed from one parent to another. Half the cases identified by the research related to crimes committed at weekends.

I am concerned that the crime statistics do not separately record incidents of family annihilation, probably because of their rarity. Statistics are, however, compiled for infanticide, so the argument about the instance of family annihilation should not exclude consideration of compiling and publishing such figures. Professor Wilson has told me that he does not think that his work has been impeded by a lack of official statistical data, because the cases typically attract significant press attention, so the internet search capacity for press stories has tended to highlight most cases for the purposes of his research.

Previous studies—to come to the point made by the right hon. Gentleman—in particular that in The Journal of Forensic Psychiatry and Psychology, emphasised the rareness of violence convictions among those who commit such offences. Of 203 cases examined in that study, only seven involved a killer with a previous criminal record of violence. That, however, does not tell the whole story. Professor Wilson has highlighted to me that in many cases subsequent inquests throw up evidence of some previous domestic abuse. The evidence tends to come from family or friends, but the abuse had not escalated to the point of criminal prosecution. That may be another reason why police forces and the courts should give closer attention to fully recording details of all accusations of domestic abuse. For too long, clearly, the domestic dispute has not been taken seriously enough by some serving police officers.

For that reason, I applaud the Home Secretary’s September announcement that Her Majesty’s inspectorate of constabulary is being required to look at the performance of individual forces in England and Wales to examine the way in which they approach, investigate and record cases of domestic violence. I would prefer to see the review as one of a series of measures better to address the shortcomings in how we deal with such tragic cases. At the weekend, The Sunday Times reported that one of the cases the Home Secretary had in mind in ordering this review was the murder of Rachael Slack and her two-year old son, Auden, in Holbrook, Derbyshire, three years ago, by Auden’s father, who later committed suicide. The father had been treated for mental illness, but we do not know what information may have been shared by the mental health professionals.

Family annihilation seems to be rarer in the UK than in the USA or in some parts of Europe, and one of the factors driving that could be our tougher gun laws. The Birmingham researchers found that in the United States and some parts of Europe the greater prevalence of such weapons led to 80% of family murders being carried out with a gun; in the UK, that number is less than a fifth. Nevertheless, we have seen family annihilation cases in which unstable men had been permitted to have shotguns and firearms, but then used them to murder their families.

The Michael Atherton case is one shocking example. The murderer had been granted a licence for both shotguns and firearms even though he had been reported for domestic violence on many occasions. In fact, the weapons had been taken away from him after such an incident, and then returned. The police officer who had approved his application turned out to have been running his own dealership in confiscated weapons, while serving as an officer, which led to him receiving a suspended prison sentence. Atherton used his weapons to murder his partner and her relatives before killing himself.

I wish to emphasise one further shortcoming. When the perpetrator of such a crime commits suicide, the duty of the coroner seems to be limited to identifying how the deceased died and giving verdicts accordingly. Invariably, the cases are massively distressing for the surviving relatives, and coroners sometimes seem at pains to be guarded about saying anything negative about the perpetrator. There is no duty to undertake any further analysis of the background circumstances or the state of mind of the perpetrator, except for the purposes of determining the cause of death and who might have been responsible. That denies us the opportunity to learn any lessons.

Given the rare incidence of such cases, it has been suggested that they should merit a much deeper analysis through what some academics have called psychological autopsy. The true incidence of mental illness as a contributory factor could be helped by a detailed review of each case—there are not so many cases, so it should not be an onerous requirement. Perhaps it should involve examining coroners’ reports and police files, interviewing relatives, friends and contacts of the deceased, and analysing medical records from hospitals and general practitioners.

The Atherton case and that of the serial killer Derrick Bird led to a 2010 proposal that the individual health records of all NHS patients holding shotgun or firearms certificates be file-tagged with a recommendation that, if a GP considered that such a patient presented a risk to themselves or the public, the police should be alerted. That seemingly reasonable and prudent proposal to improve public safety was later vetoed by the Information Commissioner on the grounds of patient confidentiality, the self-same argument that led to the failure to alert my constituent’s sister-in-law to the danger his brother posed to her and her son’s safety.

The purpose of the debate is to draw greater attention to the phenomenon of family annihilation and to the important research that is being done to understand it better. My purpose is also to urge the Government to build on the Home Secretary’s review of police effectiveness in dealing with domestic violence by creating a cross-Government initiative to encourage better risk assessment and information sharing between health professionals, the police and members of the public who might be at risk; to promote better statistical information about cases of family annihilation; to examine the concept of undertaking psychological autopsies in cases in which the perpetrator of family murders has committed suicide, by undertaking a full assessment of the history of that person, including questioning family members; and, finally, further to strengthen gun control legislation to ensure that no person with a history of domestic abuse or who is suffering from mental illness can get access to lethal weapons.

As the Home Secretary said when she ordered her domestic violence review,

“We have a duty to provide vulnerable people with the best possible protection.”

Sadly, I feel that in Ben Philpotts’s case, and in many of the others I have highlighted in the debate, we have fallen a bit short in that duty. The general crime rate in this country is falling, but, though still mercifully rare, the number of cases of family annihilation is rising. There should be a public policy response to meet that challenge.

16:17

[The Minister for Crime Prevention (Norman Baker)]

I thank my hon. Friend the Member for Cardiff North (Jonathan Evans) for the opportunity to debate this important issue and for the lucid and measured way in which he presented his case. Family annihilation, or domestic homicide as it is more commonly known in this country, is a diabolical crime and one that the coalition Government is committed to tackling.

Fatal domestic abuse is all the more shocking in cases involving children. As my hon. Friend said, family annihilation has no established definition but is a term that is often used to describe the tragic circumstances in which a parent kills their children, and sometimes their partner, often before seeking to take their own life. As he said, such cases are rare in this country—the Home Office homicide index suggests that around six incidents of a parent killing one or more children and a current or former partner were recorded in 2011-12—but they are all the more appalling to us when they occur.

Child protection is a priority for the Government, and we are committed to ensuring that we have the best possible arrangements in place to protect children and families from harm. Only last week, I spoke to the House about my concerns regarding the circumstances of the deaths of Rachael Slack and her young son, Auden—to which case my hon. Friend referred—at the hands of Rachael’s mentally ill former partner. I outlined the steps that are being taken to review the apparent police failings in that case.

My hon. Friend rightly drew our attention to the tragic deaths, also in 2010, of Ben and Patricia Philpotts at the hands of Ben’s father, Harold. I am aware that a serious case review of the circumstances surrounding Ben’s death was published in August 2010 and that, sadly, it concluded that lack of communication between local agencies contributed to the risk that he and his mother faced. Action is being taken to address that failing, as I will set out later.

Closer to home, my hon. Friend is no doubt aware of the appalling incident in Cwmbran in September 2012, in which Carl Mills set fire to the house where his partner, Kayleigh Buckley, was staying with their six-month-old daughter, Kimberley, and her mother, Kim, resulting in the deaths of three generations of one family. I understand that a local review of that case is ongoing and that, in due course, it will be quality assured by a Home Office-chaired panel. The Government takes such cases extremely seriously. We must ensure that lessons are learned to deliver justice for those who have lost their lives. We must also do more than that; we must ensure that lessons are acted upon.

I am aware, as my hon. Friend is, of the recent study by Professor David Wilson and Dr Elizabeth Yardley of Birmingham City university regarding the behavioural patterns of male so-called family annihilators. I thank the authors for their attempt to bring new learning to such a difficult area, with a sensitive and well written report. However, I do not agree that domestic homicide is on the rise. Official statistics from the homicide index show that the domestic homicide rate has remained stubbornly static over the past decade at around two a week.

My key focus is to ensure that we do everything that we can to support local agencies to reduce the occurrence of such tragic events. To help to achieve that, the coalition Government has instigated a new process, so that every local report on a domestic homicide is reviewed and quality assured by a panel of independent and Home Office experts. I understand that such a review is ongoing in the case of Kayleigh, Kim and Kimberley Buckley. Each review results in a tailored action plan that must be delivered by the area in question to ensure that we learn from individual tragedies. The Home Office will shortly issue a document collating the lessons learned from those reviews into a national action plan. I hope that that meets some of my hon. Friend’s concerns.

On child protection services, following the publication of Professor Eileen Munro’s review, the Government has published a new version of “Working Together to Safeguard Children”, which provides statutory guidance for all professionals who work to protect children. The new guidance is less bureaucratic and puts more trust in front-line skilled professionals. The guidance clarifies the core legal requirements, by making it much clearer what individuals and organisations should do to keep children safe and to promote their welfare. The guidance provides a national framework within which local agencies and professionals draw up and agree their own ways to work together to safeguard and promote the welfare of children.

The Government has also made a series of reforms to the police’s handling of domestic violence and child abuse. All police forces have measures in place to ensure that officers have the knowledge and skills to deal effectively with cases of child abuse and domestic violence. Specific training on domestic violence and abuse is included in the national police training curriculum. That training was updated this year to take account of the Government’s introduction of a new definition of domestic abuse. The new definition helps to prevent the escalation of abuse that may end in tragedy—the right hon. Member for Oxford East (Mr Smith) referred to this—by dispelling the belief that domestic abuse begins and ends with violence. It places coercive control at the centre of determining whether abuse is taking place.

The police play an important part in local child safeguarding arrangements and have a statutory responsibility to safeguard and promote the welfare of children and to investigate child abuse and other crimes committed against children. The police have a legal duty of care. As well as their duty to investigate criminal offences, they have emergency powers to enter premises and to provide immediate protection for children who are believed to be at risk of significant harm. Nationally, we are working to ensure that local police and children’s services are best placed to respond to allegations of child abuse, and our existing arrangements have been further strengthened with the Child Exploitation and Online Protection Centre becoming a core part of the National Crime Agency.

The Government has ring-fenced nearly £40 million for specialist local domestic and sexual violence support services. Facilities funded with this money include 144 independent domestic violence advisers, who help victims of domestic violence to have their voices heard, and 54 multi-agency risk assessment co-ordinators to protect the interests of those who are most at risk, by bringing all agencies together to promote information sharing and to drive up a joined-up local response to supporting victims.

[Mr Andrew Smith]

In the various welcome collaborative initiatives that the Minister has mentioned, will the point made by the hon. Member for Cardiff North (Jonathan Evans) about mental health professionals having knowledge of the potential risk to others in the community be addressed?

[Norman Baker]

Yes. I addressed the mental health issue in part during an Adjournment debate last week, but I have asked my office to investigate further the Information Commissioner’s ruling, which is what I believe the right hon. Gentleman is referring to, and rightly so. It is an important point.

Up to 60% of abuse victims report no further violence following intervention by independent advisers, so clearly they are working effectively to some degree.

National funding operates in tandem with local initiatives. Local safeguarding children’s boards bring together local authorities, health organisations, the police and others to co-ordinate member agencies in protecting and promoting children’s welfare. I am sure that my hon. Friend the Member for Cardiff North will join me in endorsing the Cardiff Health Alliance’s multi-agency approach to supporting victims of domestic and sexual abuse and integrating child protection and domestic abuse training to ensure a joined-up local approach. It is vital that all local authorities remember the importance of such initiatives when making difficult decisions about spending in coming months.

We must do more nationally to reach out to those caught in a cycle of abuse, which is why the Home Office has piloted two initiatives to empower victims and to stop domestic abuse in its tracks. The first of these is the domestic violence disclosure scheme, known popularly as Clare’s law, which offers the opportunity for anyone to seek disclosure of a partner’s violent past. Those who have the legal right to know are provided with information that could save lives, which empowers them to make an informed choice about their future.

Our second pilot scheme creates a new process to protect victims in the immediate aftermath of domestic abuse. Domestic violence protection orders have the power to prevent a perpetrator of domestic abuse from having contact with the victim for up to 28 days. That offers both the victim and the perpetrator the chance to reflect on the incident. It provides the victim with an opportunity to determine the best course of action to end a cycle of abuse and sometimes stops the unsatisfactory requirement for them having to leave the house for their own safety. We are carrying out an evaluation of both of pilots, and we expect to be able to announce plans for their future this year.

The Home Office has funded a project to improve the understanding of the different local multi-agency models in place to support the sharing of information about safeguarding responses for children and vulnerable people. The project recognises that many areas are considering new and different ways to deliver services and aims to develop a national picture of what models are already in place—for example, multi-agency safeguarding hubs and co-located assessment or specialist teams.

The project will increase our collective understanding of what is happening and provide a practical exchange of learning and experience to local areas that are looking to develop their multi-agency working and information-sharing arrangements. Early findings from the project were released in July, as part of accelerated action from the Government’s new national group to tackle sexual violence against children and vulnerable people. The report provides information to help local areas that want to put in place more effective local multi-agency approaches and responses. The Government are now developing a further package of support to ensure the early identification of children and families who are at risk and to ensure that agencies are best placed to prevent abuse from happening.

I turn to the four specific points that my hon. Friend made. On risk assessment, I hope that he has been reassured to hear about the work that has taken place since the tragic events of 2010 to establish multi-agency risk assessment conferences and, more recently, wider work to promote multi-agency safeguarding models, such as multi-agency safeguarding hubs, which draw together local agencies to protect those who are at highest risk. I agree that, although patient confidentiality is important, it cannot be allowed to stand in the way of saving lives. The right hon. Member for Oxford East rightly made that point. I am happy to reassure him that the national group to tackle sexual violence against children and vulnerable people, which I lead, has identified the sharing of information as a critical issue and is working on advice to dispel myths that prevent the effective sharing of information.

My hon. Friend asked a valuable question about the recording of statistics. I am happy to reassure him that the Home Office homicide index retains detailed information about domestic cases. He made the point that, in considering the level of data captured, we must consider whether the additional detail justifies the resources needed to obtain them. That is a balance to be judged.

On post-homicide reviews, I understand my hon. Friend’s concern about the limitations of coroner’s inquests, but I am sure he will be reassured to hear that coroners are under a legal duty to refer cases involving the death of children to the local children’s safeguarding board in a process that triggers a serious case review, as happened in the Philpott case.

I am sure that my hon. Friend will be pleased about the Government’s initiation of the domestic homicide review process. I agree that we must be joined-up in addressing domestic violence, which is why, for example, I undertook in the House last week to raise our approach to mental health in domestic violence cases with the Department of Health at the next inter-ministerial group on violence against women and girls, which I will attend and which will be chaired by the Home Secretary.

My hon. Friend referred to the importance of gun control in the context of domestic abuse. I am happy to tell him that, as part of the revised guide on firearms licensing law, we have introduced new, detailed guidance on firearms and domestic violence for the police that makes it clear that evidence of domestic violence will generally indicate that a person should not be permitted to possess a gun.

So-called family annihilation seems to transgress the fundamental natural instinct to protect that we expect a parent to feel for a child. Understandably, these cases cause shock and outrage, but we must appreciate the complexity of the circumstances that may contribute to such tragic outcomes, and continue to co-ordinate a joined-up approach to tackling child abuse and domestic and sexual violence to protect those who are most at risk. Through our violence against women and girls action plan and the national group to tackle sexual violence against children and vulnerable people, which I now lead, the Government has made significant strides towards a better reality for the victims of child and domestic abuse. However, we recognise that there is still much to do.

Only last week, I raised my concerns about domestic abuse at a meeting of all chief constables, and in the coming weeks I will meet representatives of third-sector groups and the Director of Public Prosecutions. I look forward to discussing our plans with them. It is vital that we protect those who are vulnerable to the worst crimes. I look forward to updating Parliament on our continued progress in tackling domestic violence and child abuse in the coming months.

Police and Crime Commissioners (Wales)

Wednesday 6th November 2013 Westminster Hall

14:00

[Nick Smith (Blaenau Gwent) (Lab)]

Thank you, Mr Amess, for the opportunity to debate the powers and performance of police and crime commissioners in Wales.

Public confidence in the police authority that covers my constituency has been rated as among the lowest in the country. As recently as 2008, Gwent police were working to raise public confidence in their service from a very low 39%. Even now, just 53% of people are satisfied with the service that they receive, which is one of the lowest rates in the country. For a service built on giving the public the confidence to sleep soundly at night, that is shockingly low, and that is why I am in favour of the PCC role. It is a link between the public and the police who serve them, and a check and a balance that is independent of the police. If the job is not being done well, the public have the final say. Those are principles that we as Members of Parliament can appreciate.

However, many have argued that there is no appetite from the public for PCCs. For example, the Welsh turnout for the PCC elections was a meagre 14.9%, with a polling station in the Gwent area reporting a turnout of zero. One year on, those poor figures still colour many opinions of PCCs. So why is there a troubled mandate? Well, the original November polling day was the worst possible time to hold an election; the large areas covered by each police authority make traditional campaigning very difficult; and this was compounded by the Government’s decision not to use freepost leaflets. It all adds up to a system set up to return pretty meagre results. Having said that, let us stop using the small turnout as a stick with which to beat PCCs.

[Paul Flynn (Newport West) (Lab)]

My hon. Friend described the turnout as meagre. Does he recall the sensational world record low turnout at a polling station in my constituency, where there was a nil vote?

[Nick Smith]

My hon. Friend amplifies the point very well.

We should judge PCCs on their ability to restore confidence in the police in the future, not on the botched system that installed them. The charity, Victim Support, encouraged PCCs to sign pledges to champion the victims of crime. It asked for the police to be more victim-focused and more effective at meeting their needs, and to give victims and witnesses a strong voice in the wider criminal justice system. Those are the sorts of issues that we should be considering when deciding whether PCCs have been worth it.

Unfortunately, Gwent’s PCC has been making headlines by not following another principle that Victim Support alluded to: the need for PCCs to be both open and accountable. Anyone following the story of PCCs across the country will be disappointed with the saga of Gwent PCC Ian Johnston and his turbulent first year. Mr Johnston instigated the retirement of Chief Constable Carmel Napier on May 23, despite the fact that Gwent police reported crime figures that at one point in 2012 showed the highest reduction in England and Wales—15% overall.

A lack of openness has threatened to damage the PCC role. First, Mr Johnston’s request for the chief constable to retire was revealed only in a leak to our local newspaper. When asked why this had taken place, Mr Johnston said that it was in part because there had been doubts about the crime figures produced by Gwent police. Although we all agree that that sort of scrutiny is exactly what we expect from a PCC, since then, colleagues and I have been demanding evidence that the figures were a case of statistical sleight of hand.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

Is my hon. Friend familiar with the evidence given by PCCs and deputies to the Select Committee on Welsh Affairs on 11 July in Cardiff? The North Wales PCC gave me some very evasive and, at worst, misleading answers about his residency and whether he lived in Cardiff or in north Wales, in Caernarfon.

[Nick Smith]

I heard about that case. It is up to the Minister to look into the issue of the residency of the North Wales PCC. It is important, and has been raised at various times by colleagues.

Six months on, Mr Johnston has produced no statistical evidence that the impressive crime figures that we heard about in Gwent were not accurate. Instead, in a letter to me, Mr Johnston has said that he had heard reports from members of the public

“that officers seemed preoccupied with numerical targets and talked about a limit on the number of crimes that could be recorded each day”,

and found

“that the Chief Constable was pursuing a numerical target driven culture that focussed on the volume of crime.”

An internal review of crime recording has been set up since the chief constable’s retirement, but I am not convinced that that is sufficient. In the meantime, through press articles and the questioning of the Select Committee on Home Affairs, a picture was painted of a difficult working relationship between Mr Johnston and Ms Napier.

[Wayne David (Caerphilly) (Lab)]

Does my hon. Friend agree that one of the problems thrown up by the Gwent saga is the fact that the PCC has been intervening in what are effectively operational police matters? He has seen himself as a chief constable in waiting as well as a PCC, which points to a weakness in the legislation. There is not a clear definition of what is strategic and what is operational.

[Nick Smith]

My hon. Friend makes an important point. I will ask the Minister about the Government’s and MPs’ scrutiny of PCCs and their role.

Everything is coming out in dribs and drabs, and it has threatened to undermine the public’s confidence in Gwent police, and the voters’ confidence in the PCC role. Our PCCs must appreciate that although they are in a position of authority, they are not above authority. They must face tough questions, too. The furore around policing in Gwent is reducing, and a new chief constable, Jeff Farrar, has been appointed. Having seen his work on Operation Jasmine, an investigation into terrible care home abuse, I am confident that he will be an asset as the head of Gwent police.

As we move forward, I propose three things. The lines of communication from the PCC must be as open and detailed as possible. In Gwent, having to drag out information from the PCC has been a painful process, and that cannot be right. It benefits no one if information is hard to obtain. That was the old system, which we should be moving away from. That is particularly relevant, given that police forces face Conservative cuts of 20%, which go too far, too fast.

The Welsh Labour Government are doing all that they can by funding 500 new police community support officers during their Assembly term, and by protecting the community safety budget, but it may not be enough. A PCC who is open and transparent could go a long way to help staff and the public understand the difficult decisions that will be taken at this difficult time.

Secondly, from a Gwent perspective—this is the nub—we need confidence in the data collection and performance measurements used to review our police. We have all heard constituents’ concerns that the figures do not translate to what they see on the streets. As their elected representative, Mr Johnston needs to look into the public’s concerns and regain the confidence of all of us. Let us see whether the Gwent police internal review of crime recording ever comes to anything.

Her Majesty’s inspectorate of constabulary’s visit to Gwent as part of its national crime data integrity programme would be a perfect opportunity, once and for all, to look into the claim that crime reporting was being capped in Gwent. Will the Minister consider that?

Finally, let us measure PCCs against criteria such as victim satisfaction levels within the justice services in the coming year.

[Paul Flynn]

I have no disagreement with my hon. Friend about the qualities of the new chief constable. Does he recall that the Chairman of the Home Affairs Committee, my right hon. Friend the Member for Leicester East (Keith Vaz), asked the police commissioner:

“Would you be surprised if people decided not to apply to come to Gwent given the circumstances surrounding the departure of the Chief Constable? Do you expect a good field of candidates?”?

The commissioner replied:

“I think we will get a very good pool of talent from which to select the next Chief Constable.”

Does my hon. Friend not think that it would have been advisable to ensure that there was a large pool of talent and a choice, rather than what we had, which was one candidate for the job?

[Nick Smith]

My hon. Friend makes a very good point. It is always best when the top jobs are filled through good competition. Having said that, I think that Chief Constable Farrar will do a good job in the future.

[Stephen Doughty]

I thank my hon. Friend for giving way again; he has been very generous. On the last year of performance and the powers of the police commissioners in Wales, does he agree with me that one of the crucial things that we have seen is the variety in performance levels and willingness to be transparent, particularly with the public? I have had a very positive experience in south Wales with both the police commissioner—my predecessor in this place—and his deputies. He has had a positive role with other people in the community, but I know that that has not necessarily always been the case with other commissioners. The Dyfed Powys commissioner was also very transparent when he came before the Select Committee on Welsh Affairs. Does my hon. Friend agree that the issue is variation in performance and willingness to be open with the public, Members of this House and others?

[Nick Smith]

My hon. Friend makes a very powerful point on something that needs to be taken on board not just in Wales, but across the UK. We and the public will judge the PCCs on their roles in the years to come.

[Wayne David]

Does my hon. Friend agree that one lesson that must be learned from the developments in Gwent during the past 12 months is that the PCCs have incredible powers? In Gwent, the chief constable was in effect dismissed in a way that was legitimate according to the law, but which negated any kind of natural justice. She was basically told to retire: “If you don’t retire, you’ll be sacked.” What is more, that was without any established employment procedures or practice at all. Again, that was done under the legislation, but it does create a big question mark, because I do not think that any other post in the public sector has as much unaccountable power as a PCC.

[Nick Smith]

Yes. My hon. Friend makes the point very powerfully. That is what happened in the Gwent area, and I think that we still need to unpick what happened on that occasion. That is why we need to have that extra, important look at crime data recording in Gwent and get to the bottom of that question, which is at the core of Ms Napier’s resignation. It is now up to the Government to detail how they will scrutinise the role of PCCs in Gwent and across the country.

16:39

[The Minister for Policing, Criminal Justice and Victims (Damian Green)]

It is always a pleasure to serve under you, Mr Amess. I congratulate the hon. Member for Blaenau Gwent (Nick Smith) on obtaining the debate. He raised a number of interesting and legitimate questions relating to the powers and performance of police and crime commissioners in Wales, and I will seek to respond to all of them. I hope that he will agree with me that police officers and staff in the whole of Wales—not just in Gwent—are making a significant contribution to the successful fight against crime. In that context, I am grateful for his support for the role of the PCC.

Given all the points made by the hon. Gentleman and by other hon. Members about PCCs and policing, I shall start by talking about the context in which the PCCs operate. The Government inherited a policing landscape disconnected from the public. There was a lack of local democratic accountability, as the public had no direct involvement in the old police authorities. At the same time, there was too much central Government interference through centrally imposed targets that stifled police professionalism and discretion, and there was too little Government focus on tackling national concerns such as organised crime.

Reform was necessary, but it had to take place against a very tough financial background. Despite that background, we have embarked on the most radical reform of policing in 50 years. The reform is aimed—PCCs are central to this—at ensuring that the police are more responsive to the public and more transparent in their work. I hear what the hon. Gentleman says about transparency and I will deal with that in detail in a second. The reform is also aimed at ensuring that the police are more flexible in their approach and more suited to the demands of the 21st century.

At this stage, it is clear from the figures that matter that the reforms are working. Crime is down to the lowest level ever recorded. Let me narrow the focus to Gwent. In the period from June 2010 to June 2013, crime in Gwent went down by 29%. In the past year, since the election of the police and crime commissioner, it has fallen by 4%. I will not weary hon. Members with the figures for the other three police regions in Wales, but they are all consistent with that.

Gwent has had the biggest fall of any of the police regions in Wales, but all of them show significant falls, both over a three-year period and over the past 12 months. The test that we in the Government put on the police is now a simple one. We swept away all the targets; we just ask them to cut crime, and they are doing so. They are doing so across Wales and in particular in Gwent. Everyone involved is to be congratulated on that.

Of course, we have not reached the end of the reform process—one never does. The reforms continue, and the next and most radical phase of police reform is aimed at transforming front-line policing. We want every police officer to fulfil their potential and to feel a greater sense of professional pride, so that the public get a better service. The impetus for change now lies both with the police and with the PCCs.

[Paul Flynn]

The Minister will have noticed that the trend of reducing crime was accelerating before the arrival of the PCCs, but does he really think that a level of support for a candidate of, say, between 6% and 8% of the total vote is any kind of meaningful democratic involvement?

[Damian Green]

I agree with the point, which many people have made, that one would have wished the turnout to be higher. It was not ideal, but the fact was that 5 million people cast votes in last year’s elections and that is approximately 5 million more than ever had a say in the police authorities that the PCCs replaced. Police authorities were unaccountable, invisible bodies. Now, people have the chance to elect the police and crime commissioner.

[Simon Hart (Carmarthen West and South Pembrokeshire) (Con)]

Does my right hon. Friend agree with the senior Dyfed Powys police officer who told me that it might be between two and five years before we are able properly to assess the benefits or otherwise of police and crime commissioners? Perhaps it will be then that we will see whether there is public appreciation of them and voter turnout might be somewhat different.

[Damian Green]

My hon. Friend makes a very good point about the length of time. Now that we are more or less up to the first anniversary of the PCCs, we can see what each of them has done and can make a realistic assessment of their effectiveness, rather than simply looking at the turnout in the elections last November.

Let me deal with some of the specific issues that the hon. Member for Blaenau Gwent and others brought up. One was transparency. I find it difficult to accept the criticism that PCCs are in any way less transparent than the system before. I defy any Member of the House to have gone out before last November, asked their constituents who the chair of the police authority was and expected more than one in a million to know the answer. They were completely invisible; we know that.

Specific criticism was made of the police and crime commissioner in Gwent. I have been on his website and found that, on the page entitled “Transparency”, he says:

“As well as the information we have a legal responsibility to provide under the…Act…and The Elected Local Policing Bodies (Specified Information) Order…we have…agreed to make the agendas and minutes of the Strategy and Performance Board…and the Joint Audit Committee…available. The SPB is where the Commissioner holds the Chief Constable to account and the JAC provides comments, advice and assurance on matters relating to the internal control environment of both the Chief Constable and the Commissioner.”

There is a series of pages, whose titles include “Gifts and Hospitality”, “Register”, “Publications”, “Finance”, Performance”, “Decisions Made”, “Estates Register” and “Complaints Information”.

The document is transparent. A person does not even need to be in Gwent to see it; they can sit in London and find out quite a lot of detail about what the police and crime commissioner in Gwent is doing. I gently suggest to the House that none of that would have been available 12 months ago, because police authorities did not have to do that sort of thing.

[Nick Smith]

I perfectly accept the anonymous nature of police authorities before PCCs came along. However, does the Minister not accept that we only found out that the PCC in Gwent had effectively sacked the chief constable—made her resign—because of a leak in the local newspaper?

[Damian Green]

I will return to the departure of Carmel Napier; I said that I would deal with each individual issue that came up.

Regarding the point about Winston Roddick, I think there was some feeling in the intervention and response of the hon. Member for Cardiff South and Penarth (Stephen Doughty) that a cloud hung over Mr Roddick in some way. There had been an allegation that he did not live in the area for which he had been elected. The Independent Police Complaints Commission found no evidence to support that allegation and therefore did not pass on the investigation file. Its report said:

“Considering the evidence provided by witnesses, voters and credit checks, the supporting mobile phone cell site analysis and the account provided by Mr Roddick, in my opinion, there is no evidence that a criminal offence may have been committed by Mr Roddick.”

I think we should put the matter to bed.

[Stephen Doughty]

Is the Minister aware of the complaint that has been made by four of the five candidates for the north Wales police and crime commissioner elections in recent days—both about the IPCC decision and about other matters that have come out as a result of that investigation? Notwithstanding what he has just said, will he look further into the matter?

[Damian Green]

The point about the IPCC—the clue is in its title—is that it is independent. It is not for me or any Minister to intervene in its investigations. It is independent. It looked into that complaint, and I have just read out its verdict.

[Wayne David]

Regarding the situation in north Wales, surely the Minister will agree that it is at least morally wrong that a Liberal Democrat candidate was elected but never declared that he was a Liberal Democrat. That was the case with Mr Roddick.

[Damian Green]

What candidates choose to describe themselves as at elections is, perhaps happily, not a matter for Ministers. I merely observe a point that has been made by many others after people have claimed that being an independent means that one is not a politician: being an independent means that someone is a politician who will not tell people what their politics are, which is what I have always believed.

[Paul Flynn]

The point is a serious one. In the dark age before 1987, when my constituency had a Conservative Member of Parliament, a certain Winston Roddick had stood and described himself as a Liberal Democrat. He stood in north Wales as an independent, and then metamorphosed into a Liberal Democrat overnight. Is that not likely to bring the whole process into disrepute?

[Damian Green]

There is a long history of people changing parties throughout long political careers—indeed, the greatest ever Englishman—Winston Churchill—did it. I feel that it is not necessarily for the House to comment on the issue.

Many PCCs have done extremely good work. In Gwent, Ian Johnston has actively promoted a drug intervention programme, which has seen a 15% rise in participants over the past year. I shall be non-partisan about the issue. Only one of the four PCCs in Wales is in my party, but I have examples of all of PCCs doing good work.

In south Wales, Alun Michael has launched a number of evidence-based initiatives with partners—for example, working with two health trusts to analyse and reduce the number of violent incidents that result in victims being taken to A and E. In north Wales, Mr Roddick has asked the chief constable to devise an operational delivery plan to tackle rural crime, with a rural crime team already in place to act as a contact point for farmers and residents. In Dyfed Powys, Chris Salmon has worked with his chief constable so that all stations there now operate on a “when we’re in, we’re open” principle—if a member of the public calls at a station when an officer is in, the caller will be attended to.

The point that I made about public scrutiny bears repeating. PCCs are subject to public scrutiny in a way that police authorities never were. The public now know whom to turn to and whom to hold responsible if they have concerns regarding policing in their area. We know that 73% of the public in England and Wales are now aware of the role of PCCs, which contrasts with the 7% of the public who knew what to do if they had a complaint under the old police authorities.

[Stephen Doughty]

The Minister has been generous in giving way. What is his relationship with the PCCs in Wales? What specific concerns have they raised with him to which he has been able to respond positively? Is he able to give any examples? For example, has he discussed police funding for south Wales and Cardiff as the capital city?

[Damian Green]

I regularly meet all the PCCs. I have met the PCCs in Wales as a group. They are, as all people are, energetic in pleading their own cause. I always listen as sympathetically as is sensible.

It is interesting to note the change in the amount of public correspondence that the PCCs receive. Some have reported a fiftyfold increase in public correspondence over the year to date compared with the old police authorities. The public are engaging with the PCCs, and the PCCs are becoming key local leaders across the whole criminal justice system.

I should deal with the case of Carmel Napier, because that was an important part of the hon. Member for Blaenau Gwent’s speech. First, I should, as I am sure others who know her would want to, thank Carmel Napier for three decades of service to the police and for her leadership—not just in Gwent, but at a national level—on improving the police response to violence against women and girls.

It is clear under the legislation that it is for police and crime commissioners, not Ministers or Members of Parliament, to make decisions about appointing, suspending and removing chief constables. The process for a PCC to remove a chief constable is set out in legislation and, contrary to some of the points made earlier, includes strict safeguards. There is a police and crime panel, which has a wide remit to review or scrutinise decisions made by a PCC.

As has been mentioned, the PCC has the power to appoint a new chief constable, and has done so in Gwent this week. It is for the commissioner to determine who is best placed to lead the local constabulary. That is provided for in legislation. For the first time, there are confirmation hearings and proper public scrutiny of the event, which in the past happened behind closed doors and in secret.

[Wayne David]

Will the Minister give way?

[Damian Green]

May I finish this passage? I have been generous in giving way.

The Home Office has issued a circular to advise PCCs and chief constables of the principles and legal requirements for appointing chief officers. In addition, as part of its role in supporting PCCs and chief constables, the College of Policing has developed guidance and a toolkit for making senior appointments. The college also supports PCCs by providing details of career history, skills and qualifications of prospective chief constables to ensure that commissioners have as much information as they need.

[Nick Smith]

The Minister has been generous in giving way. Given the controversy over crime recording in Gwent, will he consider asking Her Majesty’s inspectorate of constabulary to look into the claim that crime figures were capped in Gwent?

[Damian Green]

That was the final point I was determined to get to before I sat down. I reassure the hon. Gentleman that HMIC is in the process of conducting a review of crime recording integrity—precisely his point. That review is of all forces, so it will include Gwent. The integrity of the crime figures in Gwent is being investigated by HMIC as we speak. It will break the investigation down into two parts.

[Nick Smith]

One detail is missing from the Minister’s answer. Will the HMIC please look into the capping of crime figures in Gwent?

[Damian Green]

As I said, HMIC is conducting a general investigation into integrity, and it will no doubt be aware of the hon. Gentleman’s concern.

I hope that I have been able to respond to all the concerns raised by hon. Members. The reforms will continue. I want to see PCCs take a greater role in cross-cutting issues, leading to less wasted police time and bureaucracy and a better use of technology. We want to see more force collaboration and greater public understanding of how their local force functions. We want PCCs in Wales to build on their—

17:00

Sitting adjourned without Question put (Standing Order No. 10(11)).

Written Statements

Wednesday 6th November 2013 Written Statements

Wednesday 6 November 2013

International Tax Compliance (Cayman Islands)

Wednesday 6th November 2013 Written Statements

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

An agreement to improve international tax compliance was signed with the Cayman Islands on 5 November 2013. This agreement sets out precise details of information which will be automatically exchanged. The text of the new agreement has been deposited in the Libraries of both Houses and will be made available on HM Revenue and Customs’ website.

Afghanistan Reserves Call-out Order

Wednesday 6th November 2013 Written Statements

[The Minister for the Armed Forces (Mr Mark Francois)]

With the expiry of the call-out order made on 6 November 2012, a new order has been made under section 54 of the Reserve Forces Act 1996 to enable reservists to continue to be called out into service to support operations in Afghanistan. The new order is effective until 10 November 2014. Reservists continue to make a valuable contribution to operations in that country and almost 1,500 have been called out during the last year.

Bathing Water Quality Results (England)

Wednesday 6th November 2013 Written Statements

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Dan Rogerson)]

Today I would like to announce to the House the results of water quality monitoring at England’s popular beaches and lakeside sites during the 2013 bathing season.

Between May and September, the Environment Agency took samples of water at 415 bathing areas that have been designated under the Bathing Water Regulations 2013 to test for compliance with the water quality standards set by the EU bathing water directive.

High-quality bathing water is important both for the health of water users and for our seaside resorts whose economies depend on people’s enjoyment of the beach.

This year a record number of 342 of the 415 bathing waters—over 82%—met the highest standard, known as guideline. Almost 99% have complied with the directive’s mandatory minimum standard. This means that the compliance rate has returned to the level we would expect after last year’s extreme weather conditions. It confirms that investment by water companies and other measures to improve bathing water quality are paying off over the long-term.

Only five sites failed this year—Allonby, Fleetwood, St Annes, Seascale and Instow. Failures to meet the standards are caused by a complex and individual set of circumstances at each bathing water. The main sources of pollution are sewage and animal waste washed into water, particularly during rainfall.

These results are particularly encouraging because we are now only two years away from full implementation of the revised bathing water directive, which will introduce much tighter water quality standards from 2015. If these standards applied now, over 55% would meet the highest “excellent” standard and almost 90% would pass the new minimum standard. I remain committed to all designated waters passing the new minimum standard. Water companies, national and local government, businesses and the wider community have a part to play to ensure we meet the new standards and have beaches that people can enjoy.

Pharmaceutical Price Regulation Scheme

Wednesday 6th November 2013 Written Statements

[The Minister of State, Department of Health (Norman Lamb)]

My right and noble Friend the Under-Secretary of State for Health, Earl Howe, has made the following written ministerial statement:

I am pleased to announce today the heads of agreement on the new pharmaceutical price regulation scheme (PPRS). The PPRS is a voluntary scheme agreed between the Department of Health, acting on behalf of the UK Government and Northern Ireland and the branded pharmaceutical industry, represented by the Association of the British Pharmaceutical Industry (ABPI), under section 262 of the National Health Service Act 2006.

The current voluntary pricing scheme, the 2009 PPRS, will terminate on 31 December 2013. Following negotiations, the Department of Health and the ABPI have reached agreement on the outline terms of a new scheme which will operate for five years starting from 1 January 2014.

The new scheme will provide an unprecedented level of certainty on almost all the NHS branded medicines bill. The bill will stay flat over the next two years and will grow slowly after that. The industry will make compensating payments to the Department of Health if NHS spending on branded medicines exceeds the agreed growth rate. The agreement therefore provides stability and predictability to both the Government and the UK pharmaceutical industry, supporting the industry’s global competitiveness. It will encourage the use of innovative and effective new medicines in the NHS.

Alongside these arrangements, the National Institute for Health and Care Excellence (NICE) will continue its work to introduce the broader value assessment for new medicines covered by value-based pricing. We have listened to feedback from patients’ groups that they would welcome further opportunities to feed into the development of the new arrangements for value assessment and have agreed that NICE will carry out a frill public consultation before implementing the methods for wider value assessment in autumn 2014. Publication of the complete 2014 PPRS is expected later in the year.

In addition to the agreement, I am also publishing today the Government response to the consultation on the statutory pharmaceutical pricing scheme, which contained proposals to strengthen the scheme, and align it more closely to the PPRS. This scheme provides an important safeguard for the NHS, controlling the prices of branded medicines sold to the NHS by pharmaceutical companies that decide not to join the voluntary PPRS. Through this response document, we are setting out the changes we will be making, including introducing a 15% price cut on branded medicines sold by statutory scheme companies. We will shortly be introducing amending regulations to effect these changes.

Copies of the heads of agreement, the response to the consultation and the related impact assessment have been placed in the Library. Copies are available to hon. Members from the Vote office and to noble Lords from the Printed Paper Office.

General Aviation Red Tape Challenge

Wednesday 6th November 2013 Written Statements

[The Parliamentary Under-Secretary of State for Transport (Mr Robert Goodwill)]

I, together with the Minister without Portfolio, my right hon. Friend the Member for Welwyn Hatfield (Grant Shapps), wish to inform the House of the changes to the regulation of general aviation following the general aviation red tape challenge.

The general aviation (GA) red tape challenge ran from 11 April to 16 May 2013. It received nearly 500 responses, including 298 via e-mail, three times as many as any other theme to date. These responses identified many areas where improvements are needed and highlighted the need for a change in approach to regulating GA. As a result of this, the Government are launching a substantial programme of reform that will help support a vibrant GA sector. The GA sector currently supports around 50,000 jobs in the UK and makes an overall economic contribution to the UK economy of £1.4 billion per annum. It could and should be able to contribute more.

The Civil Aviation Authority (CAA), the independent regulator of civil aviation in the UK, recognises the need to create a culture change in the regulation of the GA sector. As part of this culture change the CAA is setting up a new GA unit within its current structure. This is firm recognition that general aviation requires different, and less onerous, regulation to that of commercial air transport. The CAA’s GA unit will be dedicated to effective and proportionate regulation that supports and encourages growth of the GA sector. The unit will also work with Government to identify potential funding for new technologies to support the sector. It will be fully set up within the CAA by April 2014.

The CAA has incorporated the findings of the GA red tape challenge into its own internal review to produce a comprehensive GA reform programme. This will support a programme of deregulation and self-regulation for the GA sector. It will also remove complexity, look to deregulate where possible and where not, consider how to allow the GA sector to take on more responsibility and accountability for its own safety where possible and appropriate. This has already started with the launch in September 2013 of a consultation on deregulating for airworthiness purposes all UK-registered single-seat microlights. Starting in November, the CAA will lead a series of workshops with the GA sector to identify other areas that would benefit most from deregulation or self-regulation. These moves represent the start of an ambitious programme of work to follow.

The Government have successfully lobbied for an evaluation of the application of commercial aviation safety requirements to non-commercial aviation to be included in the EU regulatory fitness and performance (REFIT) programme and welcome the European Aviation Safety Agency (EASA) road map for general aviation. Both the Government and the CAA will engage with the GA community over the coming months to identify priorities for reform and take these forward within the EU’s reform programme.

The CAA will strengthen its engagement with the sector to improve consultative arrangements and ensure effective representation. The CAA is committed to being open and transparent in its engagement and collaboration with the GA community. It will work with a firm objective to support education and compliance rather than regulation and enforcement, using legal instruments and powers only as a last resort.

The CAA will involve the GA sector in the development of a new regulatory framework and its associated policies; there will be opportunities for the sector to challenge the CAA when it believes regulation is unduly burdensome; there will be more scrutiny of the CAA’s fees and charges to provide greater transparency; and the CAA will improve the quality of information it provides. From the responses to the red tape challenge it is clear that regulatory complexity has led to misunderstandings. To address this, the CAA will run a “myth-busting” initiative to clarify what exactly regulations require. For example, it will debunk the myth that the CAA requires all aircraft movements within the UK to be logged.

To facilitate the effective and timely implementation of these measures, the Government are appointing an independent “challenge panel” including GA industry representatives. This panel will report directly to Ministers. It will provide a “critical friend” function to the CAA. The challenge panel will run initially for six months until April 2014. During this time the panel will monitor and support the implementation of the CAA’s deregulatory programme. It will also be asked to identify further opportunities to deregulate and to promote growth of the sector. It will provide to Ministers an interim report in January and a final report in April.

We will task the challenge panel to propose ideas, and will also encourage the CAA and Government Departments such as the Department for Business, Innovation and Skills and the Home Office, to consider where projects might support and encourage an innovative and dynamic GA sector. For example, how best to support a dynamic leisure and training sector, and how to remove outdated paperwork which serves little purpose.

In announcing these measures we are announcing the launch of a “right to reply” consultation by the CAA into its response to the GA red tape challenge. This consultation will run until 6 December and is a good opportunity for the GA sector to make its own assessment of the CAA’s detailed response. The responses to this consultation will be available to the challenge panel, which will be able to submit its own views on the CAA response within its January interim report. These reforms mark an important and significant step-change in the approach to GA regulation. The new regulatory regime will be founded on risk-based intervention, proportionate to the safety needs of informed participants while protecting uninvolved third parties and supporting and encouraging a flourishing GA sector. We will work closely with the general aviation sector and the GA representative bodies in particular in taking this forward

General aviation can and should contribute to the UK’s economic success, while providing a safe environment for participants and the public. The Government’s aim is therefore to make the UK the best country in the world for general aviation.

I will place copies of the documents in the Libraries of both Houses.