House of Commons

Tuesday 11th March 2014 Commons Chamber

Tuesday 11 March 2014

The House met at half-past Eleven o’clock

Prayers

Tuesday 11th March 2014 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Tuesday 11th March 2014 Commons Chamber

The Chancellor of the Exchequer was asked—

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

1. What fiscal measures he plans to introduce to support young people into work.

[The Chief Secretary to the Treasury (Danny Alexander)]

The Chancellor of the Exchequer is at ECOFIN and I have been asked to reply.

Youth unemployment is falling and the number of young people on jobseeker’s allowance is 120,000 lower than in May 2010. No young person should be left behind in the recovery. That is why we have delivered 1.6 million apprenticeship starts so far this Parliament. We will abolish national insurance contributions for under-21s, which will help to support jobs for almost 1.5 million young people, and we are supporting up to half a million young people into education and employment through the Youth Contract.

[Dr Coffey]

I welcome the announcement in the autumn statement on the employers’ national insurance holiday for under-21s, which will be a big boost for many businesses in coastal towns such as those in Suffolk Coastal, and for pubs across the country, which regularly employ young people. Has my right hon. Friend estimated what impact the measure will have on youth unemployment?

[Danny Alexander]

We think the policy will have a significant impact. That is also the view of business organisations, which have warmly welcomed it. With the abolition of employer NICs for under-21s, it will become more than £500 cheaper to employ an under 21-year-old earning £12,000 a year, and more than £1,000 cheaper to employ an under 21-year-old earning £16,000 a year. Of course, employment is driven by a range of factors, but the wide welcome the measure has had suggests it will have a significant impact on employment.

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

But surely the Minister recognises that, in areas such as mine—a rural part of Scotland like the one he represents—it is sometimes much more difficult, so the Government should make more effort to ensure that absolutely no one is left without a job opportunity.

[Danny Alexander]

I recognise the hon. Gentleman’s point on rural areas, and I think that both he and I wish the Scottish Government recognised that more. Scottish National party Members are conspicuous by their absence from Treasury questions once again, but perhaps we will address that under Question 2. A combination of extra funding for apprenticeships, national insurance support for employers and the Youth Contract gives as much help in rural areas as it does in urban areas.

[Jake Berry (Rossendale and Darwen) (Con)]

Will my right hon. Friend join me in congratulating Warburtons bakery, which is making a £20 million investment in east Lancashire, creating more than 60 jobs? It is supporting the Rossendale and Darwen jobs fair in May. Youth unemployment in my constituency has been brought down by 28% in the past year.

[Danny Alexander]

I join my hon. Friend in congratulating Warburtons bakery on that investment and on the jobs it is creating. It is of a piece with businesses creating more than 1.6 million private sector jobs since the Government came to office, because we have created the right conditions for businesses to grow. The reduction in employers’ NICs for young people will give that business an incentive to take young people on in those new jobs.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

How many more young people have been claiming jobseeker’s allowance for more than 12 months compared with when the Chief Secretary took office four years ago?

[Danny Alexander]

As I said in my answer to the first question, the number of young people on jobseeker’s allowance is 120,000 lower than it was in May 2010. The Labour party told us that it would not be possible to create enough jobs even to take up the jobs lost in the public sector but, in fact, more than 1.6 million jobs have been created in the private sector since the Government took office. The hon. Gentleman should congratulate us on that record.

[Chris Leslie]

Perhaps the Chief Secretary did not hear me properly—I asked about the long-term youth claimant count. The number of young people who have been out of work for 12 months or more has doubled under this Government from 28,300 to 56,100. Frankly, 56,000 young people will be staggered by the complacency of his answer. Surely we should be offering a guaranteed starter job for all young people who have been out of work for a year or more, paid for with a repeat of the bankers’ bonus tax. Does he still believe that those bankers need their millions more than those young people need their opportunities?

[Danny Alexander]

Long-term youth unemployment was down 25,000 on the quarter. Youth unemployment is down 15% in the hon. Gentleman’s constituency, and he ought to welcome that. The fact is that the bonus tax, which the former Chancellor says would not raise any money, is being spent on, I believe, 10 different measures by Labour, showing how fiscally incredible its plans are.

[Mark Pawsey (Rugby) (Con)]

Youth unemployment has shown a welcome national fall, but the situation is even better in my constituency, where youth unemployment has more than halved from 7.6% to 3.1%. Does the Chief Secretary agree that that shows that the Government’s long-term economic plan is working for my young constituents?

[Danny Alexander]

I am delighted to hear about the success in reducing youth unemployment in Rugby, which is a consequence of the coalition Government’s decisions to make sure that we have the right climate for businesses to invest, grow and create jobs, which is in stark contrast to what the Opposition did in office.

[Anas Sarwar (Glasgow Central) (Lab)]

2. What recent discussions he has had with the Governor of the Bank of England on a currency union with an independent Scotland.

[The Chief Secretary to the Treasury (Danny Alexander)]

Both the Chancellor of the Exchequer and I have regular discussions with the Governor of the Bank of England on a wide range of issues on the UK economy. As I said last week in Edinburgh, there will not be a currency union between Scotland and the rest of the UK. The shadow Chancellor has also made that clear. A currency union would not work for the rest of the UK or for an independent Scotland.

[Anas Sarwar]

Not keeping the pound could mean higher mortgages, more expensive car loans, higher credit card bills and uncertainty about how pensions and benefits are paid, yet we have no credible answers from the nationalists. Standard Life, RBS, Lloyds, Aggreko, Allianz, BP, Shell, Citigroup, the CBI, the Institute of Directors and many others say that the currency plans are bad news for Scotland. Can the Chief Secretary tell us: are they scaremongering? Is it bullying? Is it bluff and bluster? Are they part of some Unionist conspiracy, or are they reflecting the concerns of people across Scotland?

[Danny Alexander]

There is no bluff, bluster or bullying on this issue. Businesses, the Treasury and the political parties are making it clear that, on the basis of the evidence, a currency union would be bad for Scotland and bad for the rest of the United Kingdom. The hon. Gentleman rightly lists a range of businesses that have looked at their business models and recognised the damaging effect that independence would have on them. It is important that those businesses feel able to speak out to explain to their shareholders and workers how they see it, because people in Scotland should have every bit of information we need when we cast our votes in the referendum in September.

[Mr Julian Brazier (Canterbury) (Con)]

I commend my right hon. Friend’s answer. Does he agree that anybody who thinks that a currency union between sovereign states is a good idea should make an early visit to southern Europe?

[Danny Alexander]

It is striking how little the Scottish National party appears to have learned from what has happened in the eurozone. The truth is that when setting up a new country, the last thing anyone wants to do is to abandon all the levers that control the economy. The first few decades of independence would be a risky, dangerous and uncertain phase, and embarking on it without the ability to control interest rates or an exchange rate that can, for example, adjust to oil price fluctuations, and with your hands bound on tax and spending—one of the lessons of the eurozone crisis—is an utterly ridiculous proposition.

[Mr Speaker]

Question 3, Andrew Selous.

[The Chief Secretary to the Treasury (Danny Alexander)]

Employment in the United Kingdom is increasing—

[Mr Speaker]

Order. I know that the Chief Secretary is an important man with many important matters on his mind, but none is more important than the grouping of questions 3 and 11. Am I right?

[Danny Alexander]

You are right, Mr Speaker, and I beg your pardon.

[Andrew Selous (South West Bedfordshire) (Con)]

3. What recent estimate he has made of the rate of employment.

[Richard Harrington (Watford) (Con)]

11. What recent estimate he has made of the rate of employment.

[Danny Alexander]

Employment in the UK is increasing and, under this Government, has exceeded 30 million for the first time in our country’s history. Over the last year, the employment rate has risen 0.6 percentage points to 72.1%, higher than that in the US, Italy and France, and the EU28 and the G7 averages. In the last year, employment has grown faster in the UK than it has in France, Germany, Italy, Japan, the EU28 and the G7.

[Andrew Selous]

Given that some Members of this House were predicting that the Government’s long-term economic plan would lead to the disappearance of 1 million jobs, can the Chief Secretary remind the House how many new jobs have been created in the last three years?

[Danny Alexander]

My hon. Friend is right and he draws attention to one Member who told the CBI annual conference that our plan would lead to the disappearance of 1 million jobs—[Hon. Members: “Who was it?”] It was the Leader of the Opposition. In fact, employment has increased by 1.3 million, with more than 1.6 million jobs created in the private sector—proof, if anyone should need it, that our economic plan is working for the United Kingdom.

[Richard Harrington]

I know that the House will be delighted to hear that long-term unemployment in my constituency of Watford is down by 22%. Youth unemployment is down by 33% in the last 12 months alone, and the number of JSA claimants is also down by 27%. Will my right hon. Friend confirm that the Government will stick to their long-term plan and continue to back Watford business with better infrastructure and lower taxes on jobs?

[Danny Alexander]

It will please my hon. Friend to know that I can confirm that, yes: we will stick to the plan that is getting the recovery going. There is, of course, a vast amount still to do to get our economy back on the right track and to ensure we get more people into work. Nothing would threaten that more than abandoning the economic plan that has got us this far.

[Stephen Timms (East Ham) (Lab)]

Will the Chief Secretary confirm that the number of people on jobseeker’s allowance for more than two years has quadrupled since the Government came into office? Will he accept that we have a serious long-term unemployment problem that requires Government action, beyond what is happening at the moment, to tackle it?

[Danny Alexander]

The most recent set of figures for the quarter show that long-term unemployment has come down, including in the right hon. Gentleman’s constituency. I note, too, that the shadow housing Minister’s flagship programme to build more houses has been cut away by the shadow Chancellor, or is that yet another way they plan to spend their mythical bonus tax?

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

Will the Chief Secretary confirm that the employment rate is actually below pre-recession levels?

[Danny Alexander]

The employment rate, the number of people in employment, is higher than it has ever been. The employment rate is getting near to its record high again.

[John Pugh (Southport) (LD)]

That is good news, but what proportion of new jobs are in London and the south-east? Do we not need to do even more to rebalance the economy?

[Danny Alexander]

Employment levels are rising in every part of the United Kingdom, but my hon. Friend rightly draws attention to the fact that there is a great deal more work to be done to invest in infrastructure and expand our investment in apprenticeships. The growth deals and city deals benefit every part of this country, and the industrial strategies taken forward by the Secretary of State for Business, Innovation and Skills are helping to grow manufacturing and exports in a way that was lamentably absent from the previous Government’s plans.

[Derek Twigg (Halton) (Lab)]

Small and medium-sized enterprises have a crucial role in providing employment. Why are my constituents and the businesses in my constituency telling me that they are still having problems borrowing from banks?

[Danny Alexander]

We are taking a lot of action to get banks lending more to small businesses. If the hon. Gentleman has any specific cases, I am sure he could take them up with the bank, or draw them to my attention—I would gladly look at them. Measures such as the employment allowance, a tax rate for small businesses to employ more people, and national insurance cuts for under-21s, have been widely welcomed by small business organisations precisely because they will support small businesses to create more jobs and employment.

[Chris Heaton-Harris (Daventry) (Con)]

4. What fiscal steps he is taking to limit welfare spending.

[The Economic Secretary to the Treasury (Nicky Morgan)]

The Government have announced their intention to bring social security spending within firm spending controls through the introduction of a welfare cap. The level of the cap will be announced at Budget 2014. The Government have taken significant action to bring welfare costs under control since 2010. The welfare cap will ensure that welfare spending remains on a sustainable footing and that significant deteriorations in the forecast do not go uncorrected.

[Chris Heaton-Harris]

I welcome that answer. Does my hon. Friend believe that the tough decisions the Government have taken to control public spending on welfare have enabled them to protect public spending on schools and the national health service, and that this policy is a vital part of the Government’s long-term economic plan to reduce the deficit and safeguard the British economy?

[Nicky Morgan]

My hon. Friend is entirely right. The Government have taken difficult decisions to place the public finances on a sustainable footing, while protecting important areas of expenditure such as the NHS. The Government’s long-term economic plan to return the public finances to a sustainable path has restored fiscal credibility. It is notable that the Labour party has no plan, long-term or otherwise, other than to borrow more, spend more and tax more.

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

Does the Minister accept that the cuts to the welfare budget will lead to an increase in poverty, particularly child poverty? Does she believe that that is a price worth paying?

[Nicky Morgan]

The number of children in poverty has fallen and the number of children in workless households has gone down by 100,000.

[Nick de Bois (Enfield North) (Con)]

5. What steps he plans to take to reduce youth unemployment.

[The Financial Secretary to the Treasury (Sajid Javid)]

Youth unemployment is falling, and the rate for the number of young people not in education, employment or training is at its lowest since 2008. However, we are not complacent. We are helping up to 500,000 young people into education and employment through the Youth Contract, funding jobcentres to help young adults who are not at school to find work through training, and piloting a new mandatory skills scheme for young jobseekers without basic maths or English.

[Nick de Bois]

When the Chancellor came to my constituency—where youth unemployment has fallen 32% since the general election—to launch his employment allowance, he met representatives of the excellent Ridgeway Garages, who told him that they would be employing more people and hoped to employ more young people. They also came to last week’s job fair and recruited five people, including young people. However, many businesses were unaware of the existence of the employment allowance. What steps will the Chancellor take to promote that excellent scheme?

[Sajid Javid]

Let me begin by praising my hon. Friend for holding another successful job fair in his constituency. It is a concept that he pioneered, helping many young people to find jobs. HMRC has already held discussions with businesses, charities and payroll software providers about the employment allowance, and will use its key publications and communications to advertise it further. It will also work with key stakeholders to ensure that the abolition of employer national insurance contributions for under-21s, which will come into effect in April 2015, is delivered effectively.

[Ian Austin (Dudley North) (Lab)]

The Government clearly oppose the implementation of a national youth jobs guarantee, but given that long-term youth unemployment is twice as high in the black country as it is elsewhere, surely the Minister must accept the case for a specific, targeted plan to guarantee young people in the area the chance of a job or training so that they can start their careers.

[Sajid Javid]

When the last Government were in office, unemployment among young people rose by 45%, so we are not going to listen to any ideas that Labour Members may have about it. The best way of cutting unemployment, whether long-term or otherwise, is to establish a growing economy that creates jobs. In the last four years, our economy has seen 1.3 million jobs created, and more people employed than at any other time in history.

[Charlie Elphicke (Dover) (Con)]

Youth unemployment in Dover and Deal has fallen by 25% in the last year, having increased by 50% in the last Parliament. Does that not show that it is important for us not just to have a long-term economic plan that is working but to do more to repair the damage done by the last Labour Government?

[Sajid Javid]

My hon. Friend is absolutely right. We need to stick to our long-term plan to ensure that we have a growing economy that creates jobs and gives people the financial stability that they need, and the biggest risk to that plan would be our adoption of Labour’s policies of more borrowing, more spending and more debt.

[Andy Sawford (Corby) (Lab/Co-op)]

Unemployment among young people in my constituency remains stubbornly high, at just under 500, but under-employment is also a big issue. Many people are in insecure employment, on zero-hours contracts, and barely managing to struggle on the minimum wage. Will the Minister make an assessment of under-employment and develop a strategy to address it?

[Sajid Javid]

Unemployment in the hon. Gentleman’s constituency rose in all categories under the last Government, and youth unemployment has fallen by 33% so far under the present Government. I hope that the hon. Gentleman will join me in welcoming that. He is right to point out that we must do much more to deal with the problem, but I am sure he supports the efforts that the Government have made in regard to apprenticeships. There have been 1.5 million apprenticeship starts over the last four years.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

6. What consideration he has given to reforming the membership of the Monetary Policy Committee of the Bank of England.

[The Financial Secretary to the Treasury (Sajid Javid)]

The Government are protecting the incomes of low-income households by freezing fuel duty and taking 2.7 million people out of tax by increasing their personal allowance. The best way to raise—[Interruption.]

[Mr Speaker]

Order. I think that the Minister is a tad confused. We are on Question 6, which is about membership of the Monetary Policy Committee of the Bank of England.

[Sajid Javid]

I beg your pardon, Mr Speaker.

The Monetary Policy Committee consists of the individuals who are best qualified to make the decisions necessary to achieve the Government’s monetary policy objectives: the Governor of the Bank of England, the two deputy governors, two members of the Bank with responsibility for monetary policy and market operations, and four external members who are appointed by the Chancellor. All appointments are made on merit.

[Jonathan Edwards]

Diolch, Mr Speaker.

Regardless of the result of the referendum in Scotland, it seems inevitable that the devolved Governments will have more fiscal responsibility over the coming years. Fiscal empowerment needs to be matched with monetary policy-setting reform. Does the Minister agree that one option would be to appoint representatives of the devolved nations—and, arguably, representatives of territories outside the United Kingdom that use sterling, such as the Channel Islands and the Isle of Man—to the MPC, to ensure that monetary policy is formulated on the basis of the economic requirements of every part of the sterling zone? Would that not truly represent a partnership of equals?

[Sajid Javid]

No, I do not agree with the hon. Gentleman. I think the MPC is constituted in the right way. He knows that monetary policy is not a devolved responsibility, and there are no plans to change that.

[Mr Douglas Carswell (Clacton) (Con)]

As well as ensuring more diversity in terms of gender, will my hon. Friend ensure more diversity of opinion and outlook in the membership of the MPC? Specifically, may we have a few free market economists who recognise that cheap credit is a consequence of economic success, not necessarily a cause of it?

[Sajid Javid]

I like the contribution my hon. Friend makes to Parliament so I hope that he is not applying to join the MPC. I agree, however, that when appointments are made on merit, diversity is important.

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

I wonder if the Minister can tell us why there have been no women on the MPC since June 2010. Why has the Chancellor not appointed a single woman to the MPC over those last four years, and does the Minister agree with Labour that it is time to put that right?

[Sajid Javid]

Appointments to the MPC should always be made on merit and—[Interruption.] Diversity is, of course, always an important consideration. Factors in decisions on appointing external members to the MPC include looking at career training and background as well as ethnicity and gender. [Interruption.] The Government would like to see more women on the MPC and will encourage them to apply. [Interruption.] It is also worth noting that four women have already been part of the MPC.

[Stephen Mosley (City of Chester) (Con)]

Following on from the previous question, how will the Government be encouraging more women to apply for jobs on the MPC?

[Sajid Javid]

Whenever there is a vacancy on the MPC, the Government look at encouraging women to apply and will often invite women to apply to ensure that we can make our best efforts to increase diversity.

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

7. What plans he has to enhance the role of the Office for Budget Responsibility.

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

The OBR has a broad remit, set out in the charter for budget responsibility, to examine and report on the sustainability of the public finances. Autumn statement 2013 announced that over the course of 2014 the OBR will be initiating an external review of its core publications. Following the outcome of the review, the Government will hold their own review of the OBR at the start of the next Parliament.

[Tom Greatrex]

I thank the Minister for his reply, but as the Chief Secretary’s own leadership manoeuvres now require him to suggest a different policy from his Conservative colleagues in government, and after more spurious and out-of-touch attacks by the self-styled Bromsgrove bully boy, please will he explain precisely why he objects to the OBR undertaking an audit of all party manifestos prior to the election?

[Mr Gauke]

I might refer the hon. Gentleman to what his colleague the noble Lord Eatwell said when this matter was debated in the House of Lords on 8 November 2010. [Hon. Members: “Who?”] Labour Members are saying, “Who?” He is actually the Labour spokesman in the House of Lords. Lord Eatwell said:

“we on this side agree…to confine the activities of the OBR to consideration of the impact of government policies alone. I am sure it is right that the OBR should not become embroiled in political controversy.”—[Official Report, House of Lords, 8 November 2010; Vol. 722, c. 16-17.]

[Mr Stephen Hepburn (Jarrow) (Lab)]

8. What steps he has taken to reduce the cost of living for people on low incomes.

[The Financial Secretary to the Treasury (Sajid Javid)]

The Government are protecting the incomes of low-income households by freezing fuel duty and council tax and taking 2.7 million people out of tax by freezing the personal allowance. The best way to raise living standards is to stick to the Government’s long-term economic plan, which delivers for all. Britain is back on the path of prosperity: the economy is growing, the deficit is falling and jobs are being created.

[Mr Hepburn]

Now that’s nonsense. How on earth can this Government—the lot of them—justify this, let alone lie straight in bed at night, when they have given the top 1% richest people in this country a £100,000 pay rise and at the same time they are impoverishing the real workers of the country—the postmen, the nurses, the teachers—by making them up to £2,000 a year worse off?

[Sajid Javid]

The hon. Gentleman should put an end to the petty party politics and focus on the facts. He talks about the richest 1%, but the richest 1% are paying almost 30% of total income tax, which is the highest share ever. The richest 5% are paying almost 50% of total income tax. The only way this country will recover from Labour’s great recession is if we stick to our long-term economic plan, which is delivering for all.

[Christopher Pincher (Tamworth) (Con)]

Is not creating more jobs the best way to help the lowest paid? Of the 200 businesses I have polled in my constituency, 83% say that they are optimistic about the future and want to expand to create more jobs. Would not the best way to help them be to lower their taxation so that they can create those job opportunities?

[Sajid Javid]

Of course my hon. Friend is right; the best way for anyone to raise their living standards is through having an economy that creates more paid employment. That is why we should welcome the fact that more than 1.3 million jobs have been added to our economy over the past four years.

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

The Minister is not having the best of days today, and I wonder whether I could help him by inviting him and the Chancellor to come to Coventry, where I could introduce him to many families in my constituency who are on very low wages and, despite both parents working, finding it very hard to make ends meet. Is he aware that the singular achievement of this Government, and this Treasury, has been to create a new social class—namely, the working poor?

[Sajid Javid]

The hon. Gentleman talks about people not having the best of days, but he should reflect on the policies of the Government he supported and on how many lives were destroyed by the great recession, which was the deepest in 100 years. The best way to raise living standards is to stick to our long-term economic plan. If we abandoned it, many more people would suffer.

[Ian Swales (Redcar) (LD)]

A good way to help those on low incomes is to take less money from them in tax. Next month, the Liberal Democrat manifesto target of a £10,000 income tax threshold will be achieved. Will the Minister help the low paid further by increasing that threshold to £10,500?

[Sajid Javid]

This Government are proud that we have been able to cut taxes for the lowest paid in society. In fact, people working full time on the national minimum wage will have seen their income tax bill more than halved because of this Government, and I welcome my hon. Friend’s support for that policy.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

Now we know that the Minister thinks there are no women in Britain good enough to be on the Monetary Policy Committee, let me ask him another question. The Chancellor’s Budgets and spending reviews have hit women, particularly those on low incomes, a staggering four times harder than they have hit men. Millions are struggling with the cost of living crisis, and people are on average £26 a week worse off since 2010, so why are the Chancellor’s top-rate tax cut and marriage tax break giving 80% of the benefit to men? Just take a look at the Government Benches. Are this Government completely out of touch with the women in this country?

[Sajid Javid]

Because of this Government’s economic plan to deal with the record budget deficit that the previous Government left behind, more women are employed in our economy than at any other time in history, and 1.4 million women have been taken out of income tax altogether because of our personal income tax allowance increases.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

9. What assessment he has made of the effect of freezing fuel duty on the price of petrol.

[The Economic Secretary to the Treasury (Nicky Morgan)]

The autumn statement confirmed that fuel duty would be frozen for the remainder of this Parliament. As a result of this Government’s actions, average pump prices are now 13p a litre lower than they would have been if we had implemented the previous Government’s fuel duty escalator, and they will be 20p a litre lower by the end of this Parliament.

[Stephen Metcalfe]

Does my hon. Friend agree that this Government’s changes to fuel duty and the scrapping of next months’ increase proposed by the previous Government provide more proof that it is this Government who are helping hard-working families to tackle the cost of living and supporting our long-term economic plan?

[Nicky Morgan]

I thank my hon. Friend for that question. He is entirely right. In total, the Government will have eased the burden on motorists by £22.5 billion over this Parliament, to 2015-16. By the end of this Parliament, it will cost the typical motorist £11 less to fill their car.

[Helen Goodman (Bishop Auckland) (Lab)]

Will the Minister explain to my constituents in rural west Durham why, of the 10 areas that the Treasury wants to have a special rural fuel duty discount, eight are in Liberal Democrat constituencies, with two in the constituency of the Chief Secretary?

[Nicky Morgan]

There are strict criteria that towns have to meet in order to be included in the list. If other towns want to be considered, they need to supply the relevant evidence. The criteria include the pump price threshold, the cost of transporting fuel and the population density. If the hon. Lady’s constituents would like to submit evidence to the European Commission, they are welcome to do so.

[Duncan Hames (Chippenham) (LD)]

Motorists in my constituency are relieved to have had fuel duty frozen, but they want the Government to go further. Now that pump prices have fallen from their peak levels, how does what the Government have achieved with fuel duty rates compare with a policy of a fair fuel stabiliser?

[Nicky Morgan]

The point made by the hon. Gentleman, which his constituents will appreciate, is that freezing fuel duty has enabled people to spend more money on themselves and their families in other ways. He needs to understand that fuel duty cuts and freezes since Budget 2011 have had to be fully funded through tax rises or spending cuts elsewhere. Any further action needs to be considered in the context of the wider public finances.

[Sammy Wilson (East Antrim) (DUP)]

Tomorrow, the FairFuelUK campaign will be handing in a petition calling for a reduction in fuel duty. Given that the National Institute of Economic and Social Research has indicated that a 3p reduction would increase jobs by 70,000 and GDP by 0.2%, does the Minister agree that such a measure should be given priority in the forthcoming Budget in order to help the economy on its way and to promote growth?

[Nicky Morgan]

That is a matter for the Chancellor. The hon. Gentleman will appreciate that the Government regularly receive a range of representations on fuel duty. We hear what he and many other campaigners, not only on fuel duty but on many other issues, have been asking for.

[Guy Opperman (Hexham) (Con)]

20. I want to address the point about the rural fuel duty cut. We have been beneficiaries in Northumberland, as one of the two constituencies not necessarily in Scotland. I can state the reason simply: merely look at a map and identify the fact that the least amount of people are there.

[Nicky Morgan]

I thank my hon. Friend for his question. I am delighted that his constituents will benefit from the rural fuel rebate scheme, which means that, as I said, his constituents will have more money to spend on themselves and their families in other ways.

[Sheila Gilmore (Edinburgh East) (Lab)]

10. What steps he plans to take to assist people who earn below the income tax threshold.

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

The question was about help for those who earn below the income tax threshold. It is worth pointing out that 2.7 million people who earn below the current income tax threshold would be above the threshold but for the actions of this Government to raise the personal allowance. Those in work who do not pay income tax have benefited from, for example, frozen fuel duty and council tax, and reduced energy bills. The Government are also introducing universal credit to ensure that work always pays.

[Sheila Gilmore]

I thank the Minister for his reply, but I am not sure that the 17% of employees—4.6 million people—who are already under the income tax threshold will be impressed by the main policy being to increase the threshold yet again. The problem for these people is that the tax cuts that have taken place already have been more than wiped out by reductions in working tax credits and child tax credits. What targeted help will the Government give to such people, such as extended free child care or serious work on earnings thresholds being increased?

[Mr Gauke]

I have to remind the hon. Lady of the state of the public finances when we came to office and the very difficult circumstances that we face. The fact that 2.7 million people have been taken out of income tax as a consequence of our policies shows the emphasis by the coalition Government on supporting those in low-paid work.

[Richard Fuller (Bedford) (Con)]

The Minister is absolutely right about the commitment of our Liberal Democrat and Conservative colleagues in increasing the tax threshold. What consideration has my hon. Friend given to looking similarly to national insurance contributions?

[Mr Gauke]

My hon. Friend makes an important point. We have to look across the board, and what we see is a Government who, in difficult circumstances, while taking difficult decisions to reduce the deficit, have made every effort to ensure that work pays. I am sure that we will continue to do so.

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

12. What comparative assessment he has made of trends in the annual rates of inflation and growth in average earnings since May 2010.

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

The fall in living standards is a consequence of the economic crisis. In its latest forecast, the Office for Budget Responsibility expects real earnings to rise in 2014 and growth to strengthen in every year of the forecast. The only way to raise living standards is to stick to our long-term economic plan and to deliver a recovery that works for all.

[Mr Cunningham]

Despite this Government’s policies making the economic situation worse, the hard work of the skilled labour force and small businesses has started to lift the economy. Is the Minister aware that in the west midlands GDP per capita is 18% below the UK average and wages are well below the national average? Real wages fell by 5% from 2010 to 2013; wages are not rising and people in the west midlands are struggling to make ends meet. What are the Government doing about that? They should stop blaming the previous Government because it is their policies that caused this in the first place.

[Mr Gauke]

The reality is that the west midlands, as with other parts of the country, is growing strongly. Today’s figures show that manufacturing has grown by 3.3% over the past year, and that is particularly important for the west midlands. The reality is that we are moving into a period of growth, and that is encouraging. Further work needs to be done, but the truth is that this Government have succeeded in turning around the mess that we inherited.

[Jessica Morden (Newport East) (Lab)]

13. What discussions he has had with energy-intensive industries on measures to be included in the 2014 Budget.

[The Economic Secretary to the Treasury (Nicky Morgan)]

I meet a range of companies and industry bodies to discuss energy issues and their impact on business. The Government take the competitiveness of energy-intensive industries very seriously. We have made a package of £400 million available until 2015-16, and we continue to explore ways to ensure that our energy-intensive industries remain competitive.

[Jessica Morden]

Last week, job losses were announced at Orb steelworks—a subsidiary of Tata—in my constituency. The combination of high energy prices, the carbon floor price and the renewables obligation has hit the UK steel industry much harder than its competitors. Will the Minister acknowledge that there needs to be a package of measures in the forthcoming Budget, because unfortunately what the Government have done so far has just not been enough?

[Nicky Morgan]

First, may I express my sympathy for anybody whose job has been either lost or put at risk? I know that Wales Office Ministers have been in close contact with energy-intensive industries in Wales and have had discussions with both the Department for Business, Innovation and Skills and me about these issues. The Government recognise that the rise in energy costs is a key issue for many businesses, especially given the lower than expected European carbon price, and we will of course listen to all concerns expressed in relation to these issues.

[Andrew Griffiths (Burton) (Con)]

14. How much beer duty was paid by people in each income quintile in each year from 2008 to 2013.

[The Economic Secretary to the Treasury (Nicky Morgan)]

Budget 2013 ended the beer duty escalator and reduced the tax on beer by 1p a pint to help support pubs. The Office for National Statistics publication “The effects of taxes and benefits on household income” provides estimates of the amount of beer and cider duties paid by households in each quintile, and in 2011-12 households in the bottom quintile paid £87 while households in the top income quintile paid £208.

[Andrew Griffiths]

Given that we have seen revenue to the Treasury increase, £400 million-worth of investment by the industry in jobs and growth, and brewers and businesses benefiting from the cut in beer duty, does the Minister agree that the Chancellor was right to scrap Labour’s hated beer duty escalator? Given that a trip to the pub is one of our few pleasures in life, does she accept that it would be folly to increase beer duty in the Budget?

[Nicky Morgan]

Of course I agree with the actions that my right hon. Friend the Chancellor of the Exchequer took at the last Budget, and I congratulate my hon. Friend on the campaign he ran on behalf of pubs, both in his constituency and across the country. I have seen the confidence that the reduction in beer duty has given to Britain’s pubs. The public finances already assume that beer duty will rise by less than other alcohol duties this year, after we ended that beer duty escalator. As my hon. Friend will know, we keep all taxes and duties under review.

[Kevin Brennan (Cardiff West) (Lab)]

In the interests of balance, will the Minister acknowledge that although a penny off a pint through beer duty is welcome, the Chancellor’s VAT changes added 5p to the price of a pint? Will she simply acknowledge that fact, as VAT does not get mentioned by Ministers at all?

[Nicky Morgan]

I understand the point the hon. Gentleman is making, but the fact is that, given the changes introduced in last year’s Budget, the cost of a typical pint has come down. We should all be very grateful for that.

[Greg Mulholland (Leeds North West) (LD)]

I warmly welcome the Treasury decision to scrap the beer duty escalator, give a cut in beer duty and support a freeze this year, but although that has been hugely helpful to brewing, it has not helped many pubco pubs, which face a pubco price escalator. The price of an 11 gallon keg of Fosters for a pubco pub has gone up four and a half times more than it has for a free-of-tie pub, with the same inflation and the same duty. Will the Government stop this scandal with a fair deal for our local?

[Nicky Morgan]

The hon. Gentleman knows well that the Department for Business, Innovation and Skills has been reviewing that whole matter. It has had many thousands of responses to its consultation, and we await the response, which will be published in due course.

[John Howell (Henley) (Con)]

15. What recent steps he has taken to reform the banking sector.

[The Financial Secretary to the Treasury (Sajid Javid)]

Through the Financial Services (Banking Reform ) Act 2013, the Government have brought forward the most significant reform to the banking sector in a generation. We have ring-fenced vital everyday banking, including investment banking, and introduced depositor preference and bail-in to ensure that taxpayers are not on the hook when a bank fails.

[John Howell]

Does my hon. Friend agree that under the previous Government’s system of financial regulation, there were no clear channels of accountability, and that by putting the Bank of England back in charge, it will be better placed to take full responsibility for financial stability?

[Sajid Javid]

I agree with my hon. Friend. Under the previous Government’s system of financial regulation, there was a lack of clarity over who was responsible for financial stability, so when the alarm bells were ringing, no one was listening. We have reformed the system of financial regulation to address those failures by placing responsibility for financial stability firmly with the Bank of England and creating two newly focused financial regulators, the Prudential Regulation Authority and the Financial Conduct Authority.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

If the Royal Bank of Scotland asks for permission to pay bonuses of more than 100% of salary—while, incidentally, its subsidiary NatWest closes branches in my constituency—will the Chancellor just say no, or is he as out of touch as the bank appears to be?

[Sajid Javid]

The failed regulation by the previous Government that led to Government ownership of RBS also produced a system of governance that is done on an arm’s length basis. Those are commercial decisions for RBS. If the hon. Gentleman wants to make representations to it, he can do so through me if he wishes.

[Richard Fuller (Bedford) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Chief Secretary to the Treasury (Danny Alexander)]

The core purpose of the Treasury is to ensure the stability and prosperity of the UK economy. I can tell the House today that I am publishing the first review of compliance with the rules on tax arrangements for public sector workers. Compliance with those rules has been high, but details have been passed to Her Majesty’s Revenue and Customs in 125 cases where appropriate assurances have not been received, and I have imposed financial sanctions on two Departments that have breached the rules. The intention is to send a clear message that everyone should pay their taxes.

[Richard Fuller]

Since 2010, unemployment in Bedford has come down and average weekly earnings have gone from below the national average to above the national average thanks to the commitment of local people to making difficult decisions in tough economic times and the Government’s commitment to their long-term economic plan. Does the Minister agree that the biggest risk, given that the British Chamber of Commerce is forecasting higher growth next year, is for us to abandon that plan and adopt the policies of the shadow Chief Secretary to the Treasury, who has never had a proper job in his life?

[Danny Alexander]

I welcome the success in the Bedford economy. I am sure that it was just an omission by the hon. Gentleman that he did not mention the Liberal Democrat mayor of Bedford in his list of those responsible. He is right that it is the long-term economic plan of this Government that is ensuring that the economy is on the right track, and the worst thing we can possibly do is to step away from that plan.

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

May I ask the Chief Secretary to the Treasury about a proposal I made last autumn to allow the Office for Budget Responsibility independently to audit the spending and tax commitments in the manifestos of the main political parties? That proposal, which will require legislation, already has the support of the Chair of the Treasury Committee. Will the Chief Secretary and his party join a cross-party consensus to make that happen ahead of the next general election?

[Danny Alexander]

The idea is well worth further consideration. What I am worried about is the pressure that it would place on the OBR, which is a new organisation that has only recently taken on responsibility for forecasting the public finances. I worry that in the first election, when it has those responsibilities, the OBR might find it difficult to carry through that function. None the less, the idea is well worthy of debate, because the British people need to know that what every party says is what it means. I respectfully suggest to the shadow Chancellor that spending a bank bonus tax 10 times over does not meet that test.

[Ed Balls]

The Chief Secretary will know that that statement about the bank bonus tax is entirely out of date, which is why the Chancellor does not want the OBR to audit our policies. I understand his reluctance. After all, the party that pledged in its manifesto not to raise tuition fees and to stop the Tory VAT bombshell has something to fear from an OBR audit. On the other hand, there was some encouragement. I urge him this time, on this one issue, to try to persuade the Chancellor to take a different view, to change his mind and do the right thing by voting in the Finance Bill for this important change. It can and should be done. Let not the Liberal Democrats be a roadblock to this important reform.

[Danny Alexander]

If the right hon. Gentleman wants to see the influence of the Liberal Democrats in this Government, he can look at the £10,000 income tax personal allowance, which will be reached this April. He can look at the decisions we have taken to rein in higher rate tax relief on pension contributions. He can look at the increase in capital gains tax. He can look at the record number of apprenticeships in our economy. He can look at the work we are doing together, as a coalition Government, to clean up the mess that his party made and ensure that this country is back on the right track economically.

[Simon Hart (Carmarthen West and South Pembrokeshire) (Con)]

T2. Does the Chief Secretary agree that the Welsh Government’s refusal to take on tax- varying powers damages their economic credibility?

[Danny Alexander]

I have not heard a definitive refusal directly from the Welsh Government, although I have heard some very disappointing comments from members of the Labour party in this House. The changes we are proposing to make following the Silk commission, including the devolution of income tax powers to the Welsh Assembly, subject to a referendum, constitute an important package of reforms that will strengthen the accountability of the Welsh Government as well as the economic levers available to them.

[Fiona O'Donnell (East Lothian) (Lab)]

T4. I hope that the Chief Secretary thinks that I am a woman who merits an answer. Given that he has recently found his mojo, can he tell us whether he supports any changes to the way in which levels of child poverty are calculated?

[Danny Alexander]

I think that the hon. Lady merits answers to all her questions. There is a good case for retaining the existing measures, but it is also important that we have an understanding, through the measures we use, of the wider factors that influence child poverty—the barriers to life chances and so on. I do not propose getting rid of the existing measures, which I think are important, but supplementing them with further measures to ensure that we have policies which are properly targeted to deal with the long-term causes of child poverty would help us all.

[Mel Stride (Central Devon) (Con)]

T3. Next month many thousands of my constituents will benefit from the £10,000 income tax personal allowance, something that I am proud has been introduced by a Conservative-led Government. I urge my right hon. Friend to ensure that in the upcoming Budget we continue to press down on personal tax and try, wherever possible, to freeze or reduce fuel duty, which is extremely important for my rural constituents.

[Danny Alexander]

I share the hon. Gentleman’s pride in the fact that the coalition Government have delivered that important measure, which is supporting 26 million working people in this country with an income tax cut worth about £700 a year. My pride is enhanced by being a member of the party that proposed it at the 2010 election.

[Julie Hilling (Bolton West) (Lab)]

T6. In 2011 the Chief Secretary said that anyone who wanted to cut the top rate of tax was living in cloud cuckoo land. Is it not clear that that is exactly where he and his friend, the out-of-touch Chancellor, now live?

[Danny Alexander]

In the Budget in which we reduced the 50p rate to 45p, we introduced measures that raised five times more from the wealthiest people, including, for example, the annual tax on enveloped dwellings, which is a mansion tax for tax dodgers in respect of people from overseas who own properties in this country. It raised five times more than we expected at the time.

[Bob Blackman (Harrow East) (Con)]

T5. I congratulate my right hon. Friend on the slow but steady progress on improving the economy. Does he agree that the most important thing now is to ensure that people have more money in their pockets to spend as they wish and that therefore the threshold for the 40% rate of tax needs to be increased so that middle earners can see the benefit of this Government?

[Danny Alexander]

It is of course important that we make sure that people have more money in their pockets, and it is particularly important that that help is focused on those on lower earnings. That is why we have focused our attention on raising the income tax personal allowance. We have also, for example, frozen fuel duty and taken steps on energy bills. It is worth pointing out that increasing the personal allowance benefits 40p rate taxpayers by the same cash amount as basic rate taxpayers.

[Nick Smith (Blaenau Gwent) (Lab)]

T9. Eight hundred and twenty-five young people are desperately seeking work in Blaenau Gwent. This month, I will be asking local employers to sign up to offer work experience. Why does not the Chief Secretary listen and introduce a compulsory jobs guarantee to give these young people a chance?

[Danny Alexander]

I warmly welcome what the hon. Gentleman is doing to encourage employers in his constituency to offer work experience. The evidence of this Government’s work experience programme is that work experience is more effective than the future jobs fund and a great deal cheaper to deliver, so it is more cost-effective. He is on the right track in what he is doing in his constituency; his Front Benchers are on the wrong track.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

T7. A few weeks ago, I joined my hon. Friends the Members for Harlow (Robert Halfon), for Northampton South (Mr Binley) and for Waveney (Peter Aldous) in presenting to the Chancellor a Boost Bingo petition with over 300,000 signatures, calling for a cut in bingo duty. [Hon. Members: “House!”] Will the Minister give to those who, day in, day out, enjoy bingo—including those who like to shout “House!”—comfort from this House that their concerns are being addressed in the forthcoming Budget?

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

At this point in the year, all I can say to my hon. Friend is, “Let me take that as a further Budget submission.”

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Does the Chief Secretary agree that to have a successful financial services sector we must have bankers, lawyers and accountants whom everyone trusts, and that we need a new value system of trust in these institutions? If so, will he have a careful look at the behaviour of Grant Thornton and the way in which it treats clients and businesses in this country?

[Danny Alexander]

I certainly think that a new culture is needed in the banking sector. That was the basic reason why the Parliamentary Commission on Banking Standards was established. It produced a very wide-ranging report, and many of its recommendations were taken forward by this House in the Financial Services (Banking Reform) Act 2013. I think that that will lead to a better culture. I suggest that the hon. Gentleman raises his specific concerns with the Department for Business, Innovation and Skills.

[Penny Mordaunt (Portsmouth North) (Con)]

T8. The maritime taskforce will report shortly, setting out the opportunities and actions to make Portsmouth and the Solent area the heart of the maritime industry in the UK. Will the Economic Secretary work with me to ensure that we can capitalise on the report’s findings to make that vision a reality?

[The Economic Secretary to the Treasury (Nicky Morgan)]

I know that my hon. Friend has worked extremely hard on this. I congratulate her and Admiral Stephens on the excellent work that the taskforce has been doing. It is producing more than a vision for Portsmouth; it is producing a set of clear actions that will enable the Solent area to achieve its ambitions in maritime, marine and manufacturing. Considerable sums will be invested in those sectors. Portsmouth has a Minister and a cross-Government team to help it to secure what it needs, and the Treasury will do all it can to enable the taskforce’s remit to be realised.

[Bill Esterson (Sefton Central) (Lab)]

The Government’s own figures show that net lending to small and medium-sized enterprises has fallen since the funding for lending scheme was introduced, as confirmed by businesses in my constituency. Does the Minister accept that the scheme has totally failed Britain’s small businesses?

[The Financial Secretary to the Treasury (Sajid Javid)]

The hon. Gentleman is right to raise this issue. Lending to small businesses has been a matter of concern to this Government. There are potentially some issues of competition in the market, and that is why we welcome today’s update by the Office of Fair Trading on its SME market study. The funding for lending scheme has helped. It has increased net lending by the participating banks by more than £10 billion during its first phase, and I think we are right, in its second phase, to focus it on SMEs only.

[Tessa Munt (Wells) (LD)]

I am sure that Members of this House will welcome the overwhelming support in the European Parliament this morning in voting in favour of open public registers of company beneficial ownership and voting against exempting trusts from public disclosure. Will the Minister apply pressure to his colleagues to ensure that the Council adopts the same rigorous position as Members of the European Parliament?

[Mr Gauke]

We will look at that proposal. There is a need to ensure that systems that apply across the European Union have a proper understanding of how trusts work in the UK and some of the challenges that exist. Trusts are not companies, and there are more difficulties in dealing with them than there are in dealing with a public register for companies.

[Mark Tami (Alyn and Deeside) (Lab)]

The banks keep telling us that they are lending more to small business, but the reality on the ground seems to be very different. In particular, what are this Government doing about the excessive level of charges, which means that even when loans are available they are often not taken up?

[Sajid Javid]

I hope that the hon. Gentleman supports the funding for lending scheme, which has not only led to more money in the banking system going to companies and households, but reduced the cost of lending. He may also be aware of today’s update from the OFT. I suggest he takes a good look at it, because it is worth reading.

[Neil Carmichael (Stroud) (Con)]

Part of the long-term economic plan is the drive to improve skills, which is relevant to my constituency, where manufacturing is important and growing. Does the Chief Secretary agree that it makes a big contribution to driving up productivity?

[Danny Alexander]

I totally agree with my hon. Friend and I congratulate him on the work he has done in his constituency to promote the take-up of apprenticeships. The fact that there have already been 1.6 million apprenticeship starts during this Parliament compared with about 1 million during the previous Parliament shows the additional emphasis, even in these tough financial times, that this Government are putting on making sure that young people have the right skills for today’s economy.

[Kelvin Hopkins (Luton North) (Lab)]

Britain has a growing and enormous trade deficit with the rest of the European Union, which is overwhelming evidence, if it were needed, that we have an inappropriate exchange rate, which means that we are in effect exporting more than 1 million jobs. When will the Government develop a sensible exchange rate policy?

[Danny Alexander]

Monetary policy is, rightly, the preserve of the independent Bank of England. I would also point the hon. Gentleman to the fact that 3.5 million jobs in this country are linked to British membership of the European Union. That is why I believe so strongly that Britain should stay a full member of the European Union.

[Mike Freer (Finchley and Golders Green) (Con)]

In my constituency, homes worth £1 million or £2 million are not mansions, but family homes. Will my right hon. Friend confirm that we will not tax homes bought by hard-working families by introducing something called a mansion tax?

[Danny Alexander]

Although it is unlikely that such a tax will be introduced in this Parliament, I remain a strong advocate of an additional levy on high-value properties. I think that is an appropriate way to ensure that the further deficit reduction that this country still has to go through over the next few years is handled fairly and that everybody makes a contribution.

[Meg Munn (Sheffield, Heeley) (Lab/Co-op)]

Many people on low incomes rely on public transport, yet the cost of bus fares continues to rise. What measures is the Treasury looking at to help those people who desperately need effective public transport?

[Danny Alexander]

The principal step we are taking is ensuring that people have more money of their own in their pockets when they go out to work. Cutting income tax for working people is putting £700 back in the pockets of 26 million workers in this country. That helps people with many of those financial pressures, as does freezing council tax, reducing fuel duty and the help we are giving on energy bills. I am sure that if the hon. Lady raises the subject at Transport questions, Ministers might have more to say about it.

[George Freeman (Mid Norfolk) (Con)]

Last year a record half a million new businesses were created—the highest annual rate since records began. In the face of the anti-business rhetoric of Labour, does my right hon. Friend agree that, by reducing red tape, boosting access to entrepreneurs’ relief and making it easier to take on an apprentice, this Government are making high-growth SMEs the engine of our long-term economic plan?

[Danny Alexander]

I totally agree with my hon. Friend. The Labour party does not seem to understand that Governments do not create jobs and growth; it is hard-working businesses and hard-working people in this country who do that. That is why so much of our policy on tax, regulation, infrastructure investment and skills is devoted to ensuring that this country has the best environment for businesses to invest and create jobs. That is the only way our economy will recover sustainably.

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

The Chief Secretary’s tax threshold boasts would carry more weight if he had not broken his VAT promises at the last general election. Does he agree with the Treasury’s own figures which show that an average family now pay more than £1,350 extra in VAT since he put it up?

[Danny Alexander]

I agree with the figures that show that the mess the hon. Gentleman’s party made of the economy cost every household in this country £3,000. That is something he should be ashamed of and for which he should apologise.

[Several hon. Members]

rose—

[Mr Speaker]

Order. I am sorry to disappoint colleagues. There are some appetites that remain unsatisfied, but such is the nature, I fear, of Treasury questions in particular.

We come now to the 10-minute rule motion and when Members have filed out of the Chamber in a seemly way, the hon. Member for Heywood and Middleton (Jim Dobbin) can enjoy the rapt attention of the House.

Heanor Memorial Hospital (Derbyshire)

Tuesday 11th March 2014 Commons Chamber

Nigel Mills (Amber Valley) (Con)

- Hansard - - Excerpts

It is with great pleasure that I present this petition, signed by more than 3,000 of my constituents, showing the extent of feeling about the closure of the Heanor Memorial hospital.

The petition states:

The Petition of the people of Heanor and the wider Amber Valley area,

Declares that the Heanor Memorial Hospital provides essential services to the community of Heanor, and that the Southern Derbyshire Clinical Commissioning Group should allocate sufficient resources to ensure that the hospital is once again able to open and serve the people of Heanor.

The Petitioners therefore request that the House of Commons urges the Government to take all possible steps to ensure that Heanor Memorial Hospital remains open and that health provision in Heanor is enhanced not diminished.

And the Petitioners remain, etc.

[P001331]

Co-operative and Social Enterprise (Development)

Tuesday 11th March 2014 Commons Chamber

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

12:34

[Jim Dobbin (Heywood and Middleton) (Lab/Co-op)]

I beg to move,

That leave be given to bring in a Bill to require the Secretary of State to ensure that each Local Enterprise Partnership (LEP) has at least one board member who is a co-operative or social enterprise business specialist, and that LEP plans make specific reference to development of co-operatives and social enterprises; and for connected purposes.

As both a Labour and a Co-operative Member of Parliament who represents Heywood and Middleton in the borough of Rochdale, where the co-operative movement was first formed, I am especially pleased to introduce the Co-operative and Social Enterprise (Development) Bill. In my borough, we are proud of our links to the co-operative movement, and as a co-operator, I am proud of my role with the Co-operative party.

The Co-operative party has added much to the labour movement and to public policy for many years, and I hope that that will always remain the case. I know that such a feeling is shared by many on the Opposition Benches, and perhaps even by some Government Members. As we have seen, the co-operative movement has been through an extremely tough time, and we are still plotting our course to calmer waters. I hope that the measures in the Bill will go a little way towards ensuring a bright future for co-operation and social enterprise in this country. As co-operators, we passionately believe that the values and principles underpinning co-operatives and mutuals offer an alternative business model—a more ethical and democratic way for businesses to operate—and that more must be done to ensure a level playing field for their establishment and development.

My Bill would place new duties on the Secretary of State to ensure that local enterprise partnership boards benefit from at least one co-operative and social enterprise business expert or practitioner. That is important, as the needs of co-operatives and social enterprise can be particular to their unique business models. We need new co-operative and social enterprises to flourish across the country. Ensuring that LEP boards have this type of business experience would enhance the quality of the LEP and the chances of kick-starting new co-operative and social enterprise organisations, which would in turn provide valuable training and job opportunities to constituents such as mine. I hope that it will be enacted ahead of the next round of plans.

The Bill’s second measure would ensure that LEPs’ published plans report specifically on relative successes in the development of co-operatives and social enterprises throughout the life of the LEP. That should ensure that boards do not lose sight of an important and valuable sector. It would provide an important opportunity for co-operatives and social enterprises to engage with the process and for their aspirations and the particular hurdles they must scale to be listened to properly. It would then be possible accurately to measure the success of the LEP.

The economic recovery will be sustainable only if it benefits each and every region of the UK and spans all sectors of our economic life. Opposition Members believe that that is not made easier by the coalition Government’s decision to scrap regional development agencies, which were replaced by LEPs. We are still relatively early in the development and implementation of LEPs, but they and their plans have come under significant scrutiny recently. My right hon. Friend the Member for Wentworth and Dearne (John Healey), writing for the Smith Institute, stated that, despite the lofty ambitions of the Deputy Prime Minister,

“Three years on…LEPs lack both resources and capabilities, with negligible budgets and no real powers to lead economic development in their areas.”

In its excellent report on local enterprise in 2013, the Business, Innovation and Skills Committee highlighted the concern that LEPs were failing to achieve the right balance and diversity of membership on their boards. It called on the Government to give more guidance to ensure that the right information was provided. I hope that the measures in my Bill will go a little way towards ensuring that those recommendations are met.

During the development of my Bill, I contacted co-operatives of all sizes around the country. I thank them for the time that they took to respond. I also thank organisations such as Social Enterprise UK for the helpful material that they provided. The responses have been overwhelmingly supportive of my aims. Many co-operatives have told me that they are struggling to engage with or be understood by LEPs. I hope to continue this work in the coming months.

Michael Heseltine’s report, “No Stone Unturned”, set out a bold—some would say rhetoric-heavy—vision of economic localism. I hope that the measures I have set out will start to make a real difference in the development of co-operatives and social enterprise within that vision.

Question put and agreed to.

Ordered,

That Jim Dobbin, John Pugh, Mr David Crausby, Fiona Bruce, Mrs Mary Glindon, Mr Joe Benton, Mr Gareth Thomas, Meg Munn and Mrs Linda Riordan present the Bill.

Jim Dobbin accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 6 June, and to be printed (Bill 179).

Care Bill [Lords]

Tuesday 11th March 2014 Commons Chamber

[2nd Allocated Day]

Further consideration of Bill, as amended in the Public Bill Committee

New Clause 34

The Health and Social Care Information Centre: restrictions on dissemination of information

‘(1) Chapter 2 of Part 9 of the Health and Social Care Act 2012 (the Health and Social Care Information Centre) is amended as follows.

(2) In section 253(1) (general duties), after paragraph (c) (but before the “and” after it) insert—

“(ca) the need to respect and promote the privacy of recipients of health services and of adult social care in England,”.

(3) In section 261 (other dissemination of information), after subsection (1) insert—

“(1A) But the Information Centre may do so only if it considers that disseminating the information would be for the purposes of—

(a) the provision of health care or adult social care;

(b) the promotion of health.”.

(4) After section 262 insert—

“262A Publication and other dissemination: supplementary

In exercising any function under this Act of publishing or otherwise disseminating information, the Information Centre must have regard to any advice given to it by the committee appointed by the Health Research Authority under paragraph 8(1) of Schedule 7 to the Care Act 2014 (committee to advise in connection with information dissemination etc).”’.—(Dr Poulter.)

Brought up, read the First time, and Question proposed (10 March), That the clause be read a Second time.

12:43

Question again proposed.

[Mr Speaker]

I remind the House that with this we are discussing the following:

Amendment (a) to Government new clause 34, in subsection (3), after ‘of’, insert ‘improving’.

Amendment (b) to Government new clause 34, in subsection (3), after ‘adult social care’, insert

‘; and if it has satisfied itself that the recipient is competent to handle the data in compliance with all statutory duties and to respect and promote the privacy of recipients of health services and adult social care.”.’.

New clause 25—Misuse of data provided by the Health and Social Care Information Centre: offence—

‘(1) A person or entity commits an offence if they misuse, or negligently allow the misuse of information they have requested and received from the Health and Social Care Information Centre.

(2) “Misuse” means—

(a) using information in a way that violates the agreement with the Health and Social Care Information Centre;

(b) using information in a way that does not violate the agreement with the Health and Social Care Information Centre, but that gives rise to use that is outside the agreed limits of use; or

(c) using information supplied by the Health and Social Care Information Centre in such a way as to allow or enable individual patients to be identified by a third party.

(3) A person who is guilty of an offence under subsection (1) is liable—

(a) on summary conviction, to an unlimited fine;

(b) on conviction on indictment, to imprisonment for not more than two years or a fine, or both.

(4) An entity who is guilty of an offence under subsection (1)—

(a) is liable to an unlimited fine; and

(b) must disclose the conviction on all future applications to access data from the Health and Social Care Information Centre.’.

Government amendment 8.

Amendment 29, in clause 116, page 100, line 29, after ‘Authority’, insert

‘and the Secretary of State’.

Government amendments 17, 18, 15 and 16.

[Dr Sarah Wollaston (Totnes) (Con)]

I love medical data. They have undoubtedly saved my life and the lives of almost everybody in the House. Medical data, particularly big data, allow us to identify which drugs and procedures work and which do not work. They enable us to pick up the rare side effects of medications that have recently been released on to the market before they can wreak the kind of havoc that we have seen in the past. They enable us to identify which are the good hospitals and which are the failing hospitals. They allow us to identify which clinicians need serious retraining and from which clinicians the public need protection.

I would argue that evidence-based medicine is one of the greatest advances of our age. Evidence-based medicine works a lot better if we have access to big data. I state for the record that I do not intend to opt out. I hope that the Government will use the six months that we have to mount a clear campaign to the public that sets out just what the possibilities are.

I also feel that some of the concerns about releasing big data to pharmaceutical companies are misplaced. We need our pharmaceutical companies to be able to access those data, and there is a virtuous circle. We know that if we attract more research to the UK, not only will that benefit our universities, it will create more employment.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

My honourable colleague from the Health Committee mentions pharmaceutical companies. Does she feel it is appropriate—we touched on this in the first part of the debate—that insurance companies have access to hospital data? As I said yesterday, BT now has access to our hospital patient data on the cloud systems in the United States. Does she think that those uses are concerning, and what should we do about them?

[Dr Wollaston]

That is absolutely correct and I will come to those points later in my remarks. The public did not expect to see their records uploaded to insurance companies, specifically where that resulted in higher premiums for many people.

We have a virtuous circle of improving access to data for our universities and creating high-quality jobs within the industry. If we can attract research to this country, and it is carried out among the UK population, the results from that research will be more relevant to the British population. Also, less research will be carried out in circumstances that are ethically questionable or with oversight that may not be up to the standards we expect in this country, or that sometimes exploits people in developing countries and where we cannot be sure of the accuracy and reporting of that research.

This is a virtuous circle, but I am afraid it has unfortunately been broken by the oversight and some of the arrangements that have taken place in NHS England and the Health and Social Care Information Centre. It is frankly beyond me that nobody has assumed responsibility for destroying the trust in what should have been the most exciting advance that would have benefited countless hundreds of thousands of people, not only now but in the future.

On the six-month delay, I call on the Minister to set out clearly how we will campaign to inform the public of the benefits of the proposal, but also of the risks. We have seen a rather patronising approach that has assumed the public will not notice or care about those small risks, but they are there and we must set out clearly what they are and how they will be addressed and minimised. There is much more we can do to minimise those small risks.

Of course we need transparency about past errors; the performance of NHS England and the Health and Social Care Information Centre in the Health Committee was disappointing. I am glad that on its website, NHS England has now clarified that Sir Nick Partridge, former chief executive of the Terrence Higgins Trust, will conduct an audit of all previous data releases by the NHS information centre—the predecessor body. We are also expecting the release on 2 April of all the data released by the current body. I understand that that will set out the legal basis for those releases, but also their purpose, and that goes to the heart of my amendment.

We must have clear penalties for breach, not only in the provisions in the Bill, but across the whole NHS and social care sector. The Minister will know that in practice, if somebody wants to snoop on someone’s personal medical data, there are far easier ways to do it. He will also know that the penalties are derisory. In a well-publicised case in December 2013, a finance manager at a general practice had been deliberately snooping on the records of thousands of patients within the practice, and focusing—rather disturbingly—on one young woman he had gone to school with and her family. Those were repeated breaches of her and her family’s privacy in a really toxic way. That individual was fined only £996. The public need to be clear that there will be severe penalties not only for individuals who deliberately breach privacy, but for companies. A fine of £996 for an insurance company or a large body is laughable.

[Mr Jamie Reed (Copeland) (Lab)]

The hon. Lady makes an excellent case. The maximum fine for an individual breaching the data clause in the situation she describes is £5,000. Does she agree that that is not adequate?

[Dr Wollaston]

I thank the shadow Minister for making the point that £5,000 is woefully inadequate. The financial penalties—significant ones on a sliding scale commensurate with the wealth of the individuals or organisations concerned—should be set out, but I believe that people should go to prison for such data breaches. Organisations should be clearly held accountable. It should be made clear to them that, should such breaches occur, requests from them will not be looked on favourably. There should be a clear penalty. Currently, those penalties simply do not exist.

How do we explain to the public the small risks and how we will address them? One significant risk has not been covered: the powers of NHS England to direct the Health and Social Care Information Centre to collect information when it is considered “necessary or expedient”. That could include full identifiable, confidential data. Will the Minister address one point on that? I have been told that NHS England has, in meetings with senior researchers, discussed the fact that, in the next releases of care data, it plans to include free text. Free text takes us into an altogether different area, so will the Minister give categorical reassurances on it? I support the principle of a default opt-in, but might not support it if the data included free text. Free text is deeply and intensely personal data and is not coded, and the public need specific reassurances on it.

[Paul Burstow (Sutton and Cheam) (LD)]

Given that the intention, as I understand it, is to create wholly anonymised data, surely the use of that contextual information creates the possibility of re-linking to an individual’s identity. The hon. Lady is right to make that point, and I hope the Minister can reassure us, but surely that is a step too far.

[Dr Wollaston]

I agree with my right hon. Friend. Free text takes us into a different territory. People say things in free text to their doctor knowing that it will not appear in a coded form.

There are other ways in which we can improve reassurance for the public. Perhaps we could pseudonymise data before they leave the practice, which would introduce another important layer of protection. That suggestion has been made to the Minister on a number of occasions.

[Barbara Keeley]

The hon. Lady was in the Chamber yesterday when I talked about the cloud systems using NHS patient data launched in the States. What disturbed me about that was that the commercial companies involved said that the data—our patient data that they were using—included clinical data, demographics, education and income. That provided a context, and the companies could link episodes throughout a patient’s life. People would be disturbed if they understood that companies charging for usage in another country had linked their data in that way and had almost a lifetime’s coverage of people’s medical records.

[Dr Wollaston]

Linking primary and secondary care data is so important, but the purpose to which it is put is at the heart of the matter. To whom are the data released? If data are uploaded to Google—27 CDs of our database—and leave the premises, we have no control over them. We could not apply in the States the controls and sanctions I have described. It is simply not good enough to be reassured that the data will not be handled by Google staff. What is to stop them accessing the data when they have gone offshore? The hon. Lady is right to make that important point.

My amendments are about improving the situation in two ways, the first of which is on the purpose of the information. Will the Minister consider adding the word “improving”? He might be concerned that, if the wording is “improving health and adult social care”, the Bill could restrict open research. I do not agree. He will know that improving the care of patients is fundamentally the purpose of research. The amendment would therefore not restrict open research. The amendment would put beyond doubt the fact that the fundamental purpose of releasing data to, for example, insurance companies or Genomics UK, is improving care. People would see that the data release is not for a fundamentally commercial purpose to benefit a commercial organisation without a necessary link to improving care for people in the UK. Those questions should be asked at every stage of the process.

It was reassuring yesterday to hear the Minister clarify that insurance companies will be specifically excluded. However, there is no reassurance in the existing wording in respect of other organisations, including, for example, the Department for Work and Pensions. We can see how the case could be made that disseminating information to the Department for Work and Pensions is for the purposes of

“the provision of health care or adult social care”

or “the promotion of health”, which is the existing wording of new clause 34. As he knows, the longer somebody is off work with, say, lower back pain, the less likely it is that they will ever return to work. The Department for Work and Pensions could argue that disseminating information is all about improving care, but in fact, the fundamental purpose might be altogether different. If the principle in the Bill is that information dissemination is clearly about “improving” care, it would focus people’s minds on the underlying purposes when they make appraisals about whether their information should be given out. That could happen without disadvantaging primary medical research access to the information—the principle of improving care would clearly be at stake. I hope the Minister considers adding the word “improving” to the Bill.

My amendment (b) would mean that there is a reassurance in the Bill on how the data are handled by the person receiving them. We have the reassurance of the confidentiality advisory group, but including a responsibility and a duty in the Bill not just for those giving out the information but for those receiving it would be helpful. I ask anyone following this debate to hold their fire and not to be distracted by those who are rather jumping on the bandwagon on this issue and seeking to undermine the fundamental principles behind care.data. Those principles are important and we could save countless hundreds of thousands of lives in the future by having good access to medical data. But it simply will not do to gloss over the very real concerns that have been expressed. We will see the same problems arising six months down the line unless those very real concerns are addressed. To those who are following the debate, I say, “Do not opt out.” Let us give the Government, NHS England and the Health and Social Care Information Centre the opportunity to address those real concerns and to put them beyond doubt. I will not opt out and I hope that others will join me.

13:00

[Barbara Keeley]

In my early career, I worked as a systems programmer and engineer for IBM. I do not usually have much opportunity to mention that, but it is probably appropriate in this debate. I have been struck in recent weeks by how many people with an IT background—as well as those with medical backgrounds—have serious concerns about care.data and the plans of the Health and Social Care Information Centre.

The Minister was not keen to take interventions last night, so I will ask my questions now. I want to touch on the important issue of consent for the uses of patient data. As I said earlier in the debate, the hospital episodes statistics database was originally an administrative database. When did any of us sign up to having our data used to recalculate the cost of insurance cover for long-term illness? Given the points I made about the use of our confidential hospital patient data in commercially chargeable systems in the US, when did we sign up to have our data used on a chargeable basis by companies such as BT and MedRed on their cloud systems in the US? I do not recall doing that, and I suspect no one else does either. Does the Minister agree that patients should have the option of having their data used only for clinical care and for commissioning that care? If the genie is not completely out of the bottle yet, that is a question worth asking.

[Paul Burstow]

The hon. Lady is making important points about the need to be clear about what these data are used for. There is an argument that anonymised and properly controlled data have a part to play in the area of medical research. Does she think that should be out of scope, or can we have safeguards that enable it to be in scope? Understanding whether a medicine works in a particular way with a population is a very powerful use of such data. In her view, is that appropriate or not?

[Barbara Keeley]

In the concerns I am listing, I am not touching on the use of data in medical research. My concern is about the revelations we have had in recent weeks. I am citing commercial uses. Those data are being used on a chargeable basis and the companies involved seem to be crowing about it.

Can a project such as care.data guarantee that what patients sign up to now—or at any point in time—will not mean something different in future months when new datasets are gathered? The hon. Member for Totnes (Dr Wollaston) touched on some of the exciting possibilities for data, but new uses are being planned all the time. I mentioned systems in the US, but the Health Secretary recently signed a memorandum of understanding with the US Health Secretary for secondary uses sharing. The Minister last night said that he would not comment on a US system, but our hospital patient data is on those systems being used on a chargeable basis. Should patients have the right to withdraw their consent if new uses are developed that they do not approve of? The data have gone, and people are developing new uses for them, way beyond what any patient may have felt they consented to.

My right hon. Friend the shadow Health Secretary raised the issue of lack of transparency over the patient’s right to opt out. He asked about the junk mail leaflets— as they have been called—that were not even delivered to every household. What do Ministers propose to do to explain to all patients about the extraction of their identifiable personal data, and what precisely the dissent codes mean? We touched on this in our Health Committee inquiry sessions, and it was not clear, although some people thought they knew. It is a pity that Ministers have not taken the opportunity to answer the questions that were put to them in Health questions—the information changed on the HSCIC database on the very day we had Health questions in the morning.

We know that NHS England and the HSCIC can require GPs to upload patient data in an identifiable form from every GP practice in England, to be linked with the hospital episode statistics and other datasets. That is concerning enough, because it is a powerful new use of a lot of data, but the hon. Lady suggested that the HSCIC is talking about free text. That is a concern, because that is the place where people open up to their doctor and might give information that they do not want to be shared.

It is important that we know exactly how the HSCIC is funded. In the spirit of transparency, will Ministers request full disclosure of all funding sources of the HSCIC, including outside earnings from third parties for the use of data? I have talked about seeing our hospital data now being used on a chargeable basis by companies such as BT in the US. Who pays for the HSCIC’s staff? Are staff seconded to the HSCIC? Who pays the transaction costs? We have seen examples recently of networks of private organisations coming into NHS England to write and fund reports and lead consultations. Who pays for staffing and transaction costs, if it is third parties, is a key aspect of transparency.

The Health Committee has held an initial inquiry into care.data, and I and other Committee members expressed real concerns about the scheme and the impact it could have on the trust between patient and doctor. Our concerns have been compounded by news that commercial companies have been allowed to pay for NHS patient data, and use them for purposes unknown to the public. The use of our data has gone beyond our control, the data are in other countries and uploaded to cloud servers, and we do not know where they are.

[Grahame M. Morris (Easington) (Lab)]

My hon. Friend is making pertinent and relevant points. Does she share my concern about the need to tighten up on section 251 exemptions? They allow the use of identifiable data for commissioning purposes. NHS England was granted a 251 exemption last April, and that may lead to identifiable data being used at a national level, a regional level, in the area teams and in the clinical commissioning groups. Is that something that the Government should address?

[Barbara Keeley]

Indeed it is. There is a question about why CCGs have to have identifiable patient data, and there is a lot of concern about that, which my hon. Friend is right to raise.

We expressed our concerns, but they have been compounded by reports of use of data unknown to the public. The Minister was unwilling to answer the point I wanted to put to him earlier in the debate about how the HSCIC will treat organisations such as BUPA, which are insurance providers as well as providers of health and care. I hope that he will answer that question when he winds up the debate. BUPA is one example, but there are other companies that have multiple functions—some of them are straightforwardly commercial and others involve health and social care—and there is scope for confusion if those firms apply for and obtain access to the data.

The revelations we have already had show that HSCIC does not have accountability, transparency or sufficient control over releases of patient data. In our Committee inquiry, it was put to HSCIC and to NHS England that one of the ways being recommended to ensure that escapes of patient data did not happen, and to allay the fears and concerns we have expressed, was for HSCIC to run on the basis that it kept the database intact and did not download datasets outside the information centre. What it did was take in research queries and ran them. That would be much safer and that is what is done on secure systems in other places. A mechanism has been suggested and I hope it is being considered.

I appreciate the comments made by my colleague, the hon. Member for Totnes about not opting out, but a recent survey of 400 GPs found that 40% intend to opt out of the scheme because of a lack of confidence in how the data will be shared.

[Dr Wollaston]

Does the hon. Lady agree that we have an opportunity, in the next six months, to provide reassurance on some of these real concerns? Does she share my hope that GPs will change their position and that we should be doing everything we can, as opinion-formers, to encourage them to do so?

[Barbara Keeley]

I would like to think so, but I am not going to hold my breath. I think I am a lot more pessimistic than the hon. Lady. Indeed, we know that some GPs have been so alarmed that they want to opt their patients out of the scheme. They should be able to do that without penalty. It is up to Ministers, NHS England and HSCIC to rebuild that confidence, but they are not doing so at the moment. They seem to see what is going wrong as a communication or public relations problem. It is not a communication or PR problem; it is a very serious problem with regard to the integrity of what they are doing, and a lack of transparency and accountability. We cannot say that enough times.

[Sarah Newton (Truro and Falmouth) (Con)]

I have worked alongside the hon. Lady to try to improve our social care system, so does she not agree that it is important that we work on this issue so that GPs are confident about sharing data? Otherwise, how will we enable the integration of social care with the NHS in the community to give people the sort of care that I know that she and I, through all our work together in Parliament, want to see?

[Barbara Keeley]

Yes, indeed, but I cannot emphasise enough that I do not feel much confidence at the moment and I do not blame GPs for not being confident. They are, in data protection terms, the owners of their patient data. If they do not feel that their concerns have been allayed, we have some way to go. I will touch on that point in a moment.

There are fundamental concerns on how data will be shared and the Government’s amendments do not address them. The amendments would improve Government new clause 34, but broadly it offers no further protection. It seems that data could still be released to commercial bodies, such as private health care companies that are also health insurers, the pharmaceutical industry and private health care providers. We need assurances on that. As far as I can see in this debate, we have not had them.

The Government’s new clause will actually widen the dissemination of information to include the promotion of health. Promotion of health can take in all kinds of commercial companies, for example food and drink companies that say they have a public health campaign. This will cause more problems. It draws the purposes so widely that misuses would still be permitted, and even be given a statutory basis. The requirement that the HSCIC must have regard to the advice of the confidentiality advisory group is still an inadequate protection.

I have added my name to amendments (a) and (b), tabled by the hon. Member for Totnes, because they would narrow the purposes for which data can be disseminated. However, I remain concerned about the commercial exploitation of patient data. I support new clause 25, which highlights the seriousness of the offence of misusing patient data. We need a clear disincentive for institutional abuse of confidential patient data with appropriate penalties including, as the hon. Lady said, imprisonment. Imprisonment is appropriate for the abuse of confidential patient data.

13:15

The Health Committee has started looking at these issues, but I fear that our inquiry and this debate are only the start of a necessary process of scrutiny. We will need a much longer period of consultation to get the provisions right. As a stop-gap measure, I have tabled new clause 35 as a manuscript amendment, because there is a need to ensure that Parliament retains oversight of the HSCIC. The amendment would ensure that the main powers and duties in part 9 of the Health and Social Care Act 2012 that relate to the functions of the HSCIC are all made subject to the super-affirmative resolution. That would be needed until we felt more comfortable and our concerns had been allayed.

My final point is that it is vital that the relationship of trust between a patient and a doctor is not lost. To ensure that that does not happen, patients must feel that their personal information that they disclose to a doctor will remain confidential. I do not think that people have that confidence at the moment, and much needs to happen to make sure that they will.

[Jim Shannon (Strangford) (DUP)]

I was under the illusion that there would be five speakers ahead of me, but I am none the less pleased to make some comments on amendments (a) and (b) to Government new clause 34, and on new clause 25. I thank the hon. Member for Totnes (Dr Wollaston) for setting the scene, and the hon. Member for Worsley and Eccles South (Barbara Keeley) for her contribution.

My inbox, like many others, has been full with messages from various charities on different aspects of the Bill. Having sat on the Care Public Bill Committee, I can well understand many of their concerns. I received a briefing from Cancer Research UK, as many other Members did. It was informative and clear, and raised points that I do not believe have been addressed in the Bill and require greater clarity through amendment.

Along with Cancer Research UK, I warmly welcome the clauses that will introduce the Health Research Authority as a non-departmental government body. I have the highest respect for the Minister, but last night clarity on this was sought by the shadow Secretary of State, the right hon. Member for Leigh (Andy Burnham), the hon. Members for Easington (Grahame M. Morris) and for Worsley and Eccles South (Barbara Keeley) and me. With respect, I do not think that Hansard gives the clarification that right hon. and hon. Members, Cancer Research UK and Macmillan are seeking. I am hopeful that the Minister will today be able to give us that assurance and clarity.

Clarification of the amendment of section 261 of the Health and Social Care Act 2012 is needed to ensure that access to data for research is not restricted on the basis of the amendment. Cancer Research UK states:

“While we appreciate the context of this amendment and understand that the motive behind it is to avoid inappropriate disclosures of data, we are concerned that the wording of this is unclear. We would like reassurance that access to data for researchers is included under ‘provision of health care and adult social care’ and that access to research data will not be restricted on the basis of this amendment.”

I hope the Minister will be able to provide assurance on that.

Cancer Research UK is one of the largest funders of clinical research in the United Kingdom of Great Britain and Northern Ireland. It is currently running more than 240 clinical trials, which in 2012 recruited some 37,000 patients. Clinical research is important to find drugs that work and treatment that saves lives. Today in Westminster Hall, we were made aware that with better access to new cancer drugs, 5,000 more people would be alive today and that many more lives could be saved. It is essential that we develop an understanding of both new and existing treatments, and that they are offered through the NHS. We therefore want to see a regulation and governance system in the NHS that promotes and supports research, while also protecting patients.

There has been significant controversy surrounding the proposed care data upload of GP records to the Health and Social Care Information Centre and there have been at least two debates in Westminster Hall on these issues where Members have expressed their concerns strongly. Concerns have been expressed that the public have been insufficiently informed about this upload and that data may be released inappropriately, for example to insurance or marketing companies. I know the Minister replied last night to my intervention, but the doubt lingers even today within Cancer Research UK, Macmillan Care and other charities that had expressed initial concerns. I have concerns regarding the nature of the release, but it was never my intention to restrict data going to the likes of Macmillan or Cancer Research UK to aid in their fight against the scourge of cancer.

[Barbara Keeley]

I read a blog article this morning written from the point of view of people with disabilities who had real concerns about the mention of insurance providers. It is often very difficult for people with serious conditions to get insurance, even travel insurance, and the notion that their medical data are being linked to insurance information, or might be sold in future to companies that are insurance providers—even if those are health and social care providers—is a real worry for them. They are really fearful about this and I think we would see a mass opt-out by people who have that fear.

[Jim Shannon]

That is the issue, summed up in a couple of sentences. The Minister may look to his civil servants for some direction; he may have it already. If so, that is good news.

[The Parliamentary Under-Secretary of State for Health (Dr Daniel Poulter)]

May I reiterate what I said many times in my opening remarks, which I hope will be helpful to the hon. Gentleman? Clear safeguards are being put in place to ensure that the data cannot be used for insurance purposes. I give that reassurance again today.

[Jim Shannon]

Earlier I referred to Macmillan and to Cancer Research UK who, even today, are not convinced. We make these points on behalf of our constituents and the groups that lobby us.

[Dr Wollaston]

Does the hon. Gentleman agree with many commentators, including the British Medical Association, that it would help if the remit of the confidentiality advisory group could be extended from currently just looking at patient-identifiable data to looking at pseudonymised data or potentially identifiable data? That would give further reassurance that there is more oversight so that we do not see the kind of instances that many people are expressing concerns about.

[Jim Shannon]

The hon. Lady is right that the amendments would go a long way to addressing that issue. I hope that the Government take that on board.

In response to the fears expressed by many, several amendments were tabled to clarify the circumstances in which the Health and Social Care Information Centre will be able to release data. We need further clarification of the provisions concerning the dissemination of information, which suggest that the information centre may disseminate it only if it considers that doing so would be for the purposes of the provision of health care and adult social care. Clarification is needed for those charities that have contacted many of us in the Chamber. Cancer Research UK, among other worthy causes, would like reassurance that access to data for research is included on the

“provision of health care and adult social care”

and that access to research data will not be restricted on the basis of the amendment. That is the reason I support the proposals.

Cancer Research UK has said that it particularly welcomes the Government’s inclusion of proposals that would give the Health Research Authority the ability to accept guidance on how the governance of particular research should be handled by the NHS trusts and their duty to adhere to it. These proposals were added following calls from Cancer Research UK and the medical research sector, and were supported by many parliamentarians during the pre-legislative scrutiny of the Bill of which I, with others, was a part.

Governance continues to be the primary barrier to conducting research in the NHS. A single trial can take place across multiple trusts, so obtaining governance approvals from each participating trust, which may have different approval criteria and often duplicate checks, can cause significant delays. New clause 25 would put in the Bill the firmness, accountability and legislative control that is necessary to ensure that the leakage, for want of a better word, of information does not take place. It is important that we do that.

In conclusion, statistics indicate that by 2020 one in two people will get cancer. We had a debate in Westminster Hall this morning on cancer care; it was passionate and well thought out by many Members with personal experience of cancer in their families and their constituencies. The enormity of cancer and what it will do to society is why we have a responsibility in the House to ensure that we help. The need for research and new treatments for cancer is greater now than ever. We must ensure that while protecting people from the unsafe or mercenary use of personal information, we are not hampering the fantastic work done by these charities to discover more about cancer and to help more people win their personal battle. I support these amendments and I ask the House to do the same.

[Sarah Newton]

It is a great honour to follow the hon. Member for Strangford (Jim Shannon), who touched on an incredibly important point: we must not forget the people whose lives have already been transformed by research organisations’ access to data to find cures and prevention for diseases such as cancer. There cannot be anyone in the House who has not been touched by cancer, personally or within their families. It is incumbent on us all to do everything we can to create the right ecosystem and regulatory environment to enable research that will have a life-saving and transformative effect for people.

[Dr Wollaston]

Does my hon. Friend agree that early diagnosis is one the keys to improving cancer outcomes? By linking GP records to hospital records we can identify which practices were not referring early enough and help to improve that practice.

[Sarah Newton]

That is a very important point. Without the sharing of data, such patterns would not occur and we would have the much-talked-about postcode lottery whereby someone’s ability to get timed referrals and access to the best quality care depends on where they live and who their GP is.

I have the great pleasure and privilege of serving on the Science and Technology Committee. We have recently undertaken an inquiry into the regulatory framework for research into all sorts of diseases, including cancer. A very important finding of the inquiry was the essential role of sharing data. It is incredibly important that we come up with the right structures and protections to enable people, and GPs, to have confidence to enable the sharing of that data.

We should be very proud—we in the Chamber must not forget—of the fact that the UK leads the way in many areas of medical research; our universities, our trusts and our foundations are world leaders in what they do. That is very important in terms of our universities’ standing and important to a lot of high-quality jobs in our economy, not only for the benefit of citizens here but people all over the world. We must to do all in our power to maintain a system that enables money to be invested in research at our universities.

13:30

[Grahame M. Morris]

The hon. Lady is making a powerful case for the benefits of a system that would make it possible to identify hotspots of disease and carry out early interventions. I think that it could also be useful to studies of the long-term effects of medication. For instance, there was a long-term study of the link between the oral contraceptive and the incidence of particular forms of cancer. I think that such a database would be incredibly useful to studies of that kind, provided that there were the necessary safeguards in relation to privacy and access.

[Sarah Newton]

The hon. Gentleman has given yet another reason for the importance of collecting and sharing data in a way that helps to improve health outcomes. A further example is an inquiry into medical implants that was conducted by the Science and Technology Committee. Orthopaedic surgeons were able to keep a great many data relating to the types of implants used in, for instance, hip replacements, and to track, over time, the outcomes for the patients. As a result of that research, they were able to identify particularly problematic implants, and the information was shared among clinicians so that they could improve existing implants and develop new ones. Hip replacements have improved greatly as a result. It is vital that we establish frameworks that give confidence to patients and to medical practitioners, so that such information can be collected and used to improve patient outcomes.

[Barbara Keeley]

The hon. Lady clearly supports such uses of the databases, but, as I said earlier, there is concern about the fact that this is going global. There are memorandums of understanding between countries, and the granting of access to one organisation seems to lead to its being granted to others. The whole thing could easily spiral out of control. Does the hon. Lady share that concern? I do not know whether her inquiry established any way of describing the system that would enable people to understand it and have confidence in it.

[Sarah Newton]

In many of our inquiries, we have looked into international collaborations between universities that are tackling some of the greatest challenges of our time. One example is research into various forms of dementia, and proteins in the brain that contribute not only to vascular dementia, but even to vCJD. We have concluded that in order to meet the huge challenges that those diseases pose to the whole world, we need to pool our resources across universities and research communities internationally. There is an increasing number of well-established protocols and sensible ways of reassuring patients and others about the use of their data. Such international collaboration makes it more likely that we can make discoveries that will drive improvements in people’s outcomes.

Frameworks and safeguards exist to enable universities and academics to collaborate. We should be careful about the language that we use in this context, because there has been scaremongering, and people are identifying all sorts of potential uses for the data for which there is not much evidence. We have been reassured several times today that the information would not fall into the hands of insurance companies and be used in a harmful way.

[Mike Thornton (Eastleigh) (LD)]

The hon. Lady is making a strong point. I visited the oesophageal cancer research unit at Southampton hospital. As I am sure all Members know, oesophageal cancer is a particularly filthy disease, and is very difficult to treat. The lack of data made it hard for those in the unit to find out what was going on, and to have more information to work on. I am glad to say that they are getting there—slowly—but I think it particularly important to note that data of this kind can be used to save lives.

[Sarah Newton]

We could spend a great deal of time talking about different types of medical research that are enabling huge progress to be made with particular diseases. Given the time that is available to me, however, I now want to talk about another aspect of the importance of sharing medical data to improve patient outcomes—the integration of social care with NHS services. I am sure that everyone in the Chamber would say that that was a good thing. It is important for all the services in a community, whether provided by a local council or by primary or acute care authorities, to be joined up around patients and their families to ensure that patients receive the best possible care, whatever their long-term condition may be. That is a subject that we all discuss, and on which we largely agree. However, when it comes to practical implementation, what we hear in inquiry after inquiry is that the barrier that prevents the delivery of those joined-up, improved outcomes is a lack of ability to share data.

[Grahame M. Morris]

The hon. Lady is being extremely generous in taking so many interventions. I agree with her assessment of the value of integration and better collaboration, but does she agree with me that the most important way of getting primary care on board is winning the confidence of general practitioners? One suggestion from the British Medical Association is that the Department of Health should offer GPs an indemnity against the possibility of being sued by patients who feel that their data has been misused. Does the hon. Lady think that that would be a good way of rebuilding their trust?

[Sarah Newton]

I think that GPs are some of the most trusted people in our communities, and that the relationship between them and their patients is incredibly special and important. I certainly have not detected any lack of trust in GPs in the course of my constituency work.

Let me tell the hon. Gentleman about a wonderful initiative that is taking place in Cornwall as part of the Government’s pioneer programme. Many organisations in various parts of the United Kingdom applied to the Government to become integration pioneers, and 14 areas were chosen. I am very proud that Cornwall was one of them.

We are blessed with a unitary authority and a commissioning group of GPs, the Kernow commissioning group. They are full of great ideas about working in new and collaborative ways to improve health outcomes in Cornwall: they are truly dedicated individuals, with an inspiring programme of change. However, all that depends on data sharing. If patients in Cornwall are to be given the joined-up care that they need, general practices must be able to share patient information with other organisations in Cornwall—organisations such as Peninsula Community Health, a social enterprise that is delivering most of our community services alongside the acute hospital, Royal Cornwall hospital, and voluntary sector organisations. They are leading the way in our pioneer bid to enable patients to live independent, good-quality lives at home.

All that great work is underpinned by the need of all those people, working together to bring about health improvements in Cornwall, to share patient information. At present the Cornwall pilot is going very well, is growing, and is supported by both GPs and patients. That leads me to believe that the relationship between GPs and others is different from the relationship described by the hon. Gentleman, in that it is based on trust.

[Grahame M. Morris]

I apologise if I did not make my point very well. I was suggesting not that there had been a breakdown of trust between patients and GPs, but that there was a tension between GPs and the Department of Health—or, at least, NHS England—over the way in which the scheme was being administered, and that there was an opportunity for that to be corrected. That was my simple contention.

[Sarah Newton]

Again, I thank the hon. Gentleman for his intervention and I am sure we are going to hear more from the Minister, although we have already heard a great deal from him, about the sorts of reassurances GPs and other people have been seeking about how the data are going to be used.

It is essential that we address the fears and concerns that have been so well raised today, particularly by my hon. Friend the Member for Totnes (Dr Wollaston), because it is vital that people do not opt out. For all the benefits we have heard about today in improving care in our country by integrating the NHS with social care and in making sure we get the benefits from our first-class medical research, we have to have a data capture and data sharing set of regulations and behaviours among the people who are making those decisions that gives us all confidence so that we truly do derive the benefits we have heard about today.

[Several hon. Members]

rose—

[Mr Speaker]

It is very good of the right hon. Member for Charnwood (Mr Dorrell) to drop in on us. I know he was here yesterday and we must now hear from the Chair of the Health Committee.

[Mr Stephen Dorrell (Charnwood) (Con)]

Mr Speaker, I take your rap across the knuckles in the spirit in which it was intended. I apologise to the House for being late today, due to a diary conflict. I hope I can claim that I do not arrive, speak and then disappear very often. My practice is to be here for a debate and to contribute and listen to it, and I apologise to the House for not matching that standard in this debate.

I am, however, grateful for the opportunity to speak in this debate, because a discussion about the way in which the health service handles data and introduces a culture that allows a freer exchange of data around the health and care system is fundamental to the delivery of more joined-up services—ultimately between the NHS and the social care sector—which is an objective that is espoused widely, and regularly repeated, in this House.

The Select Committee had a session at which NHS England gave evidence about the position it got to with care.data and the delay that was announced two or three weeks ago. Although there is a widespread view within the Select Committee that it is important to get better at handling data in order to allow the delivery of improved services, we also had a sense that NHS England, in its handling of the care.data programme, had not respected sufficiently the sensitivities both of individual GPs, as the hon. Member for Easington (Grahame M. Morris) was saying, and—more importantly, ultimately—of individual patients about the safeguards that apply to their data and the uses to which those data can be put.

I agree with the hon. Gentleman that it is important that the six months of additional breathing space NHS England has given itself is used to address those concerns, both within the service and among patient groups, about security of data and the safeguards in respect of which data are used as a result of a more open—in the correct sense of that word—use of data around the system.

[Barbara Keeley]

As the right hon. Gentleman was not here at the time, he will not know that I moved a manuscript amendment on better parliamentary oversight of the Health and Social Care Information Centre. It seemed to me—I wonder if he noticed this, too, in our Committee inquiry—that there were a great many individuals making decisions on key issues. Questions were put to the HSCIC about the pseudonymisation of data at source, yet the answer we got back was, “Well, I’ve looked at that, and I don’t support it.” The comments were all a bit “I”, but I would like a bit more of the “We” in oversight, and not so much of the “I”.

13:45

[Mr Dorrell]

I was told a long time ago that it is important in certain circumstances in life to be careful with pronouns. It is fair to say that in the evidence we heard last week not all the witnesses were as careful as they could have been with their pronouns. However, I do not want to follow the hon. Lady too far down that road. Instead, I want to make a couple of broader points that I think are important if we are to deliver the objective of the efficient use of data within the health and care system in a way that respects the sensitivities of patients and the people who work in the system.

In the policy arena, when we talk about data and the safeguards around data, there is quite properly an instinct to be concerned about the power of information technology to make information available on a scale that was undreamt of a generation ago and to recognise that that requires proper safeguards. The default question is: what are the safeguards? That is a perfectly proper question, which has to be answered, but it is important that we do not lose sight of the benefits that can come from proper and efficient use of data.

I want to dwell on one illustration of that in the context of the health and care system. Traditionally we have been moderately good, in particular in the hospital service, at measuring episodes of care. What we have been almost completely blind about are the patterns that link one episode of care to another along an individual patient’s life journey. Care.data, as I understand it, is designed to address that weakness in a properly anonymised way, recognising that if we connect the patterns, one episode of care is often linked to another, and another and another, in that patient’s life journey. If we are to build a health and care system that is more joined-up, to use one bit of jargon, or, to use another cliché that is often repeated, treats patients or people not conditions, we need to equip ourselves with an information system that traps, and allows us to see, the experience of those people around whom we are trying to build the system.

The current information systems available to the health and care system simply leave that gap wide open. They do not connect up the individual episodes of care experienced by individual patients. They measure the numbers of people who go in for diagnostic services or the numbers of people who are treated for a particular condition or the number of attendances of care workers at home. They measure all those things, but they do not connect the individual patient-person experience through the line. Addressing that weakness is fundamental to what we are trying to do, and we must not lose sight of that in the concern we properly have about the safeguards that are required if care.data is to proceed with the public and professional support it needs.

[Paul Burstow]

The right hon. Gentleman is making an important point about why the programme has to succeed. Given that about 70% of what the NHS spends goes on the management of multi-morbidity—on people suffering from long-term conditions, often physical and mental—the ability to look at those data across the journeys people make through our care system is an essential part of good commissioning for population health.

[Mr Dorrell]

The right hon. Gentleman is 100% right. That is precisely what the care.data programme is designed to address.

[Nicola Blackwood (Oxford West and Abingdon) (Con)]

My right hon. Friend is rightly concentrating on the benefits of the programme. Sharing large datasets clearly has big research and integration benefits, but we now have a huge confidence problem with the programme. It will be beneficial only if it gets widespread buy-in from patients. What does he believe is the answer if we are to regain the public’s confidence?

[Mr Dorrell]

First, we must concentrate the rationale for the programme on to patients. Looking back at how NHS England has got itself into this position over the past few weeks and months, I have lost count of the number of times I have been told how important the programme is for research. I absolutely agree that it is important for research, but the health and care system does not exist to support research; it exists to treat and care for patients. The logic of allowing commissioners to develop joined-up services that respond to individual people’s needs—and the pattern of need based on multi-morbidity to which the right hon. Member for Sutton and Cheam (Paul Burstow) has referred—must be placed centre stage in the justification for the improved handling of data in the health and care system.

I go back to the point that this must be about treating people, not conditions. We cannot achieve that if we do not have the information to allow us to connect up the experience of the patient between one part of the system and another. In regard to the logic behind NHS England’s plans, yes there is a research argument, but—with apologies to the research scientists—it is a secondary argument. The primary argument is that we must improve the services delivered to patients and service users.

[Barbara Keeley]

The hon. Member for Oxford West and Abingdon (Nicola Blackwood) has just mentioned the need to reassure patients; that is a big concern at the moment. I have here the transcript of the information I was given in the Health Committee, in which Max Jones of the HSCIC said of the care.data programme that the GP extraction services

“took great care to make sure that we only extract the coded information in those records and not the free text notes”.

However, the hon. Member for Totnes (Dr Wollaston) said earlier that there had been discussions in HSCIC meetings about extracting free text data. Is the right hon. Gentleman as alarmed as I was to hear that? Does he agree that, in the light of the need for reassurance, we do not need such revelations, news and other bits and pieces coming at us from every direction every day to make the whole fiasco worse?

[Mr Dorrell]

I am not going to comment on whether the free text data should or should not be part of the system, or on whether the safeguards are adequate. However, I agree with the hon. Lady absolutely that the one sure way of undermining public confidence in safeguards is to change those safeguards every five minutes according to whichever witness we are listening to.

[Dr Wollaston]

My right hon. Friend made the point that the programme is for the benefit of patients. Does he agree that it would reassure people if we made it crystal clear that it was about improving care and not about systems?

[Mr Dorrell]

My hon. Friend is right, as she always is on these issues. This is about improving the care that is delivered to patients.

Getting away from the debate about data, I want to make my final point. We are repeatedly told that the system is too fragmented and has not taken advantage of the opportunities created by the proper gathering and manipulation of data—as other sectors of the economy have done—in order to reshape services around the needs of consumers. That is the opportunity that the proper handling of data provides, and it is hugely in the interests of patients that we ensure that we take that opportunity. We must take it, but we must do so with proper safeguards.

[Mr Jamie Reed]

It is a real pleasure to follow the hon. Member for Totnes (Dr Wollaston), my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley), the hon. Member for Truro and Falmouth (Sarah Newton), the hon. Member for Strangford (Jim Shannon), who made a typically excellent speech, and the Chair of the Health Committee, the right hon. Member for Charnwood (Mr Dorrell). I am really glad that the right hon. Gentleman did not miss the debate. The Health Committee did some excellent work in considering the issues before us, as we have heard during our debates yesterday and today.

I rise to speak to new clause 25 and amendment 29, tabled in my name and those of my hon. Friends. We are discussing these in light of clause 116, the Government’s new clause 34 and the dramatic events that have led to the cessation of the roll-out of the care.data scheme since we first expressed concerns in Committee about how the Government were treating the implementation of this vital project.

Let me be absolutely clear. Opposition Members—and, I am sure, most other Members—passionately want the care.data project to succeed. The failed implementation of the scheme to date is a matter of profound regret, and the shadow Secretary of State, my right hon. Friend the Member for Leigh (Andy Burnham), has offered cross-party support to help to salvage the project. We are serious about it and we want it to work. Many individuals have real and legitimate concerns relating to the use of their private medical records, but, as the academic and writer Ben Goldacre has pointed out,

“we learn how to save lives by studying huge datasets on the medical histories of millions of people. This information helps us identify the causes of cancer and heart disease; it helps us to spot side-effects from beneficial treatments, and switch patients to the safest drugs; it helps us spot failing hospitals, or rubbish surgeons; and it helps us spot the areas of greatest need in the NHS.”

He is undoubtedly right.

A growing population, an ageing population, the rise of co-morbidities and the necessary drive to improve the quality of care and the treatments available to patients mean that the success of the NHS will increasingly rely on the data to which it has access. The care.data scheme was meant to be designed to link together medical records from general practice with data from hospital activity, eventually extending to cover all care settings in which a patient receives treatment, inside and outside hospital.

The improvement of health care depends on removing the barriers between primary and secondary care, between the GP surgery and the district general hospital and between social care providers and traditional health care providers. Integration is key to meeting the needs of patients, and the availability of integrated data is central to shaping the services that will meet those needs. It is in that context that the need for the care.data project should be seen.

Given the real and tangible improvements that such a project could provide to our health care system, as well as the clear public benefits and what I believe is genuine political consensus surrounding the project, it really is inexplicable that we should now find ourselves at this point as a result of the Government’s rank incompetence in its implementation. The tragedy is not that this failure will draw political criticism, heated argument or the condemnation of campaigners outside the House of Commons; it is that it risks the project and jeopardises the benefits that it could provide. That is the real tragedy. At stake here is the means by which we can improve the lives of millions of people. Also at stake is a way in which we can serve the people of our country by easing suffering, pain and distress. This is not simply an arid, technocratic Government data collection programme. The success of the project should be the concern of every single Member of this House. Why, then, has growing public fear about the programme led to the Government having to stop its implementation for six months? There are a number of reasons for that, and our new clause and amendment seek to address the issues that have led us to this point.

It is worth noting that many of the public and professional concerns that have led to the near-collapse of this vital project were raised in Committee. Unfortunately, the Minister described Opposition Members’ concerns as a “false debate” and a “straw man”. How he must regret those words. Had he listened to the concerns expressed by many in Committee, and had reasonable attention been paid to people with no party political axe to grind, we might well have found ourselves in a position in which the care.data scheme could have been successfully rolled out on schedule. As it is, the Minister has had to table a series of amendments to the position he was defending in Committee and, only weeks after he dismissed those widespread concerns, the implementation of the care.data scheme has ground to an enforced halt.

Given the need for the care.data scheme, and its likely benefits for patients, the Government should have adopted a profoundly different duty of care for the implementation of the scheme. The collection and use of data are becoming ever more contestable public issues. Whatever the data in question, when data relating to an individual are subject to collection, collation, analysis and investigation, individuals and society at large will always ask a standard set of questions: who wants these data; why do they want them; what will be done with them; what will the effect of this be; and in whose interests is this being done?

The sensitivity around personal information is always acute, but sensitivity and anxiety around personal medical information are understandably the most acute of all. When that sensitivity is set against the widely publicised issues relating to the National Security Agency of the United States, GCHQ in our own country and the broader emerging themes relating to how Governments in modern western democracies routinely gather and use data specific to individuals, the need for a considered, calm, detailed and honest approach to care.data could not be more important.

14:00

The communication about care.data and the provision of safeguards around it were always going to be a difficult, fairly complex task. At the heart of this issue, however, is trust. It was always going to be difficult for any Government to ask the public to trust them on a matter of such sensitivity, in particular on health policy, but for this Government that notion was destroyed as soon as the reorganisation of the health service was introduced—a reorganisation that was deliberately hidden from the public before the election and which no one wanted or voted for. That duplicity probably destroyed at a stroke the notion of trust or, at least, made it exceptionally difficult to rebuild.

From such a fragile starting point and dealing with such a sensitive issue, the Government should have taken care to be scrupulously candid at every opportunity. Ministers ought not to have claimed that the Health and Social Care Information Centre would never make identifiable patient data available to third parties, whether medical research charities, pharmaceutical companies or university research programmes. Although it is true that the data will be pseudonymised, it is still possible for individuals to be re-identified from them. To claim otherwise is simply not accurate, and I suspect that Ministers know that.

Concern about how the HSCIC deals with applications for patient data and how such data will be used is now widespread. The Chair of the Health Committee has written to the Secretary of State asking for the details of which organisations have acquired medical records since 2010. The whole country will look forward to reading the detail of the Secretary of State’s reply.

In 2012, the Department for Work and Pensions tried to obtain access to confidential patient data so that they could be linked to information about employment, tax credits and benefit claims. The request was rejected. In the same year, however, the Institute and Faculty of Actuaries received the hospital records of 47 million people from between 1989 and 2010. Also, management consultants PA Consulting Group secured the

“entire start-to-finish HES dataset across all three areas of collection—inpatient, outpatient and A&E”,

and those data were uploaded to Google’s servers for use with Google’s other software. As the hon. Member for Totnes rightly pointed out, who consented to that? Perhaps the Minister can tell us when he responds.

Trust was damaged further when the Secretary of State claimed, incorrectly, that every house in the country had received a leaflet on care.data, informing them of the project, its purpose and how individuals could opt out if they wanted to. That is not true. A freedom of information request has revealed that NHS England did not ask for the leaflet to be classified as in “in exceptional circumstances”, so the leaflet has not been delivered to households registered with the Royal Mail’s door-to-door opt-out.

[Barbara Keeley]

My hon. Friend is making a good speech and laying out the issues clearly—he is talking about the junk mail leaflet that was not delivered to every household. It also did not have an opt-out form. As a member of the Health Committee, however, I am still getting queries from people who fear that even after opt-out data will still leave their GP practice to be used by HSCIC. Do we need to be assured about that as well?

[Mr Reed]

Absolutely. That is one of the real issues. As we have heard from Members on both sides of the House, absolute clarity is needed on such issues and on the data, which we as individuals own, from those who seek to provide that data to other people for other purposes. This goes to the heart of the matter, and the fundamental issue—that fundamental breach—is one of trust. My hon. Friend is absolutely right to raise that.

Trust can never be given with blind faith, but it can be built if it is based on accountability. That is what new clause 25 and amendment 29 seek to achieve. The new clause seeks to create a new, specific offence of the misuse of data provided by the HSCIC. Building on the schedule of offences in the Data Protection Act 1998, it makes it an offence to use data provided by the HSCIC for the purposes of re-identification. A person or organisation found guilty of that offence would be subject to an unlimited fine. In addition, it makes it a requirement for any organisation making applications for data from the HSCIC to disclose any previous convictions under the offence.

The purpose of the new clause is to help build public confidence in how individual patient data are used by ensuring that any person or entity who misuses the data is liable to significant criminal sanctions. Patients can then be assured that their privacy and the proper use of their medical data are of the utmost importance to Parliament, the judiciary and the NHS. The new clause would also place a duty on those convicted of misusing data to declare that conviction when reapplying for future data. In reality, barring some unforeseeable public interest, those guilty of misusing data once would be unlikely to gain access again.

In order to ensure a robust system, accountability for the use of the data must also cover those who grant permission for the data to be used. Clause 116 removes from the Secretary of State the duty to approve applications to use patient data for medical research. That is wholly and entirely wrong, and amendment 29 seeks to restore that duty.

In light of the letter from the Chair of the Health Committee to the Health Secretary, the emerging details of how patient data have been used and the rather strange pronouncement from the HSCIC that it will not say more about improper release of medical records until “later in the year”, the Secretary of State’s accountability for how patient data are used is absolutely critical. The use of patient data is a matter of huge import, and the issues surrounding it are enormous, too.

[Grahame M. Morris]

My hon. Friend is making important points and I hope that the Minister is taking note of them. Does my hon. Friend share my concern about the Minister’s assurances last night on the security of the data? The buck stops with the Health and Social Care Information Centre, not the Minister, but Ministers come and go, so it is easy to make assurances, as he might not be here next year.

[Mr Reed]

I absolutely share those concerns. We did not hear anything last night that reassured anybody who understands the Bill. Certainly, Government new clause 34 is not worth the paper that it was hastily written on, and I want to move on to that right now.

Surely it is not too much to expect the democratically elected politician who sits in Cabinet and is responsible for the national health service to be accountable for how the medical data that that service captures is used. Crucially, the Secretary of State for Health is accountable not only to this House but to the people of this country in a way that a quango cannot be and has never been. Such accountability can begin the process of building the trust necessary to ensure the success of projects such as care.data. Without that, QED, the Secretary of State is asking Parliament and the people of this country for permission to remove democratic accountability from how their confidential medical data are used. The implications for the use of patient data in any project are utterly toxic.

I said earlier that it would be tragic if the Government’s failings were to continue to contribute towards the erosion of trust in care.data. Sadly, the Bill provides scope for other regrets. Part 1 seeks to make worthwhile but modest improvements to our care system, falling a long way short of the concept of whole-person care articulated by Labour. The Government new clauses and amendments that we are now discussing, however, and clause 119—the hospital closure clause that we will discuss later—fundamentally disfigure what is without doubt a worthwhile Bill. Perhaps that shows us the two sides of the coalition in the ministerial team. We shall see. None the less, it is a cause for regret.

Trust is at the heart of Government new clause 34. Yesterday, the Minister tried to reassure the House that the new clause would provide the safeguards that people require for the protection of their confidential medical data. He demonstrably failed to do that. Challenged time and again to illustrate how his new clause would facilitate the claims he has made for it, or improve safeguards for patients, he could not do so. Next time, it might be a good idea if the Secretary of State could get the same person to write both the Government amendments and the Government press release, because the amendments and the new clause do not provide what the Government claim they will. Sadly, that erodes trust yet further.

New clause 34 has been made necessary due to the appalling handling of the care.data project by the Government and the resulting erosion of public trust. The truth is that the new clause was hastily tabled again just before the deadline for amendments because the original, botched new clause 14 did not do what the Government said it would. Guess what? New clause 34 does not do what they say it will either. Subsection (3) would amend section 261 of the Health and Social Care Act 2012 to read:

“The Information Centre may disseminate (other than by way of publication), to any such persons and in such form and manner and at such times as it considers appropriate.

But the Information Centre may do so only if it considers that disseminating the information would be for the purposes of—

(a) the provision of health care or adult social care;

(b) the promotion of health.”

Yesterday, the Minister was given numerous opportunities to explain how this provision would prohibit private health insurance companies from gaining access to our data—he could not do so. The new clause provides for entirely elastic definitions that, in practice, will have a limitless application.

What happens when a private health insurance company requests information from the HSCIC on the basis that it was going to conduct specific controlled, randomised assessments of the impact of physical activity on various age groups in order to promote and recommend appropriate physical activity to its policyholders— perhaps with a view to reducing their premiums? That is clearly being used to promote health and well-being, so how would new clause 34 stop it? It would not—under the proposed wording, it would be facilitated. Once such a company has the data, what prevents it from using them for other means? Under our new clause 25, such use would be a clear offence, but sadly the Government have offered no such safeguards.

It is no wonder the public cannot trust Ministers. Just a few weeks ago, in Committee room 9, the Minister assured me and the rest of the Public Bill Committee:

“There are strict controls about the release of potentially identifiable information; for example, that type of information would only ever be released to approved organisations for approved purposes”.––[Official Report, Care Public Bill Committee, 30 January 2014; c. 516.]

Yet these strict controls fail to appear time and again. The only comfort offered to the public is that those issues will be resolved by regulations drafted by Ministers in whom confidence and trust has been lost—that is not good enough. With that in mind, can the Minister explain who signed off the release of data covering 47 million patients that were obtained by the Institute and Faculty of Actuaries? Such issues must be addressed, and it seems likely that when he eventually responds to the Chair of the Health Committee, the Secretary of State will give cause for yet further concern about how patient data are being used.

In responding to the news about that massive data breach, a Department of Health source stated:

“The rules changed last year so this would no longer be allowed. Information like this can only be accessed now if there is a clear benefit to improving health or health systems.”

It is chaos: if the rules have already been changed, the new clause tabled in haste by the Minister is full of superfluous subsections. Why does he need to change the rules again if they have already been changed?

We have a golden opportunity to get this right. The more that patients allow their data to be used, the greater the positive effects of care.data. These issues will not be resolved today and they will not be resolved by any of the Government proposals before us. If we want care.data and schemes like it to work in the future, we need to establish trust. Getting this right will save lives. Accountability is critical when accessing and using the most sensitive personal data, and the whole House can send a message to the people of this country—that we understand their concerns, that we are serious about safeguarding their most private data and that we are determined to continue to improve our health services—by voting for new clause 25 and amendment 29.

[Dr Poulter]

I thank hon. Members for the many comments and pertinent points made during the debate, both last night and today, and I will do my best to respond to the main issues raised. In particular, I wish briefly to respond to a couple of points raised by the shadow Minister. He talked about rank incompetence, but let us remember that the previous Government wasted £10 billion on an NHS IT project that was not fit for purpose and did not work. So Government Members will take no lessons about information services in the NHS from Labour Members, given that their Government wasted £10 billion, which I would have rather seen spent on front-line patient care. Furthermore, Labour Members repeatedly raise the issue of the lack of safeguards, but they failed to put them in place when they were in government. Only this Government have put in place safeguards, doing so through the 2012 Act, which I outlined clearly in my contribution last night, and through the further reassurances provided by the proposals we are making today.

14:15

Let me deal with some of the very good contributions that have been made to the debate. My right hon. Friend the Member for Charnwood (Mr Dorrell) made a characteristically strong contribution and we should take note of it. The purposes and benefits of the care.data programme, and of joining up and properly putting together patient data, have to be a universal good. What we do not always understand in the health service is how the different parts of the system integrate and join together. My right hon. Friend made it clear that if we want to understand what good joined-up care and good integrated care look like, it is very important that we ensure we have the right data to understand that. If we want to know how we better keep people out of hospital and better look after people with multiple medical comorbidities—my right hon. Friend the Member for Sutton and Cheam (Paul Burstow) discussed that—we need to understand what good care looks like, where we can make better community-based interventions and where we can put in place better care pathways to understand what that good care looks like and ensure we improve patient care. That is one of the overriding benefits and improvements that this system will put in place, and it is long overdue.

[Liz Kendall (Leicester West) (Lab)]

We all want to see better, more integrated care, so why did Ministers not keep a closer eye on the cock-up that has been made with care.data?

[Dr Poulter]

It was very clear, as NHS England has acknowledged, that the communication exercise put forward was not ideal. That is part of the reason why we are debating the issue today. I hope I have brought further reassurance to hon. Members about the fact that the 2012 Act does put in place robust safeguards, which were not in place under the previous Labour Government. We have put in place the safeguards through that Act and through the Government amendments we have tabled.

[Mr Jamie Reed]

Does the Minister accept any responsibility for this near disastrous collapse of the care.data scheme, or is it all NHS England’s fault?

[Dr Poulter]

As the hon. Gentleman will be aware, under the 2012 Act, NHS England has responsibility for much of the operational day-to-day performance of the NHS, and NHS England has accepted responsibility for the fact that it did not communicate some of the information about care.data in the best way. But I hope that by referring the House to the safeguards we have in the 2012 Act and the additional safeguards we are putting in place through our Government amendments, we can reassure hon. Members that data will be used for the benefit of the health and care system, and for the promotion of health.

I wish now to deal with some of the good points raised in the debate and I hope to bring further reassurance to hon. Members. My hon. Friend the Member for Totnes (Dr Wollaston) rightly asked about an issue that came up recently in the Health Committee: whether data would be allowed to be passed on to the Department for Work and Pensions. The overriding purpose of any release to the DWP could not conceivably be the provision of health care or adult social care in England or the promotion of health so, no, that could not happen under the 2012 Act or under the provisions we have introduced today.

My hon. Friend also raised issues relating to the HSCIC and free text. As the hon. Member for Worsley and Eccles South (Barbara Keeley) said, it was outlined in the Health Committee evidence sessions that the use of free text had been examined and had, in effect, been ruled out—I hope that my recollection is correct on that. To give further reassurance, may I say that the HSCIC made it clear that the General Practice Extraction Service that we have in place to support the extraction of the data from those GP systems for care.data has taken great care to ensure that we extract only the coded information in those records, not the free text notes, which patients may well have shared during consultations with their GPs? In addition, a number of explicit conditions were excluded from those extractions, including issues relating to HIV/AIDS; sexually transmitted infections; termination of pregnancy; in vitro fertilisation treatment; complaints; convictions; imprisonment; and abuse by others. Clear safeguards and reassurances have been established on those issues, and I hope that reassures my hon. Friend further.

[Dr Wollaston]

Will the Minister confirm that there is no way that free text will be uploaded, either now or in the future?

[Dr Poulter]

As things stand at the moment, free text is not going to be used. That is the reassurance given by the HSCIC; it clearly does not envisage that text being used and it has given reassurances on that. That is reassuring for me and I hope it is reassuring to my hon. Friend. There are those additional safeguards in place, particularly for vulnerable patient groups, to make sure that more personal data about convictions, imprisonment and abuse by others will not be collected by the information centre.

[Grahame M. Morris]

rose—

[Dr Poulter]

I will deal first with the points made by the hon. Member for Worsley and Eccles South and then I will give way. I inferred from the hon. Lady’s remarks that she thought that GPs should be able to opt out for their patients. However, we have made it clear that it is a decision not for GPs to make on behalf of their patients but for the patients themselves. Furthermore, people can, at any time, object or change their mind, and the Health and Social Care Information Centre must respect their wishes and remove their data from records.

[Grahame M. Morris]

I am grateful to the Minister for giving way. Will he clarify the point raised by the hon. Member for Totnes (Dr Wollaston) in relation to vulnerable patient groups? Does that include patients with very rare conditions who could be identified, even from anonymised data, because they are part of a relatively small group?

[Dr Poulter]

Of course strict criteria are in place under the 2012 Act about the use of data where a patient could be identified. The Health and Social Care Information Centre cannot randomly release data that would identify patients, except where there are specific public policy reasons for doing so, such as in the event of a flu pandemic or a public emergency. There are strong safeguards in place under that legislation to protect patient data. It would be wrong of the hon. Gentleman—I know he often inadvertently misleads himself in some of his conclusions and goes around in circles in his remarks—to confuse Members and to confuse the House. The legislation is clear. He has been in many debates on the matter over the past few weeks, and strong protections are in place to protect patient confidentiality and to prevent patients from being inappropriately identified.

I do not want to be drawn into individual cases, but the hon. Member for Worsley and Eccles South also raised the issue of the MedRed BT Health Cloud, which will provide public access in the United States to 50 million de-identified patient records from the Health and Social Care Information Centre in the UK. We have clarified the matter. The data referred to are not confidential, but are published anonymous data of the aggregate population—not at patient level. The data are available freely to any member of the public or organisation via data.gov.uk. There is no conspiracy about the data; they are freely available to any one of us in this Chamber or to any member of the public.

It is worth highlighting the powers of the Secretary of State, which the shadow Minister also raised in his comments. Let me reassure the hon. Member for Worsley and Eccles South in respect of the amendment that she has tabled today. Section 245 of the 2012 Act enables the Secretary of State to direct the Health and Social Care Information Centre to establish information systems—to collect data—including systems on how to carry out that collection.

The Secretary of State can also direct the Health and Social Care Information Centre to report on any matter about its functions. If concerns were raised about the issue of free text data, which my hon. Friend the Member for Totnes mentioned, the Secretary of State could pass on directions to the Health and Social Care Information Centre.

[Barbara Keeley]

The Minister referred to my manuscript amendment on parliamentary oversight of the actions of the HSCIC. I tabled that amendment late because there is a belief that the Secretary of State and the Minister have not been asking the right questions. It has taken the Health Committee and other Members making inquiries to bring out all the issues. We need to keep on doing that, which is why I tabled that important amendment. There was not time to do it in a timely way, but that is why it was done.

[Dr Poulter]

As a Member of the previous Government, it is a pity that the hon. Lady did not take these issues more seriously at the time. It has been left to the current Government to fix the problem through the 2012 Act and the amendments that we have tabled today. That is not good enough and she knows it. It is also the case that she has not read the 2012 Act properly, because I have just outlined the section 245 powers that the Secretary of State has. That is parliamentary oversight in anyone’s terms.

Finally, let me turn to amendment 29 tabled by the hon. Member for Copeland (Mr Reed). As he has said:

“The importance of such data in medical research, and in the synthesis of new treatments and better care, cannot be overstated. In research terms, more information about how people with certain conditions react to treatments can led to better research being undertaken, which uses resources more efficiently and improves a patient’s quality of life.” ––[Official Report, Care [Lords] Public Bill Committee, 30 January 2014; c. 513.]

I completely agree with that. It is important that we uphold a person’s right to confidentiality while enabling the use of information to improve the current and future health and care of the population, with appropriate safeguards to protect confidentiality.

The Health Service (Control of Patient Information) Regulations 2002 made under section 251 of the National Health Service Act 2006 modify the common law obligations of confidentiality. It allows researchers, public health staff and other medical practitioners to access information where there is no reasonably practicable way of obtaining consent to use such information for the purposes of medical research. That is in the interests of improving patient care or in the public interest.

Amendment 29 requires the Secretary State to give approval for the processing of confidential patient information for research purposes. In January 2011, the Academy of Medical Sciences published a review of the regulation and governance of health research. It criticised the complexity of the arrangements for regulating the use of patient information, saying that they are a significant barrier to research. None of us in this House wishes to put barriers in the way of medical research. The Secretary of State has already delegated the function of the approval of processing confidential patient information for research purposes to the existing Health Research Authority special health authority. The 2002 regulations as amended by this Bill would give the new HRA this function directly.

Under this Bill, the HRA would be responsible for overseeing the ethical review of health and adult social care research. As access to patient information may involve the consideration of ethical issues, it makes sense for the HRA to make decisions on applications for access to confidential patient information for research purposes.

Robust legislative safeguards ensure approval for access to patient information for research purposes is given appropriately by the HRA. These include a condition that the HRA may approve processing of patient information for research purposes only if approval has been given by a research ethics committee, established or recognised by the HRA, and a requirement that the new HRA appoints an independent committee to provide advice on applications to process patient information. This provides continuity for the committee known as the confidentiality advisory group, which I spoke about earlier in my opening remarks.

[Sarah Newton]

rose—

[Dr Poulter]

If my hon. Friend will forgive me, I will not give way. I have only two minutes left, and I want to address some of the other points made in the debate.

The HRA was set up to streamline approvals for research. The Academy of Medical Sciences has said that the transfer of responsibility for the research use of confidential patient information to the HRA provides a good opportunity to reduce the complexity in this area of regulation and governance that has in the past led to conflicting interpretations of it by researchers, trusts, patients and other stakeholders. It brings important clarity to the people whom we care about the most—the patients and the users of our health and care services.

Given those reassurances, I hope that the hon. Member for Copeland (Mr Reed) will withdraw his amendment and that Members will feel able to support the Government’s revised clauses in the interests of bringing greater clarity to safeguard patient confidentiality in the use of health and care information.

I am also grateful to my hon. Friend the Member for Totnes and other colleagues for tabling amendments (a) and (b) to new clause 34. It is clear that we share the desire that the huge wealth of data available through the health and care information system must support research to improve health and care. Although I welcome the intention behind amendment (a), which is to clarify that data should generally be disseminated only for purposes that improve health and care, the proposed wording would have the unintended effect of closing down access to data for some wholly legitimate purposes. For example, it might effectively block the Health and Social Care Information Centre from disseminating data that could be used to ensure that a particular health care service change will not have a negative impact on current levels of safety and quality of care or, worse, on the prevention of harm. I am sure that we would all want to avoid such an unintended consequence in the wake of the Francis report and the need to use health and care data properly to expose the rare examples in our NHS and care system of care that does not meet the standards we expect.

I have done my best to address many of the concerns raised in the debate. The care.data programme is a good one that we should all support. This Government, unlike the previous Government, are ensuring that we have proper safeguards in place to protect patient confidentiality.

Question put and agreed to.

New clause 34 accordingly read a Second time, and added to the Bill.

14:30

Proceedings interrupted (Programme Order, 10 March).

The Deputy Speaker put forthwith the Questions necessary for the disposal of business to be concluded at that time (Standing Order No. 83E).

New Clause 25

Misuse of data provided by the Health and Social Care Information Centre: offence

‘(1) A person or entity commits an offence if they misuse, or negligently allow the misuse of information they have requested and received from the Health and Social Care Information Centre.

(2) “Misuse” means—

(a) using information in a way that violates the agreement with the Health and Social Care Information Centre;

(b) using information in a way that does not violate the agreement with the Health and Social Care Information Centre, but that gives rise to use that is outside the agreed limits of use; or

(c) using information supplied by the Health and Social Care Information Centre in such a way as to allow or enable individual patients to be identified by a third party.

(3) A person who is guilty of an offence under subsection (1) is liable—

(a) on summary conviction, to an unlimited fine;

(b) on conviction on indictment, to imprisonment for not more than two years or a fine, or both.

(4) An entity who is guilty of an offence under subsection (1)—

(a) is liable to an unlimited fine; and

(b) must disclose the conviction on all future applications to access data from the Health and Social Care Information Centre.’.—(Mr Jamie Reed.)

Brought up.

Question put, That the clause be added to the Bill.

14:30

Division 227

Ayes: 222

---

Labour: 214
Democratic Unionist Party: 3
Plaid Cymru: 2
Alliance: 1
Green Party: 1

Noes: 291

---

Conservative: 246
Liberal Democrat: 43
Independent: 1

Clause 109

The HRA’s Functions

Amendment made: 8, page 96, line 2, after ‘individuals’ insert

‘aged 18 or over who are’.—(Dr Poulter.)

Clause 116

Approval for processing confidential patient information

Amendment proposed: 29, page 100, line 29, after ‘Authority’, insert

‘and the Secretary of State’.—(Mr Jamie Reed.)

Question put, That the amendment be made.

14:45

Division 228

Ayes: 219

---

Labour: 212
Plaid Cymru: 2
Alliance: 1
Green Party: 1
Conservative: 1
Democratic Unionist Party: 1

Noes: 293

---

Conservative: 246
Liberal Democrat: 43
Democratic Unionist Party: 2
Independent: 1

Schedule 7

The Health Research Authority

Amendments made: 17, page 145, line 34, at end insert—

‘(c) to the Health and Social Care Information Centre in connection with—

(i) the exercise by the Centre of functions conferred in regulations under section 251 of the National Health Service Act 2006 (processing of patient information for medical purposes);

(ii) any publication or other dissemination by the Centre of information which is in a form which identifies an individual to whom the information relates or enables the identity of such an individual to be ascertained.’.

Amendment 18, page 146, line 4, at end insert—

‘8A Regulations may provide for the committee appointed under paragraph 8(1) to be required, in giving advice, to have regard to specified factors or matters.’.—(Dr Poulter.)

New Clause 6

Secretary of State’s response to a section 65 regulator’s report on an NHS foundation trust

‘In section 65KD of the National Health Service Act 2006, after subsection (1) insert—

“(1A) If the Secretary of State, in relation to the report, would be satisfied as mentioned in subsection (1), with the addition, omission and/or alteration of recommendations contained therein that the Secretary of State regards as reasonable—

(a) to secure the safety, quality or efficiency of some or all services, or

(b) in the circumstances of the case

he may accept the final report as if it had been amended to provide for the addition, omission or alteration so specified.

(1B) Where the Secretary of State has accepted the report with amendments as specified in subsection (1A), the Secretary of State must as soon as reasonably practicable—

(a) publish a notice of the decision, the amendments and the reasons for them;

(b) lay a copy of the notice before each House of Parliament.”.’.—(Jeremy Lefroy.)

Brought up, and read the First time.

[Jeremy Lefroy (Stafford) (Con)]

I beg to move, That the clause be read a Second time.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

With this it will be convenient to discuss the following:

New clause 16—Powers of local commissioners in relation to TSA recommendations—

‘(1) In section 65DA(1) of the National Health Service Act 2006 (Chapter 5A of Part 2: Objective of trust special administration) omit “objective” and insert “objectives” and omit “is” and insert “are”.

(2) After subsection (1)(a) insert—

“(b) the continued provision of such of the services provided for the purposes of the NHS by any affected trust at such level, as the commissioners of those services determine.”.

(3) After subsection 1(b) omit “(b)” and insert “(c)”.

(4) In subsection (2) of that section after “The commissioners” insert “of the trust in special administration and any affected trust”.

(5) In subsection (4) of that section after “the commissioners” add “of the trust in special administration and any affected trust”.

(6) In subsection (9) of that section after ““commissioners” means the persons to which the trust provides services under this Act” add “and the commissioners of services at any affected trust”.

(7) In section 65F insert—

“(2E) Where the administrator is considering recommending taking action in relation to another NHS foundation trust or an NHS trust which may become an affected trust, the administrator shall engage with the commissioners of services at any such NHS foundation trust or NHS trust in order to enable those commissioners to make decisions pursuant to the matters set out in section 65DA.”.

(8) In section 651(1)—

(a) after “action which the administrator recommends that the Secretary of State” insert “or the commissioners of any affected trust“; and

(b) after “should take in relation to the trust” insert “or any affected trust”.

(9) In section 65K add—

“(3) Where the final report contains recommendations for changes to be made to services provided by an affected trust, the commissioners of services at that affected trust shall make a decision within 20 working days whether they wish to undertake public and patient involvement regarding all or any of the recommendations and, if they are so minded, shall comply with any arrangements for patient and public involvement agreed by those commissioners under this Act before making any final decision concerning the said recommendations.”.

(10) In section 65KA add—

“(7) Where the final report contains recommendations for changes to be made to services provided by an affected trust, the commissioners of those services shall make a decision within 20 working days whether they wish to undertake public and patient involvement regarding all or any of the recommendations and, if they are so minded, shall comply with any arrangements for patient and public involvement agreed by those commissioners under this Act before making any final decision concerning the said recommendations.”.

(11) In section 65KB(1)(d) after “that” insert “to the extent that the report recommends action in relation to the trust in administration”.

(12) In section 65KB(2)(a) after “decision” insert “in relation to any recommendations made the in relation to the trust in administration”.

(13) In section 65O add—

“(4) In this chapter “affected trust” means—

(a) where the trust in question is an NHS trust, another NHS trust, or an NHS foundation trust, which provides goods or services under this Act that would be affected by the action recommended in the draft report; and

(b) where the trust in question is an NHS foundation trust, another NHS foundation trust, or an NHS trust, which provides services under this Act that would be affected by the action recommended in the draft report.

(14) In section 13Q(4) at the end insert “save to the extent required by section 65K(3) or 65KA(7)”.

(15) In section 14Z2(7) at the end insert “save to the extent required by section 65K(3) or 65KA(7)”.

(16) In section 242(6)(b) at the end insert “save to the extent required by section 65K(3) or 65KA(7)”.’.

This Clause ensures that all commissioners of services affected by a trust special administrator’s report have the right to define local specified services; clarifies that, save for the trust in administration, local commissioners remain the decision makers for services they commission; and restores public engagement for changes other than for a trust in administration.

Amendment 30, page 102, line 31, leave out clause 119.

Government amendments 35, 36 and 11 to13.

[Jeremy Lefroy]

I wish to speak to new clause 6, which stands in my name and those of hon. and right hon. Members from across the House.

The new clause would give the Secretary of State some discretion to amend details of the final recommendations from Monitor regarding the outcome of the administration of an NHS foundation trust. As the law stands—so I am advised—the Secretary of State must either accept or reject Monitor’s recommendations in full. If they are rejected, there is another lengthy period of reconsideration. The result is that even if the Secretary of State broadly welcomes Monitor’s recommendations but has concerns about some matters of detail, it appears that he has to reject everything.

I have tabled this new clause as a direct result of my experience representing a constituency that has undergone the very first trust special administration of a foundation trust. I hope it will also be the last—at least in its current format. It has been a hugely time-consuming and costly process, and I would not wish it on any other community, constituency or Member of this House. The new clause would slightly improve the process, but what I would much rather see is a total rethink of the way in which the basic tasks of a trust special administration are carried out, both for NHS trusts and for NHS foundations trusts.

In my view, the relevant legislation—introduced by the previous Government and continued under this one—is not fit for purpose, but that is a debate for another day. In the meantime, I simply urge Monitor and the NHS Trust Development Authority not to put any other trusts—whether they be NHS trusts or foundation trusts—into the current form of administration. I urge everybody to work together on developing a system that enables trusts that are too small, such as the Mid Staffordshire trust, to be dissolved without having to go into a rapid, short-term and wholesale redesign of services. It can be done and I am certainly willing to work with anyone who wishes to design a better system.

I will not go into the full details of the administration of the Mid Staffs NHS Foundation Trust—that is a subject for a full debate on another day—but I will simply point out that it was made a foundation trust in 2008 on the recommendation of Monitor after a lengthy process, and that it is now being dissolved in 2014 on the recommendation of Monitor after a lengthy process. In paragraph 4.269 of his inquiry report, Robert Francis says:

“There can be no doubt that the Trust should never have been authorised as an FT”,

which happened in 2008. There must be a better way of doing things.

My new clause 6 would give the Secretary of State the power to accept the broad thrust of Monitor’s recommendations in the unhappy event of any future administration, giving her or him discretion to alter their detail without having to reject them in their entirety. The new clause therefore offers the Secretary of State flexibility and discretion in what is too rigid a process. I think that any Secretary of State would welcome that. A constant theme of the Ministers whom I have heard in my short time in Parliament has been that such and such an amendment would introduce too much inflexibility into the law. I am therefore doing exactly what Ministers long for, which is to offer them such flexibility.

15:00

Of course, the law—the previous Government’s National Health Service Act 2006, as amended by this Government’s Health and Social Care Act 2012—may already provide flexibility, and my new clause may be unnecessary. While Mid Staffordshire was going through its administration, I was told that the Secretary of State had no flexibility under the law, but when he made his decision two weeks ago, he accepted Monitor’s recommendations with a welcome addition—an instruction to NHS England to review how consultant-led maternity services might still be provided at Stafford. I and my constituents have been arguing that case throughout the administration, and I sincerely hope that NHS England will see how vital it is for consultant-led services to continue in a networked form within the University Hospital of North Staffordshire NHS Trust, of which Stafford hospital will now be an important part.

[Joan Walley (Stoke-on-Trent North) (Lab)]

The hon. Gentleman is making well-informed comments about the whole issue we face. He says that the arrangements need to be looked at on another day, but surely our experience in Staffordshire and the complete confusion over a set of recommendations that have been accepted but cannot be implemented means that we ought to find some way to resolve the whole issue in this evening’s debate, not give the Secretary of State powers to close down general hospitals at random all over the country.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Ms Walley, in fairness, interventions must be very short.

[Jeremy Lefroy]

I am grateful to the hon. Member for Stoke-on-Trent North (Joan Walley) for playing an extremely important and constructive role in this whole matter. She has been very supportive, and she makes some extremely important points. We need to look at the whole issue of administration, to which I will come in a few moments.

The Secretary of State’s decision to introduce the addition has given me considerable comfort about new clause 6, which I tabled before his decision, not being necessary. He does not seem to consider himself entirely constrained by the law into only accepting or rejecting Monitor’s recommendations in full; there is clearly room for proposing changes to details while still accepting the main thrust about the dissolution of a trust.

We shall of course need to see the results of the NHS review of consultant-led maternity services. If, as I hope, they are retained as a vital part of the regional health service—together with the level 1 special care baby unit, which serves a much wider area—it is important that finances are put in place to ensure that they are sustainable. I would therefore welcome clarification from the Minister about how the Department of Health now interprets the law.

If the Secretary of State’s decision on Mid Staffordshire demonstrates that the law allows for positive changes to the details of recommendations without Monitor having to go through another lengthy and legalistic process at a time when, as in the case of Stafford, a hospital is in a very fragile state, I welcome that fact, and new clause 6 will be unnecessary. However, if the Minister wants confirmation of the flexibility set out in the new clause, I would be happy for the Government to accept it or something similar.

Finally, to return to the question of trust special administrations, I believe that they are the right way to dissolve the legal entity of a foundation trust, but they are most certainly not the right way to redesign clinical services. That is not to criticise Monitor generally or the trust special administrators in the case of Mid Staffordshire—I believe that they acted within the remit given to them by this House—but we as a House did not get it right either in 2006 or in 2012. I urge a complete rethink, starting today.

[Andy Burnham (Leigh) (Lab)]

I rise to speak to my amendment 30. When the coalition came to office, it made a series of grand promises about future changes to hospital services. The coalition agreement proclaimed:

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

GPs were to be put in the driving seat and given the power to shape local services. That was then; now we have a Secretary of State who has not just failed to stop centrally dictated closures but wants to legislate to make them much easier. What a difference four years make.

Clause 119 allows a hospital to be closed or downgraded simply because it happens to be near a failing one. It denies local people a meaningful say in those life and death decisions. It creates an entirely new route for hospital reconfiguration—top-down and finance-led. It subverts the established process in the NHS, which requires that any changes to hospitals should first and foremost be about saving lives, rather than saving money. It puts management consultants, not medical consultants or GPs, in the driving seat. By any reckoning, it represents a major change of policy from the one originally set out by the coalition.

[Dr Poulter]

If the right hon. Gentleman is so concerned about issues of financial failure, why did the Health Act 2009, through which the previous Labour Government introduced the regime, allow trust special administrators to consider only financial failure, not care failure, a fact which we are changing in the Bill?

[Andy Burnham]

The Minister anticipates me—he has hit the nail on the head. It was a different vehicle. It was a vehicle for financial and administrative reconfiguration, not service reconfiguration. In our view, those important decisions cannot be imposed on people, but should follow an established process. It should begin with local consultation, with local elected members involved in overview and scrutiny having the chance to make challenges, and then it should be referred for independent reconfiguration. That was the previous Government’s established policy, and in my view it is the right way to make changes in the NHS. As I shall explain, that is why I believe that he and his colleagues are spectacularly wrong.

[Dr Poulter]

rose—

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

rose—

[Andy Burnham]

I give way to the hon. Lady.

[Caroline Lucas]

Does the right hon. Gentleman agree that as well as being profoundly undemocratic, the measure is likely to be incredibly counter-productive? Any Government who try to use a trust special administration to impose sweeping change without proper local public engagement will face a barrage of opposition because, as he says, change should be driven by clinical arguments, not imposed top-down.

[Andy Burnham]

The hon. Lady is absolutely right. The measure risks damaging, rather than building, public trust in the whole process of changing hospitals. In the end, that is probably the most powerful argument against what the Government are seeking to do.

By any reckoning, the proposal is a major change of policy from the one set out in the coalition agreement; yet there has been no Green Paper, no White Paper, no policy document, no statement to Parliament, no proper explanation of the Government’s intentions and no justification of the extreme measures sought. Instead, on the back of a court defeat, the Secretary of State has rammed a new clause into the Bill, asking the House to give him sweeping powers over the NHS in all our constituencies without even having the courtesy to come to the House to make the argument for the changes himself. How arrogant to expect us just to rubber-stamp the powers, without even coming to explain himself. That really shows the House a major discourtesy.

The fact is that the Secretary of State has not adequately made the case for what he wants to do. Instead, Members are asked to take a leap of faith and to trust him, but that is very hard to do when we see what happened to the people of Lewisham. In standing up to this Government, they won a victory for everyone; without them, we would not be debating clause 119 today. I pay tribute to my right hon. Friend the Member for Lewisham, Deptford (Dame Joan Ruddock) and my hon. Friends the Members for Lewisham West and Penge (Jim Dowd) and for Lewisham East (Heidi Alexander), who provided superb leadership when the people of Lewisham felt incredible outrage at their trusted and valued local hospital being prised out of their hands.

[Dame Joan Ruddock (Lewisham, Deptford) (Lab)]

I am most grateful to my right hon. Friend. He should also pay tribute to the efforts of all the clinicians, GPs and health workers. It was not just down to the leaders of the community; everybody was united. That was because the decision was not about clinical standards, but was an accountant’s solution to a different problem.

[Andy Burnham]

My right hon. Friend makes a very important point. The community came forward, with clinicians standing beside ordinary people on the streets of Lewisham, to say, “This is not acceptable.” My right hon. Friend and others gave voice to that concern and brought it to this House. That incredible campaign gave heart to campaigners everywhere. She was right to put that point on the record.

[Heidi Alexander (Lewisham East) (Lab)]

The Save Lewisham Hospital campaign was terrifically important, but there was also a protection written into law in relation to the trust special administration regime. Does my right hon. Friend agree that clause 119 will today remove that legal protection?

[Andy Burnham]

I agree with my hon. Friend. That is the point that the Minister revealed in his intervention. The original power was designed for something entirely different. It was designed to deal with financial failure in a trust. It put in place measures to dissolve and rescue that trust through administrative reconfiguration. It was never intended as a vehicle for back-door reconfiguration across a whole health economy. That is where the Government got themselves into trouble. The fact that they cannot see that now, after the court has told them that they went way beyond Parliament’s original intention, reflects badly on their ability to listen.

[Dr Poulter]

rose—

[Mr Dorrell]

rose—

[Andy Burnham]

I give way to the Chairman of the Health Committee.

[Mr Dorrell]

I ask the right hon. Gentleman to reflect on what he has just said. Does he really believe that we can make the changes that are necessary, whether in an individual health institution or in a whole health economy, by looking purely at the finances, without looking at the effect that changing the financial structure needs to have on the structure of care delivery, particularly through the delivery of more integrated care, which he and I so often talk about?

[Andy Burnham]

This is where the right hon. Gentleman and I differ. I believe that we need to begin by asking whether there is a clinical case for change and build from there. Clause 119 seeks to turn things around. It starts with the financial case for change and the clinical issues come second. The previous Government established a very clear policy, advised by Sir Ian Carruthers, that the clinical case must be front and centre, and that we must build from there. Clause 119 completely subverts that.

[Dr Poulter]

The shadow Secretary of State is rewriting history. Under the TSA clause written by the Labour Government, only financial failure could be considered as part of a trust special administrator regime. That is not the case under the changes in the Bill, in which it is about patient care. The Care Quality Commission has a clear role in assuring that patient care. Will he now accept that?

[Andy Burnham]

The Minister makes my point again. The powers dealt only with financial failure. That is the point. The Government tried to misappropriate those powers and use them as a back-door route to impose reconfiguration on local communities. That is where they got into trouble. That is why the High Court said that they were acting beyond their powers and breaking Parliament’s original intention in the legislation. In his two interventions, he has made my fundamental case, which is that this is the wrong vehicle for making major changes to hospital services.

[Dr Poulter]

rose—

[Jim Dowd (Lewisham West and Penge) (Lab)]

rose—

[Andy Burnham]

I give way to my hon. Friend.

[Jim Dowd]

My right hon. Friend says that clause 119 is the result of defeat in the courts. That is true. However, the Government capitulated before the decision of the appeal court was known, just after the decision of the High Court in July. My contention—if I am able to catch your eye later, Madam Deputy Speaker, I would be happy to elaborate further—is that the Government knew from the outset that they had no legal power to do it and were just, in the way of all bullies, trying it on until somebody stopped them.

15:15

[Andy Burnham]

That is why I say, “Thank God for the people of Lewisham.” The Government may well have got away with it if they had picked on a community that does not know how to fight like my hon. Friend’s community. I say in all seriousness that they did a service for every community that is worried about its hospital services. That fight inspired everybody. He is right that the arrogance is breathtaking.

We have not had a White Paper or an explanation of why the Government have tried to misappropriate these powers. In the absence of information, mistrust is building about the Government’s intentions. Why are they doing this? It seems to many people that they would not be driving these powers through today if they did not have every intention of using them to the full. It will not have escaped people’s attention that financial problems are building in the NHS, with the King’s Fund predicting that more than one in five hospitals will end this year in deficit. The Labour party has today identified 32 communities where there are entrenched financial problems and that could be at risk of imposed change if clause 119 passes.

The Minister must answer a straight question: are any plans being worked up in the Department of Health, NHS England or Monitor to begin an administration process in any of those areas or in any other parts of the country if the clause passes? The hon. Member for Stafford (Jeremy Lefroy) made a similar point a moment ago. Indeed, he went further and said that there should not be a further administration process. I hope that the Minister will listen to that point. The House deserves an honest answer to that question today before it can be expected to give its consent.

[Mr Crispin Blunt (Reigate) (Con)]

As a constituency MP, I have seen hospitals that are well supported by their community, and which happen to be in Labour marginal seats, create powerful political forces. As a result, decisions were made by two of the right hon. Gentleman’s predecessors that materially damaged the delivery of secondary health care in my constituency. He will therefore understand why I am considerably happier with the arrangements in the Bill, which take both care and money into account. The Secretary of State will have the powers that he needs to make sense of the delivery of health care so that it is not at the mercy of the kind of decisions that his predecessors took.

[Andy Burnham]

Before the hon. Gentleman makes that argument, I suggest that he speaks to the people of Lewisham to see whether they think that the process was fair. I suggest that he goes and speaks to the people of Stafford to see whether they think that the process has been fair. I do not know how he can argue that the new process is better than the original process, whereby there was always local engagement and through which elected Members had a chance to refer matters to the Independent Reconfiguration Panel.

[Andrew George (St Ives) (LD)]

We often debate this matter in the House and we all agree in principle with the concept of reconfiguration, until it is the local hospital in our constituency that is affected. That is the conundrum. What facility does the right hon. Gentleman think the Secretary of State and the Department of Health need to overcome the fact that every MP will defend their local hospital, even though reconfigurations are clearly required?

[Andy Burnham]

The hon. Gentleman makes that argument as if there were no changes to hospitals under the previous Government. There was plenty of change, but there is a right way and a wrong way of doing things. I would argue, as I just have, that the previous way of doing things was a better way.

[Grahame M. Morris]

Will my right hon. Friend give way?

[Andy Burnham]

In a moment.

The previous Government made changes to stroke services in London just before the last election. The number of units went down from 12 to eight. That was based on a clinical case for change. We took that argument to local people and said, “Look, it will save lives if this goes through.” That is how the Department can take people with it—by building a case for changing hospital services. Clause 119 threatens to set that back, because it puts finance in the driving seat. That risks losing public trust in the case for change. That is why what we are being asked to endorse today is, in my view, fundamentally wrong.

[Grahame M. Morris]

My right hon. Friend has made his point powerfully. I was going to ask him for an example of how it is possible to make a reconfiguration that is clinically driven. He has given the example of stroke services in London. Another example is coronary services in the north-east, where an overwhelming clinical case was made by clinicians and accepted by the general public.

[Andy Burnham]

The difficult thing for me is that when I think back to some of the processes I was involved with—stroke services in London, child care and maternity services in Greater Manchester, changes to A and E across the country, Chase Farm hospital, and other places—those issues were cynically used by those on the Government Benches when they were in opposition, and it was a bare-knuckle fight to save every hospital in the land. That is what they said, whereas we made the case for change because it would improve patient safety. I would not change my tune if I was in opposition; I still believe that hospitals need to carry on changing, but as I said, I will not do that by imposing changes on local people. The right way is to explain why, and take people with us.

[Dame Joan Ruddock]

Let me give my right hon. Friend another example. I and my hon. Friend the Member for Lewisham West and Penge (Jim Dowd) both supported the closure of a local children’s hospital, and its services were moved to Lewisham hospital. When the trust special administrator looked at Lewisham hospital, children’s services were not even considered.

[Andy Burnham]

Government Members would do well to listen to my right hon. Friend because she followed that whole process in detail. If people listen carefully, she is saying that clinical evidence took second place, and the process was driven by management consultants, not by clinicians. Government Members told the House that doctors would be in charge from now on, but that was not the experience of my right hon. Friend or the hon. Member for Stafford. That is why this proposal should not be accepted by any Member of the House.

[Frank Dobson (Holborn and St Pancras) (Lab)]

My right hon. Friend says that the propositions were made by management consultants. He will be aware that those consultants were from PricewaterhouseCoopers, which was Northern Rock’s auditor and did not notice that it went broke, and KPMG, which was the auditor for Halifax Bank of Scotland and Bradford and Bingley, and did not know that they went broke. They are probably giving bad financial advice as well as clinical advice.

[Andy Burnham]

I am not sure there is much I can add to that. Why are management consultants better placed—my right hon. Friend makes the point that they are not—to make sweeping changes to hospitals in our constituencies than experts and clinicians?

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

It is always dangerous to wander into territory that is not necessarily our own, but what happens—or is likely to happen—here today, has an awful habit of happening up in Scotland tomorrow. As a consequence of the fact that the Scottish Government are perhaps the most centralist and draw in all their powers, what representations, if any, has my right hon. Friend made to his equivalent in the Scottish Parliament to find out exactly how they would go about the same business?

[Andy Burnham]

I speak to my counterpart in the Scottish Parliament on a regular basis, and we are clear that this proposal is not the way to take people with us or build support for change in the NHS. This is a way to alienate people and damage public confidence, and that is why it is so dangerous.

[Steve Baker (Wycombe) (Con)]

Will the right hon. Gentleman give way?

[Andy Burnham]

I will make some progress but I will give way to the hon. Gentleman before the end of my speech.

Let me set out more of the background, because the Minister raised it a moment ago. In 2009 I took proposals through the House to create a process that could be used in extremis to deal with a trust that had got into serious financial problems. That was a financial and administrative vehicle, not a vehicle for widespread service change across the health economy. That is why the High Court was quite correct in upholding Parliament’s original intention when it accepted the case of the people of Lewisham against the Secretary of State, and threw out his plan to downgrade a much-loved and successful hospital. At that point, common decency would have suggested that the right response to the reverse in court would have been to listen to the court and bow down gracefully. Instead, it appears for all the world as if in a fit of pique, the Secretary of State is changing the law to get his way because he can. Imagine the outcry if someone caught breaking the law could simply come along and change it to their satisfaction. We would not accept that for burglars, and we should not accept it for politicians.

[Dr Poulter]

The right hon. Gentleman is being very generous in giving way. He makes the point that, during his time in office, the regime was very limited. In the interests of consistency, I point out that page 6 of his own impact assessment for the TSA regime in May 2009 states:

“NHS Trusts…are not free-floating, commercial organisations …State-owned providers are part of a wider NHS system.”

That directly contradicts what the right hon. Gentleman has just been saying.

[Andy Burnham]

Is the Minister listening to the debate and to what I am saying? I have explained to him carefully that that was a vehicle for financial and administrative reconfiguration. Yes, a neighbouring trust might have had to come and help with a solution to carry on with the administration and the running of that trust. That is the point, and that is what he has just read out. It was never a vehicle for service change—I do not know how many times I can make that point to the Minister before he actually listens.

[Richard Fuller (Bedford) (Con)]

Will the right hon. Gentleman give way?

[Andy Burnham]

I will give way one final time, and then I will complete my remarks.

[Richard Fuller]

For clarity, the shadow Secretary of State is talking about in extremis and financial failures. What policy did he put in place for in extremis care failures, and why is it not appropriate to have others help out in such circumstances?

[Andy Burnham]

I will come on to that point, but the CQC had existing powers on care failure, and powers to move more quickly than clause 119 provides for. Adequate powers were in place to deal with the point the hon. Gentleman has just made.

In truth, it is arrogance in the extreme for the Government to be coming along today—and worse, it seriously risks damaging public trust in how change in the NHS is made. That will be the real loss if the clause is accepted. It threatens to destroy any public faith in a sense of fair process governing these crucial decisions, and any prospect of cross-party consensus on a way to make changes to hospital services.

Making changes to those services is about the most difficult decision that politicians have to make, but the fact is that hospitals need to change if we are to make services safer and respond to the pressures of an ageing society. We did not shy away from that in government, and we do not say something different now. However, there is a right way and a wrong way of going about such things.

The Government’s answer—to use a brutal administration process to take decisions above the heads of local people—is a spectacularly wrong response to a very real problem, and precisely because those decisions arouse such strong emotions, we must find better ways of involving people, not shutting them out. If people suspect a stitch-up, and see solutions imposed from on high, they will understandably fight back hard. Does the spectacle of tens of thousands of people marching in Stafford or on the streets of Lewisham not give Ministers pause for thought that this new approach might seriously set back the goal of better public engagement in the NHS?

[Steve Baker]

rose—

[Andy Burnham]

I will give way one final time, but I hope the hon. Gentleman will take on board the point that public engagement is essential if we are to have trust in the NHS.

[Steve Baker]

I am most grateful to the right hon. Gentleman and I have listened extremely carefully to what he has said. Wycombe lost its A and E under his Government. Does he seriously suggest that that change was not imposed on the people of Wycombe, or that they were listened to, engaged and approved of the change?

[Andy Burnham]

I am saying to the hon. Gentleman that the previous Government had a process at the end of which was an independent panel—the Independent Reconfiguration Panel—to take a decision on whether a proposal was right or wrong in the interests of patient safety, which was the driving principle. I will defend the changes we made to improve services. I have given him the example of stroke services in London. The Opposition are not against making change in the NHS, but we are emphatically in favour of local people in areas such as his having the ability to have their say in the process. Clause 119 seeks to drop solutions on local people from on high.

Our policy was set out in the Carruthers review, commissioned by Patricia Hewitt in 2006, which concludes:

“Reasons for change should be built on a clear evidence base of clinical and patient benefits.”

That principle guided the Darzi review towards the end of the previous Government, which put quality centre stage. The Darzi review influenced the plans for stroke services in London and others, and the difficult changes we planned to make in south-east London before the last election. A detailed consultation, “A Picture of Health”, had brought together a case for change to how services were delivered across the area. It was given formal approval before the election, but was subject to the Government’s moratorium after it.

In the space of a few years, Ministers have gone from campaigning outside hospitals to save services to campaigning for extra powers to close them down without debate. That will leave the NHS more top-down than ever before, with the patient and public voice utterly marginalised.

15:30

I want to deal with whether clause 119 gives powers to shut down services for clinical reasons. The fact is that the CQC already has power to take urgent action to shut down unsafe hospital wards or services. Nothing in the clause allows the failure at a single trust to be dealt with any quicker than it was previously. In fact, the clause extends the period the TSA can spend on drafting the report, elongating what was designed to be a very quick process.

Opposition Members are clear that the clause adds nothing, but instead takes away the patient, public and professional voice, and establishes the dangerous principle that changes to hospitals can be financially and not clinically driven. We will vote for amendment 30 to delete the clause, but we will also back new clause 16, tabled by the right hon. Member for Sutton and Cheam (Paul Burstow), which returns a degree of power to local people.

I am sorry that the Secretary of State is not here, but I ask the Minister to pass on my message to him. The NHS does not belong to him to chop and change as he pleases. It belongs to everyone. He would do well to remember that. The way to achieve change is to involve the public early on, give them a meaningful say and build confidence in the clinical case for change. Clause 119 sets back that cause and will damage already fragile confidence in hospital reconfiguration. In the end, that is the most powerful argument against it. By shutting the public out, the measure risks creating a backlash against change in the NHS when it needs to change to survive. I appeal to Members on both sides of the House to think about that and to put constituency before party when voting on this crucial measure.

[Sir Tony Baldry (Banbury) (Con)]

I have left instructions for my body to be left to Oxford university medical school, partly because there is quite a lot of it, but also because I hope that, in that way, I can demonstrate that engraved on my heart are the words, “Keep the Horton General”. When the right hon. Member for Leigh (Andy Burnham) was Secretary of State for Health, my local general hospital was threatened with the downgrading of its maternity and children’s services. We went to the health overview and scrutiny committee, which referred matters to the independent reconfiguration panel. As a consequence, we now have consultant-delivered children’s services and a consultant-led maternity service. I, too, am slightly disappointed that the Secretary of State is not here to listen to the debate, because I am concerned about the proposals as someone who has had to contest the downgrading of hospital services.

I have some questions to put briefly to my hon. Friend the Minister. The “Dear colleague” letter circulated to us gives the impression that the powers in the proposals will be used only in exceptional circumstances, when services are clinically unsafe or when a trust is financially insolvent. However, hon. Members know that many trusts will end up with a deficit this year. I need the Minister’s assurance that the measures will be used in truly exceptional circumstances. They have been used only twice so far, in Mid Staffordshire and Lewisham. However, if TSAs are to be used simply if a trust moves into deficit, rather than going into a process of health overview and scrutiny committees and the Independent Reconfiguration Panel, that is a matter of great concern.

[Dr Poulter]

I hope I can reassure my hon. Friend on that now, before my closing remarks. The right hon. Member for Leigh (Andy Burnham) did his best to conflate routine service reconfiguration, which should be clinically led in the best interests of patients, with those in extremis measures, which have been used only twice in five years. They were used only in circumstances of extreme hospital failure when patients’ lives were at risk. There is a clear distinction. I hope my hon. Friend finds that reassuring.

[Sir Tony Baldry]

I do find that reassuring, but I have a final question that I hope my hon. Friend will address when he winds up the debate. There has to be a trigger, but what will the trigger be for these extreme circumstances? In other words, what distinguishes a proposal for hospital reconfiguration, in which local people can go to the health overview and scrutiny committee and the Independent Reconfiguration Panel, from a crisis situation, such as occurred in Mid Staffordshire and may have occurred in Lewisham? We all have local hospitals and we all need to be able to explain to our constituents how we might find ourselves in the circumstances of these short-cut situations. We really need Ministers to make it clear to the House that these powers will be used in extremis, and I hope that my hon. Friend will address that point when he winds up.

[Jim Dowd]

I agree strongly with the sentiment expressed by the hon. Member for Stafford (Jeremy Lefroy) that no community should be subjected to the tender mercies of the trust special administrator regime. It is brutal, harsh, unfair, unreasonable and impervious to local knowledge or opinion.

Following the way in which most reports are presented, I shall start with my executive summary—my understanding of what happened in the South London Healthcare NHS Trust. The right hon. Member for Banbury (Sir Tony Baldry) was wrong. The special administrator was not appointed to Lewisham hospital. That is the very heart of the matter. He was appointed to the South London Healthcare NHS Trust, which is the adjoining trust, then comprising the Queen Elizabeth hospital in Woolwich, the Princess Royal university hospital in Orpington and Queen Mary’s hospital in Sidcup. He then decided to take a well-functioning, well-respected, well-performing and financially sound institution, in the shape of Lewisham hospital, and use it to deal with problems elsewhere.

In an Adjournment debate 18 months ago when the issue first occurred, I used the simile that it was like the administrator for Comet advising that the best thing to do, in the interests of Comet, was to close down Currys. That is exactly what the trust special administrator did.

[David T. C. Davies (Monmouth) (Con)]

If the hon. Gentleman believes that it is important that local people are listened to, would he care to comment on the decision by Labour’s Health Minister in Wales, Mark Drakeford, to shut down or downgrade Withybush hospital in west Wales?

[Jim Dowd]

The short answer is no, I do not wish to comment.

Lewisham was stitched up from day one. In 40 years as a public representative I have rarely come across anything so disreputable, so devious, so mendacious, so dishonest and so duplicitous as the process that was employed regarding south London health care. It started on 13 January 2012 when the then Secretary of State, the right hon. Member for South Cambridgeshire (Mr Lansley), now Leader of the House, laid an order before the House entitled the South London Healthcare National Health Service Trust (Appointment of Trust Special Administrator) Order 2012, alongside an explanatory memorandum that included the case for applying the regime for unsustainable NHS providers—the first time it had been done. There was also an additional order that extended the consultation period for the trust special administrator. As I say, it was called the South London Healthcare National Health Service Trust. When the administrator got on with his work and produced a report, it was entitled, “The Trust Special Administrator’s Report on South London Healthcare NHS trust and the NHS in South East London”. Parliament did not authorise an inquiry into the NHS in south-east London, but, by that cover, they attempted to shut down a perfectly well-functioning district general hospital in Lewisham because it was administratively more convenient.

On 16 July, Mr Matthew Kershaw was appointed as the trust administrator. I had numerous dealings with Mr Kershaw. Personally, I found him to be a perfectly reasonably, sane and sensible person, but he was commissioned by the Department to do a job. His priority, quite plainly and self-evidently, was not to decide what was in the best interests of the people of south-east London, but to do the bidding of Richmond House.

[Richard Drax (South Dorset) (Con)]

May I just clarify my concern that administrators can reach out, far beyond where we initially thought they could, into such areas as community hospitals, of which there are several in my constituency? The NHS is in such a financial mess, and getting worse, that these powers will inevitably provide a temptation to interfere more, and the Secretary of State will be able to close hospitals against the will of local people.

[Jim Dowd]

I accept absolutely the hon. Gentleman’s point. The wording of the clause is such that the powers are virtually unfettered—they are untrammelled. It does not say that an administrator can make recommendations about neighbouring trusts or nearby trusts; it says that they can make a recommendation about any trust anywhere in the entire health economy. It will be a threat to every single Members’ community willy-nilly, because it will be the new norm.

I will come on to what Lewisham experienced previously, but there used to be clinically led reconfiguration panels. This Government seem to have eschewed them. They are difficult and complicated, but they need to be so because this is a premier public service that matters so much to people in every part of this country. They are eschewing that in favour of an administrative route that will give them untrammelled powers.

[Bob Stewart (Beckenham) (Con)]

rose—

[Jim Dowd]

I give way to the gallant hon. Gentleman.

[Bob Stewart]

I thank the equally gallant hon. Gentleman and a neighbouring Member of Parliament. I, too, have never understood why Lewisham hospital had to be involved in this exercise, and I still fail to see why it has to suffer as a consequence of the failure of other hospitals that, although they are outside my constituency, affect my constituents deeply.

[Jim Dowd]

The hon. Gentleman is right. We have discussed the impact of this on our constituents many times.

I will try to shed some light on why Lewisham was put in the firing line, and why such administrative vehicles are so dangerous and antithetical to good health care. On 24 July 2012, the then Secretary of State invited the Members for Bexley, Bromley and Greenwich to a meeting in his office. That is entirely logical, because South London Healthcare Trust covers Bexley, Bromley and Greenwich. Strangely, he also invited the Members for Lewisham. My right hon. Friend the Member for Lewisham, Deptford (Dame Joan Ruddock) was unfortunately unable to attend, but my hon. Friend the Member for Lewisham East (Heidi Alexander) and I did attend.

15:45

I thought this was rather strange because if they were looking at the south-east London NHS, why not invite the hon. Members who represent Southwark and Lambeth, the other two boroughs that comprise south-east London? I think the answer is that the services provided principally in Southwark and Lambeth are provided by foundation trusts in the shape of King’s, and Guy’s and St Thomas’. Various people were there, including my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford), my hon. Friend the Member for Eltham (Clive Efford) and the hon. Members for Beckenham (Bob Stewart) and for Old Bexley and Sidcup (James Brokenshire); there were probably some others as well. There were various NHS officials including David Flory, who at the time—I do not know where he is now—was a deputy chief executive, and a woman whom I later discovered to be Hannah Farrar, who played a considerable role in the work of Mr Kershaw as the administrator and came to be roundly despised right across Lewisham for her efforts.

I remember them saying repeatedly—almost as if it were some kind of religious incantation—that “the solutions to the problems of South London Healthcare NHS Trust cannot be found solely within South London Healthcare NHS Trust.” I woke up at that moment to the notion that they were after Lewisham again and that that was the only reason we had been invited. At the margins of every constituency, people can be treated in a neighbouring health area rather than the one they are currently in, so there would be some impact there. They were signalling the fact that it was going to be a back-door reconfiguration, although the Secretary of State, in announcing the original order, said that it was not a back-door reconfiguration. In football parlance, that is the same as getting your retaliation in first. By saying that it was not going to be a back-door reconfiguration, that is exactly what it was going to be without any of the four so-called tests that the Government have much trumpeted but never used.

The key element of the four tests is the consent of local commissioners. The summer reshuffle gave us a different Secretary of State but he accepted with alacrity and enthusiasm the task that his predecessor had set out. As my right hon. Friend the Member for Leigh (Andy Burnham) mentioned, just four or five years previously Lewisham had been through a clinically led process of reconfiguration, called “A Picture of Health.” It found that there was an incontrovertible case for Lewisham to remain as a fully functioning district general hospital and for the formation of the South London Healthcare NHS Trust with the three hospitals that I have mentioned. That report was independently vetted by Professor Sir George Alberti, professor of surgery at King’s College, London, and was found to be sustainable and reliable. The decision on how health care is provided in this country should be made by a clinically led process assessed by a clinician.

For some reason, NHS London, as it once was, always had the idea that there should be only four A and Es in south-east London; St Thomas’ over the river, King’s, the Princess Royal in Orpington and the Queen Elizabeth in Woolwich. It did not want Lewisham; I do not know why it has been obsessed with that for years. It obviously saw the opportunity to dust off that idea—despite the fact that Lewisham had only recently been through a clinical reappraisal—and tried to achieve its goal.

It set out a timetable which, as the hon. Member for Stafford will agree, was pretty brisk to put it mildly for setting up the TSA South London healthcare. There were 75 working days between 16 July and 29 October 2012 for the provision of draft reports. Consultation was to run between 2 November and 13 December 2012 and the final report was to be presented by 7 January last year, with the Secretary of State making a decision prior to 1 February. He actually made the decision on 30 or 31 January. The whole thing from beginning to end was to take five or six months.

I will describe briefly how the TSA process works because, let us not forget, if this clause goes through, this could be coming to a community near you. They—and I say “they” because they come mob-handed, bringing all their own clinical advisers—are almost like the Moonies: they have a mission, a task, to bring understanding to those who are less well endowed with it than themselves. All the advisers are imported and paid for, and, together with the consultants—who, as was pointed out by my right hon. Friend the Member for Leigh, are management consultants, not clinical consultants—they set about their task.

One thing that amazed me was the astounding rate at which they were able to get through public money. It was absolutely phenomenal. The consultants—as we were told by my right hon. Friend the Member for Holborn and St Pancras (Frank Dobson), they were mainly from KPMG and PricewaterhouseCoopers—consumed over £2 million of the £5 million cost of the TSA process. The people to whom they were least likely to listen were the local clinicians, whether GPs or hospital doctors, and the local residents and patients. Those people were invited to the consultation groups—although not to the public meetings—but they were then told what they could and could not discuss. If they tried to discuss anything that was not on the facilitators’ list, they were threatened with expulsion. If that is the consultants’ idea of public engagement, it does not commend itself much to the public.

[Dame Joan Ruddock]

I want to ensure that my hon. Friend does not end this part of his speech without reminding the House that one of the things that those involved in the TSA process intended to do was sell off half the land occupied by the buildings of Lewisham hospital—and that was not in the public consultation document.

[Jim Dowd]

It is with some trepidation that I must disagree with my right hon. Friend. In fact, the figure was closer to two thirds of the estate. The scheme was so well engineered that they left the bit that we were keeping, allegedly, for whatever was going to be there—a glorified first aid post—completely landlocked. There was no access apart from via the River Ravensbourne, which is not the mode of transport favoured by most people using Lewisham hospital. Oh yes, it was all worked out well beforehand.

The public meetings following the publication of the draft report were, of course, rather more difficult to control. People were able to ask questions, although they did not receive many answers. Those who were presenting the case on behalf of the trust special administrator did not seem particularly receptive to what was being said, although on occasion, when they came up against a difficult objection, they would say “South London Healthcare NHS Trust is losing £1 million a week: £1 million that is not being spent on health care for patients.” We know that—it is self-evident—but when they were told “That is not the problem of Lewisham hospital”, and asked “Can you not understand that?” , the answer was no, they could not understand it.

That was followed by a little homily of the kind much beloved of some people: “If your domestic budget was being overspent week after week, you would need to take action, would you not?” Naturally everyone agreed, but a woman who attended the public meeting at Sydenham school said to Mr Kershaw, “If your domestic budget was being overspent, of course you would have to do something about it, but that would not include breaking into the house of the people next door and nicking all their stuff”—which is what was being proposed in south London by the special administrator.

After attending numerous meetings with Mr Kershaw and his associates, and at the other south London hospitals, I eventually concluded that—recognising that those who would be worst affected by their proposals were hardly likely to be very receptive to them—they automatically assumed that there would be opposition and hostility, and automatically factored in and discounted it, saying “Of course they are going to object to the changes, but we have a task and a mission to pursue.” The whole process was condescending, impenetrable and antagonistic. The special administrator and his acolytes and accomplices had a mission, given to them before they ever left Richmond House, which they were determined to deliver. They already knew the answer, and they were not going to bother to do anything other than go through the motions.

We owe thanks to Lewisham council, to the Save Lewisham Hospital campaign and, amazingly enough, to the High Court and the Appeal Court, whose three judges—Lords Justices Dyson, Underhill and Sullivan—within 24 hours unanimously overturned the Secretary of State’s case that he had the powers to do this. As I have said, the Secretary of State had already capitulated by then. The Government knew from the outset that this was legally questionable. They knew they did not have the powers to behave in the way they were behaving, but they basically just said, “Who’s going to stop us?” I will tell you who stopped them: the people of Lewisham and their supporters and the High Court. That is who stopped them.

This clause will make occurrences like that more, not less, likely. More communities across the country are going to be threatened and will come under the tender mercies of the TSA process.

[Andy Burnham]

My hon. Friend is absolutely right. More communities could face this threat, but is not the point that those communities would not have the ability to fight it in the way that Lewisham was able to fight and defeat it?

[Jim Dowd]

My right hon. Friend is right; that is precisely the point and that is precisely what this Government intend. I have absolutely no doubt about that; their writ will run whether people want it or not.

After all that, what is the current position of South London Healthcare NHS Trust—after that £5 million? Princess Royal in Orpington is now an adjunct of King’s College hospital. The TSA was quite happy to say the whole thing should be passed lock, stock and barrel to King’s. There was a rather unseemly squabble about the size of the bung King’s should get for taking on Princess Royal, but there was no specification about the services that should be provided there or anywhere else; that was entirely up to King’s. Queen Mary’s, which of course is not a fully functioning district general hospital, is now being managed by Oxleas NHS Foundation Trust, the primary care trust in that part of the world. Again, the TSA made no recommendations about what services, or what range of services, should be provided there.

Queen Elizabeth, which, of course, is the biggest problem in what was South London Healthcare NHS Trust, has now merged with Lewisham university hospital in the Lewisham and Greenwich NHS Trust. It is now managing a very difficult proposition; I do not dispute that for a moment. I have my doubts about whether that is the best move for the people of Lewisham, but I understand why it has been done. Yet, the board at university hospital Lewisham was prepared to enter into that agreement before the TSA even set foot in the area. So what we have now in south-east London was entirely possible by rational argument and reasoned consent without the need for the TSA and all the disruption, anguish and distress he and his acolytes have caused. I say to Members voting on this tonight, “Remember; you may not want to visit a TSA and I don’t blame you, but that won’t prevent them from visiting you if this clause goes through.”

[Paul Burstow]

I start by acknowledging the receipt of a petition handed to me yesterday, containing 159,000 signatures collected by members of 38 Degrees, expressing their concerns about the matter we are debating today. I know that a great many Members will have received e-mails about that and will have their own opinions, and I want to discuss the issues.

[David T. C. Davies]

Will the right hon. Gentleman refresh my memory? Is that the same pressure group that a few years ago was saying that the NHS was going to be privatised, which is completely untrue, and which a couple of months ago was saying that it was about to be silenced by some Bill the Government were pushing through yet is now very noisily campaigning once again? Surely this cannot be the same completely unreliable group of left-wingers with links to the Labour party, can it?

[Paul Burstow]

That was a lot of accusations and I will leave 38 Degrees to answer for itself. All I wanted to do was formally announce that it had given me this petition because, out of conscience, I thought that was the right thing to do. I want now to share my concerns about, and view of, new clause 16.

First, however, I want to reflect on what the shadow Secretary of State, the right hon. Member for Leigh (Andy Burnham), said. He made the point, on which I think there is consensus, that we should not reach the stage at which a trust special administration process is embarked on, and that we need to take every possible step to avoid that. That means that we must learn the lessons from the successful reconfigurations and reorganisations. Unfortunately, there are too few successful reconfigurations that do not lead to people mounting the barricades to oppose the change. The right hon. Gentleman referred to the example of stroke services, but such successes are few and far between. Part of the reason for that is that, historically, the NHS has not been good at engaging with its population in a way that brings them with it and gives them a feeling of being jointly involved in the process. People need to feel part of a shared endeavour and that their health services are fit for their community. That is what we need to instil in the process if we are to avoid the need to use the power that the Government are proposing.

16:00

I accept that no NHS organisation is an island. Hospitals sit in complex webs of health care, and changes to one hospital will have knock-on effects on those around it. It is therefore right, when a trust is deemed to be failing administratively, financially or clinically, that the consequences of decisions about its future should be set in that wider context. I said as much in Committee. This is what clause 119 sets out to achieve.

I also expressed concern in Committee about the arrangements for engaging the public. I suggested that local authorities, which have strategic and scrutiny responsibilities in health, should be fully engaged in the trust special administration process. I am pleased that the Government have accepted that, and tabled amendments to clause 119 in order to achieve that. However, while local authorities have a role in giving voice to the wider public interest—indeed, in Lewisham, the local authority was critical in regard to the legal challenge—I believe it is essential that the views of the public are represented in other ways as well. When the TSA process is triggered, it should be pervious to those views. That is a role for the healthwatch organisations, which this Government put in place a year or so ago. They are well fitted to discharge that role, and I am pleased that, as a result of my representations, the Government are tabling amendments to add such a provision to the Bill.

When the trust special administration process was first introduced in 2009, Labour Ministers told the House that it was to be used only as a last resort, and that must remain the position of the coalition Government today. I believe that that is the case.

[Bob Stewart]

What worries me is the trigger for the process. What level of debt would have to be achieved in order for one of these extraordinary witchfinders-general suddenly to appear in our area to sort out our hospitals?

[Paul Burstow]

The hon. Gentleman anticipates my next point. It is far from clear how the judgment should be made that a trust is failing. In my view, the gateway to the process should be a narrow one, and it should be jealously guarded. My concern is that so many trusts are sitting on top of private finance initiative debt, and that hospitals could be at risk as a consequence. That debt amounts, over time, to about £70 billion; a significant burden has been hung around the neck of the NHS. I want to ensure that we have processes that can recognise and manage that without tipping organisations into crisis unnecessarily.

[Joan Walley]

Does the right hon. Gentleman agree that trust special administrators coming in and making recommendations, as they have done in the case of Staffordshire, can completely undermine the hospitals that are being asked to take over the failing hospitals? Such a process brings about no resolution to the problem at all.

[Paul Burstow]

I think the hon. Lady will find some sympathy for that view.

Local commissioners and trusts should be responsible for sorting out difficulties that could lead to a failure. Again, it needs to be clearer what happens at the pre-failure stage, and Ministers need to work with NHS England and Monitor to set out the pre-failure regime so that it is crystal clear what needs to happen to avoid triggering the TSA process. It might be argued, as Labour did in 2009, that when an NHS trust fails, there needs to be a fast way of making decisions about its future. Those decisions might have knock-on effects, but that should not mean that one trust’s failure triggers a wholesale re-engineering of local health services without proper checks and balances and accountability. Decisions about local health services should be taken by clinical commissioning groups.

I have tabled new clause 16 because I believe that two principles established by the Health and Social Care Act 2012 deserve to be protected. The first principle is—

[Andy Burnham]

Will the right hon. Gentleman give way?

[Paul Burstow]

If I may develop my point, I shall be happy to give way to the right hon. Gentleman.

The first principle is that, in the absence of failure in the arrangements set up by local commissioners, decisions about what services should be provided at an NHS trust or an NHS foundation trust should be taken by local commissioners working within their local health economies, and should not be foisted on the local NHS from outside. This autonomy principle is reflected in the absence of any general right for the Secretary of State or NHS England to direct local commissioners about the discharge of their functions. The previous position under the Labour Government was that the Secretary of State could issue directions to primary care trusts. We did not replicate that in the 2012 Act.

[Andy Burnham]

The right hon. Gentleman has made an outstanding contribution to proceedings over the past couple of days and I pay tribute to him for that. He was centrally involved in the development of coalition health policy after the last election. Does he agree with us that clause 119 represents a major departure from some of the statements that were being made by him and by others in this House when the Health and Social Care Act was going through?

[Paul Burstow]

I am grateful for that intervention. As I develop my argument, I think the right hon. Gentleman will hear where I sit on the spectrum of viewpoints. He may be interested in what I am about to say.

The second principle is that commissioners who have successfully managed the quality and demand in their area should not have decision making taken away from them. Decision making can be removed from the trusts that are failing, and this may mean that commissioners of such bodies have to accept unwelcome changes. But local decision making should remain in place where a local commissioner and provider are working successfully together. Thus the first purpose of my new clause is to seek to place with the commissioners of services at NHS foundation trusts and NHS trusts that are not in special administration the same decision-making powers as are given to commissioners of services of NHS trusts that have been found to fail and are in special administration.

At present the Bill creates two classes of commissioner. Where there is a trust in special administration, the clause provides that commissioners of services at that trust are able to define the services that the failing trust should continue to provide. The commissioners are thus entitled to ring-fence certain services that they feel must be preserved for the benefit of local patients. They are, in effect, given a veto on the extent of changes that can be made to a troubled trust because of the statutory objectives set for the administrator. The commissioners are thus able to act to preserve local services.

However, the present text of section 65DA does not give the same rights to the commissioners of adjoining trusts. They are relegated to second-class status. Clause 119 as drafted envisages that a special administrator is entitled to make recommendations for changes at trusts other than the trust in special administration which are not approved by local commissioners. In its present form clause 119 does not provide that the commissioners of the services at trusts other than the trust in special administration enjoy the same veto over the extent of any changes as the commissioners of a trust in special administration. There is a fundamental lack of parity of esteem between the different organisations and the different commissioners in a locality. It is that inequality that I am seeking to change.

[Heidi Alexander]

rose—

[Paul Burstow]

I give way finally to the hon. Lady.

[Heidi Alexander]

I am grateful to the right hon. Gentleman. Will he explain to me whether, if his new clause had been on the statute book at the time of the south London TSA process, only Lewisham clinical commissioning group would have had a veto over services at Lewisham hospital that it was proposed to change, or whether commissioners of services at Lewisham hospital, such as Greenwich, Bexley or Southwark CCGs, would also have had such a veto? Exactly who is he talking about?

[Paul Burstow]

What I am saying is that in a situation where trusts that are not themselves in special administration are being brought into the process, the commissioners of those trusts should be given equal standing in the process. At present they are not given the same standing as the commissioner of the failing service. The commissioner of the failing service is given a greater role in determining the outcome of the process. I want to ensure that if we use this process in future, in the way the Government intend, there is a parity of esteem between all commissioners, representing the clinical interests in the area and the interests of patients.

[Heidi Alexander]

Will the right hon. Gentleman give way?

[Paul Burstow]

Forgive me, but I will not give way. I want to ensure that others have a chance to debate the clause and my new clause, and I need to make some progress.

Why therefore should responsible commissioners who have worked successfully with their local NHS trusts to produce a sustainable set of NHS services be prejudiced by the failure of a commissioner who has not secured such an outcome? Clause 119 risks penalising responsible co-operation between commissioners and providers, and it gives a veto to the potentially irresponsible. My new clause removes that inequality by providing that commissioners of services at an NHS trust that is affected by any proposed changes should be placed in the same position as the commissioner of those services covered by the administration process.

Secondly, my new clause makes it clear that, if the special administrator issues a final report recommending changes at a trust that is not in special administration, the decision makers to decide whether those changes ought to be accepted should be the commissioners of services at the successful trust and not the trust special administrator, the Secretary of State or Monitor. Clause 119 envisages that the TSA can recommend changes at an NHS foundation trust which is not in special administration, but fails to provide any mechanism to put those changes into effect. It follows that the recommendation from the TSA is left hanging in the air. The TSA cannot impose decisions on a reluctant CCG, because the Secretary of State is unable to direct CCGs and cannot, through Monitor, require changes to the services by the foundation trusts.

When making submissions to the Court of Appeal in the Lewisham case, leading counsel for the Government accepted that chapter 5A of the Health Act 2009 was a purely procedural statute. Chapter 5A does not provide any additional powers for the Secretary of State or Monitor. It simply defines the process that must be followed before existing powers may be exercised. The TSA takes over the role of the board of the trust in administration, so that it can make decisions about that organisation. The Secretary of State and Monitor have powers to dissolve NHS bodies, but the TSA does not have a role with regard to any trust that it is not administering. There is therefore a fundamental problem with clause 119 in that particular case, and that is what my new clause attempts to address.

I am proposing a new clause that would make it clear that a TSA report is to be provided to commissioners of services at any affected trust who are the decision makers as to whether they wish to accept or reject the recommendations. They are the relevant decision makers —in other words, the local commissioners.

[Heidi Alexander]

Will the right hon. Gentleman give way?

[Paul Burstow]

I will conclude, because I want to ensure that there is time for other people to speak. I am sure that the hon. Lady will make a speech. If she comments on my remarks, she might be gracious enough to allow me to intervene to clarify if she is still unclear.

Obviously, if the local commissioners decide that they are minded to accept recommendations, local people who use services provided by trusts that are not deemed to be failing should not have changes foisted on them without proper consultation.

In conclusion, I am grateful to the Government for what they have already done by including Healthwatch and local authorities as consultees in the process, but we need to go further to ensure that all the commissioners who we in this House, under the 2012 Act, said should be the primary decision makers in arranging health care should be treated the same and have a genuine say in any trust special administration process. That is an essential safeguard, but it is not clear at the moment; it needs to be clear in the future, so that we ensure that this process works in the interests of patients and the local public.

[Heidi Alexander]

I want to do two things in my contribution: first, to speak in support of amendment 30, which would delete clause 119; and, secondly, to make a few comments on new clause 16, which was tabled by the right hon. Member for Sutton and Cheam (Paul Burstow). I would be content to support the right hon. Gentleman’s new clause, but I have some reservations and some questions that I would like his assistance in answering.

I do not want to rehearse everything that has been said about the case of Lewisham and the trust special administration process that took place in south London. My hon. Friend the Member for Lewisham West and Penge (Jim Dowd) summed up well the feelings of frustration and anger that existed in Lewisham at the time. Like him, I do not wish to inflict that process on other communities across the country.

16:15

I concur with everything the shadow Secretary of State said about the TSA regime being the wrong starting point for a discussion of how and where local health services are provided. Such a regime starts with the need to save money, and all the members of the public I spoke to saw through it straight away. They asked, “Why on earth is this not driven by what is in the best interests of people’s health, as opposed to having the starting point of needing to save money?” Such an approach breeds cynicism and scepticism among the public from the very outset.

In my experience, the TSA process also leads to rushed and shoddy work being done by those who are carrying it out. As I said on Second Reading—this is worth repeating—in Lewisham the special administrator suggested that his proposed changes to the whole health economy of south-east London would cost £266 million and would take three years to implement. His projections were shown to be catastrophically wrong: it would cost twice as much and take twice as long.

The process and the consultation were atrocious. I stood outside a public meeting where 100 people were trying to get into a packed hall in which there were already 300 people. The police had to be called to escort the trust administrator into the room.

[Jeremy Lefroy]

In our case, we had a public meeting where about 400 people were outside trying to get into a meeting of 1,500 people.

[Heidi Alexander]

The experiences in Stafford and in Lewisham have probably been very similar. Multiple public meetings were run in a chaotic and haphazard fashion, and if I had not intervened in this particular meeting in Catford to try to calm the audience down and enable them to ask questions, I am not sure whether it would have been able to proceed.

We have heard about the quality of the consultation in Lewisham. The fact that the online consultation did not include a direct question about the closure of accident and emergency services and maternity services at Lewisham hospital beggars belief. My constituents were asked whether they agreed that acute services should be consolidated on four instead of five sites in south-east London. It is no wonder they came to me asking, “Where is the question about Lewisham A and E?” As my right hon. Friend the Member for Lewisham, Deptford (Dame Joan Ruddock) said, the consultation contained no direct question about the sale of two thirds of the land. There was a question about the sale of land at the hospitals that were placed in administration, but there was no such question about Lewisham hospital. We must be under no illusion that if clause 119 had been on the statute book at the time the administrator made recommendations about Lewisham hospital, its full A and E, its full maternity service and its excellent paediatric unit would now be closing.

Many people have said to me that I am somehow against change in the NHS, but nothing could be further from the truth. We have already heard about the successful changes to stroke care in the capital. They did not come about overnight, or over 45 nights or 75 nights; they came about as a result of clear and calm consultation and communication with residents. They came about as a result of clinicians, not accountants, being in the driving seat. The public rightly care about their NHS and the local health services to which they have access. As I said on Second Reading, that is because people experience the best and the worst moment of their lives in our hospitals. It is right that they have their say in a process that is fit for purpose, but an extended and augmented TSA process, which the Government propose through clause 119, is not the right way to take decisions of such significance and which excite such public interest.

The Government have tried to spin clause 119 as some sort of clarification of existing policy. That is nonsense. It is a direct result of the Lewisham hospital case that was heard in the courts. We know that the previous Government produced guidance that said that the TSA regime should not be used as a back-door approach to reconfiguration. This is a fundamental change in policy. It removes the legal protection that currently exists for successful hospitals located adjacent to failing hospitals that have been placed into administration.

The Government also claim that such a process would be used only in exceptional circumstances, but how do we know how often it will be used in future? I press the Minister to respond to the point made by the shadow Health Secretary about whether he has had any discussions with his officials about other hospital trusts being placed into administration and about applying the unsustainable provider regime elsewhere.

[Dr Poulter]

Let me place it on the record that, as far as I am aware, there have been no discussions involving either me or my ministerial colleagues about applying the TSA regime elsewhere.

[Heidi Alexander]

That is useful. I am sure that Members are grateful to hear that from the Minister, but we know that there are many trusts in serious financial difficulties. Given the huge pressures on the NHS at the moment, this regime could be applied in many more places in the future. The truth of the matter is that the TSA regime will be used as a steamroller to force through the closure and downgrading of hospital services with limited public consultation, using a process that is set up in a way that creates public scepticism and mistrust from the word go.

The Government want to change the law to allow them to do elsewhere what the courts told them they could not do in Lewisham. As I have said already, I would not want to inflict that chaos on anyone else. It damages trust not only in NHS leaders who are meant to be leading change but in our democracy.

I wish to say a few words about new clause 16. As I have already said, I will vote for the new clause if the right hon. Member for Sutton and Cheam pushes it to a vote this evening, because it offers a limited improvement on clause 119. None the less, it raises its own set of questions. The new clause leaves clause 119 in the Bill, so it still allows an administrator appointed to a failing hospital trust to make recommendations about services provided at successful neighbouring hospitals, which are not part of the trust to which the administrator has been appointed.

As I understand it, the right hon. Gentleman’s new clause would give power to the commissioners of such services at the affected hospital outside the failing trust to have some sort of veto over whether the recommendations go any further. It suggests that if the commissioners of services at the affected hospital, such as Lewisham, agree with the changes being proposed, full public and patient consultation would kick in, consistent with the normal levels of communication and engagement that are required in full-service reconfigurations. If the local commissioners disagree with the recommendations, they can, if I understand his new clause correctly, call the process to a complete halt. I can see why that has some attractions, because it seems to provide some kind of brake on the all-encompassing powers of an administrator, and for that reason I am content to support it. However, it does not provide an entirely coherent solution to the problem that lies at the heart of clause 119.

[Paul Burstow]

The hon. Lady is helpfully setting out her concerns and her support for the new clause. The first proposition must be that we should never even get to that stage, so we need to have much better processes in place beforehand, and I hope that we will hear something about that from the Minister. More importantly, the commissioners, all of whom have a stake in a local health economy—the different trusts—ought to be around the table to sign off on what a TSA will actually do.

[Heidi Alexander]

I am grateful to the right hon. Gentleman for that answer, but I am still not clear whether the new clause would provide a direct veto to commissioners of services at a hospital located outside the trust to which an administrator has been appointed.

[Paul Burstow]

That is the intention, so the new clause has been drafted to have that effect. We will hear shortly whether the Government find it to be technically deficient.

[Heidi Alexander]

I am sorry to be down in the detail of the new clause, but I think that it is very important, not least because many of us have received hundreds of e-mails about this. We need clarity on which commissioners are being given an effective power of veto by the new clause. Is it just the primary commissioner of services at a hospital, or does it go wider than that? To take the Lewisham example, it is not clear whether the power of veto would be given only to Lewisham CCG or also to the commissioners of services at Lewisham hospital, such as Greenwich or Bexley CCGs.

It is also not clear from new clause 16 whether there is a definite guarantee that full consultation would kick in if commissioners agreed to the recommendations of the TSA, because with reference to commissioners it includes the words

“if they are so minded”.

It is not clear what would happen if they were not so minded. Where is the redress for the public in that?

Another concern about new clause 16 is that if commissioners of services at a trust outside the failing trust disagree with the TSA’s proposals, potentially millions could have been spent bringing in the administrator and the management consultants and working up a whole series of proposals, but it could then be brought to a halt by a group of commissioners. I cannot help but question whether it would not be better either to apply the TSA regime to one individual trust or to go through a proper reconfiguration process, with all the safeguards that would include.

I am also intrigued as to why the right hon. Member for Sutton and Cheam tabled new clause 16 at this time. It is quite detailed, and given that he was a member of the Public Bill Committee, it might have been wise to introduce it in Committee and thrash out the detail there. I would like to add that he has always struck me as a man of principle. He has a deep understanding of how the NHS works and, I believe, a deep commitment to tackling the care crisis we face. However, tabling the new clause as some kind of alternative to voting against clause 119 seems to me to be tinkering at the edges. What we really need to do is vote to remove that clause from the Bill, because it poses a significant danger to hospitals across the country.

I am conscious that I have spoken for a long time, so I will say just a few words in conclusion. We know that the Conservatives stated in their manifesto that they would stop the forced closure of A and E departments and maternity wards. We know that in the coalition agreement both the Liberal Democrats and the Conservatives talked about stopping the centrally dictated closure of A and E departments and maternity wards. The truth is that neither the Lib Dems nor the Conservatives are stopping these closures; instead, they are legislating for them. They are paving the way for a wholesale programme of hospital closures and downgrades. We might stop them if we vote for new clause 16, but for me “might” is not good enough. In my view, amendment 30, which would delete clause 119, is our best hope for putting the Lewisham debacle behind us and providing the public with a fair and transparent means of making decisions about the public service that matters most to people—the NHS.

[Mr Dorrell]

I want briefly to explain why I intend to support clause 119 in the Lobby this evening and to say that I have some sympathy with the points that my right hon. Friend the Member for Sutton and Cheam (Paul Burstow) made about new clause 16. I hope that the Minister will address his specific points about the importance of equivalence between the commissioners of unaffected hospitals and the commissioners of key services. This is not about a veto, I suggest to the hon. Member for Lewisham East (Heidi Alexander); it is about the right of commissioners out of area to safeguard essential services in a parallel way to commissioners in the core area of the affected trust that is subject to the trust special administrator regime.

16:30

The core points made about the consequences when a trust special administrator is appointed are important, although, with respect to other Members, we must be clear that those consequences are very limited. We are talking about the consequences of appointing a TSA to a trust that is financially unsustainable. We are all agreed that if the trust is not financially unsustainable, a TSA will not be appointed. We all agree that reconfiguration is necessary. Of course it is better done in consultation with local communities and professional groups and through the normal reconfiguration process; everyone agrees about that. The question before the House in relation to clause 119 is what happens if those preferred options fail, the trust becomes financially unsustainable, and a TSA is appointed. It is a question of whether the TSA, in that narrow set of circumstances occurring twice in five years, is required to think only about the institution in isolation or should be looking at the interests of patients as a whole in the context of the health economy in the immediate and surrounding areas.

[Grahame M. Morris]

I hold the Chairman of the Select Committee in high regard for his expertise. Let me point out, though, that he analyses this on the basis of two cases in five years, but in fact the situation has changed rather dramatically. The information presented to our Committee is that about a third of NHS trusts are predicting deficits, and, as we heard earlier, 32 are in severe financial difficulty. Those may not be the exceptional circumstances that the Minister would have us believe, and that should be a cause for concern for Members on both sides of the House.

[Mr Dorrell]

Saying that a trust is in deficit is not the same as saying that it is heading into administration. It lies within the power of the commissioners and the trust management regime to avoid administration, which everyone in the House agrees is the preferred outcome. Indeed, it is striking that each of the Members from Lewisham and from Staffordshire identified the difficulties that the TSA regime creates and the difficult circumstances that arise when a TSA is appointed. Some Labour Members have suggested that this is a back-door means of driving change without consultation by appointing TSAs to trusts all around the country. If I thought that that was anywhere near to being anybody’s intention, I would oppose clause 119. However, the important point about clause 119 is that if it were the Government’s intention, which I do not remotely believe that it is, they could pursue that policy whichever way the Division goes.

The point about clause 119 is that it raises an extremely narrow question: should the TSA take into consideration only the institution that has been demonstrated historically to be unsustainable, or should the TSA look outside that immediate health economy for solutions that will better serve the needs of patients in that area? It seems to me that we need only pose the question in that precise and, I believe, accurate way for it to be seen to be a rhetorical question.

[Richard Drax]

Rather than looking at administrators and what can be done in the event of a disaster, let us look at Dorset county hospital as a classic case of what to do. It was in trouble and has been turned around, and local clinicians and managers are now talking to the GPs in Weymouth. They are now thinking—don’t laugh—of integrating their services. Well, whoopee doopee, this is huge common sense: not an administrator in sight and, more to the point, not a politician in sight either.

[Mr Dorrell]

I do not always agree with every word my hon. Friend says, but I agree with everything he said in that intervention, so I am delighted that I gave way to him. His argument is that commissioners and the trust management should get ahead of the trust administrator. Nobody should sit around waiting for an administrator to be appointed; the objective should be to avoid trust administration along precisely the lines identified by my hon. Friend.

[Grahame M. Morris]

I want to make a few points in support of amendment 30, which would delete clause 119 on the basis that the TSA was never designed to deal with reconfigurations across an entire region. Despite the assurances given by the right hon. Member for Charnwood (Mr Dorrell) and Government Front Benchers, the potential remains for this mechanism to be used as a back-door route to making changes and closures at hospitals.

I also declare my support for new clause 16. However, although it would ameliorate the worst parts of clause 119 by ensuring that local commissioners in non-failing areas had a veto over any decisions affecting their trust, it is not, as colleagues have said, a perfect solution.

Clause 19—or, as 38 Degrees and other campaigning groups refer to it, the hospital closure clause—should not stand part of the Bill. I had the honour to serve on the Bill Committee for what is now the Health and Social Care Act 2012 and I attended 39 out of 40 sittings. I missed one because I attended a Health Committee sitting at which the then Health Secretary was giving evidence about NHS England, which was previously called the NHS Commissioning Board, and I did not want to miss that.

I sat through that Bill Committee and listened to the Government’s reasons for their reorganisation. We were told that it would deliver a decentralised service and put power in the hands of clinicians. To be frank, clause 119 makes a mockery of that claim. Far from delivering a decentralised service that puts power in the hands of clinicians, the Secretary of State seems to be seeking to take power away from GPs and local communities in order to further reconfigure the NHS for purely financial reasons.

To suggest that the trust special administrator regime is a natural extension of the existing legislation is a gross distortion. The TSA process was never intended to be used as a back-door way to make unpopular reconfigurations. Potentially, clause 119 could take control of every NHS trust and foundation trust away from the public, leaving no hospital bed in the country safe. It should not stand part of the Bill.

If the Bill is enacted, clause 119 will mean that the NHS in England will face further wholesale, top-down reorganisations. The clause could be used as a method to achieve that. I do not think that anyone in this House wishes that to happen. I am sure that, in their hearts, some Government Members do not want that, and certainly no one in the country voted for it. Our problem is that there would be virtually no accountability to local people.

The successful legal challenge brought by the London borough of Lewisham and the Save Lewisham Hospital umbrella campaign—I pay tribute to their efforts, which have brought about this situation—showed conclusively that the Secretary of State did not have the power to axe Lewisham’s accident and emergency and maternity wards as a solution to problems in the neighbouring South London Healthcare NHS Trust.

Clause 119 is designed to allow the Secretary of State to do what he failed to do in Lewisham—to close down thriving and financially sustainable hospitals on a whim, without full and proper consultation. To suggest, as was said in Committee, that a tokenistic meeting with a local authority overview and scrutiny committee would assuage public concerns does not hold water. We must rebuild trust: we need full and proper consultation with patients and the public, and we need agreements with clinical commissioning groups. I am somewhat surprised at the willingness of Government Members, who have championed the cause of GP-led commissioning, to subvert the role of CCGs in that respect.

[Liz Kendall]

As a fellow member of the Health and Social Care Bill Committee, does my hon. Friend remember that we warned the Government that although there were clearly problems with strategic health authorities, those bodies could take a wider view of the health economy, and that having very new, young and small clinical commissioning groups that are all separate meant that it would be very hard to take such wider views? Does he remember that we warned the Government in those debates, and does he agree that they are doing this top-down reorganisation now precisely because there is no mechanism for delivering wider health views?

[Grahame M. Morris]

I do remember those debates, some of which were very long and acrimonious. I still have the scars on my back. They are a badge of honour, and I am proud to have been in the trenches with hon. Members fighting to preserve our NHS and to save it from the Trojan horse of privatisation.

To return to the matter in hand, the trust special administration process will bring drastic changes to hospital configurations. It represents a move away from the principle of reconfiguration of services on the basis of clinical need in favour of doing so solely on the basis of financial considerations. The justification process starts with the need to save money.

There have been attempts to reassure hon. Members and the general public that the trust special administration process would be enacted only in exceptional circumstances. As in our earlier exchanges about clause 119, hon. Members need to be alive to the situation confronting many NHS trusts, including the fact that about 30 trusts have been identified as being in particular financial difficulties. Those circumstances are not exceptional: come the end of the year and next year, there is a very clear and present danger that they will be not exceptional but normal.

In this situation, the NHS and foundation trusts are struggling, for a variety of reasons, to do more with less. I accept that the burden of the private finance initiative is one of those reasons, but there are others. There have been problems where walk-in treatment centres have closed. NHS spending has fallen in real terms. Almost a third of NHS trusts in England now forecast a deficit at the end of the financial year. There is growing pessimism about the financial health of the NHS, and figures suggest that the number of trusts undergoing the trust special administration regime will grow. As I have said, some 30 trusts have been identified as at risk of closure were clause 119 to be enacted as part of the Bill. Under this Government, it seems that the exceptional circumstances that would trigger the trust special administration process would no longer be exceptional.

I advise hon. Members who want to avoid soon having to take part in campaigns to save accident and emergency or maternity wards in their own constituencies —as has been done by my right hon. Friend the Member for Lewisham, Deptford (Dame Joan Ruddock), my hon. Friends the Members for Lewisham West and Penge (Jim Dowd) and for Lewisham East (Heidi Alexander), and the hon. Member for Stafford (Jeremy Lefroy)—to support Labour’s amendment 30.

16:45

Clause 119 will permit the Secretary of State, on the recommendation of a trust special administrator, to take actions against hospitals that lie outside the initial scope of the administrator’s investigation. Any organisation that neighbours a trust that is in financial distress, regardless of how popular, successful or robust its services are or how financially viable it is, could be downgraded or closed. The whole House—not just Opposition Members, but Government Members—should be concerned about the implications of the clause.

I have no doubt that, as was outlined by the Chair of the Health Committee, there are cases in which changes are needed in the local health economy that extend beyond the trust that is failing. The fundamental problem is that clause 119 seeks to change the trust special administration process in a way that was never intended. It has the potential radically to change the configuration of our NHS services. When hospitals are identified as being no longer viable, it risks being used as a Trojan horse to privatise our hospitals. [Hon. Members: “Oh!”] There is a groan from Government Members, but one of them suggested a merger between two hospitals in or nearby his constituency in Devon. There are practical issues to consider. We saw what happened in Bournemouth and Poole, where a sensible merger proposal was resisted on the grounds that it was anti-competitive.

[Andy Burnham]

Given that clause 119 is a dramatic extension of the Secretary of State’s powers, as my hon. Friend is rightly saying, does he agree that it is astonishing that the Secretary of State is not in the House this afternoon to make the case in person, to ask for the powers and to justify the idea that we should entrust the future of our hospitals to him?

[Grahame M. Morris]

I am absolutely amazed. I share my right hon. Friend’s incredulity that the Secretary of State is not here. In my view, clause 119 is one power too many for a Secretary of State who apparently believes the NHS to be a 60-year-old mistake. [Interruption.] That is a direct quotation from the Secretary of State before he took office.

The Secretary of State’s increased power and Monitor’s expanded role directly contradict the Government’s earlier promise that local commissioners would no longer be subject to central diktat. That represents a reversal of the vision that was presented during the consideration of the Health and Social Care Act 2012. Clause 119 supports none of the preconditions for a legitimate reorganisation of a local health economy and will allow trust special administrators to overrule any concerned parties.

If clause 119 becomes law, the Secretary of State will be granted the power to issue directions to require foundation trusts and clinical commissioning groups to take steps that they do not want to take. Any Member who wants to prevent the Secretary of State’s axe from falling arbitrarily on their own hospitals without clinical justification should seek to remove the clause from the Bill. I therefore urge right hon. and hon. Members to support Labour’s amendment 30 and new clause 16, which is a compromise measure to ameliorate the worst aspects of clause 119.

[Steve Baker]

I have listened with quiet astonishment as Opposition Members have suggested that the NHS previously offered meaningful accountability and public control.

In the manner in which the right hon. Member for Leigh (Andy Burnham) spoke to amendment 30, he viciously punched a raw and delicate bruise in Wycombe. As I indicated in my intervention, it was under the last Government that we lost A and E services, maternity services and paediatrics. Years later, all that people want is to have those services back. They want an emergency unit that is capable of accepting whoever turns up. To use the jargon, they want the treatment of undifferentiated emergency patients. The NHS should not be offering constant excuses for why that cannot be provided. God knows, we pay enough in tax and in salaries that people ought to be creative enough to figure out how to offer the treatment of undifferentiated emergency patients at local hospitals like the one in Wycombe. There is a proposal to do so, which I will return to another day,

I have found myself listening to some sort of exposition of a democratic utopia that has never existed. When considering how this has been positioned—the idea that it is about reconfiguration rather than urgent procedures when a trust is in extreme difficulty—will the Minister reassure me that the Government did not establish clinical commissioning groups and health and wellbeing boards, and the rest, just so that they could use this clause and power to override everything else they have put in place?

[Dr Poulter]

I am happy to give my hon. Friend that reassurance. We believe in locally led commissioning and in listening to patients locally. That is what devising services locally is about. This clause is not to be conflated with normal procedures for designing and arranging local hospital services. I hope that that reassures my hon. Friend and other hon. Members.

[Steve Baker]

I am extremely grateful to the Minister for that reassurance because in my constituency there is really only one story: the loss of services, and, because of the way the clause has been presented by Labour Members, people are worried about that.

It has been said that these hospitals are categorically different because they exist in a broader health economy, but that is not why they are different. Any business exists as part of a wider economy with dependencies and so on—the hon. Member for Lewisham West and Penge (Jim Dowd) suggested the example of Comet versus Currys. In private enterprise, if the administrator turned up and shut down our competitors when we failed, it would obviously be absurd, but the truth is that both sides of the House have made a positive decision to use the techniques of state socialism to provide health care. That choice has consequences, one of which is this clause.

[Mrs Emma Lewell-Buck (South Shields) (Lab)]

It will come as no surprise that I support the proposal to remove clause 119 from the Bill. Of all reforms in the Bill, this clause has attracted the most attention from my constituents. They recognise it for what it is—a frightening power grab by central Government that will put services across the whole country at risk from the Secretary of State. It is a cynical move from the Government, who in their wildly unpopular top-down reorganisation of our beloved NHS claimed that they wanted to put more power in the hands of doctors. Now they seek to give sweeping new powers to the Secretary of State.

It is of course true that some NHS trusts and foundation trusts find themselves in tough financial situations, and in those difficult situations decisions will have to be made so that services continue to operate. That is what the TSA regime was set up to do, and it is an appropriate process for dealing with the difficulties within a trust. It is true that trusts do not operate in complete isolation, but the TSA is already required to act with the interests of the wider health service in mind.

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

My hon. Friend is right when she says that the Secretary of State wants the power to privatise—I will be brutal about it—NHS services. We must recall—this is why we cannot believe the Minister or the Secretary of State—that before and during the general election, the Prime Minister said that there would be no top-down reorganisation of the national health service—[Interruption.]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. With the hon. Gentleman facing that way I could not hear a word he had to say. I am sure it was a very short intervention that I would love to hear. Will he repeat the question?

[Mr Cunningham]

I am sure my hon. Friend will agree that the changes the Government want to make are in order to privatise the national health service through the back door. That is why the Secretary of State wants that power. Equally, we cannot believe the Secretary of State because, during the general election, the Prime Minister said that there would be no major changes to the national health service, and no top-down reorganisation. Why should we believe this lot now?

[Mrs Lewell-Buck]

I could not agree more with my hon. Friend.

TSAs can consider the impact on neighbouring authorities when making their recommendations, but they cannot and should not reconfigure services in well-performing trusts. Well-run trusts can and do collaborate with their neighbours, and play a role in reconfiguring services to help to achieve financial stability, but that must be voluntary. It is wrong for the Government to act through TSAs to reconfigure services in well-run trusts, and to do so against the wishes of local people and clinicians. It is also wrong that the opinions of health care professionals should be overruled by financial concerns, especially when the decisions being made affect trusts that are not at financial risk. That undermines the ability of health care professionals to act in the interests of their public.

The Government’s defence of the proposal is that clause 119 is a clarification of existing law, and yet the amendment was tabled in the other place while the Government’s appeal over the downgrading of services at Lewisham was still being considered. Surely it is the role of the courts to interpret and therefore clarify the law. It is more likely that the Government anticipated that their appeal would be rejected, as it was, and acted to expand the powers of TSAs so that reconfigurations such as that proposed for Lewisham could go ahead in future. I want to be clear: when any Government amends legislation so that it can be interpreted differently in the courts, they are not clarifying things but changing them.

[Paul Burstow]

I take the hon. Lady’s general point and understand why she is making it, but yesterday we debated new clause 11, which would have made clear a mistake that hon. Members on both sides of the House believe the courts made on the applicability of human rights legislation to social care that is publicly provided within private institutions. In that instance, we were not changing the law, but trying to ensure that the courts interpreted it correctly in the first place. There are instances when we do that.

[Mrs Lewell-Buck]

I agree with the right hon. Gentleman, but I do not believe it applies to clause 119.

My constituents are not especially concerned by the technicalities of legislation. The letters and e-mails I receive show concern with the practicalities of clause 119. People tell me that they fear for local services because, as more trusts fall into financial difficulties—more than 30 are reported to be in serious danger of doing so—the Secretary of State’s power will spread over a wide region. Perhaps the trusts that those people or their relatives use will not have a TSA appointed, but it is likely that services in their area will collaborate with trusts that do have one appointed. That makes them a target.

If the heroic efforts of the people of Lewisham and my hon. Friends are anything to go by, public concern will quickly turn to public outrage and protest if clause 119 makes it to the statute book. Lewisham has shown the Government the strength of opposition they can expect when they attempt to force unpopular reconfigurations on local communities. It is difficult to understand why they propose using that model throughout the country, but it appears that that is their intention.

I am concerned that, by taking that approach and using the TSA regime for a purpose for which it was never intended, the Government will make it more difficult to have a level-headed discussion on meeting financial challenges. We need a mature debate on how to adapt services to improve sustainability, but clause 119 will lead to pitched battles up and down the country over the closure of individual departments. The clause has attracted more controversy than any other in the Bill, and with good reason. It ignores the will of clinicians and the communities they serve. It puts at risk services in every corner of the UK. The Government must change course now.

[Karen Lumley (Redditch) (Con)]

I shall make a short contribution on clause 119. I agree with the principle behind the clause and the Bill, but we must ensure that the NHS can operate properly and efficiently, and provide our constituents with the care they deserve. My hon. Friend the Minister and my right hon. Friend the Secretary of State know very well of the review in Worcestershire in the past two years. My hospital—the Alexandra—has been in the spotlight. We have fought long and hard to retain services locally. I pay tribute to the tireless campaigners who, like me, are desperate to keep our services. Finally, we have seen a clinical solution to the problem. We all welcome that in Redditch, but it is not the end of the story—I wish it were.

17:00

We now have to wait to see if the clinical solution is affordable. If it is not, would our trust be put into administration? Our trust owes £10 million today and is forecast to owe £12 million by the end of the financial year. The people of Redditch are concerned about the future of our hospital. I ask the Minister to allay their fears today and to make it clear that Worcestershire Acute Hospitals NHS Trust is not on his radar and that the Alexandra hospital is safe in his hands and will continue to be so.

[Dr Poulter]

I know that my hon. Friend has campaigned tirelessly for her local trust and I can reassure her that there are no plans for the TSA to have any involvement in the issues that she has mentioned locally. It would be wrong and irresponsible for people to conflate those issues. There are local processes in place and they will continue.

[Karen Lumley]

One of the big successes is the creation of local commissioners. In my patch, Jonathan Wells has continually stood up for the people of Redditch in this reorganisation. Will the Minister clarify how much involvement the commissioners would have in any administration case?

Forty days is a short time indeed. As I said earlier, I agree with the principle, but I do not think that it has been thought through enough. No one would want an unsafe hospital in their patch, but we all want an NHS that treats our constituents at a local level if possible. The Minister has allayed some of my fears, and I thank him for that, but there is a great deal of concern in my constituency.

[Nick de Bois (Enfield North) (Con)]

I am grateful for the opportunity to discuss amendment 30 and new clause 16. I realise that it will come as a disappointment to Government Members but I will support amendment 30 and new clause 16. Let me explain why, and I hope that I can avoid drifting into the scaremongering that has been associated with this issue.

For me, the concern has always been about public trust in reconfigurations. As many hon. Members will know, I have been through 10 years of discussions and consultations on reconfigurations. That first started under the then Labour Government, and I agree with my hon. Friend the Member for Wycombe (Steve Baker), who suggested that there was a wonderful alliance of faith and trust professed by the Opposition in the effectiveness of consultations. For the record, we had the most shameful consultations at the beginning of the process on Chase Farm, and not much changed after the change of Government in 2010.

[Steve Baker]

To be clear, I think these consultations are a fiction and sham that do not make any difference to the progress of events in the NHS. In fact, they cruelly mislead the public into thinking that they have any say at all.

[Nick de Bois]

I am grateful for my hon. Friend’s intervention and I understand where he is coming from. Certainly in the early days under the tenure of the predecessor of the shadow Health Secretary, we were presented with consultations that listed 10 options for the reconfiguration of Chase Farm, one of which included retaining the A and E services. It disappeared from the list before anyone had had a chance to consult. A selected group of stakeholders was then invited to a meeting that, funnily enough, was not held in Enfield or Barnet. It was held in central London during working hours, meaning that very few people could attend—certainly not the public. I share the shadow Health Secretary’s view that that consultation was utterly flawed and it led to the decision to downgrade my hospital being made by his predecessor in 2008. Hopes were raised with the moratorium that was introduced by the coalition Government, but they were then sorely dashed. I have described my displeasure and the distress of my constituents who had their hopes raised in that shameful episode, the likes of which litter the history of Chase Farm over the past 10 years.

[Richard Drax]

In Swanage, we too had a consultation that was a disaster. It was binned, thank God, but another one has been started. It is taking a year, if hon. Members can believe it—a year of waiting, cost, experts and so on. This is another problem with the NHS: unfortunately, people do not trust consultations and when they happen they cost a fortune.

[Nick de Bois]

And the answer is not just with consultations. The issue facing us today, and why I cannot support clause 119, is simply this: the argument on reconfigurations, with the greatest respect to all hon. Members, will not be won by politicians or even by senior managers in the NHS. There has to be a clinically led argument from GPs upwards throughout the acute sector. For many, many years they have not made the case. The process has been littered with broken promises over the years, regardless of the good intentions of politicians. I can do nothing tonight that would suggest a further breach of trust by weakening the power of consultation, even though I accept that consultation has not had its finest hour—or, in my case, its finest 10 years.

I have faith that the voice of the British public, and the intent behind the Health and Social Care Act 2012 in particular, on which I was engaged over many weeks, is to bring clinical decision making to the front line and to empower local people, local authorities and patients further. That has been a great step. The second reason why I find it difficult to run with clause 119, and why I support the amendment tabled by the right hon. Member for Sutton and Cheam (Paul Burstow), is that he recognises the need to extend the consultation to all key stakeholders, not least to those in trusts that could be affected through no fault of their own, to extend their powers as well. That went to the heart of the 2012 Act. Indeed, we are blessed with two former Ministers in the Chamber, with whom I spent many happy hours on those Benches—it was not acrimonious at all. This was a core principle behind what we were trying to do.

Let us deal with the exceptional cases. I accept entirely that there is no master plan to run through configurations on the basis of the proposed changes, but I cannot ignore the fact that the proposed legislation we are being asked to approve allows for changes to be made in circumstances that would leave a democratic deficit and subjugate clinical judgment because of a stressful financial situation.

[Bob Stewart]

Where is the limit? That is what worries me. It is like pouring water on a tile—one cannot stop it. It might go much further than the adjacent trust area; it could go anywhere.

[Nick de Bois]

Yes, indeed. Again, I am trying to be as balanced as I can. I recognise that no single institution can stand in isolation, and I think that that is broadly accepted. However, to make decisions within 40 days on institutions, when we do not know which institutions will be affected or how they will be affected, is demanding too much of a service that is so valued by the public.

[Jeremy Lefroy]

Does my hon. Friend accept that there are some extremely important issues that cannot be resolved in 40 days, or even 400 days? For instance, the royal colleges are prescribing services that require more and more consultants to run rotas, which means that in district general hospitals it becomes even less possible to provide these kinds of services. These things are taken out of the hands even of politicians.

[Nick de Bois]

Indeed. My hon. Friend makes his point very well and I bow to his superior judgment.

I am also concerned about a point that was raised earlier. As everyone knows, I have absolutely no clinical or medical background, and it has always come as a surprise to me that I have spent so much of my time in the Chamber talking about these subjects. In business, there is a fairly simple calculation that assesses the solvency of a business; the strict definition is if someone is not able to meet their liabilities or knows that they are not able to do so in the short term, they are considered insolvent. They then go into administration and the processes kick in.

We are talking about a very different picture here in which a judgement has to be made about institutions that may or may not be considered unfit to continue. Under those circumstances—however much I accept that there are good intentions and not the devious plots that are being suggested—it means that much is left open to doubt. Therefore, it is with a very heavy heart that I will be on the other side when we go into the Lobby—when I have worked out which side that is. But I do so based on my 10 years of experience of what has been a very difficult exercise in my constituency.

[David T. C. Davies]

I listened with great interest to my hon. Friend the Member for Enfield North (Nick de Bois) but I will be supporting the Government 100% tonight because I have great confidence in what the Government have achieved with the NHS. I say that because I have seen the alternative; I have seen what has happened to the NHS when it is run by Labour, because that is the problem that I and many of my constituents face at the moment in Wales.

My right hon. Friend the Member for Sutton and Cheam (Paul Burstow) came forward earlier with a petition from the left-wing pressure group 38 Degrees. Health campaigners have been talking today about the amount of salt that we take but one has to take dangerously large pinches of salt with anything that comes out of that organisation. These people purport to be happy-go-lucky students. They are always on first name terms; Ben and Fred and Rebecca and Sarah and the rest of it. The reality is that it is a hard-nosed left-wing Labour-supporting organisation with links to some very wealthy upper middle-class socialists, despite the pretence that it likes to give out.

It is 38 Degrees who were coming out with all sorts of hysterical scare stories a few years ago about how the Government were going to privatise the NHS. It took out adverts in newspapers, scaring people witless that that was going to happen. Of course the organisation has forgotten all about it now because there was never any intention to do that. We will never privatise the NHS because we believe in public services in this party. A couple of months ago, 38 Degrees came out with more scare stories about how it was going to be gagged because of another piece of legislation that the Government were putting through to bring about fairness in elections. It said that we would never hear from it again, and yet here we are a few months later with yet another host of terrible stories, scaring members of the public quite unnecessarily. I do not think that we have to take any lessons from 38 Degrees, nor hear any more about their petition.

I am backing the Government tonight because I know that the Secretary of State has done an enormous amount to drive up standards in the NHS even as they fall in Wales. It is this Secretary of State who has presided over falls in waiting lists to 18 weeks in England. People are lucky in Wales if they can get to the target of 36 weeks. There has been an increase in funding when it has been cut in Wales and there is much better access to cancer drugs in England than we have in Wales.

New clause 16 refers to the need to confer with members of neighbouring boards. We have health boards, not trusts, in Wales. I hope the Secretary of State will confer with the boards in Wales about these changes. The only criticism that I have of the Government is that they have been so successful in improving the NHS in England that large numbers of people now contact me every single day, in Wales and in my constituency, asking for the right to be treated by the NHS run by the coalition Government and not by the NHS run by the socialists in Wales.

I ask the Minister and Opposition members to look at an article in the Western Mail today by a woman called Marianna Robinson who has spoken about the difficulty she has had in trying to get treatment and how desperately she wants to be treated in Bristol. There is a place for her in Bristol but she is not allowed to have it. I ask Ministers, and perhaps Opposition Members, to think about what we are doing here. I would like to see patients in Wales who wish to be treated in England being allowed to go to England and get treatment, with the money then being taken off the block grant to the Welsh Assembly. If Opposition Members—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I think I need to help the hon. Gentleman. As he knows, we are dealing with the new clause. I do not want the history of the Welsh health service, which is certainly not what Members are here to listen to. I know he wants to get back to the new clause, which is where we will carry on. He should also look to the Chair now when he speaks.

[David T. C. Davies]

I shall simply say this, Mr Deputy Speaker. I will vote in the Lobbies with the Government tonight. Many people in Wales would like the opportunity to vote with their feet and be treated by the national health service which is run by this coalition Government, and I hope that we shall get around to addressing that at a later stage.

17:15

[John McDonnell (Hayes and Harlington) (Lab)]

I apologise for arriving so late, Mr Deputy Speaker. I have been stuck in a meeting.

Let me begin by saying, without party rancour, that I shall vote against any measure that puts further power in the centralised hands of the Secretary of State. I apologise for going down memory lane as well, Mr Deputy Speaker, but 40 years ago, when I first represented my constituency as a local councillor, we had what I thought was a very effective health service consisting of local GPs’ surgeries, two cottage hospitals and a district hospital. In the 1980s the two cottage hospitals were closed, because a new Secretary of State—let us leave aside the party to which he belonged—decided that we did not need them, that all the services should be centralised in the district hospital, and that there should be some investment in the GPs’ surgeries. We occupied Hayes cottage hospital in an attempt to keep it open, but we lost the battle. However, it became a residential home in the end, so we had some success.

What happened next was that other Secretaries of State came along and moved some of the services from the district hospital to more centralised hospitals in central London. Then a new Government were elected and a new Secretary of State decided that we needed to devolve again, so we had Darzi polyclinics, which looked awfully like cottage hospitals to me. If you stand still for long enough, it all comes round again.

All that was basically a result of what we heard about from the hon. Member for Enfield North (Nick de Bois): a lack of trust in local people. I believe that local people supported the original model of GPs’ surgeries, cottage hospitals and a well-resourced district hospital. If they had been listened to at the time, we would not have gone round in a huge contorted circle to get back to what was virtually square one. As I have said, I am very anxious about any measure that puts further power in the hands of the Secretary of State and overrides the wishes of local people.

[Richard Drax]

In my experience, cottage hospitals are the gold standard of the national health service, and should be preserved at all costs.

[John McDonnell]

I entirely agree. There are still members of the community who, like me, deeply regret the fact that we lost two cottage hospitals in my constituency and another in the constituency of the right hon. Member for Uxbridge and South Ruislip (Sir John Randall). We lost a whole network of cottage hospitals. I do not remember who was Secretary of State in the 1980s under the Thatcher Government, but that Secretary of State was obsessed with closing them down, and they were closed down as a result of central diktat rather than listening to people.

As other Members have said, there were consultations, and, in every case, nearly 100% of local people wanted to keep the local cottage hospital. The hon. Member for Wycombe (Steve Baker) said that we were running a socialist health service. Well, my socialism is grass-roots socialism—community socialism—which means listening to local people and respecting their wishes. Local people often know intuitively what is right, and that is why I am so anxious about any further powers being put in the hands of the Secretary of State.

[Steve Baker]

Not for the first time, I find myself gently agreeing with the hon. Gentleman. I think that he has advanced a magnificently Conservative argument, and I look forward to his eventually matching the colour of his tie with the colour of his rosette.

[John McDonnell]

I will send the hon. Gentleman a few books about council socialism and the socialism of the grass roots.

Today’s debate is about trust, about listening to local people, and about not allowing any further powers to accrete in the Secretary of State’s hands and override local wishes. People do not trust central Government. That is not a party-political point; I think that people have been ill used over a long period by not being listened to at local level, which is why I urge Members to support the new clauses and the amendment.

Let us not denigrate organisations such as 38 Degrees which are merely expressing a view. Others may not agree with that view, but it has been expressed to me not just by 38 Degrees, but in e-mail after e-mail and letter after letter from people whose views I respect because they have gone through the same local experience as me. All that those people want is long-term stability and investment in a publicly funded and democratically accountable health service.

[Mr Simon Burns (Chelmsford) (Con)]

It is a pleasure to follow the hon. Member for Hayes and Harlington (John McDonnell). He said at the beginning of his remarks, and he kept to his pledge, that he was going to speak without party rancour. I, too, would like to do that because I think there is very little difference between my views on the health service and those of the right hon. Member for Leigh (Andy Burnham). We may perhaps have a divergence of view on how to achieve what we both passionately believe in, as does my right hon. Friend the Secretary of State, which is the finest health service for the provision of care for all people in this country, but on the core principle of a national health service, free at the point of use for all those eligible to use it, there is not one iota of difference, despite the speech I heard from the endearing hon. Member for Easington (Grahame M. Morris). I almost felt I had woken up from a nightmare. Having listened to the same speech in 39 of the 40 sittings of the Health and Social Care Bill Committee, I regarded it as my good fortune that during the 40th sitting, my right hon. Friend the then Secretary of State was giving evidence to the Health Committee which prevented the hon. Gentleman being in our Committee.

The point I want to make is this: the national health service has from day one constantly evolved in the delivery of health care, partly because of changing medical science, partly because of changes in the diseases that people have suffered from owing to improved and enhanced preventive care, and partly because many conditions that in the past one would stay in hospital for no longer need to be treated in hospital but can be treated in a GP surgery or elsewhere. We all—politicians, medical practitioners and others—have to recognise that the NHS is constantly evolving and revolving, and we have to adjust to those changes and meet those challenges.

I passionately believe that decisions within the NHS should be taken locally. I supported the Health and Social Care Bill so strongly because it devolved powers and decision making to the people who I think are best qualified to take commissioning decisions on behalf of patients—local GPs. I also welcome the fact that my right hon. Friend the Secretary of State is no longer micro-managing the running of the NHS on a day-to-day basis. However much admiration I have for my right hon. Friend, or even for the shadow Secretary of State when he was in post, I do not think he is best qualified to be running the health service on a day-to-day basis.

If we are going to evolve and meet the challenges, difficult decisions will have to be taken, and politicians in particular—politicians of all political parties; this does not apply simply to Opposition Members of Parliament or to Conservative Members or to Liberal Democrats—have got to be braver. When there is any consideration of a reconfiguration to meet new challenges or address problems, the knee-jerk reaction is to take the populist, easy route, say no and oppose for opposition’s sake, rather than look at the reasons behind any reconfiguration.

[Andy Burnham]

The right hon. Gentleman knows I have huge regard for him and I do not disagree that change needs to be made. The question, however, is how we make that change. I remember that when the earlier Bill was going through, he repeatedly said in this House and in TV studios that the principle behind it—if it had a principle—was to put local doctors in charge. Does he think that clause 119 is consistent with the argument he made when the earlier Bill went through?

[Mr Burns]

I am grateful to my right hon.—or, rather, the right hon. Gentleman; I nearly made a Freudian slip—for that question. I can unequivocally say to him that I believe it as strongly and firmly today as I did when I was one of the Ministers taking the Health and Social Care Bill through this House three years ago. And I shall tell the right hon. Gentleman why I believe it.

I was saying that politicians of all parties must strengthen their backbone and be prepared to look at each case of reconfiguration on its merits, and then take difficult decisions if they are in the best interests of patients. I believe that reconfigurations should initially be determined at local level—[Interruption.] If the right hon. Member for Leigh will wait, I will get to his point. They should be determined by local commissioners in consultation with local people and with the health and wellbeing boards, which play a vital part in keeping local communities and local health interests plugged in and represented, and in ensuring the delivery of the necessary services locally.

However—this is where I get to the right hon. Gentleman’s point—there will be a few rare and exceptional circumstances in which a TSA will have to be appointed. That is what happened in the case of South London. At that time, I happened to be privy to all the discussions that led up to what was, if I remember correctly, the unprecedented decision taken by the then Secretary of State, my right hon. Friend the Member for South Cambridgeshire (Mr Lansley).

[Mr Dorrell]

My right hon. Friend is making the key point in this debate. He is describing a locally rooted, clinically led consultation process that engages the professional community as well as the local political community. It must be right that we deliver change in the health and care system in that way. The Health and Social Care Act was motivated by exactly that thought process, as my hon. Friend the Member for Wycombe (Steve Baker) said. That is not what clause 119 is about, however. It covers how we should deal with the very confined circumstances in which all those processes have failed. Are we really going to say that a trust special administrator can only look at the circumstances of an institution that has been proved to be unviable? Or are we going to allow him to look outside those circumstances, in order to deliver better care for patients? That is the question the House has to decide on this evening.

[Mr Burns]

As always, my right hon. Friend anticipates what I am about to say and says it in a far more straightforward way. He is absolutely right to say that there will be exceptional circumstances; there has been one instance so far. In such circumstances, the health economy in a particular area will need to be looked at—not in isolation; that is impossible owing to the nature of patient flows and the delivery of care—in order to get to the bottom of the problem and solve it on the ground.

A number of hon. Members said that clause 119 was a vehicle for closing down hospitals or services while totally disregarding the wishes and needs of the local health economy and local people. I say to them with the greatest respect that they have—probably for genuine reasons—misunderstood the purpose of the TSA. I ask them to think again, because this is too important an issue to be politicised and used in a game of ping-pong between political parties, or groups within those parties, to try to score political points. Our sole aim must be to ensure the improvement and viability of services. Sometimes, tough decisions will have to be taken—because of changing patterns, or whatever—and in the overwhelming majority of cases, they will be taken through consultation and through the decision-making process in the local health economy.

We have been talking about the power of the TSA. I must point out, in the friendliest and gentlest way, that that power was not introduced into the health service by this Government. It was done, I think I am right in saying, by the right hon. Member for Leigh’s predecessor, and he did it for very good reasons. He accepted, as my right hon. Friend the Member for Charnwood (Mr Dorrell), the Chair of the Select Committee, said in his intervention, that there will be rare occasions when everything else has failed and this measure of last resort must be used. It is viable and reasonable to have that power as a measure of last resort, as the previous Government obviously thought; otherwise, they would never have put it on the statute book in their legislation.

[Mr Jamie Reed]

When this was tested in the High Court, the judge said that the Government were seeking to use the powers that the right hon. Gentleman has just described for a “strained and unnatural” purpose. Does he agree with that?

[Mr Burns]

The short answer to the hon. Gentleman, because I have the freedom of the Back Benches, is that I do not share that view. I was privy to the discussions that led to South London being put into special measures. That was done because there were real and significant problems to which it was impossible at a local level, within NHS London and elsewhere, to find a coherent—[Interruption.] The right hon. Member for Leigh says no. He was in opposition at the time these conversations were taking place.

[Andy Burnham]

It is wrong. The right hon. Gentleman will know that when he arrived at the Department of Health in May 2010, there was a plan in place called “A Picture of Health”—[Interruption.] My hon. Friend the Member for Lewisham West and Penge (Jim Dowd) agrees. The plan, which had been extensively debated and consulted on at local level, was to make difficult changes to the health service in south-east London. That plan was shelved because of the right hon. Gentleman’s moratorium, and precious time to make changes was therefore lost. The financial problems in those health service organisations increased because the plan was shelved, and they were left with the option of having to bring forward a more brutal administration process. Please do not rewrite history in a debate as important as this.

[Mr Burns]

I agree with the right hon. Gentleman that this is a very important debate. I have the benefit of having attended the meetings and having seen what was happening in South London. In one respect the right hon. Gentleman is absolutely right: there was a moratorium. The country wanted a moratorium to start with because of some of the closures that were causing problems, and people wanted a re-examination of the situation to check that the right decisions were being taken. Work was still going on to find a solution to South London, and my right hon. Friend the Member for South Cambridgeshire reluctantly came to the conclusion that he had to take the exceptional power that was available to him.

[Jim Dowd]

Will the right hon. Gentleman give way?

[Mr Burns]

No. I am about to conclude as I know the winding-up speeches have to begin.

In conclusion, this is an important power, and it is there to be used in very exceptional circumstances. It is factually incorrect and it will scare people to accuse any Government of using the power to reconfigure services. It will not be used for that. Reconfiguration will go through the correct processes and be based locally, with the local health economy and local people and with the input of organisations such as the health and wellbeing board. It would be foolish, as I think the previous Government agreed, not to have an emergency fall-back position to secure that. That is why we had the original power under Labour’s legislation, and my right hon. Friend the Secretary of State is continuing that power and fine-tuning it.

[Dr Poulter]

I thank all my hon. Friends and other hon. Members for their contributions to this important debate. I shall respond to as much of what has been said as I can in the time available.

The House is being asked to consider specific changes the Government are making to the existing trust special administrator regime, which was introduced under the previous Government. I stress at the outset that the TSA regime will not be used routinely, and will only be used when all other processes at a local level to deal with the challenges of hospitals have been exhausted. The usual approach for locally led reconfigurations will remain. TSAs are for rare and extreme cases of failure. This is not a power to be used to reconfigure services routinely—we need to get that right at the outset. This is a system of last resort, and other actions will of course be taken first to address the problems of trusts in difficulty.

[Richard Fuller]

Let me make the Minister aware of a real and live example: the decision of Bedford and Milton Keynes clinical commissioning groups to look at their hospitals in an ongoing review. Will the Minister provide me with a hand-on-heart, job-on-the-line assurance that these powers will not be used in that review?

[Dr Poulter]

I can assure my hon. Friend absolutely that these are locally driven reviews of clinical services—driven by local commissioners, clinically led and absolutely nothing to do with the TSA process which we are discussing today. Any scaremongering that is taking place locally is, frankly, outrageous and to the detriment of the hard work that local professionals are doing to design the right health care services.

As I said, the TSA system is one of last resort. It is about ensuring that local solutions are initially found for trusts in difficulty. That may include support from the NHS Trust Development Authority or Monitor, as part of a special measures process, or it may involve more rigorous inspections by the CQC. Other support may include requiring the publication of action plans to tackle quality or financial problems, buddying with other trusts, or making management changes. All other such processes will have had to be exhausted before the TSA process would be necessary.

[David Rutley (Macclesfield) (Con)]

With 11 areas identified as having challenges to the health economy, will the Minister give reassurances that proper checks and balances are in place so that the TSA powers will be used only in isolated, limited and exceptional circumstances?

[Dr Poulter]

That is absolutely the case. It is absolutely wrong to conflate the fact—as Opposition Members are trying to do—that from time to time even good hospitals occasionally run deficits with the TSA regime. This is a power of last resort; it is not a power that is routinely used. Local measures are in place to support hospitals to get their finances in order and to ensure that where there are care quality problems, they are addressed promptly to the benefit of patients.

[Andy Burnham]

The Minister was saying that all other measures should be explored first, in particular co-operation—buddying, he said—between hospitals. If that is the case, why did the Competition Commission step in to prevent sensible collaboration between two hospitals on the south coast, Bournemouth and Poole? How is what he has just said consistent with the Health and Social Care Act 2012, which requires hospitals to compete, not to collaborate?

[Dr Poulter]

As part of our changes in the wake of the Mid Staffordshire inquiry—changes the right hon. Gentleman would be wise to heed and learn lessons from, if he should be lucky enough ever to be on the Government Benches again—we have made it clear that we need to ensure that where there are care quality failures, hospitals learn to put such problems right much more promptly than they have done in the past. That is why we put in place buddying mechanisms and why we put trusts in special measures, to deal with issues quickly and effectively to ensure that hospital services are put back on track and patients can be properly protected.

[Christopher Pincher (Tamworth) (Con)]

Does the Minister recognise that the reason why there is concern about clause 119—with due respect to the shadow Secretary of State, I would say it is misplaced concern—is that there is legitimate concern about the way routine reconfiguration mechanisms work? Time after time, consultation does not appear to work on the ground. I have some experience of that in my constituency, where the Burton hospital trust is attempting to reconfigure our services.

[Dr Poulter]

My hon. Friend makes a good point, which has been made by Government Members throughout this debate. Under the previous Government, in particular, many people felt that things were done to them with their local NHS, rather than done in the best interests of local patients. Importantly, decisions were very rarely made with clinical leadership under the previous Government. Proper patient consultation and patient engagement did not take place. I have a list with me of maternity units downgraded under Labour; it is right to say that individual reconfiguration decisions need to be looked at on their merits, but there was a long and tragic history under the previous Government of the public, patients and local clinicians not being properly engaged in the process. That is why our Government have introduced a better process whereby, as my right hon. Friend the Member for Chelmsford (Mr Burns) pointed out, decisions about local health care services under our 2012 Act are led now by clinicians through the clinical commissioning groups. We now have health and wellbeing boards, which is an important step forward in better joining up and integrating the health and care system that we all believe in, and in ensuring that democratically elected local authorities have more oversight of our health and care system. Those are important steps forward and this Government should be proud of them. They indicate that decisions should be made locally for the benefit of local people, and that is how things routinely happen.

The trust special administrator regime is not used lightly; it is used in extremis, which is why it has been used only twice in the past five years.

[Jim Dowd]

rose—

[Dr Poulter]

Let me make a little progress, because I have been generous in giving way.

Let us consider the following:

“The vast majority of trusts perform well, but in the rare instances where that is not the case, there must be transparent processes in place to deal with poor performance.”—[Official Report, 8 June 2009; Vol. 493, c. 544.]

I completely agree with those words—the right hon. Member for Leigh (Andy Burnham) used them when he described the purpose of the regime to this House in 2009. This is Labour’s regime, which it now tries to disown in opposition. The TSA regime is only ever used as the very last resort, and provisions in the Care Bill will introduce, importantly, a new role for the Care Quality Commission for triggering the regime when there has been a serious failure of quality; the emphasis will now be on quality, rather than merely on financial failure.

Clause 119 respects the coalition agreement that routine service changes will be locally led; it is about protecting patients and ensuring we can act rapidly and effectively in their best interests in examples of extreme failure. It may therefore be helpful if I set out some of the changes and improvements we are making to the regime under clause 119.

[Steve Brine (Winchester) (Con)]

I think I know the answer to this, but the opposite has been said so many times in the past three and a quarter hours that it is worth saying it again. The Minister knows that my local foundation trust is undergoing proposals that will lead to a public consultation on reconfiguration, which is supported on clinical grounds by the commissioners. Whatever view local representatives and others take on that—I am far from sold on this at the moment—will he confirm to me, as he did to my hon. Friend the Member for Bedford (Richard Fuller), that neither he nor his administrators will be on a train to Winchester any time soon?

[Dr Poulter]

My hon. Friend is absolutely right in what he says. These are decisions, under the legislation that this Government introduced, that are being led by local commissioners and local clinicians engaging with patients; they are nothing to do with the TSA regime we are discussing today, which deals with examples of extreme failure in the NHS.

[Jim Dowd]

Will the Minister give way?

[Dr Poulter]

I do need to make some progress, as I have been generous in giving way. If hon. Members will let me make some progress, I may give way again a little later.

Clause 119 was introduced following calls to the Government by key stakeholders representing NHS providers—the Foundation Trust Network and the NHS Confederation. Like us, they recognise the experience of how the regime has operated. They know that issues of financial and clinical sustainability of health services nearly always cross organisational boundaries, and they were clear that the Labour Government’s regime needed amendments to make it effective in the spirit that the right hon. Member for Leigh intended when he created it in 2009. Let me read out again what was said in the impact assessment to the 2009 TSA regime—his regime. It states:

“NHS Trusts…are not free-floating, commercial organisations.”

It also says:

“State-owned providers are part of a wider NHS system.”

We fully agree with that, and that is what we are ensuring we take into account in the TSA regime. That is what clause 119 is about. Clause 119 would extend the remit of a TSA to make recommendations that may apply to—

[Jim Dowd]

rose—

[Andy Burnham]

rose—

[Dr Poulter]

I may give way in a few moments, but I need to make a bit of progress. The clause would extend the remit of a TSA to make recommendations that may apply to services beyond the confines of the trust in administration. The Secretary of State or, in the case of foundation trusts, Monitor, will be able to make decisions based on those wider powers. Where severe and prolonged problems exist, an administrator must be able to recommend a solution in the best interests of local patients. Only then can we resolve the situation in a sensible, holistic way and ensure safe and sustainable patient care. That is what the impact assessment said of the 2009 TSA regime, and something the Government are ensuring that we deliver, even though the previous Government failed to deliver it.

[Several hon. Members]

rose—

[Dr Poulter]

I will take the shadow Secretary of State in preference to the hon. Member for Easington (Grahame M. Morris).

17:45

[Andy Burnham]

The Minister is being generous. He has made the argument all afternoon that he is doing what I was doing; he is just using the powers that I created. That is the crux of his argument. If that is the case, why did three judges rule that this Government had broken Parliament’s original intention when they passed those powers?

[Dr Poulter]

Quite frankly, it was because the right hon. Gentleman’s legislation was not worded effectively enough—[Interruption.]

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. The right hon. Gentleman was listened to with courtesy. The same courtesy must be shown to the Minister.

[Dr Poulter]

I have repeatedly read out supporting evidence from the previous Government and from the impact assessment that showed that they recognised that the regime had to take into account the wider health economy. It is not my fault or the fault of hon. Members on the Government Benches that Labour’s legislation was not properly drafted, and that it did not do what it intended—

[Jim Dowd]

Will the Minister give way?

[Dr Poulter]

The right hon. Gentleman also suggested—

[Jim Dowd]

Is he deaf?

[Madam Deputy Speaker]

Order. The Minister’s state of health is not a matter to be dealt with from a sedentary position. If he is not giving way, he is not giving way.

[Dr Poulter]

I must make progress. I want to address the points made by my right hon. Friend the Member for Sutton and Cheam (Paul Burstow). I will not give way until I have made better progress. On the point made by the right hon. Gentleman—and this is important—when he put forward the legislation on the TSA, he envisaged potentially turning it into a hospital closure clause. In 2009, on Second Reading of the Health Bill, he said:

“We believe these measures will provide protection against the possibility of NHS providers continuing indefinitely.”—[Official Report, 8 June 2009; Vol. 493, c. 544.]

That would suggest that the right hon. Gentleman thought that whole organisations might be shut down or closed as a result of the TSA regime. We do not believe that that is the case. We recognise that trusts, when they severely fail, may have to change the services they deliver. We want to protect trusts from the closure that the right hon. Gentleman envisaged in his remarks. His own words indicate that Labour had a hospital closure clause in the TSA regime. The Government, however, are making it clear that this is about service change in the interest of patients when all other avenues have been exhausted, which is a good thing.

Let me turn now to new clause 16, tabled by my right hon. Friend the Member for Sutton and Cheam, my hon. Friend the Member for St Ives (Andrew George) and other hon. Members.

[Frank Dobson]

rose—

[Dr Poulter]

I will give way to the former Secretary of State in one moment, but I would like to make some progress. I have been very generous in giving way.

The Government are grateful to Members for raising these important issues, but, regretfully, we cannot accept the amendment. The amendment makes two key changes. First, it gives commissioners of other trusts affected by the recommendations of an administrator at a foundation trust the power to define essential services at those trusts. That would be cumbersome and impractical and draw the focus away from the trust in administration and undermine the need for recommendations affecting other providers to be “necessary and consequential”, which is something that my right hon. Friend the Member for Sutton and Cheam believes in and raised in Committee.

Secondly, protecting essential services gives the administrator their focus for the trust in administration; it is a critical part of the process. Asking commissioners at other trusts to define their essential services would incorrectly indicate an equivalence in the administrator’s role between the failed trust and other successful providers.

Clause 119 recognises the need to give other commissioners a clear role and a proper say. It already extends the existing requirement on an administrator at a foundation trust to obtain the consent for their recommendations from each commissioner of the failing trust, and also from each commissioner of any affected trust. NHS England support must be sought in cases where not all commissioners agree.

Let me be absolutely clear. Under subsections (3), (4) and (6), the commissioners who are asked to agree and draft the final TSA report already include commissioners from affected trusts. It may be hard to spot that in the clause, as it amends existing legislation.

Clause 119 also requires the administrator to consult other affected commissioners. He or she must publish a summary of the consultation responses and take them properly into account when making final recommendations. The Secretary of State or Monitor will need to be satisfied that the administrator has carried out their administration duties properly, including showing proper regard for the statutory guidance.

Commissioners of other affected trusts will therefore have every opportunity to make their views known. However, I would like to thank my right hon. Friend the Member for Sutton and Cheam for bringing the matter to our attention. The Government agree that it is important for other local commissioners to be able to protect their essential services. We will update the guidance to make it clear that the agreement of commissioners to the TSA report should include their agreement that essential services have been protected at other trusts, as well as at the failing trust, so that all local commissioners have an equal say, with NHS England arbitrating in the event of disagreement. Furthermore, I would like to invite my right hon. Friend to chair a committee of MPs and peers to consider the draft guidance and ensure that his concerns are properly addressed before the regime is used.

[Bob Stewart]

My disquiet stems from the fact that when the TSA was put into South London Healthcare NHS Trust there was no mention that it would go beyond its borders and into Lewisham. I do not think that was very clever. That is what worries me about the Government’s plans.

[Dr Poulter]

The spirit of the previous Government’s legislation was to look at the wider health economy when a trust is in extremis and has reached the point at which it is failing patients, either because of its financial failure or the direct effect that has on the quality of patient care. There then needs to be a wider look at the whole health economy. I know the Princess Royal university hospital in my hon. Friend’s constituency very well. I also know Lewisham hospital very well, having done some of my medical training there. They cannot be seen in isolation from King’s college hospital, Woolwich, Sidcup and all the other hospitals in the area, because they look after patients in that part of London as part of an integrated health and care service. When a hospital fails in that way, it has to be looked at holistically. It is a power of last resort, to be used when a trust is in extremis, not a routine power, which is why we have the TSA process set up by the previous Government.

[Paul Burstow]

I am grateful to the Minister for some of the clarifications he has given so far. When he concludes his comments on new clause 16, will he confirm that the review of the guidance that he has invited me to chair will also consider the issue of consultation to ensure that it is genuinely pervious to public opinion and other clinical opinions in the area?

[Dr Poulter]

I am happy to give my right hon. Friend that assurance. It will be for him to lead the review, and we look forward to the work he does.

New clause 16 would make a second key change: to prevent the Secretary of State or Monitor from making decisions about recommendations affecting other trusts. Instead, local commissioners would have to undertake a further process of consultation and make their own decision. The effect would be to completely undo the changes that clause 119 is seeking to make—

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. If hon. Members across the Chamber wish to have private conversations, they should leave. The Minister is answering some important points and ought to be listened to.

[Dr Poulter]

It would take outside the administration process and the timetable recommendations that affect other trusts. It could mean that a complete solution for the trust in administration and local patients could not be found. As before, my right hon. Friend the Member for Sutton and Cheam said that examining in isolation a trust that is failing significantly would be like throwing it to the wolves on its own. New clause 16 would render the strict legal timetable for the regime ineffective by significantly delaying resolution. I know that it is not his intention, but the new clause would undo the core purpose of clause 119 and the very aims of the regime, which are to put in place sustainable and safe health care services for patients when a trust has significantly failed.

[Paul Burstow]

I think I have heard the Minister tell us that there will be an equivalency between commissioners whereby they will all have to agree to changes being led by a trust special administrator, that there will be further examination of the consultation issues, and that we will make sure that the process is used rarely and exceptionally. Given his confirmation of those things, I want him to know that I am satisfied that my concerns are being addressed. On that basis, I do not intend to press my new clause, and I urge colleagues to do likewise.

[Dr Poulter]

I am very pleased that my right hon. Friend is reassured. I pay tribute to the tremendous work that he has done throughout the passage of the Bill in scrutinising and pushing the Government to ensure that we produce better, and good, legislation. I commend him for the work he has done on that.

It is important to point out that clause 119 makes a number of changes to strengthen patient, public and commissioner involvement in the process. In concluding, I shall draw out its important aspects. First, the clause would extend the public consultation period from six to eight weeks so that the public and others in the wider health economy can give their views and improve the recommendations. It would also give the administrator more time than the previous Labour Government did to produce draft recommendations, extending the period from 45 to 65 working days.

Secondly, the clause would allow a more holistic view to be taken of the wider local health system by allowing an administrator to make wider recommendations, but only as long as those recommendations are necessary for, and consequential on, primary recommendations about the failing trust.

Thirdly, the clause would widen consultation to affected trusts, their staff and commissioners. In addition—I thank my right hon. Friend the Member for Sutton and Cheam for suggesting this—we are providing in amendments 11 and 12 greater public and patient representation in the regime by requiring the administrator to consult local authorities and healthwatch organisations. That will ensure that the voice of local communities is at the front and centre of the administrator’s final recommendations. This important clause makes sure that patients and local commissioners are properly consulted. Indeed, we make sure that Healthwatch is put at the heart of everything that happens. The clause also improves arrangements for the administrator in seeking the support of commissioners affected by their recommendations, as we have discussed. That means that an administrator could develop recommendations that provide a solution for the future of failing trust services, ensuring that all those affected are fully involved. That has to be the right action.

We have heard a lot from Labour Members about the trust special administrator regime. Let us remember that this was their provision and their regime. We are putting in place measures that are true to their intentions when they put this in place, so that a trust is not thrown to the wolves when it meets their circumstances of severe failure. We will make sure that we always act in the best interests of patients. The right hon. Member for Leigh (Andy Burnham) is good at playing politics and good at spin. I am a doctor. I will always do what I believe is in the best interests of patients, and that is exactly what clause 119 will achieve.

[Jeremy Lefroy]

I beg to ask leave to withdraw the clause.

Clause, by leave, withdrawn.

New Clause 16

Powers of local commissioners in relation to TSA recommendations

‘(1) In section 65DA(1) of the National Health Service Act 2006 (Chapter 5A of Part 2: Objective of trust special administration) omit “objective” and insert “objectives” and omit “is” and insert “are”.

(2) After subsection (1)(a) insert—

“(b) the continued provision of such of the services provided for the purposes of the NHS by any affected trust at such level, as the commissioners of those services determine.”.

(3) After subsection 1(b) omit “(b)” and insert “(c)”.

(4) In subsection (2) of that section after “The commissioners” insert “of the trust in special administration and any affected trust”.

(5) In subsection (4) of that section after “the commissioners” add “of the trust in special administration and any affected trust”.

(6) In subsection (9) of that section after ““commissioners” means the persons to which the trust provides services under this Act” add “and the commissioners of services at any affected trust”.

(7) In section 65F insert—

“(2E) Where the administrator is considering recommending taking action in relation to another NHS foundation trust or an NHS trust which may become an affected trust, the administrator shall engage with the commissioners of services at any such NHS foundation trust or NHS trust in order to enable those commissioners to make decisions pursuant to the matters set out in section 65DA.”.

(8) In section 651(1)—

(a) after “action which the administrator recommends that the Secretary of State” insert “or the commissioners of any affected trust“; and

(b) after “should take in relation to the trust” insert “or any affected trust”.

(9) In section 65K add—

“(3) Where the final report contains recommendations for changes to be made to services provided by an affected trust, the commissioners of services at that affected trust shall make a decision within 20 working days whether they wish to undertake public and patient involvement regarding all or any of the recommendations and, if they are so minded, shall comply with any arrangements for patient and public involvement agreed by those commissioners under this Act before making any final decision concerning the said recommendations.”.

(10) In section 65KA add—

“(7) Where the final report contains recommendations for changes to be made to services provided by an affected trust, the commissioners of those services shall make a decision within 20 working days whether they wish to undertake public and patient involvement regarding all or any of the recommendations and, if they are so minded, shall comply with any arrangements for patient and public involvement agreed by those commissioners under this Act before making any final decision concerning the said recommendations.”.

(11) In section 65KB(1)(d) after “that” insert “to the extent that the report recommends action in relation to the trust in administration”.

(12) In section 65KB(2)(a) after “decision” insert “in relation to any recommendations made the in relation to the trust in administration”.

(13) In section 65O add—

“(4) In this chapter “affected trust” means—

(a) where the trust in question is an NHS trust, another NHS trust, or an NHS foundation trust, which provides goods or services under this Act that would be affected by the action recommended in the draft report; and

(b) where the trust in question is an NHS foundation trust, another NHS foundation trust, or an NHS trust, which provides services under this Act that would be affected by the action recommended in the draft report.

(14) In section 13Q(4) at the end insert “save to the extent required by section 65K(3) or 65KA(7)”.

(15) In section 14Z2(7) at the end insert “save to the extent required by section 65K(3) or 65KA(7)”.

(16) In section 242(6)(b) at the end insert “save to the extent required by section 65K(3) or 65KA(7)”.’. —(Mr Jamie Reed.)

This Clause ensures that all commissioners of services affected by a trust special administrator’s report have the right to define local specified services; clarifies that, save for the trust in administration, local commissioners remain the decision makers for services they commission; and restores public engagement for changes other than for a trust in administration.

Brought up, and read the First time.

Question put, That the clause be read a Second time.

17:58

Division 229

Ayes: 241

---

Labour: 221
Conservative: 7
Democratic Unionist Party: 5
Plaid Cymru: 2
Independent: 1
Alliance: 1
Green Party: 1
Liberal Democrat: 1

Noes: 288

---

Conservative: 251
Liberal Democrat: 35
Independent: 1

18:11

Proceedings interrupted (Programme Order, 10 March).

The Deputy Speaker put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83E).

Clause 119

Powers of administrator etc.

Amendment proposed: 30, page 102, line 31, leave out clause 119.—(Andy Burnham.)

Question put, That the amendment be made.

18:11

Division 230

Ayes: 239

---

Labour: 221
Conservative: 6
Democratic Unionist Party: 5
Plaid Cymru: 2
Independent: 1
Alliance: 1
Green Party: 1

Noes: 297

---

Conservative: 249
Liberal Democrat: 46
Independent: 1

Amendments made: 35, page 104, line 3, at end insert—

‘(bzc) any local authority in whose area the trust provides goods or services under this Act;

(bzd) any local authority in whose area an affected trust provides goods or services under this Act;

(bze) any Local Healthwatch organisation for the area of a local authority mentioned in paragraph (bzc) or (bzd);”.

‘( ) In subsection (8) of that section, omit paragraph (e).’.

Amendment 36,  page 104, line 13, at end insert—

‘, and

(c) hold at least one meeting to seek responses from representatives of each of the local authorities and Local Healthwatch organisations from which the administrator must request a written response under subsection (7)(bzc), (bzd) and (bze).”.’.

Amendment 11, page 104, line 23, at end insert—

‘(11B) In this section, a reference to a local authority includes a reference to the council of a district only where the district is comprised in an area for which there is no county council.”.’.

Amendment 12, page 104, line 24, leave out ‘and (bzb)’ and insert ‘, (bzb), (bzc) and (bzd)’.

Amendment 13, page 105, line 26, leave out ‘and (bzb)’ and insert ‘, (bzb), (bzc) and (bzd)’.—(Dr Poulter.)

Clause 123

Regulations and orders

Amendment made: 14, page 109, line 18, at end insert—

‘(ia) regulations under section 72 (Part 1 appeals) which include provision that amends or repeals a provision of an Act of Parliament.’.—(Dr Poulter.)

Clause 125

Commencement

Amendment made: 15, page 110, line 26, leave out ‘3’ and insert ‘4’.—(Dr Poulter.)

Clause 127

Short title

Amendment made: 16, page 111, line 20, leave out subsection (2).—(Dr Poulter.)

Third Reading

Queen’s consent signified.

18:24

[The Secretary of State for Health (Mr Jeremy Hunt)]

I beg to move, That the Bill be now read the Third time.

The Bill will bring about the most profound change in the care system for a generation. It provides certainty on care costs that has never been available before; independent and transparent inspections to drive up the quality of care; integration of the health and social care in a way that has been talked about for years but never delivered; and real patient empowerment to put people firmly in the driving seat for their care planning.

The Bill will also implement or help to implement many key recommendations made in the Francis report following the shocking failings at Mid Staffordshire NHS foundation trust. We are also establishing vital new principles for dealing with failure where it occurs, most notably the requirement and ability to deal with unsafe care quickly before lives are lost unnecessarily.

I thank all those who have been involved in considering and scrutinising the Bill, including my predecessor, who was responsible for originating it, together with my right hon. Friend the Member for Sutton and Cheam (Paul Burstow). I particularly wish to thank the Minister of State, Department of Health, my hon. Friend the Member for North Norfolk (Norman Lamb), and the Under-Secretary of State for Health, my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) for their herculean efforts in Committee and today to ensure that the Bill returns to the other place in the best possible state. There was a well-informed and rich debate on this landmark piece of legislation, for which I thank Members on both sides of the House.

We know that in the next 20 years, 1.4 million more people are likely to need care and support. The Bill prepares our country for that change with the most comprehensive reform of social care legislation in more than 60 years, creating for the first time a single, modern statute for adult care and support that is focused around the person, not the service. Meanwhile the new £3.8 billion merger of health and care services will allow the delivery of seamless, co-ordinated, whole-person care for those in need. In doing so, we will be realising a vision that was talked of for 13 years by the previous Government and actioned in three by this one.

Crucially, these reforms make a reality of the proposals of the Commission on the Funding of Care and Support, chaired by Andrew Dilnot. Many older people and people with disabilities face catastrophic and potentially ruinous bills for their care and support. The Dilnot commission judged quite simply that the current funding system is not fit for purpose. The Government have listened to the commission’s advice, have acted, and are implementing its recommendations. For the first time, a cap on care costs at £72,000 in today’s prices will provide protection to every single person in England. People who have worked hard all their lives need no longer fear that they will lose everything just because they are unlucky enough to develop care needs beyond any reasonable budget.

The difficult decisions the Government have taken on public spending have enabled us to pledge £2 billion per year to fund this cap, from which more than 100,000 people will directly benefit financially. What is more, we are raising the threshold for the means test for help with residential care, so that in 2016-17 alone, up to 35,000 more people will receive support with their care costs. Our universal deferred payment scheme will put an end to people being forced to sell their homes in their lifetime to pay for their care.

People often enter care at a point of crisis, and at a time of great distress. These reforms will create a better, fairer system, enabling people to grow old, safe in the knowledge that they will receive the care they need without facing unlimited costs. Combined with the Government’s wider moves to protect pensions and improve care standards, we are determined to fulfil our vision to make Britain the best country in the world to grow old in.

[Sarah Newton]

I had the great privilege to serve in Committee, during which the Minister of State, Department of Health, my hon. Friend the hon. Member for North Norfolk (Norman Lamb) expressed support for my view that if the pilots prove successful, we should be able to provide free social care at the end of life to allow more people to die with dignity at home. Would my right hon. Friend commit to that this evening?

[Mr Hunt]

I thank my hon. Friend for her work in Committee. That is an aspiration that we all share, and some of the results from the pilots are extremely encouraging in terms of the extra care and support we are able to give people. End-of-life care is a priority for everyone, so I share her enthusiasm that we can make progress on that very important area.

Financial security must be combined with confidence in the standard of care received. A year on from the Francis report, we are debating a Bill that will help us to deliver 61 commitments that we made in response to it. We are restoring and strengthening a culture of compassionate care in our health and care system.

Robert Francis’s report said that the public should always be confident that health care assistants have had the training they need to provide safe care. The Bill will allow us to appoint bodies to set the standards for the training of health care assistants and social care support workers. These will be the foundation of the new care certificate, which will provide clear evidence to patients that the person in front of them has the skills, knowledge and behaviours to provide compassionate high-quality care and support.

New fundamental standards will ensure that all patients get the care experience for which the NHS, at its best, is known. In his report, Robert Francis identified a lack of openness extending from the wards of Mid Staffs to the corridors of Whitehall. We want to ensure that patients are given the truth when things go wrong, so the Bill introduces a requirement for a statutory duty of candour which applies to all providers of care registered with the CQC. The Francis inquiry also found that providing false or misleading information allows poor and dangerous care to continue. We want to ensure that organisations are honest in the information they supply under legal obligation, so the Bill introduces a new criminal offence for care providers that supply or publish certain types of false or misleading information.

The care.data programme will alert the NHS to where standards drop and enable it to take prompt action. To succeed, it is vital that the programme gives patients confidence in the way their data are used. For that reason we have today amended the Bill to provide rock-solid assurance that confidential patient information will not be sold for commercial insurance purposes.

Patients also need to have confidence that where there are failings in care they will be dealt with swiftly. At Mid Staffs that took far too long. That is why the Care Bill requires the CQC to appoint three chief inspectors to act as the nation’s whistleblowers-in-chief. Their existence has started to drive up standards even in the short time they have been in their jobs.

Perhaps most fundamentally, the Bill re-establishes the CQC as an independent inspectorate, free from political interference. The Bill will remove nine powers of the Secretary of State to intervene in the CQC to ensure that it can operate without fear or favour. The Bill will also give the CQC the power to instigate a new failure regime and will give Monitor greater powers to intervene in those hospitals that are found to be failing to deliver safe and compassionate care to their patients. For the most seriously challenged NHS providers, there needs to be a clear end point when such interventions have not worked. The Bill makes vital changes to the trust special administration regime, established by the Labour party in 2009, to ensure that an administrator is able to look beyond the boundaries of the trust in administration to find a solution that delivers the best overall outcome for the local population.

[Jim Dowd]

I realise that the Secretary of State was not in office when the TSA process was started in the South London Healthcare NHS Trust, but he did accept the report of the administrator and, of course, appealed against the High Court decision that found against him. Will he clarify and put on the record that it is the coalition Government’s view, and the view of their constituent parties, that the people of Lewisham should not have an accident and emergency unit; should not have a maternity unit; should not have a paediatric specialty; and that two thirds of the hospital site should be sold off? Those were the recommendations of the TSA, which he wanted to accept.

[Mr Hunt]

Let me first tell the hon. Gentleman that the TSA did not recommend the closure of the A and E unit at Lewisham hospital, and he knows that perfectly well.

I will say what this Government are determined to ensure does not happen again. Mid Staffs went on for four years before a stop was put to it. Patients’ lives were put at risk and patients died because the problem was not tackled quickly. The point of these changes today is to ensure that, when all NHS resources are devoted to trying to solve a problem and they fail, after a limited period of time it will be possible to take the measures necessary to ensure that patients are safe. I put it to the hon. Gentleman and to all Opposition Members that if they were in power now they would not be making the arguments that they have been making this afternoon, because it is patently ridiculous to say that we will always be able to solve a problem without reference to the wider health economy. They know that: it was in the guidance that they produced for Parliament when they introduced the original TSA recommendations. What Government Members stand for is sorting out these problems quickly and not letting them drag on in a way that is dangerous for patients.

[Andrew George]

Following the concessions announced by the Under-Secretary in the previous debate, do I understand correctly that if the TSA makes recommendations to a non-failing trust to its detriment and the trust objects to those proposals, NHS England can, through its arbitration process, impose those changes?

[Mr Hunt]

Let me clarify, but first let me add that we want to listen to the consultation that will be led by my right hon. Friend the Member for Sutton and Cheam and the new Committee that he chairs. We are requiring local clinical commissioning groups and GP groups to come to an agreement on the right way forward in these difficult situations. We need an arbitration system for when agreement is not possible, which this clause allows for. We would like there to be agreement but we cannot allow a situation where, when there is not an agreement, we end up with paralysis and being unable to sort out the problem of a trust that is failing, particularly when it is unsafe and patients’ lives are being put at risk. That is exactly what was happening in the South London Healthcare NHS Trust.

As the Bill leaves the House to return to the other place for the final stages of its passage, we can be justly proud. This is a landmark piece of legislation that will transform the experience of those who rely on the NHS and care systems by giving patients and their carers both legal rights and a much better joined-up service. It will reduce the money wasted on duplication and allow more resources to be directed at the front line. It will remove the uncertainty and worry of unpredictable care costs in later life and will put individuals at the heart of a system built around their needs and not its own priorities.

Most of all it will send a signal loud and clear that when it comes to the challenge of treating an ageing population with dignity, compassion and respect, this House has not shirked its responsibilities but has risen confidently to the challenge.

18:37

[Andy Burnham]

I begin by thanking my shadow team, particularly my hon. Friends the Members for Leicester West (Liz Kendall) and for Copeland (Mr Reed), who have spent many hours trying to make sense of this unwieldy piece of legislation. I, too, want to thank members of the Public Bill Committee for their work, as well as the officials, Officers and staff of the House who enabled the Committee’s work to take place.

It is right also to pay tribute at this point to the Care and Support Alliance, a very important association of organisations working to be advocates and champions for some of the most vulnerable people in our society. The alliance worked with the previous Government and is working with this Government; indeed it works with all sides of the House. It can take some credit for some of the steps forward that are coming as a result of the Bill, and it is fair to say that there are some steps towards a better social care system.

I would argue that the Bill builds on the work of the previous Labour Government in that regard, particularly in the overdue recognition of carers. We welcome stronger legal recognition and rights for carers. We welcome better access to information and advice, which will make a difference to some people using the care system. The idea of portability—that if people move from one place to another, their entitlement to care goes with them—is a good principle and one that I put forward. We welcome the fact that it has been carried into the Bill. The principle of a cap on what people should pay for social care is in itself an important step forward. I recognise that but, as I will go on to say, we do not believe that all is at it seems.

There are measures in the Bill, as the Secretary of State said, to implement parts of the Francis report, such as the organisational duty of candour and moves to strengthen regulation. We welcome these steps but we would have encouraged the Government to go further.

The big problem with the Bill is the gap between what Ministers claim it does and what it actually does. It is not what it seems and it will not deliver on the claims made for it. Worse, it is no answer to the problems posed by an ageing society, and it is not equal to the scale and urgency of the care crisis that the country faces.

[Paul Burstow]

The right hon. Gentleman expresses concern about the care crisis. Why did he abstain in yesterday’s vote on the Local Government Association’s proposal that there should simply be an assessment of the adequacy of funding?

[Andy Burnham]

I do not think that the right hon. Gentleman is in a very strong position to talk about Members’ abstaining in votes on amendments. I shall say more about that shortly.

Let me now list three reasons for our argument that the Bill is not what it seems. First, as I have said, it is no answer to the care crisis. It proposes that a cap should be paid for by the restriction of eligibility for care, and the removal of care from some people who are already receiving it. Last week we heard from Age Concern that 800,000 people who had previously received support no longer received it. The problem is that local authorities are being asked to implement the system with no additional resources, and are therefore having to move funding from preventive social care to the administration and funding of the cap and the deferred payment scheme. Rather than taking from one area of social care to give to another, the Government should have put new resources into social care.

[The Minister of State, Department of Health (Norman Lamb)]

The right hon. Gentleman said a moment ago that the Bill removed care from some people by restricting eligibility criteria. Does he accept that although there is a national eligibility criterion—which is long overdue—any councils that choose to be more generous can do so, just as they can now?

[Andy Burnham]

If the Minister gave councils budgets that enabled them to be more generous, they might have a chance, but drastic cuts mean that they cannot provide care that is worthy of the name. He will know of the fears of organisations that represent disabled adults of working age. The Royal National Institute of Blind People, for instance, fears that the move to retrench eligibility criteria to cover only substantial and critical needs will remove care from people with moderate needs whose support currently enables them to continue to work.

[Barbara Keeley]

I understand that the Minister is to visit Salford tomorrow. Perhaps he would like to talk to Salford city council, whose budget has been cut by £100 million over the last three years, about how it might be more generous. I am glad that my right hon. Friend has mentioned carers and their new rights, but how hollow do those new rights seem to carers in Salford, given that 1,000 people will lose their care packages this year and 400 will not qualify for them? That is a direct result of what the Government have done.

[Andy Burnham]

My hon. Friend’s intervention brings me to my second reason for thinking that the Bill is not what it seems. The changes in eligibility for social care expose more people to social care charges than was the case before the present Government came to office, and, as has been demonstrated by my hon. Friend the Member for Leicester West, those charges are increasing above inflation. More people are paying care charges, and paying them at a higher level. The care cap is not what it seems. In fact, as my hon. Friend has consistently argued, it is a care con. The Secretary of State said today that the Bill would give people certainty about what they would pay—

[Mr Jeremy Hunt]

indicated assent.

[Andy Burnham]

The Secretary of State says yes, but I am afraid that it will not. The £72,000 cap is based on a local authority average, not on the actual amount that people will pay for care. So no, the Bill will not give them that certainty. The Secretary of State also said that people would not lose everything to pay for care. Let us take him at his word, and assume that £72,000 is the maximum that a person can pay, and £144,000 is the maximum for a couple. In my constituency, that would indeed mean people losing everything that they had worked for, although it might not mean that in the Secretary of State’s constituency or in other parts of the country. The Secretary of State needs to be honest with people. That is why we are saying that the Bill is not what it seems.

[Norman Lamb]

Will the hon. Gentleman give way?

[Andy Burnham]

I will, but I think that the Minister should take account of that point, because it is quite important.

[Norman Lamb]

The right hon. Gentleman says that he would like the eligibility criteria to be more generous. Is he now committing himself to funding that?

[Andy Burnham]

I am not writing a budget at the Dispatch Box this evening. I will stand by our record of giving real-terms increases to local government. I warned at the start of this Parliament that if the effect of the Government’s promise of real-terms increases for the NHS—which have actually never materialised—was a raid on local government, that would be a short-term policy. It would mean more older people ending up in hospital and who then could not be discharged because there was not the care at home. That is exactly what is happening. It is a false economy. That is what we warned them about and they failed to listen.

[Andrew Percy (Brigg and Goole) (Con)]

Will the right hon. Gentleman give way?

[Andy Burnham]

No I will not, as the hon. Gentleman has not been here all afternoon.

The third area is the claims that the Bill will improve regulation. Let me ask a direct question: if this is about improving the quality of services, why remove from the CQC the responsibility to provide oversight of local authority commissioning? Why do that if this Bill is about improving regulation? Why leave local government free to do what they like at a local level—to commission for 15-minute visits or for staff on zero-hours contracts—when we have seen the failures at Winterbourne View and other places? Why remove that important role from the CQC?

[Mr Jeremy Hunt]

rose—

[Andy Burnham]

We have never had a proper answer to that. I hope we are about to get one.

[Mr Hunt]

Let me tell the right hon. Gentleman what this Bill does: it introduces the proper expert-led inspection of social care provision that was scrapped by his Government, so that we actually know when there are care problems and we sort them out.

[Andy Burnham]

The right hon. Gentleman has not answered the question. There was a responsibility on the CQC to provide oversight of local authority commissioning. This Bill removes it. Why does it do that? It is a backward step in my view.

The fourth area is that, in respect of the care data scheme, the Bill fails to provide the assurances the Government tried to herald in the press a few days ago—to borrow the Secretary of State’s words today, a “rock-solid assurance” that data could never be passed to commercial insurance companies. I do not believe it is possible to claim that new clause 34, which has now been added to the Bill, does that. It just has general aims around the promotion of health. That does not stop data being passed to private health insurance companies. Again, I do not think the Bill does what the Secretary of State claims it does.

The fifth area I want to challenge the Government on is the whole question we have just been debating. This goes to the heart of where the coalition began, which was that local people would be in the driving seat and local GPs would be in control. The coalition agreement said the Government would end centrally dictated closures. Well, they have ripped all that up this afternoon by passing clause 119 and keeping it in the Bill. They claimed they were just doing what we left behind. That is not the case, because the High Court told them otherwise. The High Court told them they had gone beyond the powers I had created in 2009. The Secretary of State was unable to answer that. He said everything was our fault—it is never their fault or his fault. Well, how about him listening to the Court? How about him reading the clause that we passed before he tried to close or downgrade Lewisham’s A and E? Would that not have been a good thing to do? He did not do that, however. He tried to plough on and downgrade a successful A and E in the teeth of opposition and he got found out. Yet he comes back here today and just thinks arrogantly he can ram the same powers back through this Parliament.

What we have seen today from the right hon. Member for Sutton and Cheam (Paul Burstow), who positioned himself as though he was going to make a stand for local involvement in the NHS, is the worst kind of collusion and sell-out of our national health service. Just as the Liberal Democrats voted for the Health and Social Care Act, again they have backed tonight the break-up of the NHS. In the last few days the right hon. Gentleman has been asking for all these signatures from all over the country—148,000 people to sign his petition—just so, it seems, that he could get a new job working within the coalition. I am not sure they are going to feel well represented this evening.

[Mr Hunt]

The shadow Secretary of State is bandying around some big words like “arrogant” so will he now show some humility and recognise that every single one of the 14 hospitals in special measures had warning signs when Labour was in office and Labour failed to sort out those problems?

[Andy Burnham]

We took action to address care standards in the NHS. The right hon. Gentleman is trying to politicise care failure. The Labour Government inherited the Bristol Royal infirmary scandal from the previous Conservative Government, along with the scandal at Alder Hey and the Shipman murders, but we did not try to politicise those failings. The Secretary of State is trying to politicise such failings today, however.

The Lib Dems have shown again tonight that they simply cannot be trusted to stand up for the national health service. There is only one party in this House that will do that, and that is the Labour party represented on these Benches. The next Labour Government will repeal the Health and Social Care Act and restore the right values to the heart of the NHS. In so doing, we will also repeal clause 119 of this Bill. We will take the powers that the Secretary of State has taken for himself today and hand them back to local people.

We will not get the care that we want until we are able to face up to the care crisis that this country now has. Our argument is that the full integration of health and care is the only way to reshape services around the person. That is the only way to go, and we will give a full green light to NHS organisations to collaborate and integrate, instead of working with the market regime that this Government have introduced. We have had the ludicrous spectacle of the Competition Commission telling two hospitals that wanted to collaborate that they could not do so because it would be anti-competitive. That is the reality of the NHS that this Government have created. That is the nonsense that people are facing on the ground. Only when we repeal the Health and Social Care Act and get rid of the powers that the Secretary of State has taken for himself today will we put the NHS back on the right path, away from the path towards fragmentation and privatisation, and begin to build a 21st-century NHS.

[Several hon. Members]

rose—

[Mr Speaker]

Order. I was going to call the hon. Member for Totnes (Dr Wollaston), as she had applied to speak in the Third Reading debate, but if she does not wish to speak, I will call the right hon. Member for Charnwood (Mr Dorrell) instead. Does the hon. Lady wish to catch my eye?

[Dr Wollaston]

indicated assent.

[Mr Speaker]

I call Dr Sarah Wollaston.

18:51

[Dr Wollaston]

Thank you, Mr Speaker.

I congratulate the Secretary of State on this groundbreaking Bill. It is disappointing that there has been such a curmudgeonly response to it. Some important concessions and improvements to the Bill have been made during its passage through the House, and it has been a great pleasure to serve on it throughout the entire process, starting with the Committee on the draft Bill. At every stage, the Government have listened to the concerns and made improvements.

There is just one small element that I would like to draw to the Secretary of State’s attention. There has been a step change on the issue of open data. For the first time, there has been recognition of the need not only to publish data but to disseminate the findings of the research involved. That has been an important concession in relation to part 3 of the Bill. We have also heard today about the improvements to the clauses on care.data, and I would like to ask anyone following the debate on that subject to bear in mind that their health, and the health of their children and families, will be improved if we see a commitment to improving access to health data. Let us keep that in focus. We must ensure that we listen to the very real concerns that are being expressed, but please do not opt out of care.data. Let us move forward with this exciting project and with the commitment to research that we have seen throughout the passage of the Bill.

18:53

[Meg Munn (Sheffield, Heeley) (Lab/Co-op)]

I want to make one brief point. Care in our society is delivered largely by friends and family, for free. It is done willingly, because the people involved want to do it, and we should support that. I remain extremely concerned that not enough attention is being paid to the mechanisms by which that informal care could be better supported. I ask the Secretary of State not only to look at clause 18, which covers the duty to meet needs for care and support, but to commit to drafting guidance that will make it clear to local authorities and health services that clause 19 gives them the power to meet needs for care and support.

When people are in difficult circumstances, providing low-level care such as shopping and cleaning—the kind of thing that supports people with a lot of needs that are being met by someone else—is the way forward. That is what we need to see happening. I remain extremely concerned that because local authorities are under such budgetary pressure, they will focus only on the most severe needs and that the opportunity to adopt a preventive approach, which would help to provide real care and support and keep people at home, will be missed.

[Several hon. Members]

rose—

[Mr Speaker]

Order. Hon. Members will, I know, be sympathetic to each other. Everyone will try to help other colleagues, I feel sure.

18:55

[Mr Dorrell]

I shall make two brief points, which I think are the two things for which the Bill will be remembered. The first is a story that started 17 years ago, when Tony Blair as a newly elected Labour Prime Minister went to the Labour party conference and said that a Labour Government should not tolerate a position in which families lose their houses in order for their loved ones to be cared for. It has taken 17 years to legislate the solution to that problem, and I congratulate my right hon. and hon. Friends on the Front Bench on having redeemed the Blair pledge.

It was interesting that in his Third Reading speech the shadow Secretary of State started by saying that the Bill builds on the ideas that he pursued as Secretary of State. He is right when he says that, which is why the second half of his speech was such nonsense. The other element of his record on which the Bill builds is making real a commitment to joining up health and social care. We have had generations of Secretaries of State, including me and the right hon. Gentleman, who have made the case for joining up health and social care. It is the better care fund introduced by this Government which ensures that resources flow in a way that will make that rhetoric real.

The Bill will thus be remembered, first, for rationalising the individual contribution. The shadow Secretary of State has an endless argument with his colleague the shadow Chancellor about funding social care, but what we have is a plan that makes that system better than it has been hitherto. Secondly, we have a clear commitment to resource flows across the health and social care divide. Those are the two key elements of the Bill, which is why I welcome it and why I shall vote for it if I get the opportunity to do so this evening.

18:57

[Mrs Lewell-Buck]

I shall be brief. Throughout the passage of the Bill, I have felt that there is considerable consensus on what a good social care system should look like. For that reason, I am disappointed that the Government failed to be more accommodating towards a number of reasonable amendments tabled by the Opposition. In particular, I still cannot understand the Government’s decision to remove the CQC’s duty to inspect commissioning, which stood as part of the original Bill and mysteriously disappeared when it was in the Lords.

There are worse elements of the Bill, such as clause 119. We heard earlier that this is a grave threat to every hospital and community in our country. Members on the Government Benches supported the clause today, but I expect most of them will regret doing so at some point in the future. Yet again, this has been a sad day for our health service on this Government’s watch. Underpinning everything we have discussed in the many hours of debate on the Bill is the fact that local authorities all over the country are experiencing a funding crisis, driven by a Government who appear unconcerned about the effects of their spending cuts on the poor and the vulnerable. Even the sensible reforms in the Bill will not benefit everybody.

I shall end on this point. Those people who are seeing their care packages disappear, those who are locked out of the care system, and everyone who turns up at a hospital to find that departments are shut—let them know that it is this coalition’s fault. I hope all coalition members are proud of themselves.

18:58

[Paul Burstow]

The Bill deserves a Third Reading because it replaces 60 years of piecemeal, dog’s breakfast legislation. In place of that it will put a system focused on promoting the well-being and quality of life of the individual. It provides a foundational set of changes of the sort that my right hon. Friend the Member for Charnwood (Mr Dorrell) was talking about.

My 18 years in this place have been about campaigning for the changes that the Bill brings about. I have seen countless Green Papers and heard countless promises of reform. This legislation brings that reform home and delivers change—change that I hope all Members will support, because it is for the good of our constituents that we are here and the Bill delivers a lot of good.

Question put and agreed to.

Bill accordingly read the Third time and passed, with amendments.

Business without Debate

Tuesday 11th March 2014 Commons Chamber

Delegated Legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Employment and Training

That the draft Industrial Training Levy (Engineering Construction Industry Training Board) Order 2014, which was laid before this House on 14 January, be approved.—(John Penrose.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Pensions

That the draft Occupational and Personal Pension Schemes (Automatic Enrolment) (Amendment) Regulations 2014, which were laid before this House on 3 February, be approved.—(John Penrose.)

Question agreed to.

PETITION

Tuesday 11th March 2014 Commons Chamber

19:00

[Nigel Mills (Amber Valley) (Con)]

It is with great pleasure that I present this petition, signed by more than 3,000 of my constituents, showing the extent of feeling about the closure of the Heanor Memorial hospital.

The petition states:

The Petition of the people of Heanor and the wider Amber Valley area,

Declares that the Heanor Memorial Hospital provides essential services to the community of Heanor, and that the Southern Derbyshire Clinical Commissioning Group should allocate sufficient resources to ensure that the hospital is once again able to open and serve the people of Heanor.

The Petitioners therefore request that the House of Commons urges the Government to take all possible steps to ensure that Heanor Memorial Hospital remains open and that health provision in Heanor is enhanced not diminished.

And the Petitioners remain, etc.

[P001331]

World Water Day

Tuesday 11th March 2014 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(John Penrose.)

19:01

[Naomi Long (Belfast East) (Alliance)]

I am grateful for the opportunity to be able to raise the important issue of access to clean water, sanitation and hygiene.

Members will be aware of my long-standing interest in the issue both through my involvement in international development and my professional background. For 10 years before entering full-time politics, I practised as a civil engineer and spent the last five years of my engineering career working in sewerage rehabilitation and design. Others have said that that was good preparation for politics, but I could not possibly comment.

Through my work, I became increasingly aware and supportive of the work being done by WaterAid and other non-governmental organisations and charities to address the deficit of clean water and sanitation infrastructure in many developing nations. I believe it is vital to keep international development needs, especially those as basic and essential as water and sanitation, on the political agenda. Given that 2.6 billion people have no access to adequate and hygienic sanitation methods, the subject of the debate is inevitably and unavoidably broad, but the issue also impacts widely across a range of development objectives. That breadth of impact has contributed to the continuing and increasing political attention that matters related to water and sanitation have been receiving, as there is growing recognition that investment in water and sanitation can have a transformational effect on the lives of people in ways that were previously overlooked.

The timing of the debate is apposite for several reasons: first, world water day is on Saturday 22 March; secondly, we are at a defining moment with respect to the post-2015 development agenda; and, thirdly, the Sanitation and Water for All high-level meeting will take place in April. I will touch on each of those reasons in my speech, but I want to begin by noting the significance of water and sanitation in the context of last Saturday’s international women’s day.

Of the 2.6 billion people without access to adequate and hygienic sanitation methods, 526 million are girls and women. The impact on their lives, however, is disproportionate. These are girls and women without access to any form of sanitation, meaning that they are forced to defecate in the open, or in bushes or ditches, and they are forced to cope with menstruation in the absence of any real privacy, which adds further indignity to their ordeal. This forces women to make difficult choices: to wait until dark to use a public toilet, where one is available; to defecate in the open; or instead to defecate in their own homes. The World Health Organisation has calculated that women and girls in developing countries spend 98 billion hours each year searching for a place to go to the toilet, more than twice the total hours worked every year by the entire UK labour force.

Women who lack safe access to sanitation, or have no access at all, may end up waiting until it is dark to go to the toilet, have to walk long distances to find an isolated spot in the open, or use often poor public amenities. There are many reported incidents of men hiding in public latrines at night, waiting to rob or assault those who enter. Women and girls defecating in the open are also more at risk of rape and sexual assault.

A WaterAid poll of women in the slums of Lagos in Nigeria, where 40% of women are forced to go to the toilet outside, found that one quarter have had first-hand or second-hand experience of harassment, a threat of violence or actual assault in the past 12 months alone. Furthermore, 67% of women interviewed in Lagos said that they felt unsafe using shared or community toilets in public places.

The second choice is to defecate at home, which carries with it enormous social stigma and can result in isolation. In addition to the stigma, resorting to so-called “flying toilets”—plastic bags or buckets used at home—has detrimental consequences for the health of the family. The links between poor sanitation, water, and illness are well established, with an increased risk of diarrhoea, as well as infections such as trachoma, which can lead to blindness.

[Jim Shannon (Strangford) (DUP)]

Some 768 million people have poor water quality, more than 2.5 billion people have poor sanitation and 1.8 million people die from diarrhoea as a direct result of that, so does the hon. Lady feel that the Minister should be saying in his response that international water aid should be a priority?

[Naomi Long]

I agree with what the hon. Gentleman says, and he is right about the importance of water and sanitation. The biggest single health improvement in the UK came as a direct result of the introduction of sanitation and sewerage systems; in this city alone that one measure added 15 years to average life expectancy.

As a result of trying to limit going to the bathroom for long periods of time and drinking less water over the course of the day, women are also more susceptible to urinary tract infections and dehydration, adversely affecting their health. As women are generally responsible for the disposal of human waste when provision is inadequate, they are also exposed more frequently to diseases such as dysentery and cholera. It has been calculated that every day 2,000 mothers lose a child due to illnesses caused by poor sanitation and dirty water. Half the hospital beds in developing countries are filled by people suffering from diseases caused purely by poor water, sanitation and hygiene. Such statistics are staggering, unimaginable and, in this day and age, unjustifiable. These women and girls are suffering from shame, indignity and disease in their everyday lives as a result of something as routine and necessary as carrying out basic bodily functions.

Lack of access to private sanitation facilities also prevents many young girls from continuing in school beyond puberty, limiting their ability to become financially independent and to contribute fully to their community, and denying them the right to a proper education. History shows that the health, welfare and productivity of developing country populations are closely linked with improvements in water, sanitation and hygiene. Few interventions have a greater impact on the lives of the world’s poorest and most marginalised people, particularly women and girls, than reducing the time spent collecting clean water, dealing with sanitation and addressing the health problems caused by poor sanitation and hygiene. Although vaccines offer some hope of improvement on the health front, their efficacy is significantly improved where programmes are undertaken in conjunction with improvements in water, sanitation and hygiene. Neither can vaccines alone free women and girls from the time and physical burden of collecting water or from the safety risks posed by lack of sanitation.

I wish briefly to discuss an opportunity the Government have to make such an intervention: the Sanitation and Water for All high-level meeting taking place in Washington on 11 April. The Sanitation and Water for All partnership, of which the UK Government are a founding member, aims to bring about a step change in the performance of the WASH—water, sanitation and hygiene—sector, acting as a catalyst to overcome key barriers and accelerate progress towards universal and sustainable access. It is a global partnership of Governments, donors, civil society and other development partners working together to co-ordinate high-level action, improve accountability and use scarce resources more effectively. The biennial high-level meeting presents a unique opportunity to increase political prioritisation, and to strengthen accountability and the commitment to strengthen the sector’s performance. I want to take this opportunity to press for the Secretary of State for International Development to represent the UK at this important meeting.

[Lady Hermon (North Down) (Ind)]

I am most grateful to the hon. Lady for allowing me to intervene in this important Adjournment debate, which she has successfully secured. In the recent past, have senior British Government Ministers attended similar meetings to the one she has encouraged the Secretary of State to attend this year? If they have attended such meetings, is there evidence to suggest that this has been useful, influential and for the good? Hon. Members in this evening’s debate would be interested to know that.

[Naomi Long]

I thank the hon. Lady for her intervention. The previous high-level meeting in 2012 was attended by the then International Development Secretary, the right hon. Member for Sutton Coldfield (Mr Mitchell), and it would be greatly encouraging to see the same level of representation in April, signalling continued UK Government leadership on this issue. On that occasion, such senior Government representation was instrumental in other countries also sending senior Ministers, and that permitted real progress to be made. I also know that the Secretary of State and her team in the Department for International Development are strong advocates of this issue and of the rights of women as part of the development agenda. It would be hugely encouraging if she were able to attend.

This year, the UK Government are particularly well placed to drive improvements in the effectiveness of aid to the sector, as the Secretary of State for International Development is also co-chair of the Global Partnership for Effective Development Co-operation. The first GPEDC ministerial meeting coincides with the Sanitation and Water for All high-level meeting, which provides a valuable opportunity for the UK Government to link the two initiatives and highlights the importance of effective development co-operation in the WASH sector.

I want to turn now to the issue of the post-2015 international development framework. The vision set out in 2000 as part of the millennium development goals included halving the proportion of people without sustainable access to safe drinking water and sanitation. The millennium development goal on sanitation is the worst performing sector of all the MDGs, and is unlikely, at current rates of progress, to be met until the next century.

The best estimates show that at least 783 million people still lack clean water, although the true number may be far higher. Taking population growth into account and despite all the good work that has been done, there are almost as many people without access to sanitation worldwide as there were 20 years ago.

We are now faced with an opportunity to address the limited progress that has been made on water, sanitation and hygiene issues through the post 2015 millennium development goals, and I am hopeful that the Government will treat this opportunity with the significance that it deserves.

A key strength of the millennium development goals framework has been the provision of a tenable agenda that has established standards for international development co-operation. The post-2015 framework must continue those positive aspects of the MDGs while addressing their failures. We need to see an ambitious vision for international development once the MDG project comes to an end, which reflects the importance of water, sanitation and hygiene to the attainment of poverty eradication, increased equality, and sustainable human and economic development. For every pound invested in WASH there is an outturn of around £8 in increased productivity, so that is a wise investment of a resource from our limited aid budget.

The UK Government have a strong history of championing the aid effectiveness agenda, and we need to ensure that that is carried forward in the context of the water, sanitation and hygiene sector. Strong political leadership and increased sector investment are fundamental to accelerating progress towards universal access, but another important factor is the degree to which countries have developed the institutions and systems to organise and oversee the delivery of services. Increasing the effectiveness of aid is key to extending and sustaining services, particularly to poorer communities, and will be vital in achieving universal access.

Finally, I want to pay tribute to the important work that is being done on WASH both inside Parliament and in a wider context. I am greatly pleased that the International Development (Gender Equality) Bill will soon receive Royal Assent. I commend the hon. Member for Stone (Mr Cash) for his efforts in bringing forward this important piece of legislation, and also the Secretary of State for International Development and her team for their support of the Bill. The Bill, which will place a duty on the Government to consider ways in which development and humanitarian funding will build gender equality in the countries receiving UK aid, is a massively significant and symbolic step in the fight for gender equality around the world, and I hope that it is one that other countries will choose to follow.

Let me mention the important and often life-saving work undertaken by charities such as WaterAid, Tearfund, Trocaire, Christian Aid and Oxfam. I was delighted to see that Team GB and NI rowers from Northern Ireland, Richard and Peter Chambers, recently visited Uganda with Tearfund to raise awareness of lack of access to water, sanitation and hygiene. Those elite athletes found that the 3 km trek up a mountain, two hours each time, twice a day, was just as gruelling a task as rowing for gold, yet it is one that women and girls in many countries have to do each day before their real work begins.

In conclusion, I want to make four simple appeals this evening. First, I appeal again to the Secretary of State for International Development to attend the Sanitation and Water for All high-level meeting next month, as her attendance would be invaluable. Secondly, I encourage Government to do all in their power to ensure that the post-2015 goal framework includes a goal on universal access to basic water and sanitation services, including a specific target date of 2030. Thirdly, I ask the Government to ensure that water, sanitation and hygiene targets and indicators focus explicitly on reducing inequalities by targeting poor and disadvantaged people as a priority, recognising the disproportionate impact on women and girls and improving the sustainability of services to secure lasting benefits.

Fourthly, and finally, I ask all of us to pause for a moment on world water day, consider how different our lives would be without adequate access to water, sanitation and hygiene facilities and imagine how infinitely improved the lives of those in developing nations would be if we committed to playing our part in delivering the necessary infrastructure to make change for them a reality.

19:15

[The Minister of State, Department for International Development (Mr Alan Duncan)]

I thank the hon. Member for Belfast East (Naomi Long) for calling this debate in the run-up to world water day and applaud her ongoing commitment to ensuring that poor people have access to clean water and sanitation. I also note her concern about the sustainable use of the world’s water resources. I congratulate her on securing this debate for the second consecutive year. The House will certainly know that she speaks with total good sense on the subject.

The world met the millennium development goal target on access to safe water in 2010. Over 2 billion more people had access to water in 2011 than did in 1990. That is good news, but it should not lead us to think that the job is done. Over 760 million people still lack access to clean water. However, as the hon. Lady said, there has been too little progress on access to sanitation. As I said in our debate last year, it is shocking that 1.1 billion people—16% of the global population—must defecate in the open.

Clean water and decent sanitation for the poorest are integral to development. Providing those basic services would avoid over 2 million child deaths each year. Children with access to clean water are much more likely to reach their fifth birthday and be better nourished than those who do not.

I know that the hon. Lady has particular concerns about women and girls, and she is right. It is women and girls who have to carry water to their homes, often from distant sources. It is women and girls who are put at risk of sexual and other violence because they do not have a toilet and must venture out after dark. That is why DFID ensures that women and girls have a central role in our water and sanitation programmes, something reinforced by the success of the private Member’s Bill introduced by my hon. Friend the Member for Stone (Mr Cash).

For all those reasons, the coalition Government are committed to reaching 60 million people with sustainable water, sanitation and hygiene—WASH—services by the end of 2015. The UK will meet its commitments mainly through programmes developed and managed by our offices in countries in Africa and Asia. We currently have sanitation and water programmes in 17 such countries. We have increased some of those programmes and are on track to achieve additional results in Ethiopia, Liberia, Sierra Leone, Tanzania and Zimbabwe.

Last month I visited the rural water and sanitation programme near Pokhara in the rural hills of Nepal. The programme provides water and sanitation to local people, including the families of ex-Gurkhas, and does so at real value. I saw at first hand how a village’s water supply has been transformed by the installation of taps and latrines in every one of its 49 homes, and all for less than the cost of a car. It is a transformational intervention that, exactly as we have been discussing tonight, stops women having to go down a steep hill to collect water and lug it up again for the most basic uses of that essential commodity. I was pleased to be able to announce additional support of £10 million for the programme over the next five years to ensure that the work can be continued and expanded. We also have a programme that will support new partnerships between non-governmental organisations and private companies such as Plan International and Unilever to deliver WASH programmes. We have a strong track record. An analysis of DFID’s WASH programmes shows that UK aid is targeted at the poorest, as the hon. Lady requested, and is good value for money. However, we are not resting on our laurels. For example, we are researching how we can improve the implementation of our WASH programmes in six countries, including Nigeria and Mozambique.

The next high-level meeting of the Sanitation and Water for All initiative is, as was mentioned, on 11 April. The UK will be represented by a DFID Minister—in all likelihood, at the moment, the Under-Secretary of State for International Development, my hon. Friend the Member for Hornsey and Wood Green (Lynne Featherstone) but, if the diary permits, possibly the Secretary of State herself. We will use this meeting to focus on the commitments that were made at the 2012 high-level meeting.

UK support is not just for water and sanitation services. We also support country, regional and global programmes to increase water security. These programmes address the wider issue of ensuring that water is available for food and energy production. They also help countries to reduce the impact of floods and droughts. We know from events this year here in the UK how crucial this is. For poor countries, the impact is huge. The 2010 floods in Pakistan caused loss and damage of about $10 billion and put its economy into reverse. Nor does water respect political boundaries. That is why DFID invests in programmes to support the better management of rivers such as the Nile that are shared by two or more countries. For instance, our funding in southern Africa will help to protect 9 million people from flooding.

Water management is essential for an economy to be successful. At Davos this year, the global business community identified threats to water supply as one of the top four risks facing their businesses. DFID supports innovative work to form partnerships between the public and private sectors to tackle shared water resource risks and to benefit poor people. The need for solid evidence to back investment decisions is essential. DFID’s research funding therefore includes a programme called Sanitation and Hygiene Applied Research for Equity. This ground-breaking programme has developed robust evidence on how sanitation can be improved most effectively. The Department also works with the Gates Foundation to test new ways of providing sanitation services to poor people in urban areas.

The UK Government strongly endorse the recommendations of the high-level panel on the post-2015 development framework, which my right hon. Friend the Prime Minister chaired. Its report proposed ambitious targets for water and sanitation services, and for water efficiency and waste water treatment. We will continue to work with our partners to ensure that water and sanitation, including water resource management, feature prominently in the post-2015 framework. To that end, we will make sure that what we do achieves the greatest impact. We will keep refining our aid programmes. We will share our knowledge with our partners so that together we can all do more.

Question put and agreed to.

19:23

House adjourned.

Ministerial Correction

Tuesday 11th March 2014 Ministerial Corrections

Tuesday 11 March 2014

Nuclear Submarines

Tuesday 11th March 2014 Ministerial Corrections

The following is the answer given by the Secretary of State for Defence, the right hon. Member for Runnymede and Weybridge (Mr Hammond), to the hon. Member for Ellesmere Port and Neston (Andrew Miller), following his Statement to the House on Nuclear Submarines on 6 March 2014.

[Andrew Miller (Ellesmere Port and Neston) (Lab)]

Having worked with radiation for a number of years in my own career and having followed very closely the development of the civil nuclear programme, I fully concur with the Secretary of State’s comments on the underlying science. On level 0 events, similar events, such as moving waste material out of civilian sites, are subject to local communication. Why was there not a parallel situation in the case of Dounreay? Why were local stakeholders not involved? Will he ensure that the chief scientific adviser is given the maximum freedom, within the limits of classified information, to share scientific findings with the broadest possible group of nuclear experts?

[Mr Hammond]

The hon. Gentleman can rest assured that within the circle of nuclear experts—it is quite a small circle—there has already been discussion on these issues in the past two years. There is no requirement to notify level 0 events, but we did notify the Scottish Environment Protection Agency and, of course, the military nuclear regulator. It is important to note that SEPA’s primary focus is on emissions from the site—that is, what is in the discharge from the site—and there has been no measurable change in the radiation discharge. That is the important point for people living in those communities.

[Official Report, 6 March 2014, Vol. 576, c. 1085.]

An error has been identified in the answer given to the hon. Member for Ellesmere Port and Neston (Andrew Miller) on 6 March 2014.

The correct answer should have been:

[Mr Hammond]

The hon. Gentleman can rest assured that within the circle of nuclear experts—it is quite a small circle—there has already been discussion on these issues in the past two years. There is no requirement to notify level 0 events, but we did notify the Scottish Environment Protection Agency and, of course, the military nuclear regulator. It is important to note that SEPA’s primary focus is on emissions from the site—that is, what is in the discharge from the site—and there has been no measurable change in the alpha-emitting particulate discharge. That is the important point for people living in those communities.

Petition

Tuesday 11th March 2014 Petitions

Tuesday 11 March 2014

Dudley Magistrates Court

Tuesday 11th March 2014 Petitions

The Petition of residents of Dudley,

Declares that there are plans to move all criminal cases from Dudley Magistrates Court to courts in Wolverhampton, Sandwell and Walsall; further that the Petitioners believe justice should be seen to be done locally as it will be harder for local victims to testify, harder for local people to volunteer in court and harder for the press to deter crime by reporting on local cases; and further that moving the work of Dudley Magistrates Court may lead to current employees being made redundant or forced to move.

The Petitioners therefore request that the House of Commons to urge the Ministry of Justice to stop criminal cases moving from Dudley Magistrates Court to criminal courts in Wolverhampton, Sandwell and Walsall.

And the Petitioners remain, etc.—[Presented by Ian Austin, Official Report, 12 November 2013; Vol. 570, c. 927.]

[P001291]

Observations from the Secretary of State for Justice:

The West Midlands and Warwickshire Justices’ Issues Group (JIG) is of the view that centralisation of workload will deliver improved performance, efficiency and service across the Black Country Local Justice Area. The preferred proposal will address wastage caused by trials falling out of the diary at the last minute—collapsing or cracking—and address the current issue of under utilised courts. Magistrates, Judges and HMCTS must comply with their legal obligations under the Criminal Procedure Rules in respect of the service that is offered to all parties in criminal proceedings and this is compromised by the current utilisation of estate.

The intention is to comply with the West Midlands and Warwickshire JIG Listing Policy—the Listing Policy—which stipulates the principles by which the magistrates’ courts in West Midlands and Warwickshire should operate. The aims of the Listing Policy are,

“to establish, maintain and operate a planned court sitting and listing pattern making optimum use of available resources.. .to ensure only necessary time is set to conduct the business of the court.”

The West Midlands and Warwickshire Justices’ Issues Group places considerable importance on partnership working between HMCTS and the Magistrates. The JIG is concerned that there was not the support of the Magistrates in the Black Country to the proposals outlined and in view of the weight of the responses from the judiciary it has been decided that the proposals are to be reviewed. A new set of proposals will be submitted for consultation shortly.

The JIG will work with magistrates, HMCTS officers, and those who use the courts, to draft a revised proposal for a Listing Pattern for the new Black Country Local Justice Area. In the interim, all Black Country courthouses will maintain sittings. It must be emphasised that the risk of inefficiencies outlined in the consultation document remain apparent. Compliance with the West Midlands and Warwickshire Listing Policy, issued in December 2012 by the JIG, will continue to be enforced. In order to manage the workload in courtrooms in the short term, regular reviews will be undertaken, which may on occasion result in the cancellation of sitting days, where too few cases can be listed there on the day to justify opening the court.

Westminster Hall

Tuesday 11th March 2014 Westminster Hall

Tuesday 11 March 2014

[Mr James Gray in the Chair]

Cancer Treatment and Prevention

Tuesday 11th March 2014 Westminster Hall

09:30

Motion made, and Question proposed, That the sitting be now adjourned.—(Mark Lancaster.)

[Pauline Latham (Mid Derbyshire) (Con)]

It is a delight to serve under your chairmanship today, Mr Gray.

During the past few months, cancer has been something of a hot topic in this House, and the Government have committed themselves to reducing the number of people who die from cancer every year. That is an admirable goal and the provision of services to cancer patients has undoubtedly improved. However, the complicated licensing procedure for cancer drugs and the lack of knowledgeable doctors are preventing patients from receiving the life-saving treatment they need.

During my tenure as an MP, I have had the privilege of working with a cancer charity called Melanoma UK. Melanoma is a cancer that is particularly close to my heart, as my brother died from a malignant melanoma when he was only 54. What is most insidious about this cancer is that it is impossible to treat in its late stages, and it often results in a drawn-out and painful death for the sufferer.

Last week, I sat in on a meeting of the Melanoma Taskforce, which is attended by experts in skin cancer, patients and their families. The consistent theme of the complaints from these experts was that initial diagnosis and referrals of potential melanoma sufferers were taking too long, which often results in sufferers receiving treatment that comes too late to save their lives. In the case of my brother, he went to the doctor three times, but the doctor said, “There is absolutely nothing wrong with you.” Eventually, he told my brother, “All right, I will refer you to Addenbrooke’s and you can go and see somebody, but I’m sure it’s fine”, by which time more than a year had passed and it was far too late.

As I say, the consistent theme of the experts’ complaints was that initial diagnosis and referrals of potential melanoma sufferers take too long, which often results in sufferers receiving treatment that comes too late to save their lives. At that meeting, I learned that medical students receive only a week or less of teaching on dermatology, and that is on the whole of dermatology, not just melanomas. Even less time was spent on teaching them how to spot the signs and symptoms of melanoma. All that is shocking, given that malignant melanoma is the fifth most common cancer in the UK.

Another piece of feedback that I received from the dermatologists who were present at that meeting is that there are simply not enough consultants in this field and the few dermatologists that there are end up being completely inundated with patients. Sadly, the figures fully support that opinion: there are only 650 dermatology consultants practising nationwide. How can so few consultants effectively deal with the influx of potential melanoma referrals? Given this state of affairs, it is imperative that the Department of Health and the UK’s teaching hospitals encourage medical students to pursue a career in dermatology.

The other bar to the survival of late-stage melanoma patients is the difficulty in accessing effective cancer drugs. As some Members may know, about two weeks ago the National Institute for Health and Care Excellence published its response to the consultation on the use of the drug ipilimumab as the first-line treatment for late-stage melanoma. Currently, the drug that is prescribed in the first instance is dacarbazine, which is generally acknowledged to be ineffective in fighting the progression of the disease. On the other hand, ipilimumab has been proven to extend people’s lives and give them a better quality of life during treatment.

One case study to recommend ipilimumab as a first-line treatment is the story of Richard Jackson, who was told that he had only weeks to live when he was diagnosed with late-stage melanoma and was prescribed the drug straight away. As a consequence of the early prescription of ipilimumab, Richard is still alive seven years after being diagnosed with melanoma. When one considers that, when he was given the diagnosis, he was planning his funeral, because he was told that he had only weeks or months to live, that is remarkable.

Dacarbazine, which is a type of chemotherapy, often leaves patients sicker than before they began using it, and they are generally progressed on to ipilimumab anyway. NICE’s decision was based on a number of factors, including cost. If the majority of patients do not benefit from dacarbazine as a first-line treatment, NICE’s decision not to use ipilimumab initially both fails to provide value in the long term for the British taxpayer and shortens people’s lives.

With that in mind, I call upon the Department of Health to make melanoma a real priority. I know that everybody wants everything to be a “real priority”, so I understand the Department’s difficulties in that respect, but melanoma can be cured if it is detected early. The Department needs to start by motivating young doctors to study dermatology, and by working with universities so that the time devoted to teaching this important subject can be extended. Most urgent, however, is the need for the Department to put pressure on NICE to offer ipilimumab as a first-line treatment to extend the life expectancy of melanoma sufferers and—perhaps vitally—improve their quality of life, so that they can continue to contribute to society for longer as well as having a better quality of life.

Ongoing changes to the UK cancer infrastructure, such as downsizing and dismantling the cancer networks in April 2013 and the National Cancer Action Team being merged into NHS Improving Quality, risk creating a gap in the cancer expertise that is used to advise and shape the NHS and the Department of Health. NHS England is looking to broaden its work in other disease areas beyond cancer. The cancer policy team at the Department has been all but abolished, with just a handful of its staff remaining. This inevitably dilutes the cancer expertise in the Department.

The overall reduction in expertise and resource in oncology will limit the ability to identify and spread best practice and drive innovation in treatment and care. Although the diversion of resources and expertise away from cancer is worrying, it is positive to see a strong policy focus on preventing people from dying prematurely, through domain 1 of the NHS outcomes framework.

Each clinical commissioning group should have at least one member with an interest in cancer. Previously, GPs benefited from better liaison with specialists via the cancer networks, and they could use the lessons learned from that approach and build on them further to create informal communities of primary and secondary care colleagues interested in cancer, to influence what is happening in CCGs.

Multidisciplinary teams for cancer should work to feed into strategic clinical networks, in the way that they previously worked with the cancer networks, to promote collaboration, consistency and quality of care. National clinical advisory groups for the common cancers should be re-established to bolster the work of strategic clinical networks in sharing best practice, supporting intelligent commissioning and driving up standards of care.

The extension of the Cancer Drugs Fund is welcome, but there is now a need for long-term clarity that, after 2016, the new pricing and reimbursement scheme will offer patients an appropriate level of access to cancer drugs that have been proven to be effective. Furthermore, we must collect better data on what medicines cancer patients across the UK need. It is also essential that NICE offers flexibility in its appraisal of cancer medicines. It should consider looking at cancer treatments under its own separate criteria, in particular measures beyond overall survival.

The Government have done a lot of good work on cancer, but there is still more to do. I am particularly interested in melanomas and bowel cancer; they are the two cancers that I tend to specialise in. There is more work to do on those cancers, and success is about early diagnosis. If we can get early diagnosis and appropriate treatment, the Government will succeed in achieving the aim of giving people longer life and better quality of life.

09:39

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

I congratulate my hon. Friend the Member for Mid Derbyshire (Pauline Latham) on securing this debate.

I apologise in advance because there will be some repetition as I had an Adjournment debate last week on pancreatic cancer and a new drug, which is fundamentally what I will speak about this morning. I think hon. Members will understand that there is a need for repetition, because we are right in the middle of the Cancer Drugs Fund’s making a decision about this drug, so anything extra we can add is useful. I am sure the Minister has heard this before, because she attended that Adjournment debate on Tuesday 4 March.

The Cancer Drugs Fund met on Thursday 6 March and I understand that the process is that it will take a week to consider, then it will inform the applicants and then, in two weeks’ time, its decision about Abraxane will be made public and we will know. Abraxane has been licensed for use in patients in the UK and Ireland with metastatic pancreatic cancer; it has been described as the biggest advance in pancreatic cancer treatment in almost two decades, for a disease where survival rates have barely changed in 40 years.

As Abraxane has not been approved by NICE, it is not yet available on the NHS as a standard treatment. Pancreatic Cancer UK, the biggest charity in this field, together with Pancreatic Cancer Action are both keen to ensure that patients are able to access Abraxane through the Cancer Drugs Fund. We should like to see the drug approved by the CDF then eventually by NICE, so that access to it is more readily available. We know that Abraxane is due to be reviewed by NICE soon, but this process takes a great deal of time, and time is something that most pancreatic cancer patients do not always have.

My comments relate to the treatment of cancer. As I have said, I hope that hon. Members will put up with some repetition, given the importance of these few weeks to the sufferers, survivors and friends and relatives connected to this cancer, because it is a highly charged moment.

[Nic Dakin (Scunthorpe) (Lab)]

I congratulate the hon. Member for Mid Derbyshire (Pauline Latham) on securing this debate. Does the hon. Gentleman agree with her that the key is early intervention and effective treatment? That is the key to getting it right with regard to melanoma, bowel cancer, pancreatic cancer and ovarian cancer, for example. The hon. Gentleman is making powerful points in this respect.

[Eric Ollerenshaw]

As per usual, I agree with the hon. Member for Scunthorpe (Nic Dakin). I pay tribute to his work on the all-party group on pancreatic cancer. He and my hon. Friend the Member for Mid Derbyshire hit the nail on the head. At the moment I am just talking about treatment, but early diagnosis is the key to all of this, particularly pancreatic cancer. More than 50% of people who are diagnosed with pancreatic cancer are diagnosed after emergency admission to hospital: it is that late and, too often, too late to be able to do much in terms of survival beyond a year. Only 4% of people diagnosed with pancreatic cancer survive for up to five years, so it is clear how dramatic an improvement in early diagnosis would be.

It is estimated, on average, that Abraxane will allow a further two months’ survival, which, in the great scheme of things, does not seem massive, but it could double the lifetime chances of the average pancreatic cancer sufferer. Pancreatic Cancer UK launched its campaign, “Two More Months”, to highlight that. I quoted examples in my other Adjournment debate, which hon. Members may read, of survivors describing what two more months could have done for them, in their situation. Survivors talk about the possibility of getting married, which was not available because the person died early. There are other heart-rending examples of what that time would have enabled them to do. To underline the point, in terms of pancreatic cancer, as I have said, two more months is a massive improvement on what is available, unfortunately, to far too many.

In my Adjournment debate, I expressed our fears—the all-party group’s, Pancreatic Cancer UK’s and Pancreatic Cancer Action’s—that the call for the drug to be made available would be dismissed by the Cancer Drugs Fund because it gives only two more months. It is interesting that there are no pancreatic specialists in the Cancer Drugs Fund. Our key concern last week was that the two months would not be considered sufficient, because in comparison with other cancers it does not seem a great deal of time. Yet more than 60 specialists treating patients with pancreatic cancer shared their names, via Dr Seb Cummins, supporting this submission and therefore hoping that they would be listened to.

Although I did not attend the meeting, apparently the panel did not acknowledge the unmet need in this disease area and did not allocate points to represent this, given its criteria. Individual panel members did not appear to accept, as we feared, the benefits of an additional two months, although I am told that there was some acceptance that, yes, the drug did prolong life. Obviously, the panel has to take into account—I am not a specialist in medicine, Mr Gray, as you well know—the quality of life in those two months.

I understand that the decision will have been made, but it will not be public until two weeks’ time. So where do we go from here? I have already expressed concern about the Cancer Drugs Fund, because, to my knowledge, last year not one new cancer drug was agreed, plus none, if I understand the system correctly—I admit that my understanding of it is a bit basic—has been passed down to standard NHS clinical use. Nothing has left its funding stream. I am told that it has overspent a certain amount of money, but again I do not know whether it is anecdotal or exactly correct; I hope that the Minister comments on that.

The Cancer Drugs Fund process has had enormous success, which I acknowledge. Thousands of people have benefited from this innovation. There is anecdotal evidence that, because this does not exist in Wales, people there are moving across into England to take advantage of it, and why would they not, if they or somebody in their family is in this situation? The hon. Member for Strangford (Jim Shannon), who is present, has commented previously on the situation in Northern Ireland. However, although I acknowledge its massive success, it seems to me, from the outside, that somehow we are stuck in respect of where we go with the Cancer Drugs Fund and its funding in future.

It almost appears as though the Cancer Drugs Fund has become a victim of its own success. We must not let that success become failure now, simply because we are going to get a blockage of applications for new drugs; I thought that dealing with those was the whole purpose of the Cancer Drugs Fund in the long run.

In terms of pancreatic cancer, too many hopes have been raised too many times and for too long it has remained the poor relation in all this. So when hope, such as this new drug, comes along, we want that hope tested, not against other cancers but against a past history of neglect. Pancreatic cancer already has the lowest survival rate of the 21 most common cancers. As I mentioned, five-year survival rates are less than 4%. This figure has barely changed in nearly 40 years. Pancreatic cancer five-year survival rates lag behind many other European Union countries and are almost half of what they are in the United States, Canada and Australia.

Hon. Members might now understand why we want the hope given by this new drug extended to the 7,900 of the soon-to-be diagnosed 8,500 patients this year, because these 7,900 will be diagnosed with cancer too late and will die within the year. They deserve that extra time that so many others were denied in the past because there was nothing like Abraxane available. They deserve some extra consideration, given our past neglect of this, the fifth biggest cancer killer in our country.

09:48

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to follow the hon. Member for Lancaster and Fleetwood (Eric Ollerenshaw). His Adjournment debate last week is still fresh in the minds of all hon. Members here. I also thank the hon. Member for Mid Derbyshire (Pauline Latham) for bringing this matter to the Chamber for consideration. Many learned hon. Members will speak today and make a massive contribution to this debate. I look forward to their contributions.

By 2020, one in two people who hon. Members meet in the street will be affected by cancer. That is the magnitude of the issue. The hon. Gentleman passionately advanced the appeal on behalf of those with pancreatic cancer. I will not repeat what he said, but I will speak about pancreatic cancer because I know a number of people who have been affected. The hon. Lady referred to her brother, and my father had cancer on three occasions. The skill of the surgeon’s knife, the care of the GP and nurses, and the prayer of God’s people all contributed to his reaching 84 years of age, which is marvellous given that he had his first experience of cancer at the age of just over 60.

The shocking statistic of one in every two people hits home to each of us and gives us the impetus to contribute today and to plead for the cancer drugs and the help that we need. If we cannot see those changes today, when will we see them? Last Friday night I held a public meeting in my constituency on cancer services at the Ulster hospital in Dundonald, which is the closest hospital to me. We are seeking a modern cancer care centre. As an elected representative, I know so many people in my area who have passed away due to cancer, but I know so many more people who are being diagnosed with cancer. I am sure that the situation in Strangford is no different from the situation in any other constituency. Every day in Northern Ireland 25 new people are diagnosed with cancer, which equates to 1.3 people a day in my constituency of Strangford and 1.3 people in the neighbouring constituency of the hon. Member for North Down (Lady Hermon). The figures also reveal that in Northern Ireland the overall rate of cancer diagnosis climbed by a 10th between 1993 and 2011, which is a clear statistical indication of the problem. In 1993, some 370 people per 100,000 were diagnosed with the disease, which increased to almost 405 per 100,000 in 2011. Overall UK figures show that 331,487 people were diagnosed with cancer in 2011, rising from 329,547 in 2010.

The most common form of cancer in Northern Ireland is breast cancer, with some 1,300 cases in women and 340 deaths a year. There are 1,200 cases of bowel cancer and 410 deaths each year. The figures for lung cancer are horrific: 1,100 cases and 910 deaths each year. Lung cancer is almost a death sentence. There are 1,000 cases of prostate cancer and 230 deaths each year. Men are probably worse affected by cancer because we do not acknowledge that we are ill, so prostate cancer needs to be advertised to make men more conscious of it. There are 340 cases of non-Hodgkin’s lymphoma and 130 deaths each year. Those are the statistics only for Northern Ireland, which has a population of just under 1.84 million. That is not even a quarter of the population of London, which gives an idea of the magnitude of the cancer problem. I look forward to the contribution of the hon. Member for Basildon and Billericay (Mr Baron) as we have previously discussed the problem, which we both understand.

I recently attended an ovarian cancer awareness event at Stormont. The hon. Member for Scunthorpe referred to ovarian cancer in his intervention, and I am personally aware of the terrible statistics in Northern Ireland. Una Crudden, a wonderful, courageous lady from west Belfast, talked about her experiences at the debate in Stormont last Monday. She was one of five people diagnosed in her area. The other four are dead, and she is the last one to survive. We were all touched and shocked by the figures and by her presentation, which knocked it home to all of us that there is a desperate need to lift the profile of ovarian cancer.

As we all know, early detection saves lives. The fact is that, if there is an early diagnosis, up to 90% of women with ovarian cancer could survive for five years or more. The survival rate for ladies diagnosed with ovarian cancer in my Strangford constituency, and in the local Ards borough council area, is no more than 36%. Again, those figures are horrific and horrendous. Many women would never dream that if they had a swollen stomach or pain, or if they always felt full, it could be ovarian cancer. Each year, more than 7,000 women are diagnosed. If detected early, the survival rate can be as high as 70%, but sadly many people simply put the symptoms down to irritable bowel syndrome. Early detection makes a difference, and I stated at Stormont that we need an awareness scheme not unlike the scheme that I supported in a Westminster Hall debate in 2011. I cannot recall who the Minister was, but that debate led to an initiative in England to raise awareness of ovarian cancer. That scheme has undoubtedly saved lives, for which the then Minister and the Government should take credit. A lady with ovarian cancer was over at Stormont last week, and she was very grateful for what the Government have done.

As the hon. Member for Lancaster and Fleetwood (Eric Ollerenshaw) said, it is important to re-emphasise the treatment and drugs that are available for pancreatic cancer. I was contacted by Pancreatic Cancer UK about its “Two More Months” campaign. Would we not all love to have another two months of life to interact with our family and put our affairs in order? Pancreatic cancer has the lowest survival rate of the 21 most common cancers. Five-year survival rates are less than 4%, and the figure has barely changed in nearly 40 years. Pancreatic cancer five-year survival rates lag behind those in many other EU countries and are almost half of the five-year survival rates in the US, Canada and Australia.

As the hon. Gentleman said, most pancreatic cancer drugs are expensive, but they are vital to those with pancreatic cancer. Will the Minister talk about ongoing drug trials and the drugs that are available? What steps have been taken to reduce the price of those drugs? The drugs range in price from £21,000 to £100,000 per year per person. I am the first to say that we should make those drugs available, and I am sure everyone here is of the same mind. At the same time, there have to be discussions with the pharmaceutical industry to see what it can do to reduce those prices, too.

Only 1% of the total research spend of National Cancer Research Institute partners is directed at pancreatic cancer, which underlines the dire need in that sector. Some £3,613 per death per year is spent on breast cancer—I am not saying that that money should not be spent on breast cancer—compared with £553 per death per year on pancreatic cancer. Some 50% of pancreatic cancer patients are diagnosed as a result of emergency admission, which is nearly twice the rate for all other cancers combined. Patients diagnosed as a result of emergency admission, compared with other routes to diagnosis such as routine GP referral, have significantly lower rates of survival.

Earlier this year, as the hon. Member for Lancaster and Fleetwood said, Abraxane, in combination with standard chemotherapy and Gemcitabine—my pronunciation is probably wrong, but I have a Northern Ireland accent, so I hope Members will excuse me—was licensed for use in patients in the UK and Ireland with metastatic pancreatic cancer. Abraxane has been described as the biggest advance in pancreatic cancer treatment in almost two decades, which is good news, given that survival rates have barely changed in 40 years. As Abraxane has not yet been approved by NICE, however, it is not yet available on the NHS. I repeat the hon. Gentleman’s question: when will Abraxane be available? If the tests show that the drug is effective, it should be made available as a standard treatment. Pancreatic Cancer UK is keen to ensure that patients are able to access Abraxane through the Cancer Drugs Fund, and I understand that a decision is due within the next couple of weeks. Will the Minister outline her thoughts on the drug?

I could mention many other cancer drugs, but in my last brief moments I ask the Minister to consider a UK-wide strategy. I suggested such a strategy in the Adjournment debate last week, and it is important that we do not consider such drugs regionally. We have expertise in the different regions of the United Kingdom of Great Britain and Northern Ireland, which includes Scotland, Wales, Northern Ireland and England, but it is time that we had a strategy that brings everything together across the whole UK on an equal basis so that we can make the drugs and treatment available. The strategy should include regional assemblies promoting awareness among the general public.

I suggest that we have refresher courses for GPs. One of the issues that has emerged recently—it is not a criticism, because I am not a person who likes to criticise; it is simply an idea for how we can make things better—is that GPs are not always totally aware of issues. The hon. Member for Mid Derbyshire said that her brother went to the GP three times, and we can all give similar examples from our own constituencies. The refresher courses would ensure that the latest criteria and pro forma for testing were entrenched in GP minds, so that they were clearly thinking about what the patient’s problem could be at its worst. Many cancers that are curable, such as melanoma, must be detected early. If they are not detected early, they are no longer curable but deadly. That is the reality. It is scary to think that in six years, half of the people in this room will get a form of cancer during their lifetime. Something must be done and today must be the first day of a new strategy and new moves to beat cancer.

10:00

[Mr John Baron (Basildon and Billericay) (Con)]

I, too, congratulate my hon. Friend the Member for Mid Derbyshire (Pauline Latham) on securing this important debate.

I will focus my remarks on the importance of early diagnosis, but in many respects we have already won that debate. In recent years, there has been a general awareness of that issue’s importance, so I will also focus on the importance of accountability within the NHS in ensuring that the measures introduced to encourage early diagnosis are followed through by NHS England. I speak as chairman of the all-party group on cancer, which has long recognised the importance of early diagnosis—we call it cancer’s magic key. There are very few magic keys in life that open doors to untold riches, but that key exists for cancer with early diagnosis.

Initially, we may need to be reminded of the scale of the problem. Members have already alluded to some of the statistics. The Government’s figures and many independent studies suggest that if we matched European averages on survival rates, we could save 5,000 lives a year in this country. Only a month ago, the OECD published a further study, which showed that we could save up to 10,000 lives a year if we matched international averages. That is the scale of the issue.

My hon. Friend the Member for Strangford (Jim Shannon) rightly suggested that the figures, which I think are from Macmillan Cancer Support, show that within 10 years, one in two people will be diagnosed with cancer during their lifetime. Another shocking statistic that illustrates the scale of the problem is that one in four cancers in this country is first diagnosed as late as at A and E, when it is, in far too many cases, far too late to treat. Rarely can we define the scale of a problem as precisely as that. We are only talking about averages here, but thousands of lives depend on our ability to come together—not just Parliament, but the cancer community as a whole and the NHS—to drive forward initiatives to promote earlier diagnosis and thereby raise survival rates.

One or two colleagues will remember that the all-party group first looked at the issue back in 2009, when we produced a report looking into cancer inequalities. We found that the NHS stood as much chance as any other health care system of getting patients who made it to the one-year point to the five-year point. Where the system failed, however, was in getting them to the one-year point. That suggested that the NHS was as good at treating cancer patients as anyone else, but was poor at detecting and diagnosing cancer in the first instance, and that accounted for why we were behind on cancer survival rates and averages.

All the evidence clearly showed that the NHS treated patients as well as any other system after the one-year point, but we fell down in getting them to it, and we never made up that gap. There are always dangers and pitfalls with comparisons—in France, for example, we are comparing with four or five cancer centres of excellence—but by and large the figures are robust in suggesting that we have a major problem with our survival rates.

What is the remedy? It could have been to bombard the NHS with even more targets on this, that and the other, such as better training for GPs or other initiatives, but we thought that there were enough targets in the system. We came up with the idea of putting one-year and five-year survival rates up in lights, broken down by clinical commissioning group—or primary care trust, as they were then. That is important, because we all know that late diagnosis makes for poor survival. Showing those survival rates at a local level would clearly show which CCGs were failing on early diagnosis. As the report and all the evidence shows, early diagnosis makes for better survival rates, particularly at the one- year level.

We have campaigned long and hard on the issue, and I am pleased to say that the Government have listened. There have been two big reforms of the health care system. One was the reorganisation, which I will not go into, because not all of us were as supportive of that as some might have liked. The second was the focus on outcomes, which will have the longer lasting effect, to the benefit of patients. That focus put the one and five-year survival rates in the NHS outcomes framework, which sets the parameters at a national level.

The one-year survival rates are in at the local level in the CCG outcomes indicator set. That is good news, because if the managements of CCGs at the bottom of that list are worth their salt—their salaries run into six figures—they will introduce a range of initiatives to boost their one-year figures. That can mean everything from better uptake of screening, to better prevention and awareness, to more diagnostics and primary care, to better GP training. It can be a whole host of initiatives—not in isolation, but taken together.

The bottom line is that it is incumbent on the management of a CCG with one-year figures at the bottom of the pile to get their act together and to introduce initiatives to encourage early diagnosis. If those initiatives are right and that early diagnosis is pushed forward, the one-year figures will rise. The mathematicians in the room will appreciate that if the low-hanging fruit on averages—the low figures at the bottom of the table—is picked off and those managements raise their game, that will have a disproportionate effect when it comes to averages for the group as a whole.

If we as a country are seriously going to set ourselves the target of saving an extra 5,000 lives by 2015, which would bring us only up to the average, and of perhaps exceeding that thereafter, we have to focus on how we can drive forward early diagnosis at a local level. One hopes that it all then becomes self-fulfilling, in that once the poorer CCGs start raising their game, others will do likewise, because no one will want to be at the bottom of the pack. That is why we as an all-party group have been delighted with the Government’s putting the one and five-year survival rates in at the national level, and the one-year survival rates in at the local level.

I will not muddy the waters by reminding everyone that because the population sizes of CCGs are smaller than those of PCTs, we have had to introduce some proxy measures, such as staging and emergency presentations, to complement the one-year figure and add to the overall picture. The bottom line is that we are focusing on early diagnosis through those figures, particularly the one-year figure going in at the local level.

I want to ask the Minister one question about something that she knows we have focused on in the past. The all-party group, the wider cancer community and other all-party groups have worked together as a team and should be congratulated, but despite the one-year figures in the CCG outcomes indicator set, the lines of accountability are still unclear. Who will actually ensure that CCGs will be held accountable for the figures? We have the tools, but if we do not use them, there is no point in having them.

Will the Minister provide clarity on what will happen if CCGs are at the bottom of the table year after year? There is no point in having one-year figures that show poor one-year survival rates, and therefore late diagnoses, if nothing happens as a result. Where are the levers of change? Where are the mechanisms to ensure that local managers are brought to account for their poor performance? We need to focus on that. Early diagnosis is important not only because it raises survival rates, but because it, along with the figures, will reduce disparities between CCGs when it comes to cancer. Poorly performing CCGs will have to raise their game, which will also serve to reduce inequalities across the system. It is unfortunately still a fact, at least to a certain extent, that cancer care in this country comes down to a postcode lottery.

Will the Minister please address the central issue of the levers of change—if not in this debate, then subsequently? I appreciate that many such functions are now the responsibility of NHS England and that the Department of Health has taken a step back, but the Government still have a responsibility to the taxpayer to ask questions and to ensure that improvements are followed through. The Minister has been gracious in that she will be formally responding to the all-party group’s report, “Cancer across the Domains”, and a meeting will follow, but we cannot leave such a great opportunity as this debate without raising the issue. I hope she will forgive me for pursuing the matter again, but it helps to keep the focus on the issue in hand.

10:12

[Sir Paul Beresford (Mole Valley) (Con)]

I am delighted to be in a position to receive your advice once again, Mr Gray. I congratulate my hon. Friend the Member for Mid Derbyshire (Pauline Latham). She is pushing a subject that I would normally push myself as chairman of the all-party parliamentary group on skin, but I will not repeat what she said. I am delighted to see the Minister here, along with all the usual suspects, including me, who try to persuade her of various things. I am also chairman of the all-party parliamentary group for dentistry and a very part-time dentist. I will refer to and slightly repeat what I said in my Adjournment debate on oral cancer of 13 January and question the Minister’s response.

As I said during the January debate, some 6,000 new cases of oral cancer are reported annually in the UK, with 1,800 deaths each year. It is an appalling, disfiguring disease that affects sufferers’ quality of life. Early diagnosis, which everyone is pushing, can solve many cases, but it must be early. The total number of cases has been rising steadily over the past three decades, with 35% more new cases a year now than 30 years ago. The problem has become so acute that oropharyngeal cancer is the fastest growing cancer in Scotland—the only place for which I could find figures—but it is also a huge problem in the rest of the UK. The British Dental Association said:

“No other cancers have shown such a significant increase in their incidence. Furthermore, treatment of many cancers is showing impressive improvement in survival, but oral cancer continues to have high death rates.”

There are four factors that would help to restrict or perhaps even to defeat the disease. The first is early diagnosis through education of clinicians and increasing patient awareness, which greatly improves the opportunity for effective and positive treatment. The other three are purely preventative. Carcinogenic substances such as betel nut and, much more commonly, tobacco are major factors in oral and other cancers. Excessive alcohol, particularly combined with tobacco smoking, is a huge causative factor. We are all well-versed in and applaud the actions of various Governments to persuade people to reduce alcohol intake and to secure, hopefully and eventually, a collapse in tobacco usage.

I will concentrate on the human papillomavirus, which I touched on during the debate on 13 January. I want to refer to the two main ones—there is a huge family—that cause particularly unpleasant cancers throughout the body. We know about cervical cancer and the related penile cancer, but there is also oral cancer. The latest figures that I quickly managed to find on cases of HPV-related cancers for the UK are from 2009, when 7,538 females and 6,484 males were affected. It is not quite 50:50, but it is getting there.

In 2010, 2,016 males and 2,253 females died in the UK as a result of HPV-associated cancers, including cervical, penile, vaginal, vulval, laryngeal and oral. For males in the UK, the greatest proportion of new cases and deaths were as a result of oral cancer. In females, oral cancer is a relatively close second to cervical cancer. The number of annual cases of HPV-related cancers in men is rising significantly and it is not just oral cancer. Indeed, if recent trends continue, annual cases of HPV-positive oropharyngeal cancers may surpass annual cases of cervical cancers by 2020.

This country, along with several others, has an inoculation programme for HPV. A full inoculation programme would, in a manner not too dissimilar to that of polio, effectively reduce and then cut out transmission of the HPV virus. It would produce what is known as herd immunity, as has happened in Australia. Here, however, HPV inoculation is available only for girls and not for boys. The Minister correctly pointed out on 13 January that the Joint Committee on Vaccination and Immunisation, after considering the matter at two meetings in February, will be reporting later this month, hence my pre-emptive strike. She also stated that the JCVI agreed in October last year to set up a sub-committee on HPV vaccination to assess, among other things, extending the programme, as a priority, to men who have sex with men—I do not quite see the relevance of that—to adolescent boys or to both. Obviously, I hope that an inoculation programme for boys and girls should be made available and promoted.

In my area of Surrey, where parents take health and health protection seriously, only 60% of the girls who could and should be receiving the HPV vaccine do so. Assuming a 50:50 split of boys and girls at inoculation age, only 30% of the Surrey population that could and should be inoculated are being inoculated. A full spread of inoculation would, as with polio, bring herd immunity over time. It is irrelevant whether these kids grow up to pass on the HPV virus by heterosexual or homosexual sex. What is important is that, whether the JCVI agrees or not, the Government take early action, as Australia has done. I put it to the Minister that it is not fair, ethical or socially responsible to have a public health programme that leaves 50% of the population vulnerable to infection just because the vaccine is not made available to boys.

As I said, my speech is a pre-emptive strike, and I wait to hear what the JCVI and the Minister have to say.

10:19

[Grahame M. Morris (Easington) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Gray. I congratulate the hon. Member for Mid Derbyshire (Pauline Latham) and apologise for the discourtesy of my being late for the start of the debate.

It is an important subject and I am grateful for a few moments to raise with the Minister an anomaly that affects sufferers of brain cancer and to highlight the dislocation caused by the reorganisation of the commissioning of cancer services. The hon. Member for Basildon and Billericay (Mr Baron) highlighted the tension between organisation and outcomes. That is relevant to the issue I am raising, because of the hiatus that resulted from the reorganisation of the commissioning of cancer services, which came out of the Health and Social Care Act 2012; and it follows the theme of the importance of early diagnosis and treatment set out by the hon. Members for Strangford (Jim Shannon) and for Lancaster and Fleetwood (Eric Ollerenshaw).

University college London’s national hospital for neurology and neurosurgery, in Queen square, is the UK’s largest dedicated neurosurgical hospital. It is not only a UK centre of excellence, but a centre of excellence within Europe. For more than 150 years it has provided treatment and care for conditions including cancer affecting the brain. It is globally recognised. In October 2012, the hospital enhanced its services to cancer patients by the acquisition of one of the new advanced radiotherapy systems that we know as the Gamma Knife radiosurgery machine. I have been to see one of them at St Bartholomew’s hospital, and if the Minister—or any other hon. Member—has not seen one, I recommend making such a visit. It is an incredible piece of kit.

Before April 2013, when the new NHS England took over responsibility for commissioning radiosurgery, the national hospital was using its Gamma Knife to treat NHS patients with brain cancer. On 1 April, however, NHS England informed the hospital that it could no longer treat NHS patients with its Gamma Knife and that all patients waiting for treatment should be transferred to other hospitals. The other hospitals that were identified were run by private health care companies—BUPA and the Hospital Corporation of America. Not surprisingly, the patients concerned—about 60 in total—refused to transfer to other centres, because they would have to engage with new conditions and go through pre-operative checks and scrutiny, and rejoin the waiting list.

That situation makes a mockery of the Health and Social Care Act 2012. When the Government pressed the Act through Parliament, they relied principally on the argument that it would return control of patient care to clinicians and reinforce and enshrine patient choice in the NHS. NHS England has poured scorn on that idea and is exercising control over where patients can be treated. There is no choice for patients and certainly no choice for brain cancer patients who need immediate treatment.

Fortunately for the patients I have mentioned, there is good news. The national hospital is not as callous and cold hearted as NHS England, and it decided to treat them anyway. Some 60 patients have been treated since April. However, that has not dealt with the basic problem. They were treated there because it was their choice, and their clinicians’ choice, and despite NHS England’s refusal to pay for them. I should be interested in the Minister’s response. Will she give me a guarantee in good faith that she will look into that appalling situation as a matter of urgency?

10:23

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

It is a pleasure to serve under your chairmanship again this morning, Mr Gray. I congratulate the hon. Member for Mid Derbyshire (Pauline Latham) on securing the debate, and thank her for sharing her personal connection with its subject.

Every two minutes someone in the UK is diagnosed with cancer, and more than one in three people in the UK will at some time develop some form of cancer. One in four of them, sadly, will die of it. Cancer touches every community, without exception. Its reach is wide and its impact devastating. We have won many important victories in our battle against cancer, but there is a long way to go to ensure we are diagnosing it earlier, treating it more effectively, and preventing it in the first place. Many hon. Members have focused on those things in the debate, and I want to discuss them.

Detecting cancer early can make a real difference. When cancer is diagnosed at an early stage, the treatment is often simpler and the outcome is more likely to be positive. The hon. Member for Strangford (Jim Shannon) shared some startling statistics about the impact of early detection on ovarian cancer survival. Developments in cancer screening and increasing efforts to promote public awareness, such as the Be Clear on Cancer campaigns, are welcome. On Saturday, I saw the great work being done by those campaigns when I joined a team at a shopping centre in Liverpool to raise awareness of ovarian cancer in women.

Encouraging people to visit their GP sooner rather than later if they have any symptoms of concern is a simple message that can make a big difference. However, we have further to go to ensure that GPs are getting the training and support that they need to help them identify cancer signs and symptoms. Several hon. Members have raised concerns this morning about the amount of training of that kind that GPs receive. I hope that the Minister will respond on that issue in particular. I share the alarm expressed by the hon. Member for Basildon and Billericay (Mr Baron) about the fact that too many cancers are detected in accident and emergency.

Improvements at the first point of contact are not enough if, once cancer is suspected, people are not seen quickly enough by a specialist. Before Christmas there was concern at the news that in as many as half of cases the Government are missing their target for 95% of people with suspected cancer to be seen by a specialist within two weeks. It was right that Labour introduced the two-week cancer guarantee. We also left plans in place to speed up diagnosis, but unfortunately it appears that focus has drifted a bit from that important part of the fight against cancer. I am keen to hear the Minister’s comments on what further steps the Government are taking to improve early diagnosis.

If cancer is diagnosed, people need to feel safe in the knowledge that they are going to receive the most effective treatment possible, as quickly as possible. Many hon. Members expressed concern about that this morning. The hon. Member for Basildon and Billericay said that if we reached the average European survival rates we would save an additional 5,000 lives. I think that we can do better than that. Despite improvements in survival and mortality in recent decades, cancer outcomes in England remain poor when compared with the best outcomes across Europe. The hon. Members for Mid Derbyshire and for Lancaster and Fleetwood (Eric Ollerenshaw) mentioned the Cancer Drugs Fund and raised the question of its future, and I share their concern.

In more than 90% of cases when cancers are cured, it is as a result of surgery or radiotherapy. That is where our focus and resources should be directed. I welcome the Government’s recent focus on radiotherapy, and, in particular, on access to intensity-modulated radiation therapy. Last week I visited the Clatterbridge cancer centre in Merseyside, which treats 26,000 new patients every year, and saw how cutting-edge treatments are positively affecting patients’ lives.

Last week, however, we heard that the Prime Minister’s pledge that, from April 2013, all cancer patients would receive the advanced radiotherapy treatment they need, where it is clinically appropriate and cost-effective, has not been met. A less than glowing report published by Cancer Research and NHS England last week said that

“more needs to be done”

to achieve the Prime Minister’s guarantee. The report describes how momentum has been lost during the transition resulting from the NHS reorganisation in England, and it identifies a number of challenges on which I hope the Minister will comment.

One concern is that ageing equipment is preventing centres from keeping pace with innovation and providing advanced techniques. Another key concern is about deficiencies in the numbers of staff in crucial positions such as physicists, therapeutic radiographers and clinical oncologists. When I visited Clatterbridge last week, I heard first hand from the management how they are struggling to get physicists in the hospital.

There is also concern about the shortfall in radiotherapy work force capacity across the services, which impinges on the ability to deliver advanced techniques and innovate. On the number of radiotherapy treatments administered per 1,000 patients, we are well off the pace compared with other parts of Europe. While advances are being made, the pace at which innovations have been adopted across the NHS has been inconsistent. In Liverpool, cancer mortality rates are twice that of parts of London. Clearly, we still need to do much more about inequalities in access and outcomes for cancer patents. I hope that the Minister, in her response, will share with the House the Government’s plans in that regard.

Our battle against cancer will not be won with treatment alone. As the title of the debate suggests, we also need to look at prevention. More than half of all cancers could be prevented if people adopted healthy lifestyle choices such as stopping smoking, eating a healthy diet and exercising. I will focus on each of those in turn.

On smoking, great progress has been made in the past decade, but a quarter of cancer deaths are still linked to tobacco and smoking is by some margin the largest single cause of cancer in the UK. About 20% of our population smoke. That is down from 27% in 2000, but that figure is still too high. For every 1% decline in smoking prevalence, we could prevent about 3,000 deaths. Last month, Parliament voted in favour of an amendment to make Labour’s proposal of a ban on smoking in cars with children in them a reality. That great step forward will protect children and, ultimately, create a shift in smokers’ behaviour.

We are glad that the Government have agreed to standardised packaging; we look forward to Sir Cyril Chantler’s review. We are also pleased that the Government adopted our proposal to ban proxy purchasing of cigarettes. However, we must maintain momentum and ensure that those three victories are not pursued in isolation, but are part of a much bigger ambition. I hope that the Minister will share what more her Department is doing to reduce the number of smokers and smoking-related deaths, specifically in relation to the cancers that we are discussing.

Obesity is the second area for prevention and some of my biggest concerns are about the Government’s approach to tackling that. The voluntary responsibility deal stands little chance of delivering the fundamental change needed to improve our national diet. We need action that will impact on the whole population rather than the current piecemeal scheme that works on a product-by-product basis.

I was concerned to hear in the press reports relating to the World Health Organisation’s position on reducing our consumption of sugar, which leads to obesity. If what we read was correct, the view was that the Government might ignore that expert guidance. I hope that the Minister will respond to that and outline specifically what her Department is doing to tackle the obesity crisis in order to reduce cancer prevalence, because so many cancers are connected to obesity. On physical activity, to secure significant improvements in tackling the main causes of cancer, we need to see a fundamental shift in our nation’s behaviour.

[Jim Shannon]

To step back one sentence to the hon. Lady’s comments on better diet, and the need to have that at an early stage, many education authorities across the United Kingdom—they are doing this in Northern Ireland—are trying in schools to address children’s diets and the relationship of that to their parents and their family budget. Does she feel that education and health can play a joint role to help get the diet right at an early stage, which would prepare children for adult life?

[Luciana Berger]

The hon. Gentleman makes an important point about the role of education. A real intergenerational role can be played in education. If we educate our students and young people, they can play a role in informing and educating their parents and grandparents too. Some work has been done on that, but more can be done. I am concerned that when children start school, about 10% are obese or overweight, yet when they get to year 6, about a third are obese or overweight. That is a shocking statistic that we need to address urgently. I am working with my colleagues who shadow education on that and I hope that the Government are looking at what more can be done to affect the lifestyle and food choices of our young people to give them the best chances in life. A child with obesity will live on average nine or 10 years less than a child who is not obese, which is of serious concern and I thank the hon. Gentleman for making his point.

Labour is putting physical activity at the core of its public health policy. The easiest lifestyle change to make is moving from inactivity to activity and, once achieved, people can begin to feel better about themselves and more in control, and can then make better choices on smoking, drinking and eating, yet more than two thirds of our population fail to meet the minimum recommended levels of physical activity a week. I am concerned about the Government’s cuts, which have led to a reduction in local leisure services, which I have seen locally. The end of free swimming, for example, serves only to create further barriers to participation in physical activity. I would be interested to hear from the Minister on what the Government plan to do about that.

On prevention, the hon. Member for Mole Valley (Sir Paul Beresford) raised some important questions on vaccinations, specifically the HPV vaccination. I hope that the Minister will respond to those points.

Undoubtedly our national fight against cancer is going in the right direction, but is that enough? I do not think that it is. We have had a thorough debate this morning, with interesting and varied contributions. Collectively, we have touched on what needs to happen. We need earlier diagnosis, swifter access to the most effective treatment and an even stronger focus on prevention. We need bold, ambitious and concerted action on all three counts to ensure that we win not just the battle, but the war. I look forward to the Minister’s reply.

10:36

[The Parliamentary Under-Secretary of State for Health (Jane Ellison)]

It is a pleasure to serve under your chairmanship, Mr Gray. We have certainly had a wide-ranging debate. I think I would need another hour and a half to respond to all the points made, but I hope that hon. Members present know me well enough to realise that if I am not able to respond to their points in detail, I will get back to them after the debate. The shadow Minister and I have many opportunities to debate the wider public health issues, so I will devote most of my response to specific points, particularly those made by my hon. Friend the Member for Mid Derbyshire (Pauline Latham), who called for the debate. I will, however, try to touch on all points made in some way.

I congratulate my hon. Friend the Member for Mid Derbyshire on securing the debate. She always speaks movingly on this subject, not least as a result of her personal experience. She has been a tireless campaigner on behalf of her constituents and others, in particular with regard to melanoma. Before I respond to her specific points, I would like to restate the Government’s ambitions, as those apply across the debate. All Members have referred to this, but improving cancer outcomes is a major priority.

We aim to save an additional 5,000 lives a year by 2014-15 and halve the gap between cancer survival rates in England and the best in Europe. As my hon. Friend the Member for Basildon and Billericay (Mr Baron), who is the chair of the all-party group, said, we are not as good as we could be, so there is great effort and commitment to make us better. Our debate has been on how we do that, not why that is the right ambition. To achieve that, more than £750 million has been committed to deliver our cancer outcomes strategy, which includes £450 million to support earlier diagnosis of cancer by improving public awareness and GP access to key diagnostic tests.

Early diagnosis came up many times during the debate. It is worth making the point that most GPs will see relatively few cancers in a typical year. Because we all know someone affected, whether in our family or our group of friends, we imagine that GPs see cancer all the time, but they do not; certainly, they do not see many of the rare ones. The challenge of early diagnostic testing and training to get those tools into GPs’ hands is serious, because that is also a challenge for GPs, of whom we ask a great deal. That is why it is important that the Government are putting money and effort into those early diagnostic tests. That money also goes towards paying for extra testing and treatment in secondary care.

I want to touch on the architecture of the system. It has been mentioned a few times and hon. Members have expressed concerns about the changes to the system. The first general comment I would make is that the main thrust of the debate is that we can do a lot better on cancer, which would seem to lead to the conclusion that the old system was not necessarily delivering the outcomes we wanted. Although caution is understandable when major change has happened, Members are perhaps being unnecessarily gloomy about the changes that can be delivered under the new architecture for the NHS and the health system. Many of the criticisms that have been made this morning were made under the old structures as well.

Cancer is a priority for NHS England. Clinical expertise is at the heart of commissioning decisions and NHS England has established a range of clinical reference groups, and is leading on delivering clinical strategy. NHS Improving Quality is working with the strategic clinical networks and has played a key role in working with the NHS on early diagnosis, especially on awareness campaigns. NHS England has also created national service specifications for a wide range of cancers to ensure consistent, high-quality service across England.

[Grahame M. Morris]

I know that the Minister is trying systematically to get through all the points that were raised, but I challenge the point that there is no fundamental difference under the new arrangements. There really is a fundamental difference in the commissioning of specialist cancer services. Those were previously commissioned on a local basis, effectively, by primary care trusts coming together in London, but now it is done by NHS England. That has caused a huge hiatus for the patient cohort I identified. Will she agree to look at that and, if necessary, meet me and a group of clinicians to highlight the nature of the problem?

[Jane Ellison]

The point I was making was not that there has not been change—of course there has—but that it is far too early for hon. Members to be drawing the conclusions they have about the new system. The Government have put a great strategic priority on cancer and NHS England has been charged with delivering against a mandate and against that strategic priority. I take the hon. Gentleman’s point, but NHS England leads on this subject and is quite clear about the priority that the Government and Parliament put on it. I want to make that point. I understand why people have expressed concern.

[Grahame M. Morris]

Will the Minister give way?

[Jane Ellison]

No, I am going to press on, because I will have no chance of getting through all the specific points that were raised if I get into a debate with the hon. Gentleman.

I turn now to skin cancer. I should mention that NHS England has recently published a service specification—I mentioned that it has those across a number of cancers—on adult skin cancer services. That sets out what the NHS must have in place to offer high-quality skin cancer treatment, care and support. I am happy to send that to my hon. Friend the Member for Mid Derbyshire if it would be useful.

My hon. Friend and other hon. Members expressed great interest in what we are doing to ensure earlier diagnosis. It goes without saying that identifying cancers early has a huge benefit in terms of improving outcomes for individuals and for the whole health system. That is why we have committed over £450 million to improve diagnostic services. Later, I will consider in more detail prevention in the context of public health, but it is worth making the point that although diagnosis and treatment are vital, prevention is the biggest prize of all, because we can stop people even having to get to the point of being diagnosed. The more work on awareness and prevention that hon. Members and local councils—particularly given their new public health leadership role—can do, the more we will save the costs in money and in human misery.

Access to early diagnosis is most effective when people visit their GP early. That is why we are running a local Be Clear on Cancer campaign specifically on melanoma in the south-west in April and May, to raise awareness before the summer. We will evaluate the programme as part of our wider programme of Be Clear on Cancer campaigns, which, as the shadow Minister said, has done so much good work in so many areas.

We are also working with GPs to ensure they have the information they need. Cancer Research UK and the British Association of Dermatologists have developed a GP skin cancer toolkit. Evaluation shows that it has reached almost 10,000 GPs and helped to increase confidence in referring suspicious lesions.

My hon. Friend the Member for Mid Derbyshire spoke quite a bit about the NICE approval process, which was also mentioned by my hon. Friend the Member for Lancaster and Fleetwood (Eric Ollerenshaw). I know that my hon. Friend the Member for Mid Derbyshire is concerned about access to NICE’s approval of drugs for late-stage melanoma. As she knows, our priority has to be to get the best possible results for all NHS patients with the resources we have. NICE’s methodology is the best guide we have to the clinical value and cost effectiveness of different treatments.

We have asked NICE to look at the way drugs are assessed so that patients can get the treatments they need at the best value for the NHS, and the price the NHS pays is more closely linked to the value a medicine brings. NICE will carry out a full public consultation before implementing any changes to its methodology. I understand that NICE plans to launch its consultation later this month, and I urge all Members to contribute. I am sure they will, as many Members present take a significant leadership role in Parliament on cancer.

I turn now to the particular concerns my hon. Friend the Member for Mid Derbyshire raised about yervoy or ipilimumab. Although NICE has recommended yervoy as an option for treating advanced melanoma in people who have received prior therapy, I understand her concern that it should be approved as a first-line treatment. I have been advised that NICE is currently considering yervoy as a treatment for previously untreated stage three or stage four malignant melanoma. Although it is not appropriate for me to intervene in an appraisal, I have been advised that NICE’s initial draft guidance, issued on 25 February, recommends yervoy only in the context of clinical trials, as I outlined to my hon. Friend at Health questions recently.

That is not a refusal, however. Instead, it reflects NICE’s view that the technology is promising but there is insufficient clinical evidence for the appraisal committee to recommend its use as a first-line treatment at this stage. However, I hope I can reassure my hon. Friend that the manufacturer is currently conducting a further trial, which, along with other research, is due to complete in 2016. Once that research is available, I am sure NICE will wish to reconsider its guidance. NICE is currently running a consultation on its interim guidance. Again, I would also recommend that hon. Members, and particularly my hon. Friend the Member for Mid Derbyshire, make their views known to NICE. I always make a point of referring Parliament’s views, as expressed through debates such as this, to the relevant people making the decisions. I did so the morning after the debate on pancreatic cancer last week, when I sent a personal letter with a copy of Hansard to the decision makers concerned to make them aware of Parliament’s views. I always undertake to do that where relevant.

In the interim, I understand that NHS England’s national Cancer Drugs Fund panel has considered including yervoy for first-line treatment of advanced melanoma. The panel has decided to refer yervoy to NHS England’s chemotherapy clinical reference group for consideration for inclusion under baseline commissioning. If that is agreed, clinicians would be able to prescribe the drug for use in first-line advanced melanoma according to the commissioning policy that would be developed by NHS England. NHS England will make its decision known in due course.

I also want to reassure my hon. Friend the Member for Mid Derbyshire that NICE is currently developing a clinical guideline on melanoma. It expects to issue final guidance in July 2015. I hope that gives her some sense that a lot is going on this area. We will endeavour to make sure that we keep her updated.

I will have to canter through some of the other points, Mr Gray, but as so many were raised I hope you will be generous and give me a little time to do so. I turn first to the points made about the Cancer Drugs Fund and the concern that no new medicines are being accepted, which my hon. Friend the Member for Lancaster and Fleetwood raised. Just for the record, so far in 2014 the panel has added a number of drugs to the national list—I will probably stumble over pronouncing some of them, but I hope the House will forgive me. They include kadcyla for breast cancer, tafinlar for melanoma and radium-223 dichloride for prostate cancer.

I turn now to the topic of CCG accountability, which I have often discussed with my hon. Friend the Member for Basildon and Billericay, who chairs the all-party group on cancer with such vigour and passion. I entirely share his view that it is a critical point. He has articulated all the wins over the years in making sure that early outcome indicators are part of the CCG outcomes indicator set, and the importance that early outcome indicators have for early diagnosis and more information about survival rates, which we all want to see. It is important to remember that NHS England can intervene where a CCG is found to be failing in its duty to secure high-quality outcomes, although I accept that that is a high-level intervention. I think my hon. Friend is driving at what we will do with the information when we get it. NHS England is considering how it can better respond to the functions in the outcome indicator set and how all permissions and system structures work together to improve outcomes.

This is the first time we have had this indicator set and I know that my hon. Friend has talked to the national clinical director for cancer, Sean Duffy, about this, which is the right thing to do. I will also meet him to talk about it. It is helpful that Parliament returns to the issue regularly because it helps me to emphasise to NHS England how much store hon. Members set by local outcomes and how important it is for us to have a response throughout NHS England to indicators and outcomes that are not as good as they could be. I accept his challenge, which he knows that I am working on. I am having ongoing conversations about it, but it is always good that Parliament returns to the point and challenges the levers of change.

We have introduced GP inspection, and more and more data will be available to the inspectorate to ensure that it is asking questions not just about what GPs do, but about what they do not do and when we expect them to do more. There are all sorts of ways to challenge the system, and it is ongoing work.

I cannot respond to all the points made by the shadow Minister, but I will touch briefly on one. She referred to a report that highlighted the use of out-of-date equipment. To encourage NHS providers to update existing medical technology infrastructure, the Department established a £300 million fund in March 2012, which is operated by NHS Supply Chain to bulk purchase medical equipment to achieve better prices. In August 2013, NHS Supply Chain announced the signing of a deal with Varian Medical Systems to secure 20 new linear accelerators. More detail is available about that innovation fund and the radiotherapy innovation fund, but I do not have time to go into it now.

As ever, the hon. Member for Strangford (Jim Shannon) is present. He often attends debates and makes forceful points about the need for us to work together. The National Institute for Health Research is funded by my Department, so it is focused primarily on England, but I assure him, as I have tried to previously, that the published research is available to anyone. NICE guidance applies formally only to England, but it is available online to all who want to use it. It makes sense for all the Administrations to share that information and expertise, and to ensure that they make use of it when framing their own response.

We have previously discussed human papilloma virus in more detail in this Chamber and during an Adjournment debate on 13 January. My hon. Friend the Member for Mole Valley (Sir Paul Beresford) made many good points about the wider take-up of vaccination to reduce the incidence in females of that and other cancers, and in males. The HPV vaccine was introduced to tackle cervical cancer, which is why the strategy started with girls. He makes a good point about the potential benefits, which are well recognised, of extending that to protection against other cancers, particularly oral cancers.

Since 2008, more than 6 million doses of vaccine have been given in the UK with 87% of the routine cohort of girls completing the three-dose course in the 2011-12 academic year. I was concerned to hear the figure my hon. Friend mentioned from his own area. Hon. Members rightly come here to challenge Ministers about what we are doing, but when there is local information, I urge them also to challenge their local systems and to ask what it being done to bring them up to the national rate. We know that there are challenges about some of hard-to-reach groups, but I am surprised to hear the statistic my hon. Friend mentioned. I urge all hon. Members to recognise that we cannot drive the change solely from Whitehall, and that it is good if they also ask questions about accountability locally.

My hon. Friend referred to the fact that work is continuing through the Joint Committee on Vaccination and Immunisation to look at the matter in more detail. He said that the JCVI is also looking at adolescent boys and men who have sex with men, and highlighted the problem that they do not benefit from herd immunity as HPV vaccination is more widespread among girls. The JCVI is considering whether it is cost-effective to extend the programme to both those groups. The issue is complicated, especially concerning adolescent boys. The evidence base, mathematical modelling and deliberations will take time, but the work is ongoing and it helpful that the House continually expresses its interest.

I recognise that I have not responded specifically to some of the points made by my hon. Friend the Member for Lancaster and Fleetwood about pancreatic cancer, but I responded in the House only last week. I hope he will accept that it is not discourteous to say that my response has not changed substantially since then, but I took the actions I promised last week. He has put on the record his concern about the need to value the additional months of life in a disease that sadly takes people so quickly. Early diagnosis and GP training in that is critical in pancreatic cancer, which is so hard to diagnose. That is well recognised, and I thank my hon. Friend for making his point.

In the remaining few minutes, I cannot respond to all the public health issues raised, but smoking is a factor in so many of the cancers that have been discussed, as the shadow Minister said. Smoking in this country is at an historic low, and has dipped to below 20% of the population for the first time. There is a significant legislative programme and the shadow Minister said she hopes we will keep up the momentum. I assure her that I have no option given the programme that we must deliver in the coming year. I look forward to her co-operation. I also look forward to support from hon. Members in the Chamber when we introduce those measures in the House.

It is always good to remind people why leadership on smoking cessation and legislation is so important. It plays a role in prevention, which is important in many areas that hon. Members have highlighted this morning. There is a big role for leadership at local council level because the figures on smoking cessation are extremely patchy throughout the country. We must drive change at local level.

The hon. Member for Easington (Grahame M. Morris) referred to Gamma Knife, and I will respond to him in more detail after the debate if that is acceptable to him. I am sure he did not mean to say that NHS England is callous and cold. Clinicians must make difficult decisions every day on behalf of all of us in balancing competing health priorities. He used those words, but I know he did not mean them in connection with the people who must make the difficult decisions. Many of our clinicians and health leaders must perform difficult balancing acts. Just the challenges made to me as the Minister in this debate this morning would have an enormous cost. We must make difficult decisions all the time about where we can best spend resources to bring the best results for the population. I know that that is at the heart of hon. Members’ concerns.

I thank hon. Members who are present. Many are long-standing champions of particular issues in Parliament and I urge them to continue their awareness-raising work. NHS England will continue to respond to that, as will Ministers. I thank hon. Members for attending the debate this morning.

Transport Infrastructure (Wellington, Somerset)

Tuesday 11th March 2014 Westminster Hall

10:58

[Mr Jeremy Browne (Taunton Deane) (LD)]

Thank you, Mr Gray, for presiding over our debate this morning. It is narrowly focused and not necessarily of interest to many Members of Parliament, but is certainly of interest to the residents of Wellington, Somerset, which is in my constituency, and people in the surrounding communities. To put the matter into context for hon. Members who are less familiar with Somerset, I should say that the principal town in my constituency is Taunton, which has a population of around 60,000. It is the largest town in Somerset and the county town, and there have been some substantial infrastructure development projects there during the last decade or so.

A bridge was built on Silk Mills road—the Silk Mills bridge, which opened in 2005 and replaced a level crossing. That was important in allowing the traffic to flow around the edge of that side of Taunton and was introduced at the same time as a park and ride. More recently, a few years ago, the so-called Third Way bridge opened in Taunton. That alleviated some congestion in one part of town and provided a more direct route across the river.

As we speak, the northern inner distributor road is being built in Taunton, with a substantial contribution from the Department for Transport—central Government are spending in the region of £15 million, supplementing money that has been made available locally as well—to alleviate congestion in the northern part of Taunton. However, perhaps more importantly, the road will allow for the development of an extensive brownfield site near Taunton train station and provide an obvious opportunity for new jobs, new housing and new retail sites in Taunton. All that is conditional on the road that is currently being built and due to be finished next year.

There are always people who would like even more projects to be initiated and funded, but we recognise in Taunton that although the traffic congestion is a serious problem, there has been transport infrastructure investment. It is fair to recognise, of course, that central Government have limited funds and that demand always outstrips the money available.

During this short debate, I want to turn to the second town in Taunton Deane constituency, or borough. About two thirds of people in Taunton Deane live in Taunton, but if the Minister or any other Members were to travel further down the south-west peninsula on the M5, going one more junction beyond junction 25—the principal Taunton junction—and turning off at junction 26, they would come to the second town in Taunton Deane, which is called Wellington. It is well known for the Wellington monument, which overlooks the M5, and it has a population of approximately 10,000, depending on how one calculates some of the outlying parts of the town. It is a substantial community in its own right and has a very strong and proud identity.

The purpose of securing this morning’s debate is to talk about the infrastructure requirements of Wellington. There is a danger, because the town is smaller and is only six or seven miles away from Taunton, that Wellington’s transport infrastructure needs will otherwise be overlooked. I want to discuss two aspects of the transport infrastructure that I hope could be improved, if we think in terms of a five-year or 10-year project. We have a vision for improving the quality of life of Wellington residents by upgrading their transport infrastructure. The two elements are, in my view, the two core components of a transport infrastructure vision for Wellington.

The first one is the problem of traffic congestion in the town. I recognise that every Member of Parliament could stand up and identify a town in their constituency where traffic congestion was a problem, but it is becoming more of a problem in Wellington, in part because extra house building is going on in the town. The Cades Farm development has brought forward several hundred houses, which are now occupied, and the Longforth Farm development will have the space for about 500 houses when it is completed. It is only in its first phase at the moment. Obviously, that is adding a substantial percentage population increase to the town of Wellington.

If you were to come a mile or two into Wellington from junction 26 on the M5, Mr Gray—it is a very underused junction, so there is a lot of opportunity for development and it is attractive to people who can access the motorway quickly at that junction—and you were trying to get across to either the northern part of the town, coming in from approximately the east, or to places north of Wellington from the motorway, such as Milverton or Wiveliscombe, you would be hugely frustrated. You would have to go pretty much into the centre of the town, into the high street, and then turn right into a road called Longforth road.

That junction and the junction right in the centre of the town become hopelessly congested at peak times. You would almost certainly be stuck, Mr Gray, possibly for one or two phases of the traffic lights, and it would be even worse coming back, if you were coming back from Longforth road and looking to turn left and exit Wellington at that same junction. At peak times, the congestion is becoming intolerable and with the extra house building, the situation will become much worse.

What Wellington residents and I had hoped is that the Longforth Farm development would allow for a northern relief road for Wellington. At the moment, the traffic can flow round the southern part of the town without coming into it, but to get to the northern part of the town or north of it, traffic has to come into the town and out again, so Wellington needs a northern relief road. The Longforth Farm development, which is just getting under way, and will have, as I say, about 500 houses when it is complete, was widely thought to provide the opportunity for a northern relief road as part of the project. That seemed a very sensible trade-off, which would allow people to get around Wellington. I think that Wellington residents, even those who are perhaps uncomfortable with the scale of that development, would have seen that there was a quid pro quo and that there would be benefits for them in having the northern relief road.

Instead, I regret to say, the development of up to 500 houses has a road accessing the development, but it is a dead end—it is a road to nowhere. It means that if the people living in those 500 houses, when they are built, want to go to the northern part of Wellington, only 100 or 200 yards from their homes, they will have to drive out of their extended cul-de-sac into the middle of Wellington, exactly to the junction or junctions that, as I described, are already hopelessly congested at peak times. They will then have to drive back out to the north again. There is no northern relief road, just more scope for congestion.

The only beneficial caveat relates to Relyon, which is a major employer in Wellington that makes mattresses. Next time you are going along the motorway, Mr Gray, you may see a lorry with Relyon written on the side. When you are thinking of buying a mattress yourself, you may consider buying a Relyon mattress, and you would be very well advised to do so. It makes very high-quality mattresses and is one of the two big employers in Wellington, along with a company called Swallowfield, which makes aerosols and other cosmetics. We want to keep both those in Wellington. The one advantage of this new cul-de-sac is that it allows Relyon lorries to get out of Wellington without coming into the town centre, because it goes up to their factory. However, it does not allow any residents—any normal traffic—to bypass the town centre.

The first task of all is a northern relief road in Wellington, which we would very much benefit from. There are, essentially, two options—a modest option and an ambitious option. The modest option would be a road that goes into the new Longforth Farm development, but would then exit at Brendon road. It would not, in other words, try and cross the railway line, because as soon as a bridge is put over the railway line, it becomes more expensive and more complicated. It would not bypass as much of the town, but it would bypass the junction of the high street and Longforth road that I discussed a moment ago, which causes difficulties by Waitrose.

The more ambitious option would be a northern relief road that made a slightly broader sweep—there are different options as to where it could go on the map—crossed the main railway and came in at the end of either Wardleworth way, on the other side of the railway line, or possibly further along Station road, towards Milverton.

Either of those options would be an improvement on the current situation. The latter would be a sizeable improvement on the current situation and would set up Wellington for the next generation, because there would then be a southern relief road and a northern relief road. The northern relief road would not go all the way round to the north, but it would take out a substantial proportion of the traffic, and I think that it would allow Wellington’s extra development to be absorbed. It would be a long-term solution, not a sticking-plaster solution. It would stand Wellington in good stead for a considerable time.

The second big infrastructure project in the vision for Wellington’s infrastructure is a train station, and this links to the first point that I was just making about the northern relief road. Wellington is on the main line from Paddington to Penzance—or the line that normally runs from Paddington to Penzance; it is not running there at the moment. It is the main line that comes through Reading and then through Wiltshire, Somerset, Exeter and Plymouth and goes through to Penzance. Wellington did have a station; historically, it was a town with a station, but it has not had a station for many decades. There has been a debate for an extended period—longer than I have been the MP, which is almost nine years—about the feasibility and desirability of Wellington’s having its own train station.

I recognise that Wellington could not be expected to have a train service that was as frequent as Taunton’s, because Taunton is a much bigger town and virtually all the inter-city trains stop at Taunton, but there are other stops on the line between London and Penzance that are comparable to or smaller places than Wellington. I travel frequently on that line—almost every week—and shall give some examples. The fast service from Taunton to Paddington stops only at Reading, but some of the slower services stop at Castle Cary in Somerset or at Pewsey in Wiltshire, and in Cornwall the service stops at many places that are much smaller still.

It would be possible for there to be a stopping inter-city train—the slower service—stopping at towns such as Wellington. That would not require a diversion—Wellington is on the line; the line runs through the northern part of Wellington. It would require a new station, and the expectation would be that some of the trains in-between the inter-city trains, perhaps those running between Bristol and Exeter or Bristol and Plymouth, would stop in a number of places, including Wellington, and a few—not many, but one or two—of the inter-city trains would also stop at Wellington.

Such a new station would be hugely advantageous, because at the moment people who live by the train line in Wellington have to drive—even though they see the trains going past their front door—either to Tiverton Parkway or to Taunton. If they do not have a car, it is hugely inconvenient for them to get to either of those locations. They would probably need to get a bus into the centre of Wellington. Then they would need to get another bus, from the centre of Wellington to the centre of Taunton, which is 6 or 7 miles away. Then they would either have to walk from the centre of Taunton to the train station in Taunton, which is not at the same place in Taunton as the bus depot, annoyingly, or have to get a third bus, from the bus depot in Taunton to the train station in Taunton. If they allow enough time for those three bus journeys—enough time for contingencies—it is possible that getting the 6, 7 or 8 miles from their home in Wellington to the train station in Taunton would not take much less time than getting the train 150 miles from Taunton to London. That is how much extra time and inconvenience is built in.

To have a few inter-city services a day—I would not expect it to be a service every hour or so—stopping at Wellington, as they do at Castle Cary or Pewsey, would be of transformational benefit to people in Wellington and surrounding areas such as Milverton and Wiveliscombe, which I have mentioned. What would potentially work so well and make this a coherent vision would be building that station as part of the same project that came with a bridge, which made the superior version of the northern relief road possible. In other words, when I was talking about the traffic congestion and northern relief road and about the station, I was talking about not two unrelated projects, but potentially related elements of a project that would transform Wellington.

The project would provide opportunities for some more development in the town. That development would obviously need to be proportional to the size of the town, but the project would allow some reasonable development to take place. It would be hugely beneficial to the residents of the town by alleviating congestion in the centre of town. It would be beneficial to the major employers in the town, who would be able to access the motorway better. It would be beneficial to people from nearby communities, who would be able to get through Wellington and out the other side; at the moment, they get stuck in Wellington when they do not even want to be in the town. It would also be beneficial to the people who were able to use the services from that train station.

I conclude by saying that I appreciate that money is a finite resource and we live in straitened times. I am very grateful to the Minister for being willing to respond to what I appreciate is a very limited debate about a very specific project, or two potentially related projects. I hope that the message that I am leaving him is that if we can put in place a vision for this Wellington development that includes those two projects and that is supported by the borough council, the county council, Wellington town council and me as the Member of Parliament, the Department of Transport could look at putting those projects in some sort of future funding plan.

We could look at moving from just talking about the projects in a broad, generic, hypothetical sense to hoping that in one, two, three, five or 10 years we will have a plan that we can put in place, with some funding—not all the funding, but perhaps some—from a central Government pot. That could be used to turn the current situation in Wellington, which is pretty intolerable and in need of improvement, into the vision for the town that would serve its residents so well.

11:17

[The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)]

It is a pleasure to see you in the Chair, Mr Gray. I congratulate my hon. Friend the Member for Taunton Deane (Mr Browne) on securing the debate, but it would be wrong of me not to start by saying how saddened I was to hear the news that Bob Crow died in the early hours of this morning. My thoughts are with his family, friends and colleagues. Like many, I will obviously remember him as a passionate advocate of safety on the railways and the well-being of people who work on the railways. Although it is probably clear to everyone that we may have had different opinions on how to run the railways, he was a man who led his organisation from the front and made an important contribution to the debate about how railway services are run in this country. My thoughts and, I am sure, the thoughts of everyone in the Chamber are with his family, friends and colleagues.

I commend my hon. Friend the Member for Taunton Deane for his eloquent and passionate speech. I listened to his opening remarks about the improvements in Taunton and clearly I welcome his support for the improvements that have been undertaken there. Of course, I also commend his realism in recognising that money is tight. That is a helpful prefacing remark.

The economic benefits of good transport are well understood and, in challenging times, transport investment is even more important. As my hon. Friend has pointed out, transport helps to support local communities by enabling businesses to move people and goods more quickly, easily and reliably, which helps them to grow and be competitive; by enabling people to get to work and creating more job opportunities; by supporting local projects and products such as Relyon mattresses, for which we heard an admirable advertisement; and by attracting inward investment to towns and cities to make them great places in which to live and do business.

It is useful to remind ourselves—this was implicit in my hon. Friend’s remarks—that the Government inherited not only a fiscal deficit but an infrastructure deficit. In the years leading up to 2010, there was a huge increase in demand on our transport network, but investment failed to keep up with that demand. As a result, nearly half of the respondents to a CBI survey at the time rated the UK’s transport network as well below average. It is to the Government’s credit that, at a time when we are trying to put the public finances in a sound place, we are investing record amounts in maintaining, upgrading and expanding the road and rail infrastructure in this country, investment that will, according to the International Monetary Fund, improve the long-run growth potential and boost demand.

Between 2011 and 2014, we invested £32 billion in roads, rail and local infrastructure, and between 2015 and 2021 we are committed to funding of £56 billion. We ensure that that money goes throughout the country. In the current two fiscal years, the Somerset block funding for road maintenance and highways maintenance will consist of more than £40 million. It is clear that the Government are committed to investing in reliable networks and providing the capacity that towns and cities across the country need.

The severe winter weather that we have suffered has made some parts of the network extremely vulnerable. As my hon. Friend knows, Somerset has had particular difficulties, so it is right that my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs announced last week the publication of an action plan, which contains several transport recommendations. In addition to £10.5 million of funding from the Department for Environment, Food and Rural Affairs and the Department for Communities and Local Government, the Department for Transport is making £10 million of support available immediately to Somerset to enable it to start work on several short-term actions to help secure a sustainable future. As a result, I hope that Somerset will be able to begin to clear the roads of silt and debris, to deep clean the drainage system—that will help the road system—and to repair bridges and other structures. In addition, my right hon. Friend the Secretary of State for Transport has commissioned a review of the resilience of our transport networks. The challenge of the coming months is to get the network back to business as usual, to learn the lessons and to give the right support to the transport infrastructure in counties such as Somerset.

The Government clearly have a role to play in supporting communities through such extreme events and, as my hon. Friend the Member for Taunton Deane identified, in supporting communities with their priorities for transport. However, the days when Westminster decided and dictated to local communities what those priorities should be are over. Local priorities should be identified, and local decisions made, by local communities, local highways authorities and local enterprise partnerships. That is why the Government have committed £2 billion a year over the six years from 2015-16 to the local growth fund, which will be available to LEPs. Those growth deals can provide the resources required to facilitate local communities’ priorities, and such deals may well be appropriate for some of the targeted growth priorities that my hon. Friend described. The funding is not ring-fenced, but it will be available to support long-term planning infrastructure, including the transport priorities.

Many hon. Members will be aware that the growth deals are a competitive process, and moneys will be made available to the places that demonstrate the clearest-cut and most convincing arguments for delivering growth. It is important for local communities to engage with their local economic partnerships, and for local authorities and LEPs to work together to shape local priorities. I know that my hon. Friend has been involved in discussions with his LEP, Heart of the South West. I stress how important it is for the ambitions that he has described that the LEP is intimately involved in the discussions and that it recognises and supports his priorities.

I turn to the two interrelated schemes that my hon. Friend has described. He spoke about the congestion in Wellington and the need for a northern relief road to bypass the town centre by connecting roads to the east and the north, which has long been sought. The development that he mentioned will provide much of the road. It will provide access to some of the new residential development and to the factory, and it should reduce HGV traffic in the town centre. As he pointed out in an article last November, however, it will not be a

“proper northern relief road…we have the road to nowhere.”

I understand his concerns about the continuing congestion, delay and air pollution that are caused by the fact that the road is unconnected. He set out two aspirations for a northern relief road: one modest and one—a broader sweep that would cross the railway line—more ambitious. Both those ambitions are excellent examples of the solutions that the local growth fund has been established to support. As far as I am aware, and he may wish to correct me, they have not yet featured in the draft of the LEP’s strategic economic plan. I urge him to engage with the LEP and ensure that it recognises that ambition as a strategic priority. That is a route through which the scheme might be pursued.

[Mr Browne]

If we were able to bring forward a joint vision for those two projects, would there be any national impediment to Wellington having a railway station? Would the Department for Transport object to that on the basis that it might have implications for other traffic on that line? That might not be an entirely local point, but it would be beneficial to local people if there was not a national impediment.

[Stephen Hammond]

I will come on to discuss the railway station in a moment, so I will tackle that point shortly. Local pinch point funds, of which there have been two tranches under this Government, have helped with schemes such as the rail route that my hon. Friend mentions. Such problems are likely to be a priority for a future Government, and if such a scheme is re-established in future I hope that he might look at it as a potential way forward.

My hon. Friend is right to say that people in Wellington see the train services going past, but the station was closed in 1964. Wellington is thought to be the largest town on the Penzance to London line that does not have an operational station. I am aware that Mid Devon district council and Devon county council have spoken about how they might work together to re-establish local rail links between Exeter and Taunton. I understand that Somerset council has a long-term aspiration to reopen the rail line, but it has yet to identify a suitable service or adequate funding.

To come to my hon. Friend’s essential point, if Wellington station were to be re-established, the issue would be to ensure that a stopping service that called at Wellington did not interfere with the timings for some of the faster services, or with the ambition to provide accelerated services to some of the key markets such as Plymouth, Exeter and further into Cornwall. He is right to say that whatever happened, not all services would call at Wellington. The best way to achieve a semi-fast service that called at Wellington, fitted in with the timetable and allowed faster trains to pass would clearly be a discussion point. I do not see it as an impediment, but it would be a discussion point. I suggest that the next stage is to consider the proposal and to work up a business case, so that that work can be developed in partnership with the local transport body and the LEP. My officials will be happy to provide advice and guidance on how a viable case might be made.

As I have tried to convey in my short speech, I strongly believe that local priorities and local decisions should be made locally. My hon. Friend has made an eloquent case for his local priorities, and one of the main routes through which those priorities might be pursued is the local growth fund.

11:30

Sitting suspended.

Energy Company Obligation

Tuesday 11th March 2014 Westminster Hall

[Nadine Dorries in the Chair]

14:30

[Lilian Greenwood (Nottingham South) (Lab)]

It is a pleasure to serve under your chairmanship for the first time, Ms Dorries.

I am pleased to have secured this debate on an issue that is affecting literally thousands of my constituents and, I know, many more thousands of people in constituencies up and down the country. The debate is timely because last week the Government finally published their consultation document on the future of the energy company obligation.

I do not intend to focus on the Government’s impact assessment, because I want to speak about the effect that changes to the energy company obligation are having on my constituents in Nottingham South right now—constituents such as Ilona, one of the people in fuel poverty that the energy company obligation was designed to help.

14:31

Sitting suspended for Divisions in the House.

14:56

On resuming—

[Nadine Dorries (in the Chair)]

The debate will now finish at 4.26 pm. That means that we will start the wind-ups at 4.5 pm, if that is okay, which gives everyone else an indication of how long they have to speak.

I call Lilian Greenwood to speak.

[Lilian Greenwood]

Thank you, Ms Dorries for calling me to speak.

I was speaking about my constituent, Ilona. She lives on the Wollaton Park estate in one of the 500 “white bungalows”, or Crane Composite houses, that were built in the 1920s by the Nottingham Corporation as part of a bold experiment in new building techniques. The bungalows are specially constructed, with steel frames and pre-cast concrete walls. They are really distinctive and are now part of a conservation area. However, they are cold and hard to heat.

Ilona suffers from fibromyalgia and chronic sinusitis, and she desperately needs a warm house; what she has is a cold and damp house with terrible mould problems. Her landlord, Nottingham City Homes, says that the only way to make her house really warm is solid wall insulation. Since the changes to the energy company obligation, that possibility has become more distant.

Kate lives about a mile away from Ilona on the Lenton Abbey estate, which was built by the council in the late 1920s. The 900 houses on the estate are of conventional brick construction. However, as was normal practice at that time, they were built with solid walls, so there are no cavities that can be insulated. About 500 of the houses are now privately owned, with about one fifth rented out. Kate says that since NCH fitted new doors—front and back—to her house, it has been noticeably warmer. However, her house is still cold and difficult to heat, and she worries about her bills. Lenton Abbey is one of the neighbourhoods that NCH had prioritised for energy efficiency measures under its greener housing scheme. However, the changes to the ECO mean that acting on those plans may now be years away.

Ennis is in his 80s. He lives across the River Trent in Clifton. The local claim that the Clifton estate was once the largest council estate in the country may be open to question, but there is no doubt that Clifton is a large example of the post-war drive to build. It is said that the Wimpey “no-fines” construction method of concrete walls allowed for a construction rate of 30 homes per week. Unfortunately, despite the fact this design type was popular across the country, the resulting homes are poorly insulated. NCH manages more than 1,200 of these properties in Clifton, but there are more than 3,500 similar privately owned former council homes whose residents exercised their right to buy but now face the same problems as Ennis—cold, damp homes and high fuel bills.

Ennis has seen his neighbours on the Clifton estate benefit from solid wall insulation, thanks to Nottingham’s pilot greener housing scheme, which was launched in the north of the estate last September. He has heard what a difference insulation has made to his neighbours’ bills, and how warm and cosy their houses now feel. He has also seen how good the insulation looks, as hundreds of tenants and owner-occupiers alike have taken up the offer of solid wall insulation provided by the scheme during the past six months.

Sadly, for Ennis the future is uncertain, because he lives in the first street in the southern half of the Clifton estate. The scheme was due to launch there in January, until the changes to the ECO that were announced in December allowed the funder—British Gas—to pull out, leaving Ennis and thousands more Clifton South residents to look enviously at their neighbours’ homes when they walk down the street.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

I commend my hon. Friend’s campaigning on this issue, which has clearly affected her constituents. My constituents in the Candle Meadow area have encountered similar stories, with some residents getting this insulation for free, but because of the Government’s changes, all of a sudden, other neighbours not getting it. This is incredible unfairness, which can be seen from house to house—those who have and have not benefited. I fully support my hon. Friend’s argument.

[Lilian Greenwood]

My hon. Friend is right. Clifton is the largest scheme in Nottingham, but Candle Meadow is equally important, albeit of a different property type.

Ilona, Kate and Ennis are just three of my constituents whose homes need to be made more energy efficient, but there are more than 20,000 solid wall, hard-to-treat properties in Nottingham and our city is not untypical of the position throughout the UK, which has more than 7.6 million uninsulated solid wall homes.

Nottingham council is committed to improving the quality of its housing stock and tackling the fuel poverty that affects more than one in seven households in our city. It has long understood that improving council homes has wider positive social impacts. I have spoken before in this Chamber about the council’s decent homes programme, known locally as Secure Warm Modern, which began in 2008 and which, when complete, will have delivered double-glazed windows, loft and cavity wall insulation and new boilers to more than 20,000 council properties.

A joint impact study by Nottingham City Homes and Nottingham Trent university’s business school found that improvements to the physical condition of properties led to improved outcomes for tenants and better security, health and comfort, and that it also impacted on the wider community, by reducing carbon emissions, providing employment opportunities and improving neighbourhoods. It was as a result of working with Nottingham City Homes to secure funding for the completion of decent homes that I began to understand the challenges involved in tackling our city’s hard-to-treat solid wall houses.

I first raised these issues with the Minister in July 2012, explaining that Nottingham City Homes could use the decent homes funding to lever in additional benefits from the green deal’s energy company obligation, if there was more certainty about funding.

[Graham Stringer (Blackley and Broughton) (Lab)]

My hon. Friend is making a cogent, coherent case for her constituents. Is she aware that only 4% of the money spent until October last year, for the country as a whole, had gone on solid wall insulation and that the worst cases of fuel poverty and coldness often exist in homes with solid walls?

[Lilian Greenwood]

My hon. Friend is right. Solid wall homes are associated with fuel poverty. Of course, they are more difficult to deal with, which is specifically why measures were needed to help tackle those hard-to-treat homes, when many councils, my own included, had done the easier work on lofts and cavity walls.

[Huw Irranca-Davies (Ogmore) (Lab)]

I compliment my hon. Friend on the case that she is making on behalf of her constituents, but will she acknowledge that, although solid wall external insulation is critical for some of the older housing stock in our urban and peri-urban areas, it is also critically important for our rural areas, where there is a predominance of solid wall homes, and that often elderly and vulnerable individuals feel now that it is much more difficult to obtain solid wall external insulation?

[Lilian Greenwood]

My hon. Friend has probably, like me, received a briefing from Calor, which has expressed particular concern about the impact in rural, off-grid locations.

In the Minister’s reply in July 2012, he praised Nottingham for its “progressive agenda” and looked forward to visiting the city in the near future to drive that agenda forward. In the event he did not visit, but he did meet me, along with representatives from Nottingham City Homes, to discuss our ideas and experiences to date. Following those positive and challenging discussions, a joint approach was developed between the city council, Nottingham City Homes and local energy efficiency charity, Nottingham Energy Partnership. They drew up the Nottingham energy saving neighbourhoods proposal, a detailed plan to maximise the insulation work on hard-to-treat homes, promote the green deal and spread benefits to private homes as well as social housing, beginning on the Clifton estate, but with the aim of transforming energy efficiency across more than 20 Nottingham neighbourhoods with hard-to-treat houses.

We were delighted to welcome the Energy Secretary to Nottingham last spring to see how the neighbourhood model had been developed and the potential for future works. He visited the Bulwell Hall super warm zone, where solid wall insulation had been rolled out to 350 council and 352 private homes. That project helped identify the factors for success that were incorporated into the energy saving neighbourhoods proposal: a large-scale project attracting funding from an energy company; the role of NCH as a trusted intermediary for council tenants, overseeing resident liaison and ensuring quality; the key role of Nottingham Energy Partnership, a local trusted and independent organisation, in contacting every private owner and facilitating private resident engagement; and support from the city council’s planning department in developing an attractive insulation solution to suit the area. It also demonstrated the potential to support Nottingham’s local jobs plan, employing more than 200 people and supporting local employment and the development of the solid wall insulation industry.

Responding to Nottingham’s energy saving neighbourhoods proposal, the Minister wrote:

“I was delighted to see the ambitious proposals you have developed to deliver the Green Deal across Nottingham, in particular your plans for a neighbourhood wide approach fits our vision for the delivery of the Green Deal.”

Although we were unable to persuade the Minister to provide financial support for the energy saving neighbourhoods proposal, when the Department launched its green deal communities fund the following July, we were delighted to see the similarities to our plan. It seemed clear that in Nottingham we were already pursuing precisely the sort of innovative, cross-tenure, area-based approach Ministers were looking for.

The scheme was launched in Clifton in September last year under the branding, Nottingham Greener HousiNG, and was an immediate success. As I explained in last Monday’s estimates day debate, the scheme offered external wall insulation at an affordable fixed price based on property type, so private residents paid a contribution of between £1,000 and £1,300 depending on whether they lived in a bungalow, mid-terrace, end-terrace or semi-detached house. Most residents chose to fund their contribution using savings or via informal help from family and 10% took up the option of a loan from Nottingham Credit Union, which was low cost and could be repaid early without incurring a penalty. None chose to utilise green deal finance, even though the option was set out alongside others available.

The remainder of the cost—around 85%—was funded by British Gas as part of its energy company obligation. The insulation works were rolled out street by street across the Clifton housing estate, to council properties and privately owned homes alike. As residents saw their estate being transformed and heard neighbours describe their warm homes and lower bills, demand continued to grow. Within weeks, hundreds of residents had signed up and by the end of November more than 90% of council tenants had agreed to have the work done and there was 65% take-up in the private sector, with more than 1,000 private residents or landlords having signed up and paid their contribution towards getting the work done.

The feedback from residents was overwhelming. People told me that their homes were warm for the first time ever and that they were saving money and were excited about the improved appearance of the estate. Those signed up were impatient for work to start on their homes.

The Energy Secretary’s statement on 2 December prompted high anxiety in Clifton, and that anxiety turned to despair when British Gas used the opportunity of the Government’s policy change to pull out of the Clifton scheme. Last week, the other Energy Minister, the right hon. Member for Sevenoaks (Michael Fallon), responding to the debate, said that I had “suggested” that our Clifton scheme was

“a victim of the changes taking place in the ECO arrangements.”—[Official Report, 3 March 2014; Vol. 576, c. 722.]

I did not suggest it, I quoted the statement from British Gas in which it said,

“In light of the Government’s proposed changes to the ECO, it was necessary for us to review our current ECO contracts. These changes mean we can no longer fund some projects and unfortunately this is the case with our planned programme with VolkerLaser and Nottingham City Homes”.

It could not be clearer. The Minister’s Government’s ECO changes have led to the collapse of our energy efficiency scheme. As a direct result of his policy shift, hundreds of my constituents in Clifton who have paid for solid wall insulation do not know whether they will get it.

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

I will respond fully in my closing remarks, but I do not want the hon. Lady to scare or alarm her constituents unnecessarily. I spoke yesterday to the chief executive of Nottingham city council, and we are working closely with Nottingham on a new bid for our green deal communities. Although I cannot announce the result of that bid for our green deal communities fund, Nottingham has made a robust proposal that aims to deliver hundreds of measures, if not more than 1,000 measures, of the type the hon. Lady describes in south Clifton. Far from being dead and over, the south Clifton scheme has every reason to be optimistic.

[Lilian Greenwood]

I thank the Minister for his intervention. Unfortunately, my constituents are both scared and alarmed. They will, however, welcome his indication that there is hope for the scheme in south Clifton. There are many more people across Nottingham South who do not know if or when they will get the help they need with their fuel bills. They continue to live in cold homes that affect their health and the health of their children.

[Huw Irranca-Davies]

My hon. Friend is being generous in giving way. In answer to the Minister’s intervention, it is not only householders who are concerned. I have met companies in the midlands and elsewhere that have said that, because of the changes, they are rethinking where they invest and what they prioritise. Although the Minister’s announcement might be very welcome, there is now a hiatus, which is a classic symptom of the Government’s policies—they are having to rejig their thinking to catch up with a misfortune of their own making.

[Lilian Greenwood]

My hon. Friend is right. I will address the impact on employment and on businesses in due course. Nottingham will, unfortunately, continue to experience excess winter deaths and excess winter admissions to hospital as a result of cold housing. As he says, hundreds of people employed in our greener housing project are at risk of redundancy, and some have already lost their jobs. New apprentices who are looking forward to long careers installing insulation face, at best, uncertainty about their future. The young people who had completed their initial training and were due to start year-long apprenticeships leading to national vocational qualifications are now back in the dole queue.

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

My hon. Friend is making an important point. We all accept that programmes need to be fine-tuned from time to time, which is inevitable with any Government programme, but we have been told that more than 600,000 fewer properties will be dealt with under the hard-to-treat cavity wall insulation scheme. Apart from the impact on the people living in the houses concerned, taking away 609,000 properties will obviously have a major impact on businesses.

[Lilian Greenwood]

My hon. Friend is right. It gives me no pleasure to tell the Minister that those are the effects of his changes to the energy company obligation. Right now in Clifton, the contractor VolkerLaser is working at an incredible pace to try to complete work for all those residents who have signed up and paid their contribution, but the 9 April deadline, when British Gas funding ends, is fast approaching. The Minister knows that. He met me and colleagues from Nottingham on 22 January to discuss the crisis we face. He promised to raise the matter with the chairman of Centrica, British Gas’s parent company. Can he tell us today whether he has held those discussions? If so, what was the outcome?

I also wrote to British Gas following our meeting to ask it to consider a grace period for private customers who have suffered financially, thereby allowing their properties to be completed beyond the 90-day notice period. In his reply, Chris Weston, the managing director of British Gas, said

“we cannot commit to an extension of the termination period”.

Does the Minister agree that those residents who have signed up and paid should have their contracts honoured? If British Gas will not provide that funding, is he prepared to step in to honour that commitment and ensure that my constituents receive the work for which they have paid at the price they expected?

The Minister also said in our meeting that Nottingham city council should amend its bid to the green deal communities fund, which has been increased to £80 million, and we followed his advice. As I anticipated, we have not yet had success, but I remain hopeful after his earlier comments. Can he say when the next tranche of green deal communities funding is expected to be announced?

When the Minister met us, he also suggested that the Government’s announced increase in green deal cashback might help to fill the gap left by the reduction in ECO funding. A few weeks later we learned that green deal cashback could no longer be used alongside ECO. I simply ask the Minister how we can plan for the future and work with him to deliver the energy efficiency measures that our constituents need, and that we all want to see, without some certainty on the policy and funding framework within which we are operating.

The Clifton scheme, which we believe is the largest area-based approach so far, has enabled Nottingham city council to learn valuable lessons about what works. Councillor Alan Clark, the portfolio holder for energy and sustainability, has led the city’s work, and he concludes that, to be successful, a scheme needs to: address the issue on an area-by-area basis; apply to all tenures equally; pay for green deal assessments, avoiding risk and up-front costs for households; identify a fixed price for works to bring certainty to residents; engage specialist contractors of the highest quality; and engage local councils as a trusted broker. Above all, there must be a stable national policy and funding regime.

Phil Angus, the manager of Nottingham Energy Partnership, puts it more bluntly,

“the Government’s stop start approach to funding policy is sending businesses to the wall along with hard working families left in the lurch”.

He illustrates the point with reference to a typical Clifton property for which the funding support available has changed, or is due to change, every few months as a result of policy changes since last December.

Ahead of the green deal’s launch last year, the Minister described it as

“the most transformational energy efficiency programme that this country has ever seen—a programme that is built for the long term.”—[Official Report, 16 January 2013; Vol. 556, c. 983.]

Clearly, as my hon. Friend the Member for Edinburgh North and Leith (Mark Lazarowicz) said, any scheme has to be reviewed and revised in light of experience but, as Phil Angus says:

“How is any small business connected to domestic energy efficiency services supposed to plan ahead and maintain consistency with customers, supplier and workforce…is this Government on the side of business?”

VolkerLaser, the contractor that has been delivering the solid wall insulation in Clifton, surely has to conclude that the answer to that question is no. Here is what managing director Mike Weaver had to say about the effect of changes to the energy company obligation:

“The recent events…and the uncertainty in the market have had, and will continue to have a devastating effect on the VolkerLaser business. We have had to suspend our forward apprenticeship scheme and staff recruitment programme, denying up to 50 young people the chance to get ‘a start’ in this industry.

The whole business has a cloud of insecurity hanging over it and for a Managing Director who started this business over 20 years ago this is particularly distressing. VolkerLaser prides itself on retaining good staff, with a large number of long serving employees enjoying their 20th year alongside me. It is now impossible to map out our employees’ future and it is inevitable that if current conditions persist, there will have to be redundancies.

Due to the collapse of the funding market it is now extremely difficult to plan a future order book. The proposed changes to ECO have swung the market so much in the favour of the energy retailers that even if funding becomes available, it will come with onerous conditions which will place enormous risk on contractors and clients alike.

No one in this industry believes they are owed a living, but it would be good for once to operate on a level playing field. Our staff and the residents of Clifton need some security and some reassurance that ECO is not just another flash in the pan. Or, to put it bluntly, yet another initiative the government asks thousands of people to spend millions of pounds gearing up for, only to see it decimated in one fell swoop.

The impact of the proposed changes to ECO, and in particular the 100,000 solid wall minima, will be significant and will undo all of the good work the partnership has achieved to date. 42% of the staff on the Clifton Greener HousiNG initiative are residents of Nottingham; ten apprentices have been inducted so far and are now working towards a nationally recognised qualification; and countless sustainable job opportunities have been created with local SMEs.

With a doubling of the minima to 200,000 measures (or 8 million tonnes equivalent) thousands more residents will be guaranteed a reduction in their fuel bills and be afforded the opportunity to live in warm and energy efficient homes. With the certainty of funding going forward, more and more employment opportunities and apprenticeships would be generated for the benefit of Clifton residents and the local economy.”

I do not doubt that the Minister wishes to see more energy efficient homes; what I doubt are the policies and funding support he has put in place to deliver on that aspiration. He says that the ECO will lead to insulation of at least 25,000 solid wall properties a year, but at that rate it will take 304 years to complete the task. Although he ramps up green deal cashback to persuade people that they want to take up energy efficiency measures, his funding changes are denying energy efficiency measures to my constituents who desperately want them. That simply is not good enough.

As Sally Longford, one of Ilona’s local councillors in Nottingham, says:

“Many of my elderly residents living in the Wollaton Park estate cannot keep warm without paying ridiculous amounts to the energy companies. Even then cold patches on the walls attract condensation and mould, they deserve better.”

She is right. What hope can the Minister give me that they will get it?

[Nadine Dorries (in the Chair)]

Order. At the moment there are about eight minutes each for those who want to speak.

15:20

[John Pugh (Southport) (LD)]

Thank you, Ms Dorries; that will be ample.

I congratulate the hon. Member for Nottingham South (Lilian Greenwood) on her timely and effective presentation of the problems with the energy company obligation. I am increasingly in despair, and not just because of being a Liberal Democrat. I should like to be able to say that the green deal is great, and the ECO scheme is perfect, and that I support every detail of it without criticism or quibble; but I cannot. I should like to be able to say that the Government correctly understand the problems being experienced by people in the ECO scheme and that they are thoroughly engaged and are ironing out possible difficulties; but I cannot quite do that. I am grateful that the Minister responding to the debate is the right hon. Member for Bexhill and Battle (Gregory Barker), because if anyone can solve the problem he can.

I should love to be able to say that everything that is involved in managing a market composed of myriad private suppliers and big corporate giants, to environmental effect, is easy, but it is not. It is difficult, and I sympathise with the Minister. However, like him, I have lived through the solar panel trauma, when schemes hit the buffers and businesses crashed, projects were caught and there was boom and bust—white van man trying to cash in and good schemes being trashed or abandoned. I think that we all learned a lesson from that: in the green business, predictability helps an awful lot. We seem to have a similar problem now, although it is not necessarily the one that the hon. Member for Nottingham South touched on. I want to talk about the problem that the ECO scheme is creating for boiler suppliers—a topic that I have become familiar with simply because suppliers have brought it to my attention.

The phenomenon is similar to what happened with solar panels. There has been an increase in the number of suppliers and installers—I have looked at the Government stats—followed by what currently appears to be the sound of businesses collapsing and the stalling of installation.

[Gregory Barker]

If we could replicate for insulation what happened in the solar industry I should be extremely delighted. The fact is that since we took those difficult decisions in 2011 we have reached the point where nearly 3 GW of solar are installed; almost 500,000 roofs have solar, compared with 15,000 in 2010; and we have the highest growth prospects for solar, with the cheapest installations, anywhere in Europe. Solar in the UK is a huge success, because we cut costs, bore down on the expense to the consumer, and as a result are getting genuine commercial deployment.

[John Pugh]

I am delighted that the Minister can tell me that. I am a great enthusiast for solar panelling. If he can solve the problems with boilers I shall be even more in his debt.

It seems to me that the Government are not quite to blame for the problem I have outlined. It is almost an unintended consequence of the Labour fuel pledge, which led to a bit of a media panic about the green levy, which led to discussions between the energy companies and the Government. There may be some tacit agreements between the Government and the big six. I know not—it is above my pay grade. However, it is true at the moment that the big energy companies are substantially reducing their funding for boilers, from 25p per pound lifetime savings to something like 8p. The drop is sudden and dramatic.

There is some evidence that those companies do not want referrals, particularly in connection with fuel poverty. I am in possession of a letter from British Gas to Sefton, my local authority, which basically says “Don’t send us any more work at the moment. We are simply not going to commission it or progress it.” There is some evidence that some big companies have stopped commissioning altogether, and there is no doubt that the price has crashed. How should a small boiler supplier react to that? If he is severely exposed he goes bust; if he is very canny or unscrupulous he can start to fit boilers of substandard quality, which will not last, and will eventually need to be repaired and replaced. Another thing that he could do is target carbon savings rather than fuel poverty.

A large part of my constituency consists of Edwardian housing, with solid walls. We also have many old houses of the maisonette type, with old or no boilers. In those houses are many elderly people, including widows living alone, and the like. Companies in my constituency once did the jobs needed in such houses, but they no longer do them because they cannot be done without some financial support being offered; and customers in fuel poverty are precisely the ones who cannot do a deal of that kind. In rare cases that I know of, the company exercises a degree of charity and takes a hit on the job. I also have evidence that in some hard-to-treat large houses—we might call them mansions—where there is someone who meets the qualifying criteria in some way, the job will pay; obviously, putting a boiler into those places gives a substantial carbon saving and brings a better reward from the energy companies. A genuine case that was featured on “File on 4”—or it may have been “You and Yours”; I forget—involved a premier footballer profiting directly from the ECO scheme.

Clearly, something is wrong. I am not an expert—I know that there are experts present for the debate—but I know people who are. People in the trade tell me things and I am inclined to believe them. Deborah Judd, who runs a firm in Darlington, writes:

“It is so disheartening having to turn clients down who are exactly the sorts of people who need it. We’ve been going 20 years in June and now we just don’t see a future…In some cases, you can get paid £12,000 for fitting a boiler in a large house because the energy efficiency saving is so large. Realistically, that person can afford to replace their boiler themselves. We could fit 5 boilers in homes where people are in real need for that amount.”

I have similar evidence from a supplier in Blackpool, and from assessors and so on. People who appear to know tell me that there is a problem, and that it is analogous to the one that the Minister solved à propos of solar panelling.

Perhaps I can offer the Minister a solution rather than a problem. He needs to talk not to me, a relative ignoramus on the subject, but to the people who bring the problem to me, who are in earnest and have a genuine problem. Importantly—and this issue has come up previously—during the spring we must monitor how fuel poverty is addressed. Clearly, the targets might slip a long way before anyone notices. I suggest that because of the reduction applied by the gas and energy companies there is a perverse incentive to target big houses and big carbon savings, rather than people in fuel poverty.

My final point, and the point that will haunt the debate, was made by the hon. Member for Nottingham South when she summed up: we need stability in the market. If we are to get many small businesses working regularly to good effect with large corporates and funders—in this case the energy companies—and if we are to solve the problems of greenhouse emissions and fuel poverty, we shall need a strong element of stability and predictability in the market. I am concerned because at the moment the suppliers I know and talk to do not think we have that.

15:28

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

The starting point for the debate must be the notorious Prime Minister’s Question Time at the end of November, half way through which he announced that there would be a green levy review. Sure enough, there was one; only, because it appeared that the review was thought of about two minutes before Prime Minister’s Question Time, the green levies were not reviewed but stayed roughly as they were. ECO was reviewed instead, and the result is that we are where we are now.

The document put out by the Department said:

“One of the major challenges for the ECO and Green Deal is the changing nature of the types of measures that need to be delivered. CERT, by focusing on delivering low-cost measures, has been very successful at installing simple loft and cavity wall insulation. From 2012 Green Deal finance will offer a route to deliver the remaining low cost loft and cavity wall opportunities at no upfront cost and without need for subsidy. However to meet our carbon budgets cost effectively, we will need to go far beyond just lofts and cavity walls, and move towards the next most cost effective measures.

However, some 7 million of the most difficult to treat homes require some form of solid wall insulation. The Committee on Climate Change recommended in their 2009 Report, ‘Meeting Carbon Budgets – the need for a step change’ that 2.3 million solid wall homes will need to have taken up solid wall insulation by 2022 in order for the UK to be on track to achieve carbon budgets. ECO support for these properties will help drive this market, and the supply chain to fulfil it, enabling us to unlock the resulting carbon savings more cost effectively.”

That was the prospectus that people bought into when they started doing work on ECO. In that context, the process of the review has been interesting, because it effectively boiled down to ECO having to take the bullet. In quick order, it was announced on 2 December that there would be substantial changes in how ECO would work, without an impact assessment. Only now has a consultation paper been released. It says that a number of the proposals have already been announced or foreshadowed in the Government’s announcement on 2 December. I am reminded a little of the referendum in Crimea, where first the outcome is announced, then a consultation is held on what the announcement should be. The measures in the 2 December announcement, which essentially stretch out like a lump of pizza dough the annual overall commitment of some £1.3 billion from two years to four years—however it may be wrapped up in decisions to borrow from some parts of the ECO programme to maintain others—starve elements of ECO of resources, particularly the carbon emissions reduction obligation.

That announcement, however, was wrapped up in something of a complication, because ECO finances are predicated on the achievement by obligated energy companies of a carbon obligation—that is, the obligation is discharged by the amount of carbon saved by the measures undertaken—and the estimated overall finances relate essentially to what it will cost, collectively, for that overall obligation to be discharged. Treatment costs for each hard-to-treat property, for example, add up to a cost per tonne of carbon saved, and if the companies have to discharge that obligation within a set period—initially for ECO, that is 2015—the price paid for each tonne saved will logically be higher than if the same level of obligation was over a more extended period.

Another issue is the extent to which the programme admits of access to measures, which, by their nature, allow for savings to be made at a lower cost per tonne of carbon dioxide saved. Those measures, however are supposed by and large to be covered by the green deal, whereby the cost of loans for measures is recovered from bills. As the original Department of Energy and Climate Change document says, ECO should be concerned only about the measures that go beyond those treatments. However, if such measures are allowed to count for ECO’s purposes instead of green deal purposes, inevitably a carbon obligation can be discharged by concentrating on those measures, rather than on the hard-to-treat homes specified in the original DECC document on ECO.

Indeed, the consultative document published last week recognises that. On page 28, it states:

“Taken together, the proposals are likely to see a greater focus on cheaper, easier measures and a correspondingly diminished role for Solid Wall Insulation in ECO delivery.”

It continues:

“However, the Government is clear that SWI represents a major challenge for the nation’s housing stock, with nearly eight million households of solid wall construction, of which only 3% per cent have wall insulation.”

The Government set a sub-target for solid-wall insulation that is about half the estimated target in the original ECO plans.

Of course, no one told the dozens of local authorities, housing associations, and insulating companies that that was in store. Trusting the word of the Department, they did exactly the right thing in getting the best result possible from the areas that ECO was supposed to concentrate on, namely the uplifting, area by area, of those hard-to-treat homes, using their local skills and considerable efforts in developing partnerships to do so. After all, we know that area uplift worked well under the community energy saving programme and the carbon emissions reduction target. There were better results overall in value per treatment—a large chunk of the target was reached area by area—than by searching randomly for individual properties to uplift.

I will add our local programme in Southampton to the pot. In November 2013, the council announced a £30 million programme to make energy improvements to more than 2,000 council properties in Southampton over the next 18 months. It included cladding of high-rise buildings, cladding of system built non-cavity homes, and a district heating scheme alongside. That would, by the way, create between 600 and 900 jobs, as well as safeguarding 300 jobs locally. That was a partnership between the city council, a property services company and an obligated energy company. That was all very rosy, except that as soon as the Government announcement was made and it rapidly became apparent to energy companies that the obligations as previously constructed were being thrown out of the window, they drew back from progressing the scheme. It may be that some of the programme can be saved, but the prospects of thousands of residents of Southampton having possibly life-changing reductions in their energy bills in the near future, of some of the worst insulated properties in the city being transformed and of carbon efficiency in buildings in the city taking a leap forward are possibly wholly and at least largely off the agenda right now. It is the same in many other places across the country.

[David Mowat (Warrington South) (Con)]

I am listening carefully to what the hon. Gentleman is saying, and he is making some good points. He is talking as though the ECO—or the CERO part of the ECO, which I think is the thrust of his comments—has been totally revoked. What has happened, however, is that it has been extended by two years. The fact is that we were at 7% completion after 67% of the time period. In a sense, are the Government not just reflecting what is happening on the ground in a sensible way and allowing things to happen a little more slowly? That could be called a failure, but it is sensible, notwithstanding what we heard about Nottingham. I did not follow what was said on ECO versus the green deal. I also do not understand the thrust of the hon. Gentleman’s comments.

[Dr Whitehead]

The hon. Gentleman misses the point about the carbon content of ECO and how that is stretched out over the time period. Energy companies can therefore decide that they do not need to undertake the obligation in the way they did previously. That is the crux of the matter and that is why the target has gone down from having 180,000 solid-wall homes by 2015 to having 100,000 by 2017. Even with those changes, it would have been possible to keep that carbon content by not invading the green deal with the changes to the proposals and by having a front-loaded system, which the Department could have worked out.

[David Mowat]

I did understand that. The part of ECO that has been extended and strengthened is the part that looks at those in particular fuel poverty. The middle section, the carbon saving community obligation, has been strengthened. The hon. Gentleman is right that the CERO has been weakened, but that just reflects reality.

[Dr Whitehead]

The CSCO has not been strengthened. It has been stretched out at the same level over a longer time at the expense of the CERO, which has had to fund most of the money to enable the CSCO to remain even at its previous level. I do not understand whether the Department understood what it was doing when it made these changes. If it understood, stood by and did not put any remedial measures into the consultative document, it wilfully let a large section of ECO fly out the window, along with all the previous targets. If the Department did not understand what it was doing, that is possibly an even worse prospect. Either way, the programme could have been saved with a slightly different way of revising the ECO programme, but the Department allowed a large proportion of the work on solid-wall insulation and hard-to-treat cavity homes—we all know that they are an absolute imperative target for the country over the next period—simply to go to waste.

I hope that a number of these programmes can be retrieved in one way or another, but the fact is that we now have an ECO that is a shadow of its former self. In the process, it has left large numbers of people in hard-to-treat homes. Local authorities, housing associations, companies and people who thought they would get jobs are all bewildered as to what will happen. That cannot be a good outcome, when the review was supposed to ensure that affordable energy would be coupled with even more affordable energy through the insulation programmes. The final, savage irony is that a programme to save people a lot of money on their energy bills has been thrown out of the window by a green levies review that was supposed to save some people money on their energy bills. I hope we will not forget that when we debate this issue. I hope that the Minister can explain exactly what his Department was doing when it undertook the change and whether he will contemplate undoing some of these changes, so that the programmes can at least partly go ahead to do what they were originally intended to do.

15:39

[Graham Jones (Hyndburn) (Lab)]

It is a pleasure to serve under your chairmanship, Ms Dorries. I congratulate my hon. Friend the Member for Nottingham South (Lilian Greenwood) on her tenacity and on securing today’s debate.

In the brief time available to me, I want to concentrate on my constituency and the businesses in it. Hyndburn has some of the oldest, coldest housing stock in the country. Hyndburn council recently launched a warm homes energy company obligation scheme that is now under threat before it has even begun. The businesses in the green economy in my constituency that were innovating and creating jobs as result of the ECO are now concerned about their future and the ECO’s future funding.

The ECO is of particular help to places such as Haslingden and Hyndburn and cutting or even rolling back the scheme will have a disproportionate effect in a constituency such as mine. There is a perverse reality to the Government’s action in that the rolling back of the ECO will help my constituents not by insulating their hard-to-treat homes and saving them thousands on heating bills over decades, but through a comparatively small reduction in their heating bills.

Hyndburn has some of the poorest quality housing stock in the country, with 41.5% of total dwellings built prior to 1919—well above the English average of 23.6%. Some 60% is old, terraced stock and includes hard-to-insulate, Victorian, stone properties. The historic stone façade prohibits external insulation and insulating inside walls is difficult. How do people insulate the inside wall of a rear kitchen or a bathroom, let alone around bay windows and doors? The scale of the problem of cold homes in Hyndburn is chronic.

As a result of the age of the stock, 50.2% of category 1 hazards in Hyndburn are due to excess cold. Of category 2 hazards, the number of properties suffering from excess cold is a staggering 78.5%. Hyndburn borough council’s 2009 housing condition survey noted a 24.5% rate of thermal discomfort compared with the English average of 18.3%. As a result, fuel poverty, as one would expect, is at 20.4% compared with the English average of 13.9%.

The housing stock in my constituency is exactly the kind that is most in need of insulation and energy-efficiency measures. According to studies, nine out of 10 stone terraced properties of that age have hard-to-treat cavities that would benefit from the ECO. The prevalence of hard-to-treat cavities in Hyndburn is precisely why the ECO presented such an opportunity to my constituents and other local councils across east Lancashire to tackle insulation, fuel poverty and the UK’s climate change obligations. My constituency is a beneficiary of an ECO scheme, but the recently launched “Warm Homes Hyndburn” is now under significant threat.

Benefits come not only from insulating individual properties. Isothane Ltd—one of its directors is here today—is an innovative company located in Altham in my constituency and is a market leader in the insulation of hard-to-treat cavities. One of its products, a high thermal insulating foam with high bonding qualities, offers the insulation market a world-beating product. If supported, that type of company and product in the green economy can provide innovation and future green jobs.

The company is fully behind the National Energy Foundation’s opposition to the ECO reforms. The NEF believes that cuts to the ECO will mean not only poorer health conditions for people living in the uninsulated homes found in my constituency, but job losses in the energy efficiency industry. Isothane Ltd is engaged in several local authority projects that are in receipt of ECO funding and a reduction in such funding will clearly and directly impact on the company. The company and the industry are being hit not only by reductions in the ECO, but by how the ECO is funded, which is creating a huge disincentive. It is a double whammy. Mervyn Kirk at Isothane told me that

“Isothane has received no funding whatsoever for the work undertaken so far in preparation; publicity materials, canvassing and surveyors’ costs have all been paid direct”

by the company. He continued:

“All ECO funding is claimed retrospectively, so any work undertaken in schemes such as this is at considerable expense and risk to the installer.”

That is an important point.

The insulation industry had been given a clear incentive and direction of travel by the Government and had begun to invest and to create employment. By letting energy companies off the hook, however, the Government have created uncertainty and, according to the National Energy Foundation, have put thousands of jobs at risk. The Government took the decision on the questionable premise that it will lead to energy bill savings. Why have the Government injected uncertainty and then proceeded to hold a retrospective consultation? Are they considering abandoning the reductions and reversing the policy or is the consultation a simple rubber-stamping exercise? The situation is resulting in misery for those people living in hard-to-treat properties in Hyndburn and Haslingden. They will no longer get insulation and will continue to spend way above the national average on energy bills; they are effectively being punished for living in such properties.

Mervyn Kirk also said:

“In general, when ECO funding levels were around £85+ per carbon tonne, the majority of properties were able to have specialist insulation installed at no cost to the occupant as long as we were able to encourage neighbouring properties to sign up, i.e. blocks of 3 or 4 properties together…but as funding dropped to around £60 to £75 per carbon tonne, this became unworkable. The funding levels have since plummeted further and there is no confidence about levels of funding for ANY hard-to-treat cavities beyond the end of this month.”

For the record, the month in question is March 2014—this month.

I was told recently by Michael Morrall of Dyson Insulations, which was managing the ECO project in Hyndburn and installing insulation, that because the borough of Hyndburn is so densely stocked with properties of random stone cavity construction, the hard-to-treat carbon emissions reduction obligation of the ECO previously made insulating cavity walls a “fantastic opportunity” to make a change to people’s lives. Cuts to the CERO obligation have driven down the available funding, which has drastically changed the viability of installing the measures without a substantial contribution towards funding shortfalls from occupiers or local authorities. It is worth putting on the record that Hyndburn council has experienced some of the deepest cuts in the UK and is one of only seven authorities to be given a temporary rebate to cap the cuts at the maximum possible, so I do not know where local authority funding will come from.

Mervyn Kirk of Isothane Ltd also said to me:

“As the available funding levels have been gradually reduced by the energy companies, the ability for us to offer free specialist insulation to address fuel poverty and improve energy efficiency standards in traditional terraced, stone-built property has become less and less viable. Hence the current situation where homes have already had surveys undertaken, but we can only install where the gap between ECO funding and costs are met elsewhere. In the Burnley target area”—

Burnley is a neighbouring authority of Hyndburn—

“there are too many properties requiring additional funding to be able to stretch the limited resources available.”

In effect, that means that the scheme will be wound down before it has started. In a deprived area with a cash-strapped local authority and stone-built terraced properties, that could effectively kill off the scheme.

The situation stands in stark and embarrassing contrast with what the Government have said previously. In a letter that I received late last year, the Minister stated, particularly of the “Warm Homes Hyndburn” scheme:

“These are just the sort of projects that will be required to tackle the challenge of effectively insulating hard-to-treat properties.”

Fast forward just four months, however, and the Government are actively and knowingly taking steps that take us in the opposite direction and make it more difficult to achieve energy efficiency in my constituency’s housing stock. It has been a monumental shambles from the Government—the only things that have been injected are cynicism, confusion, disappointment and anger into those affected by the changes. Why has the Minister’s position changed in the short time between writing to me before Christmas, when he said that such a scheme was required in Hyndburn, and now, when he is overseeing its whole demise? Did he consider the effects that such changes would have on constituencies such as mine, or was that just an afterthought?

I must finish on this. Did the Minister see “Newsnight” two weeks ago? It showed some of the worst housing in Britain in Hyndburn. I am sure that all who saw that were shocked that such conditions could exist in this country. People on benefits were living in stone-built terraced properties with rising damp and cold in every single room. Every window and every door was mouldy. Will the Minister come to Hyndburn to understand why the old ECO scheme was so important to my constituency? Will he visit Isothane Ltd to see the opportunities that the green economy brings?

15:50

[Kerry McCarthy (Bristol East) (Lab)]

I congratulate my hon. Friend the Member for Nottingham South (Lilian Greenwood) on securing the debate. As other speakers have identified, unless problems relating to proposed changes to the energy company obligation are quickly addressed, there is a real danger that it will not help the households that it was set up to support. In the limited time I have available, I would like to mention concerns raised with my office by Toby Parker, the chief executive officer of Sustain, a successful Bristol-based small business that, as part of a range of services, delivers energy-efficiency programmes across the country under the energy company obligation.

Sustain was a leading provider under the previous energy supplier obligation regimes: the energy efficiency commitment, the carbon emissions reduction target and the community energy savings programme. When those came to an end, it invested in preparing for the ECO and the green deal. It recognised that getting those programmes up and running would take time, but, in the words of its chair, Julie Baddeley, in a letter to the Energy Minister last year, it took

“much longer, and was more complex, than any of us had envisaged”.

About 5,500 jobs were lost in the insulation industry nationally as a result of the poor transition from CERT and CESP to the green deal and the ECO, and a number of firms went to the wall. The constant chopping and changing causes considerable uncertainty in the sector. The Department of Energy and Climate Change has acknowledged that the recent proposed changes are creating uncertainty, which is affecting delivery on the ground and has resulted in a contraction in demand. That particularly affects areas outside London and the south-east, such as Bristol, where the market comprising small and medium-sized enterprises and sole traders is important for job creation and economic growth.

The energy companies are trying to reduce the costs of their obligations under the ECO, which the Government hope they will pass on to the consumer by reducing energy bills by between £30 and £35. Sustain, which is currently in contract negotiations with the energy companies, tells me that companies are stamping down on the price that they have to pay for carbon. Its chief executive says that the price is being pushed so low that it could have serious unintended consequences. First, it could reduce the quality of installations. He says that companies that work in a quality way will struggle to achieve results in that budget, which will, no doubt, lead to more complaints about poor quality work.

Secondly, the chief executive is concerned that, in all probability, customers benefiting from the carbon savings community obligation or the home heating cost reduction obligation will be expected to pay more towards the cost of those schemes, as the measures are not fully funded. He says:

“whether intentional or not, this will happen”.

Will the Minister provide assurances that that is not the Government’s intention and, if so, what steps he is taking to address that problem? Mr Parker says that, in an industry reeling from shocks, people are putting in suicide bids. In order to survive, companies are willing to deliver at those rates, but he doubts whether it is possible to have high-quality carbon reductions at rock-bottom prices.

Critically, Mr Parker has serious concerns about the effect of Government changes that have both reduced the CERO target for energy companies by 33% and also made it easier to achieve that target. That is pushing down both the volume and the price, with the result that many energy efficiency companies are questioning whether they can make the scheme work. He feels that either one or other of those changes would have resulted in a significant price reduction, but both taken together could pull the rug out from under the energy efficiency market. Has the Minister received similar representations from other companies? I am sure that Sustain is not alone in its concerns. What steps is he taking to resolve those concerns?

I would like to finish by making some wider points about the likely effect of the proposed changes to the ECO, which reflect some of the concerns raised by my colleagues. I am concerned that the problems derive from the Government’s decision to focus on reducing green levies on energy bills in response to the challenge set by Labour’s proposals for cutting energy bills. Essentially, the changes let energy companies off the hook as they do not need to spend a penny on delivering savings to the consumer. In fact, they place them in the driving seat in pressing for reductions to their obligations under the ECO, as it is for them to decide how much of any savings they make will be passed on to the consumer in reduced energy bills.

Changes to the ECO also fail to address one of the key reasons for energy prices, which is the fundamental lack of competitiveness in the energy market. We already know that the ECO is overly bureaucratic, poorly targeted and helping far too few homes. It is not sufficiently focused on those households that need it the most: less than half its funding actually goes to people in fuel poverty. The proposed changes will not improve that situation. The measures under review in the consultation suggest that the ECO will continue to favour those who can afford to part-fund measures, as well as those with larger properties.

The Government’s two flagship energy efficiency policies, the green deal and the ECO, are simply not strong enough devices for improving the energy efficiency of Britain’s housing stock and tackling fuel poverty. In the UK, we have some of the most draughty, poorly insulated housing stock in Europe. Statistics from the shadow DECC team show that a home in Dudley uses four to five times more energy than a typical house in Malmo, Sweden, where the temperature is 7° C colder on average. Figures from the Bristol-based Centre for Sustainable Energy show that there are 5,857 households living in fuel poverty in Bristol East alone.

Shamefully, 31,000 people died needlessly during the winter of 2012-13, 80% of whom were among the over-75s. That was a 29% increase on the previous year and it was estimated that a third of those deaths were caused by homes that were not warm enough. We have been lucky that this winter, although very wet, has been warmer so far.

As part of the recent cold homes campaign, I heard shocking stories from constituents. Some faced impossible choices between heating their homes and eating. I heard from one woman whose husband is extremely ill. Cold homes not only particularly affect people with a health condition, such as her husband, but deny people the most basic of comforts. In her e-mail, she said:

“all we would like is to be warm in our home”.

In this day and age, I do not think that that is too much to ask.

15:57

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship once again, Ms Dorries. I pay tribute to my hon. Friend the Member for Nottingham South (Lilian Greenwood) for securing this important debate. She is passionate about this issue and she was eloquent about what the Government’s changes to ECO have meant for her area. She was kind enough to invite me to visit the work in Clifton that she described today, which was a brilliant scheme. It was cross-tenure and cost-effective, it looked beautiful and it created local jobs. The only problem was that it was ending, owing to the decision the Government took before Christmas to cut back on ECO. At a time when so many people are concerned about rising energy bills, Minister, how can it make sense to cut back on insulation and energy-efficiency measures?

I welcomed the Minister’s earlier intervention. We should be clear that people who signed contracts in good faith but who have had those revoked owing to changes in Government policy should get that work done. Either the energy company should honour the obligation that it signed up to, or the Minister should step in to ensure that that work is done.

However, we know that the green deal for communities, or whichever funding pot the Government wish to use, simply cannot plug all the gaps created by the announced changes. A number of extremely good speeches today have highlighted the problem. I am sorry to hear that the hon. Member for Southport (John Pugh) is feeling depressed, although I note that there was a Liberal Democrat conference at the weekend that is almost certainly to blame for that. He raised a crucial issue: the functioning of the brokerage. That is slightly beyond the remit of the debate, but if the brokerage is providing prices to do a boiler job for less than £1,000 and, if at present, the rate is at 6p per £1 saved, that work cannot be done without either a contribution coming from the person receiving the work, or the work simply not being done to the requisite standard.

My hon. Friend the Member for Southampton, Test (Dr Whitehead), with his customary expertise, traced the fingerprints of blame to the notorious Prime Minister’s Question Time and the review of green levies. There is no doubt that this is one of the worst examples of policy being made on the hoof, with serious ramifications for people up and down the country.

My hon. Friend the Member for Hyndburn (Graham Jones) raised in particular some of the innovation in hard-to-treat cavities and the work of Isothane, a company with which I am also familiar. The Minister often says that he wants to create a market to end energy efficiency being generated simply by subsidy. I say to him that the innovation is taking place but will be undermined by the changes that are going through.

My hon. Friend the Member for Bristol East (Kerry McCarthy) talked about job losses and the impact of the changes on SMEs. She articulated well the genuine sense of desperation that now exists because of the changes. Following the autumn statement I was disappointed by how the Minister and others in Government defended the changes, which have undoubtedly caused thousands of people to miss out on work that they were promised, and many people to lose their jobs, as well as causing consternation to businesses that have taken investment decisions based on Government policy. I would like the Minister at least to acknowledge the hardship that has been created. Selling the changes as a simple extension of the policy or a way of offering greater certainty to industry is, frankly, an insult to those people who have been adversely affected.

The only people who seem happy about the changes are some of the energy companies—I say some, because there are some that have been extremely good on reaching their obligations under the scheme. In the main, however, the changes are poor and short-sighted. In the brief time available, I will use the Government’s own impact assessment to outline just how bad the changes are.

The biggest change the Government have announced is on solid-wall and hard-to-treat properties. I think this information will answer the questions raised by the hon. Member for Warrington South (David Mowat). The Government have not just reduced the CERO target, but have allowed cheaper measures to fulfil that obligation and added a permitted carry-over from over-delivery on previous schemes. The result is that ECO will not now deliver much at all for hard-to-treat homes.

I find it baffling that the Government have decided to make changes to the part of ECO that was beginning to show signs of progress, and that covered schemes such as the area-based scheme in Clifton, to which my hon. Friend the Member for Nottingham South introduced us. I ask the Minister to think back to our early exchanges on ECO. It was those sorts of schemes, surely, that he was citing in its defence. I know he is a fan of area-based schemes. There are obvious advantages in delivering energy efficiency on that scale—the costs are lower and more people take up schemes when they see the scaffolding go up. What is his assessment of how the changes will affect schemes such as those?

[Huw Irranca-Davies]

My hon. Friend makes an important point. There has been a great deal of talk about large-scale, area-wide schemes, but there are other aspects that the Government ought to be supporting, such as the co-operative approach. I recently visited south Staffordshire community energy scheme, which worked in concert with the Energy Saving Co-operative and Lichfield district council. It focused on four properties initially but had a plan to roll the work out. There was tremendous success for the initial four properties, but that group is waiting for the Minister to give clarification before it can do any more, and so has stopped. The stability has gone.

[Jonathan Reynolds]

I absolutely agree with my hon. Friend. I know that when the Minister responds he will say that the minimum target set for solid-wall insulation is just a minimum and could be exceeded, but, quite frankly, if we look at the cumulative impact of the changes, no more than that statutory minimum of solid-wall jobs will be done. I raised that point with him when we considered the Lords amendments to the Energy Bill and also at the most recent Energy questions. The impact of the changes means that the number of solid-wall jobs that are done will not be anywhere near what is needed.

As many Members have said today, that is a major problem for the UK, and no one will solve it for us. The Minister modestly suggested that he was responsible for the boom in the solar industry, and I agree that what has happened on domestic solar installations is absolutely brilliant—I am trying to get some solar photovoltaic panels on my own roof. He would surely admit, however, that part of that success has been the drop in unit costs that has come from other countries getting involved in manufacture, particularly China. That will not happen with solid-wall insulation or any hard-to-treat insulation. That is a problem for which we have to find a solution in the UK.

If the Committee on Climate Change wants us to do 200,000 solid-wall jobs a year, 25,000 a year is simply not good enough. My hon. Friend the Member for Southampton, Test hit the nail on the head when he said that if we look at the objectives, the key issue is that ECO was created to do that hard-to-treat work. The policy is constructed around starting to meet that challenge, yet mid-programme the Government have now changed the objectives, leaving us with a bit of a mess.

[David Mowat]

I cannot let the hon. Gentleman go much further after his comments on solar. We have heard so much today from the Opposition about fuel poverty yet every time there is a Division in the House on whether we should take an option to reduce or increase energy bills, Opposition Members always vote for higher bills. Solar PV was a great example of that: when the Minister tried to reduce the solar tariff from six times grid parity to four times grid parity—something we did two years ago—to a man and woman the Opposition voted against the measure. Yet now they stand up and talk about fuel poverty. It is not rational and it will not do.

[Jonathan Reynolds]

If we got into an extensive debate about the solar industry I am sure you would rule me out of order, Ms Dorries. If the hon. Gentleman is concerned about affordability of energy bills, one way that we can guarantee that bills will come down is if people use less energy. That objective is delivered through energy efficiency measures, insulation and the kind of work that was going on in Clifton until the Government made the changes. To withdraw from that work in order to deliver cheaper bills is surely illogical.

[David Mowat]

I completely agree that greater energy efficiency is the best way of reducing energy bills. We are an outlier in terms of the efficiency of our housing stock—although not in terms of our energy costs, which makes the Opposition’s freeze proposal even more opportunistic. The point I was making is that whenever we vote on energy costs the Opposition vote for them to be higher and as a result are not credible.

[Jonathan Reynolds]

I completely disagree. We could and should have a lengthy debate about energy companies overcharging as that issue is obviously there—people can see that and our policy is designed to rectify it. That makes the changes to ECO even more illogical. The Government have reacted to our policy, which is sensible and which a lot of people like a great deal, by trying to cut back on energy efficiency, to try to claim that energy bills will be cheaper. If the Government are serious about lowering bills, surely the obvious way to do that is to continue with energy efficiency measures. It is illogical for them to cut back on efficiency to claim that they are saving people money on their energy bills.

In the time available I will address two further points. My next point is about the impact the changes to ECO will have on jobs. The impact assessment predicts that there will be between 7,000 and 14,000 fewer jobs as a result of the changes. That has already begun to happen and a lot of companies have already contacted me about the measures they have had to take. In particular, apprenticeships have suffered a great deal—that is certainly the case in Nottingham. When I visited a scheme there, the apprentice I saw was working on his own property—a marvellous bit of PR from the scheme, but it was brilliant to see such work taking place. Those people should have lengthy careers ahead of them, given the amount of work we need done by the industry they have gone into. For them to miss out or lose their jobs because of Government changes to policy is extremely unfair. So far, the Government have not acknowledged the impact on jobs at all, despite the fact that the impact assessment does. I hope the Minister will comment on that.

The changes severely reduce the Government’s commitment to tackling fuel poverty. When CERO was predominantly concerned with delivering solid-wall and other hard-to-treat measures, the funding would naturally have gone to low-income areas, in particular social housing estates built at a certain time to certain construction standards. However, now that low-cost measures are to be included, will the Minister say what safeguards will be put in place to make sure that the funding does not go to households that could afford to pay? That would be incredibly disappointing, given that one of the already disappointing features of ECO was its modest ambitions for reducing fuel poverty.

The Government are simply not ambitious enough about energy efficiency. The energy companies know that the Government will not hold them to account for failing to meet their obligations. I note in particular that whereas before the changes a fine could be levied on energy companies for failing to meet their targets, they will now no longer face a fine, but simply a rule-based system for increasing targets. It seems that the energy companies will be let off the hook again.

The changes to ECO are poorly judged and fatally undermine much of the original purpose of the policy. I do not accept or understand the Government’s claim that they will lead to a bill reduction of £35. The changes will have severe ramifications for the green deal. The failure of the green deal and ECO to dovetail as they were intended to—their “limited blending”, as the impact assessment puts it—serves only to highlight that further. The Government have again caved in to the energy companies when instead they should be rectifying the serious problems in our energy market, and ensuring that we meet the challenge of improving the UK’s dreadfully insulated housing stock.

The people losing out from this decision by the Government, whether in Nottingham or Southampton, or the other examples given by hon. Members today, are often those who need help the most, and who have been told they were going to receive it, only to learn that the Government have let them down again. The figures are stark: 14,000 lost jobs, 440,000 fewer homes insulated and 2.2 million tonnes in carbon savings forgone. The ECO is this Government’s policy, the changes are this Government’s changes, and the consequences, be they in lost jobs, work that now will not take place or the decimation of the solid-wall supply chain, are also the responsibility of this Government. Ministers have got it badly wrong. They need to accept that and think again.

16:09

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

It is a pleasure, Ms Dorries, to serve under your chairmanship today. I congratulate the hon. Member for Nottingham South (Lilian Greenwood) on securing this debate and creating an opportunity to discuss our policy on driving home energy efficiency in some of the most difficult to treat properties and some of our poorest and most vulnerable households. She and I may not always agree on the best mode of delivery, but I admire her tenacity on this issue.

I want to reiterate the point that I made in my earlier intervention. I am not in a position to offer guarantees or to spell out details today, but I had a positive conversation with the chief executive of Nottingham city council yesterday. I am pleased with the constructive way that they worked with my officials at the Department of Energy and Climate Change following the meetings that the hon. Lady helped to facilitate. The council is looking more positively at the green deal and working to submit a bid under the green deal for communities, and I look forward to announcing the result of those bids. I am glad to say that there has been a strong response from more than 80 local authorities. We have already announced the first tranche of street-by-street roll-out of the green deal and it is receiving a positive response.

I want to make a general point. The thorough retrofit of Britain’s housing stock is a challenge and is not easy. The hon. Member for Nottingham South and the hon. Member for Stalybridge and Hyde (Jonathan Reynolds), who speaks from Labour’s Front Bench, are absolutely right. I am absolutely committed to the street-by-street roll-out. It is the engine for delivering whole-home retrofit in the most cost-effective way, but I am afraid that that was totally absent from the points raised by the Opposition. I commend them on their concern for the fuel-poor and the will to improve the housing stock of their constituents, but it is at best misinformed and at worst disingenuous to pretend that there is some bottomless pit of money when they represent the party that left us with the biggest peacetime deficit in our country’s history and brought us to the edge of financial ruin. What is more, during the last Parliament they drove up the number of fuel-poor people, which peaked in 2009—the last year of the Labour Government —at 5.5 million. Since then, on any measure, that number has fallen under the coalition Government and, according to the latest figures, it now stands at around 4.5 million.

It is wrong to suggest that energy efficiency is a universal panacea. I am a huge advocate of energy efficiency, but it is delivered at a cost, and it is not fair to deliver policy ambition on the backs of the fuel-poor. ECO is funded by consumers—every single customer. It is not funded by general taxation, and to some degree it is, like the CERT and carbon capture and storage programmes, which Labour introduced, regressive because it falls on the fuel-poor as much as the wealthy. It is unfair to disregard the cost of those programmes.

The coalition Government have acted clearly to reduce the cost of Labour’s levies on fuel bills to help to lighten the load of the fuel-poor and hard-pressed consumers. We removed from bills the cost of the £1 billion CCS programme, which the Leader of the Opposition introduced when he was Secretary of State for Energy and Climate Change, and now fund it more fairly and equitably from general taxation. We removed from domestic bills the cost of the renewable heat incentive, the final part of the domestic scheme, which will be launched in the spring, to the tune of hundreds of millions of pounds. Likewise, we responded to the escalating cost of ECO.

The Opposition must make a choice. Are they in favour of the £50 reduction in energy bills, or are they not? They owe it to their constituents and voters to make it very clear whether they will put those costs back on to energy bills. Are they saying that they would restore the ECO measures and in so doing drive up bills by at least £50 instead of freezing them? There are hard choices to make. Of course, we all want retrofit of the housing stock. I think we could all agree on the desirable measures, but they come at a cost and we must be fair to everyone and talk about how they will be funded.

It is true that it seems inequitable or unfair to cut the cost of ECO, which means that some people will wait longer for improvements to be installed, but bills will fall for millions of people. The improvements we are talking about will be installed in the homes of a few thousand people. We must be realistic. Progress was made under the last Labour Government, but they left millions of homes requiring substantial intervention to bring them up to what we would all regard as 21st century standards.

[Dr Whitehead]

Does the Minister accept that ECO is a carbon-saving obligation in the first instance, the funding of which follows? It would have been possible, even if the overall funding envelope had been kept as it was, to make changes in the carbon obligation in such a way that these programmes might have been saved. That is an entirely different point from the one he is making about whether one should abjure savings on energy bills as a result of trying to keep costs up overall.

[Gregory Barker]

I think we are talking slightly at cross purposes. Let me correct the idea that the ECO target has been obliterated, killed or put to bed, as anyone who listens to the Opposition could be forgiven for believing. The fact is that ECO has not reduced certainty; it has increased it. Labour’s CERT programme was year on year. It ran for 12 months, and was then extended for another 12 months. It was a hand-to-mouth programme. ECO now offers unprecedented transparency and long-term certainty for the insulation industry because we have extended it and guaranteed it up to 2017.

We have not simply stretched the target from 2015 to 2017. From 2013 to March 2015—27 months—we expect to deliver a saving through the scheme of around 14 megatonnes of carbon. In the period April 2015 to March 2017, to which we have extended the scheme, an additional 12.4 megatonnes will be saved, a cumulative total of 26.4 megatonnes, not 14 megatonnes. It is wrong to say that we have not extended ECO or that we are not offering long-term certainty against which companies in the supply chain can invest and set their business model.

We have given a clear message to companies in the supply chain that we cannot simply install the measures regardless of cost. We cannot reach our ambition to install solid-wall insulation at current prices, which is why we are trying to create a competitive market and to introduce new private sources of finance. We are trying to introduce greater competition and innovation to drive down the cost of the measures.

Although it is very early days for the green deal and ECO market, we are seeing real pressure on costs, not from the big energy companies but from the disruptive new entrants—the small and medium-sized enterprises, family business and entrepreneurs that are coming into the market. We should celebrate the fact that prices for solid-wall insulation are coming down. I have seen companies that are not only bringing down the cost of these measures but increasing the quality of the product, and the quality and choice of the offer to consumers. [Interruption.] The fact is that I have seen a lot of solid-wall insulation where what people end up with is homes that look like they have been airlifted from East Germany. The people who do it take out all the character and just put on some uniform fascia. In fact, what people increasingly want is choice. They do not want to see character obliterated from their home. They want to see improvements. I am glad to see that we are getting that sort of innovation into the scheme.

I understand where the Opposition are coming from in their desire to retrofit homes. I understand their ambition to improve the efficiency, warmth and comfort of homes, but unless they can cost that out and be honest with the electorate about how much it will cost and how much of the burden will fall on the fuel-poor and on hard-working families, they are just a pressure group; they are not worthy of being considered the Government. We are making those choices and laying out the whole picture for the electorate. We have to balance the costs to hard-working families with the benefits to the few that will receive ECO.

[Jonathan Reynolds]

The Minister is saying that solid-wall and hard-to-treat measures cannot be economically funded through this programme. Given that this policy is his own policy, when did he become aware that it was unworkable to try to deliver those kinds of measures under the scheme?

[Gregory Barker]

No; I obviously did not explain this properly. What I am saying is that we could not do the whole lot, the 7 million or so—I think that that is the figure, off the top of my head—properties that need to be done at this price, so what we are doing, as we work with other technologies, is getting the market going, using the green deal communities subsidy and the cashback that we have announced to jump-start the market and to fund the amount that we judge we can afford. That is in order to get the market working and to bring forward innovation; and as the market gets going, so we will see the price come down. We should use Government policy as a lever to drive down the cost, just as we have used Government policy in support of feed-in-tariff technologies as a means of driving down cost; and as costs come down, that should not be passed across in inflated profits to installers. It should come across in benefits to consumers, whether they are bill payers or people who are purchasing the technology. That is at the heart of the green deal.

We are trying to move away from the model that was used under Labour, in which there was 100% subsidy. Basically, what that meant was a glorified lottery. Millions of homes were substandard, and each year a lucky few thousand would win the lottery of insulation and get every single measure fully funded. I do not begrudge those home owners or people in the rented sector who had their homes upgraded, but that is not the fairest way of doing it. Yes, there are those who are fuel-poor who will never be able to make a meaningful contribution. We must accept that, but most people who fall into this category are capable of making a meaningful contribution to something that will add considerably to the value of their home.

[Lilian Greenwood]

My constituents back in Nottingham who are listening to these comments will probably be shouting at their radios and televisions. They will say to the Minister, “We are making a contribution to the cost of getting our homes insulated and we are precisely the sort of hard-working families that the Minister talks about.” They might feel somewhat let down by the sort of comments that he is making.

[Gregory Barker]

No. I refer back to my earlier comments: I think that there are grounds for optimism for the hon. Lady’s constituents. She is right: we have had to bear down on the cost of delivering ECO. However, we have put in place other measures, which will allow schemes such as that in Nottingham to go forward. We have already announced—

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

Will the Minister give way?

[Gregory Barker]

I will not now, as I have very little time left. We must ensure that we deliver value for money, but the hon. Lady is right: a number of her constituents are making a contribution. It is not easy to say exactly what the right level of contribution is, but I think that the principle is important and I salute the work that is going on in Nottingham, as I said. I am increasingly optimistic that schemes such as that and many others across the country will be able to be rolled out, as a result of our green deal communities fund and the increased cashback prices that we have put in place. Those have been warmly welcomed by the supply chain. We have seen a very substantial increase in the cashback offer. Up to £4,000 per household is now available for solid-wall insulation. That is up from £650. It is not a bottomless pit or a blank cheque. It comes from a pot that we judge we can afford in order to get the market moving. We will announce shortly a further tranche of long-term incentives that will encourage people to improve the energy efficiency of their home. That will show that the coalition Government are a genuine partner in that move and that we are trying to build a long-term, sustainable market for energy efficiency improvements.

However, part of that must be green deal finance working together with private finance, subsidy through the ECO and other pots. There is no silver bullet; there is no easy answer, but the situation is simply not as bleak as it is being painted by the Opposition. I understand that every time the Government change policy, that is a challenge for any business that depends on Government policy. We do look, wherever possible, to avoid unnecessary changes and to provide certainty, but the very fact that we have now extended the ECO scheme out to 2017 and put the cashback measures in place, together with the fuel poverty strategy—the first time that anyone—

[Nadine Dorries (in the Chair)]

Order. I call Mr Tom Blenkinsop. Will other hon. Members please leave the Chamber quietly?

Local Government Funding

Tuesday 11th March 2014 Westminster Hall

16:26

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

Good afternoon, Ms Dorries; it is a pleasure to be under your chairmanship for this important discussion. I appreciate that local government financing is a complex topic and one that I cannot do justice to in this short debate, but I am grateful to have been given the opportunity to highlight the gross disparities that regions face in the financing of local government.

When looking purely at settlement funding, it may appear that the differences are fairly small, with all regions besides London seeing their local authority funding cut by approximately 40% between 2010-11 and 2015-16. However, when we look at actual revenue spending power, we see that there is extremely large inter-regional variation. Revenue spending power takes into account a range of other sources of funding to local authorities and gives a more real—in this instance—sense of the disparities between regions.

The House of Commons Library has undertaken fantastic research that highlights my point. It has calculated the cumulative percentage cut in revenue spending power faced by each region between 2010-11 and 2015-16. Regions with high levels of deprivation and need face massive reductions, while regions with significantly lower levels of deprivation and need face much smaller reductions. The north-east faces an 18% cut, London and the north-west a 17% cut, Yorkshire and Humber a 16% cut, the west midlands a 16% cut and the east midlands a 12% cut. However, although they still face cuts, the south-west and the east of England face relatively small cuts of 9% and 8% respectively and the south-east faces a 6.6% cut.

In 2014-15, the 10 most deprived local authorities in England will lose six times more than the 10 least deprived compared with 2010-11, so while more deprived areas such as Liverpool, Hackney, Blackpool and my native Middlesbrough lose most, the Prime Minister’s own local authority, West Oxfordshire—one of the wealthiest—is seeing its spending power increase, as are other wealthier council areas.

Our constituents probably do not think much about the intricacies of local government funding formulae, but the consequences of the unfairness are real, significantly affecting our constituents and local communities. Both unitary authorities in my constituency, Middlesbrough and Redcar and Cleveland, have faced significant challenges and are set to face even more owing to the cuts imposed on them by the Department for Communities and Local Government.

Under a budget recently proposed by the independent mayor of Middlesbrough, Ray Mallon, 300 jobs are set to be axed and the Clairville stadium, the registry office, the TAD centre and the Middlesbrough teaching and learning centre are set to close. Elsewhere, services will be reduced, with the opening hours of leisure centres, for example, being slashed. That is not to mention the significant cuts and job losses that have already occurred in Middlesbrough.

The situation in Redcar and Cleveland is similarly bleak, with the council forced to reduce front-line services such as youth services and to make compulsory redundancies, as so many jobs have been lost that there are very few people left who are willing to take voluntary redundancy or early retirement.

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

I had a meeting last week with the leaders of the seven districts that make up the west midlands. It is becoming abundantly clear that over the next two or three years, those authorities will no longer be able to provide even the minimum services required. The situation goes back about 25 years to when Nicholas Ridley said that the ideal local authority would meet only once a year to give out contracts.

The Government, particularly the Tories, think in generations, and when they come back into power, they pick up where they left off. More importantly, Coventry will lose 1,000 jobs over the next two or three years, and it will have to find some £50 million on top of the £20-odd million that it has already found. Children’s services will suffer as much as education. Coventry and the west midlands local authorities are in a real bind.

[Tom Blenkinsop]

The picture is similar in the north-east. For example, the leader of Newcastle city council, Councillor Nick Forbes, has talked about his fear that local authorities are fast approaching a cliff edge in terms of their ability to perform even statutory duties. I also received some interesting information from the Local Government Authority about other anomalies relating to capping, which I will come to later.

Redcar and Cleveland borough council should be applauded for protecting and supporting a local company, SSI UK—an employer of fundamental importance for Redcar, Cleveland and the surrounding Tees valley area. The firm invested heavily in Teesside Cast Products’ blast furnace, coke ovens, basic oxygen steelmaking plant and continuous casting plant.

I know the company well, having been a union official on its site. Until recently, it was unable to pay its business rates, which mounted up to some £19 million. If Redcar and Cleveland borough council had not taken on board that burden, it would have been difficult for the company to keep functioning. Fortunately, a settlement is now on the table, but if that settlement had not been achieved, the local authority would have had to cut a further £9 million on top of the cuts imposed on it, without any central Government assistance. We must praise the borough council for managing its already tight budget in difficult circumstances.

Locally, some Tories and Liberal Democrats have accused councillors of relishing and delighting in cutting front-line services, and have claimed that they are seeking to score partisan political points. That is clearly not the case. Councils are making cuts because the political settlement forced on them necessitates their doing so. If anything is partisan, it is central Government’s agenda and message, because Conservative areas generally receive much smaller cuts or even budget increases. I highlight the example of the Lord Chancellor’s local authority, Epsom and Ewell, which is receiving a 3.51% increase in non-ring-fenced central Government finance provision between 2011-12 and 2015-16. In the same period, Middlesbrough and Redcar and Cleveland face a cut of approximately 30%.

A similar accusation is often levelled at local authorities that decide that freezing council tax would leave them in an even more precarious medium to long-term financial situation. That is clearly motivated not by partisan factors but by the fear, common to many local authorities, that accepting such a freeze will leave a black hole in their finances in years to come.

[Mr Jim Cunningham]

Freezing council tax might sound like a good idea at the time, but the council tax payer will pay the price two or three years down the road. My hon. Friend must also remember that in addition to local authority cuts as we know them, cuts have been made to the fire service, to the police and to neighbourhood policing, even though the Government want to cut crime.

[Tom Blenkinsop]

I agree with my hon. Friend. There are other factors, which I will not be able to go into today, and local people often expect local authorities to pick up the slack. That slack has totally gone, however. We have gone beyond cutting into flesh, and we are now cutting into bone, as local authorities increasingly recognise. Tory-controlled local authorities feel that the Government are forcing them into a position where they have to increase council tax to secure their financial future. I believe 18 councils are in that situation. Indeed, the Prime Minister’s council, Oxfordshire county council, is proposing a 1.99% increase, as is the Foreign Secretary’s council, North Yorkshire county council, which is local to me.

We have to look across the piece. I will quote from an LGA briefing that highlights issues that the Minister must take on board. For example, the LGA says:

“Councils that have frozen their council tax could still face having to organise referendums, whether or not the increase in total council tax was a direct result of their financial decisions.”

The reason for that is:

“The extension of council tax referendums to include levying bodies risks perverse outcomes that will put growth generating investment at risk.”

That may affect things such as internal drainage boards, flood defence, integrated transport plans and pension authorities. We cannot discuss this in any depth today, but Government policy is increasingly to use the private sector rather than the state for people’s pensions. The LGA states:

“Pension authorities in some Metropolitan Counties and London operate the legacy pension schemes of the Greater London Council and former Metropolitan Counties. As with the rest of the Local Government Pension Scheme, there is little control over the costs of these which are increasing with each successive valuation.”

There will be consequences for pension policy, transport policy and floods policy.

Efficiency savings will go only so far to plug the funding black hole that central Government have imposed on local government. The scale of cuts faced by councils in the north-east has led some, such as Newcastle city council, to warn that in a few years’ time they will be unable to afford to perform all their statutory duties. I imagine that the Minister will tell us, as he and his colleagues have done many times, that the reason why local authorities in regions such as the north-east face larger cuts is that they receive more funding from central Government than do those in other regions.

That is a false argument for two reasons. First, those disparities exist not only in absolute figures but in percentage terms. Secondly, and crucially, regions such as the north-east receive more funding than those such as the south-east because their need is greater. If we were to take to its logical conclusion the Secretary of State’s argument that cutting in the north-east is fine because the region receives more to begin with, we would end up with total uniformity in per capita central Government funding to local government, irrespective of an area’s deprivation and need. Does the Minister agree that it is absurd to ignore or underweight deprivation in funding formulae, as his local government financing policies do?

I am conscious that the Minister may also say that the north-east and other deprived regions are receiving punitive cuts because of the need to rebalance the public and private sectors in those regions. Although there is a need further to develop the private sector and private sector employment in regions such as mine, does he agree that the lack of regional economic resilience is caused by long-standing structural issues that date back to the ’70s and ’80s, if not before, and that there is a real risk that disproportionate cuts to local government and the consequent job losses will reduce the aggregate demand in the region? Would that not hamper, rather than help, the development of the region’s private sector?

I realise that the problem is not purely a north-south divide; it is more complex than that, and many factors are involved. Issues such as rural deprivation affect parts of the north-east such as my constituency, while deprived areas of London are also being penalised. For example, the Government’s figures show that Lewisham, which is 31st on the index of multiple deprivation, will lose 9.6% of its spending power, or approximately £2.93 million, between 2013-14 and 2015-16. Its neighbour, Bromley, which is 203rd most deprived and Tory, will receive an extra £3.4 million over the same period.

Furthermore, there is considerable intra-regional variation. Deprived parts of the south, such as Southampton, fare much worse than areas such as Poole. That said, northern regions are more deprived, in general, than southern ones. As the Tory-led Government have made the political decision that deprived areas should face more cuts and a greater reduction in revenue spending power than well-off ones, northern local authorities are generally being hit much harder than southern ones. Currently, we do not have a one-nation system to determine how much funding local government should receive. We need a one-nation system of local government financing, in which need and deprivation are properly considered and in which local government is given the resources it requires to thrive and to help local businesses grow.

16:39

[The Parliamentary Under-Secretary of State for Communities and Local Government (Stephen Williams)]

I congratulate the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) on securing this debate and speaking up for his constituents—that is the duty of all MPs. I also congratulate him on getting the phrase “one nation” into his speech many times. He is an Opposition Whip, so I am sure it will be noted that he is working overtime to be on message.

The hon. Gentleman mentioned the economic resilience of the north-east, as well as the good work done by a particular steel company in Redcar.

[Tom Blenkinsop]

That would be SSI UK.

[Stephen Williams]

I wanted to point out that my hon. Friend the Member for Redcar (Ian Swales) has an enormously positive track record on securing the reinvestment in and reopening of the steelworks in Redcar. Bearing in mind the employment growth at Nissan as well, the north-east economy seems quite resilient. The private sector seems to be thriving and new investment is coming into the region, which I hope the hon. Gentleman would applaud.

Over recent years, the Government have worked to reform the funding system that we inherited in 2010 to incentivise local economic growth and house building and give councils more freedom in how to spend their money and achieve savings. More recently, we have focused on how funding can support transformation right across locally delivered public sector services.

The Government want councils to do more for less so that the taxpayer gets a better deal. We have decentralised power and given local communities a range of new freedoms and powers, but there is more to do in order to save taxpayers’ money through greater joint working between local and central Government—not through higher charges or council taxes, but through innovation.

We have had to rebalance the economy, which has meant reductions in local government finance. I acknowledge the fact that local government has not been protected overall in central Government spending reviews. Other areas—such as the NHS and funding for schools—have been protected, but because local government spends a huge proportion of central Government money, the cuts that are necessary to rebalance the nation’s books have perhaps been felt more keenly in that area. Nevertheless, I acknowledge the hon. Gentleman’s points on that front.

We have had to make some difficult and tough decisions about the public finances over the past three years, but it was right that we took them. Our budget deficit is now sharply reduced. We are no longer the European Union country that borrows the most as a share of our national income—Spain currently holds that record—but there is still much more to do before we get the nation’s finances back on course.

We are encouraging local councils to go for local growth. We believe that local leaders are best placed to understand their local economies and the needs of their areas, so we are promoting strong local economies across the country and giving local areas the tools and incentives to drive up growth in their areas. The previous system made councils dependent on central Government for their income, and that relates in part to the heart of the hon. Gentleman’s comments.

Colleagues have described the previous system as giving rise to a begging bowl mentality. I have described it as a supplicant relationship between local and central Government, with local authorities beholden to central Government for income and, often, for power. What pots of money were given to local authorities were frequently ring-fenced, with lots of strings attached, by the previous Government. We have tried to sweep that all away so that over time local government can, increasingly, stand on its own two feet.

[Tom Blenkinsop]

The Minister will be aware that the Government’s growth plan involves local enterprise partnerships, which they demand apply for funding from a central pot in Whitehall. Most of that pot has not yet been given to LEPs. That has led to the Tees Valley Unlimited LEP saying only today that a radical rethink of the growth strategy for the local area is required if we are to go forward.

[Stephen Williams]

I will shortly come on to the north-east local economy and mention some of the funds that have gone to the region from central Government.

As I mentioned, savings on the ground can be achieved through the transformation of services, continuing to provide them to the public at a more efficient cost. There are 325 shared service agreements reported in local government, which it is estimated could save £280 million per annum. Our system means that councils that are open to new business will see the benefits of growth and be rewarded for building new housing through the new homes bonus, which will be worth almost £1 billion next year. In 2014-15, Middlesbrough will receive more than £1.5 million in new homes bonus funding, bringing the total earned by Middlesbrough since the scheme began to more than £4 million.

The hon. Gentleman referred many times to the differences between different authorities’ spending power around the country, but, on average, councils will have spending power worth £2,089 per household from April. There is protection for more deprived areas of the country—such as the hon. Gentleman’s constituency—and for areas that are most dependent on central Government grants. Such councils will continue to receive significantly more Government grant in 2014-15—Middlesbrough will have a spending power of £2,550. That is around a third more than Poole, an authority that the hon. Gentleman mentioned, which will have a spending power of £1,678 per household.

[Tom Blenkinsop]

Of course, that is the case now, but, bearing in mind the funding calculations for recent years and going forward, at what point does the Minister forecast that spending per household will equalise for those two authorities?

[Stephen Williams]

The Government have published their settlement for 2014-15, which includes the figure I have just given. We have given indicative figures for the following year, but, of course, no Government are able to extrapolate that far for future local government settlements. That will be an issue for whatever Government are in place in the next Parliament, but I would be surprised if local government support to Poole and Middlesbrough was equalised any time soon.

The hon. Gentleman mentioned central Government funding for local economic growth. We have provided substantial support to regeneration in his local economic area, Teesside, which has received £24 million from the regional growth fund and £8.6 million from the growing places fund. That has funded, for example, the Teesside advanced manufacturing park, where I am sure some of his constituents are employed.

The Government want local authorities to protect council tax payers in their area. Council tax constitutes a significant bill for many of our constituents. I would guess that many of the hon. Gentleman’s constituents feel very keenly about the council tax they have to pay in comparison with their energy and other utility bills. Under the previous Government, council tax more than doubled, but this Government have done everything possible to protect families from further rises.

Since 2010, council tax bills across England have been cut by 10% in real terms. Over the past three years, we offered sufficient funding so that councils could freeze council tax without losing income. We will do the same again for the next two years, with a further £550 million available to councils.

[Tom Blenkinsop]

I thank the Minister for his information, but in terms of local history, when his party ran Redcar and Cleveland with the Conservatives between 2003 and 2007, council tax was increased by 25%. In addition to that, the chief executive officer’s salary went from £83,000 in 2003 to £143,000 in 2007. Although council tax went up under the Labour Government, it was largely down to councils run by the Minister’s party and that of his coalition partners.

[Stephen Williams]

I will deal with the second point first. The Government have said that although it is up to local authorities—rightly so for all us localists—to set local government salaries, they should be aware of value for money for local taxpayers when setting chief executive and other chief officer salaries. Making a comparison with perhaps what the Prime Minister earns might be a good starting point to benchmark such salaries.

The council tax increased over the lifetime of the previous Government both in cash terms per household and as a share of the national tax base over that period. Although we can look at what happened on the ground in individual local authorities, it is undoubtedly the case that, right across England, council tax as a proportion of the total tax collected increased over that period, putting more of the burden of what is quite a regressive tax on local households. That is why the Government have been encouraging local authorities to freeze the tax, providing freeze grants to incentivise them to do so.

With the new funding, the average bill payer could have saved up to £1,100 for an average band D property over the lifetime of this Parliament. I hope that as many councils as possible will take up this offer in the last year of this Parliament to help local residents with the cost of living.

Councils can do more to transform services. Many councils have taken steps to make savings through common sense measures, but there is still much more that could be done. It is estimated, for instance, that £2 billion a year is lost through local fraud. Councils have a procurement budget, collectively, of more than £60 billion. Clearly, there are possibilities for savings to be made that would not adversely affect local residents. We want to see councils tackling issues before they start putting up tax bills or cutting back on services.

Councils also have more than £19 billion in reserves, which could be there to cushion the changes that need to take place over the next few years. That is before we begin to consider the more fundamental transformation in services through models such as the troubled families programme, which the Secretary of State oversees with Louise Casey in our Department, or the whole place community budgets where the emphasis might be on innovative ways of working, such as early intervention and prevention, which I have been keen on for most of my political life.

Such programmes promise to be more effective and more efficient over time. We have set aside £200 million from capital receipts to support service transformation. We should remember that in 2014-15 there will be a further £330 million to continue this transformation, including a £200 million expansion of the troubled families programme.

Another big change in local government finance will come from the better care fund, which comes on stream in 2015-16. There will be £3.8 billion of pooled budgets at a local level to integrate health and social care—aggregating the money, but joining up services in a more seamless way. I am sure that we have all often had constituents coming to see us about the disjoint between the NHS and social services, and the better care fund will partially deal with that.

The hon. Member for Middlesbrough South and East Cleveland mentioned other comparisons and the differences between the authorities in his constituency and the Prime Minister’s constituency, and the Lord Chancellor’s local authority of Epsom and Ewell. They are, of course, district councils, so I do not think he was comparing like with like. I suspect that those relatively small district councils will have had lots of extra income through the new homes bonus, because new houses have been built in those areas. I think he is on safer ground when comparing unitary authorities and metropolitan districts, rather than small district councils in the south of England.

The hon. Gentleman also mentioned recognising poverty and need in the system. Of course, that is to some extent embedded in the system that we have now started to change. All those past settlements are embedded in the system. We are now expecting local government to grow their local economies. We have put in place a 50% retention of business rates. There was a time when the Treasury took 100% of local business rates away from local authorities and redistributed the money according to its own priorities. That system has now ended. There is a real incentive for Middlesbrough, Redcar and Teesside to grow their local economies, so that we can indeed become one nation.

I congratulate the hon. Member for Middlesbrough South and East Cleveland on raising the issues on behalf of his constituents. Councils across the country still have a great deal to do to transform their local services, but I am sure they are up to the challenge.

International Military Sales Ltd

Tuesday 11th March 2014 Westminster Hall

16:55

[Mr Ben Wallace (Wyre and Preston North) (Con)]

It is a delight to serve under your chairmanship, Ms Dorries. May I draw attention to my entry in the Register of Members’ Financial Interests? I have been the chairman of the all-party group on Iran for the past nine years, and I am a former overseas director for the aerospace company Qinetiq.

I want to highlight the relationship between International Military Services Ltd and the Ministry of Defence, and a specific case as it relates to Iran. It is a sorry passage in our history and the UK’s relationship with that country. It is not only a sorry story, but un-British in that the process that I will describe has been marred by double dealing and obfuscation. The Minister will be relieved to know that I am not talking about recent history; I am talking about way back in the 1960s and 1970s.

In the days of the nationalised defence industry, the British Government established a private limited company as its trading arm to sell weapons and aerospace equipment abroad and munitions to overseas buyers, mostly to other Governments. A lot has changed since then and the aerospace industry has been almost completely privatised. For that reason, in 1991 it was decided to wind up this little shell company that was wholly owned by the Government. It would have been wound up, but for one problem—a debt owed by that company to the Government of Iran, equivalent to between £400 million and £500 million.

The debt may explain why, 23 years later, the company still exists. What was the cause of the debt and what should we do to put it right? Between 1971 and 1976, the Shah of Iran paid up front—quite rare in those days, and even today—the equivalent of £650 million for 1,500 Chieftain tanks and armoured vehicles. When in 1979 the revolution deposed the Shah, Britain quite rightly ceased those exports until the country had settled down and we clearly knew its intentions.

However, we chose not to return the equivalent of the £450 million that Iran had paid us. Instead, we sold the tanks to Saddam Hussein, who then proceeded to use a number of those tanks against the people of Iran. I think it is widely accepted that the west’s support for Saddam Hussein was a catastrophic error. That period of history is well behind us, and I hope we will not make such mistakes again. However, since that time, and despite Iran’s attempts through the rule of law to access the funds owed, the UK has held on to them.

I am not here to urge the British Government to break the successful sanctions regime, but I am here to urge that we honour the debt once and for all.

[Jack Lopresti (Filton and Bradley Stoke) (Con)]

I congratulate my hon. Friend on securing this debate. If the matter were to be resolved, what impact would it have on the sanctions that Iran has to adhere to, given what we know about some of their motivations and activities?

[Mr Wallace]

There would be no impact, because in this country we have the facility of the High Court. The funds are already held by the High Court on behalf of the Government, but should the High Court make a ruling, or a settlement be reached, they could be handed over within the parameter of the High Court and held until such time as they were unfrozen through the sanctions licensing scheme or made available as a result of a change to sanctions. This is not about releasing funds tomorrow morning to the Iranian Government, but about putting a wrong right, putting our relationship with Iran on a more open and just footing, and, hopefully, putting the matter right.

However, I am afraid that this matter does not quite end there, because Britain and Iran are signatories to the Permanent Court of Arbitration in the Hague, an international treaty whereby we effectively arbitrate over contracts. In 2001, the court ruled in favour of Iran to recover the debt. The onus is on the United Kingdom to honour its treaty obligations.

If we fast-forward to 2013, however, we find that Iranian officials, who had set out from Iran with UK visas issued by the Foreign Office, come to this country to access the services of the commercial court. On landing at Heathrow, their passports are removed from them, their visas are revoked and they are detained for a number of days in asylum centres. That was not a particularly British way to resolve an issue, especially given that we had only recently issued their visas. It was a worrying sign.

To date, the Home Office has not been willing to give me a full explanation of the reasons behind the officials’ detention. However, I am sure that the Home Office will be careful, because any court—any judge—would look very poorly on something that is done without a valid reason, as this case involves access to legitimate justice and our courts. Let me be clear: I am not seeking to change the sanctions regime and I am not seeking to hand this money over. However, in the current environment, in which we are trying to put UK-Iran relations on a better footing, I am seeking a swift settlement for all parties.

Across a range of areas, Iranian entities that are not under sanction and are not involved in any way with the Iranian Government are suffering as a result of the UK’s fear about extraterritorial US sanctions. That is because many of those sanctions, while they do not deal with US companies, have an extraterritorial reach that can unfortunately leave many British entities with a Hobson’s choice—trade with us or trade with Iran.

We are now in the rather perverse position in which the US Government are issuing letters of comfort to US banks to allow them to trade with Iran, and to allow them to have approved and licensed financial transactions with Iran, while our banks are receiving no such comfort or protection from the reach of Congress. American banks in the US are protected from Congress by the US Administration, but British banks are thrown to the lions.

As sanctions become a more common foreign policy tool—with some success; they have certainly helped to contribute to the process of Iran coming to the table—we in Britain should make it very clear that we will follow the rule of law, fill in the detail and ensure that sanctions are clearly adhered to. However, that does not discharge us from our outstanding obligations.

Previously, there have been numerous rulings in the UK, Germany and the US courts that clearly distinguish the difference between the discharge of an obligation by a party—in this case, the obligation of International Military Sales Ltd to the Iranians—and the payment of the funds to a designated entity. They are two separate issues and to conflate them, as people have tried to in the past, supposedly as a reason for not resolving this matter, is to put unnecessary and unreal barriers in the way.

I would like to hear from the Minister. I am grateful to him for coming to Westminster Hall today, because I am aware, as chairman of the all-party group on Iran, that Iran policy is way above my pay grade. It is made by the P5+1, and in No. 10 and the White House. However, I would be very grateful if the Minister at least recognised the importance of resolving this matter. We should wind up the company, which has existed in limbo for 35 years, and we should discharge the MOD’s obligation to a brass plate somewhere else in London. We can then put this sorry tale behind us.

17:03

[The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne)]

It is a pleasure, Ms Dorries, to serve under your chairmanship at this later than anticipated hour; I am grateful to you for keeping Westminster Hall open. I thank my hon. Friend the Member for Wyre and Preston North (Mr Wallace) for securing this debate. It is important that we have this opportunity to put on the record the Government’s position on the subject that he has raised today.

I know that my hon. Friend, who is chairman of the all-party group on Iran, has taken a keen interest in this matter since he joined the House. It is entirely appropriate that he should have secured this debate . He has raised the issue of a dispute, and it is important to try to get a little clarity on the record as to the nature of that dispute. It relates to a number of contracts—not to a single contract—between the Iranian Ministry of Defence, which I shall refer to as MODSAF, and International Military Services Ltd, known as IMS. I am pleased to have this opportunity to outline the Government’s position regarding the dispute. As my hon. Friend has acknowledged, I am, of course, somewhat limited in what I can say, given pending litigation in the High Court between IMS and MODSAF. The UK Ministry of Defence itself is not a party to those proceedings.

I will make a number of key points in responding to this debate. First, I wish to make it clear that the Government would like the matter to be resolved as soon as practicably possible, which I think was the main challenge laid down by my hon. Friend. We share his determination in that respect, not least because, as he said, the dispute can be traced back to 1979 and the demise of the Shah’s regime in Iran. At that time, IMS, a company wholly owned by the MOD, had approximately 60 contracts to supply MODSAF with defence equipment and services. The change in regime in Iran saw the cancellation and termination of those contracts, resulting in a number of legal disputes.

The vast majority of the disputed contracts were settled on 22 October 1990, but four contracts were not. The two largest of those four contracts involved, as my hon. Friend said, the sale of more than 1,000 main battle tanks and armoured recovery vehicles. These contracts were referred to the International Chamber of Commerce for arbitration. The ICC ruled on 2 May 2001—more than 10 years later—in favour of MODSAF. By agreement between the parties, MODSAF agreed not to pursue payment of the awards until the outcome of a planned challenge to the awards by IMS. That was under the proviso that IMS paid, by way of security, a sum sufficient to meet the awards into the High Court. That payment was made in December 2002.

IMS subsequently challenged the ICC awards through the Dutch legal system, as the seat of the ICC arbitration, culminating in a final ruling on 24 April 2009 by the Dutch Supreme Court. The challenge by IMS was partially successful, in that the Dutch Supreme Court partially set the ICC awards aside.

The Government and IMS accept the ruling of the Dutch Supreme Court. However, there are legal issues that remain unresolved as to the precise amounts payable to MODSAF and crucially, as my hon. Friend said, as to how the sanctions regime that had been subsequently imposed impacts on the awards and the circumstances under which MODSAF is entitled to receive payment. These issues are subject to litigation, with a High Court hearing scheduled for June.

In addition, as I have already mentioned, there are other contracts under dispute. In relation to one of these, an infrastructure contract, the ICC tribunal ruled in favour of IMS on 28 January 2005. Prior to the Dutch Supreme Court ruling in 2009, international sanctions were imposed against the Iranian Government, in the context of their potential nuclear aspirations. In 2008, MODSAF itself was designated under the relevant sanctions regulations. Notwithstanding the recent sanctions relief included in the joint plan of action agreed with Iran, the bulk of the sanctions remain in place until a comprehensive settlement is reached on the nuclear programme. It would be inappropriate for the Government to comment any further on these issues, given the pending litigation.

However, the Government would like to see a final and appropriate resolution of these long-running disputes, and we hope that the recent progress in reaching an understanding on a variety of issues with the Iranian Government will facilitate that objective.

[Mr Wallace]

I am not referring specifically to this case. In general, given previous rulings, does the Minister not recognise that it is perfectly acceptable for a court to deal with the discharge of an obligation separately from how that obligation is then paid to an entity? They are not the same things.

[Mr Dunne]

My hon. Friend pre-empts the conclusions to my remarks, but I can confirm that we anticipate a resolution being possible, ideally without recourse to the High Court action in June. We would be happy to see the parties engage to reach a settlement on the outstanding issues before it gets to court. We think that can be done irrespective of the sanctions regime. Once a settlement has been reached to agree a final amount, the payment of that amount becomes a matter for the prevailing sanctions regime in place at that time. I agree that those are separate issues, but the ultimate payment cannot be made while the sanctions regime is in place.

I want to mention a couple of other factors that the House needs to be aware of. All the negotiations that have taken place on this matter have been conducted by employees of IMS on a confidential basis, in turn routinely channelled through legal representatives. Also, given the title of this debate, I should like to clarify the relationship between the Ministry of Defence and IMS. IMS is a wholly owned subsidiary of the Ministry of Defence; all but one of its 20 million shares are held by the Secretary of State for Defence and the other single share is held by the Treasury Solicitor. It is governed by the Companies Act, with accounts filed in Companies House. The company formally ceased trading in 2010 and now exists purely to resolve the disputes that I have already touched on.

[Alison Seabeck (Plymouth, Moor View) (Lab)]

rose—

[Nadine Dorries (in the Chair)]

I am sorry, Ms Seabeck, but because you were not here at the beginning of the debate, it is not in order for you to intervene. [Interruption.]

[Mr Dunne]

I should have been happy to take the intervention. If the hon. Lady has a point, perhaps she can make it to me afterwards.

[Nadine Dorries (in the Chair)]

May I clarify that Ms Seabeck is not allowed to intervene in this half-hour debate because she is the Opposition spokesperson?

[Mr Dunne]

Thank you, Ms Dorries. We all learn something new every day.

IMS employs two part-time staff members and three directors. The position of the Ministry of Defence and the Treasury is that the company should be wound up once the final disputes have been settled. I think that that addresses a number of points raised by my hon. Friend.

My hon. Friend mentioned the incident that took place in January last year, in which three Iranian officials were detained and deported from Heathrow airport. The former Under-Secretary of State for Foreign and Commonwealth Affairs, my right hon. Friend the Member for North East Bedfordshire (Alistair Burt), wrote at the time to the UK legal representatives of those concerned, explaining that although it was not the intention of the Government to cause undue anxiety, since the attack on our embassy in Tehran in 2011, Iranian officials had not been allowed to visit the UK in their official capacity. The Government regret any distress caused to those involved. Following the softening of the sanctions regime, we think it would now be possible for Iranian officials to engage with IMS, either on neutral territory or, indeed, here again in the UK, if they were willing to return.

To sum up, the Government and IMS recognise and accept the rulings of the Dutch Supreme Court in this matter. A number of issues remain unresolved and are subject to potential litigation, but we hope that a final settlement can be agreed soon. The parties are not very far apart in financial terms, and we hope that they can come to a resolution without further recourse to the courts. I hope that I have explained the Government’s position on this matter.

Question put and agreed to.

17:13

Sitting adjourned.

Written Statements

Tuesday 11th March 2014 Written Statements

Tuesday 11 March 2014

ECOFIN

Tuesday 11th March 2014 Written Statements

[The Chancellor of the Exchequer (Mr George Osborne)]

A meeting of the Economic and Financial Affairs Council will be held in Brussels on 11 March 2014. The following items are on the agenda to be discussed.

Follow-up to the G20 meeting of Finance Ministers and governors

The presidency and the Commission will debrief the Council on the main outcomes of the G20 Finance Ministers and central bank governors’ meeting in Sydney. The Government are supportive of the Australian G20 agenda, particularly the focus on strong, sustainable and balanced growth.

Preparation of the European Council on 20-21 March 2014—economic elements of the EU 2030 energy and climate framework

Council will have an exchange of views on economic elements of the EU 2030 energy and climate framework, with a view to input to the March European Council. The Government support the EU 2030 framework, which should provide certainty for investors and support the EU’s cost-effective transition to a low-carbon economy.

Savings taxation

Council will seek to adopt the amended savings taxation directive, as requested by the European Council in December 2013. The Government continue to support the adoption of the amended savings directive as a means of advancing the automatic exchange of information agenda.

Current legislative proposals

The presidency will provide information on the ongoing work on financial services dossiers.

Single resolution mechanism

The Council will examine the state of play and may revise the mandate for the presidency to finalise negotiations with the European Parliament. The Government welcome the progress on this file since general approach was reached at ECOFIN in December 2013, and will be ensuring that it fully respects the unity and integrity of the single market.

Off-payroll Engagements

Tuesday 11th March 2014 Written Statements

[The Chief Secretary to the Treasury (Danny Alexander)]

Today, I am announcing the conclusions of HM Treasury’s evaluation of Departments’ compliance with the rules governing off-payroll appointments in central Government.

New, tighter rules were established in May 2012 when I published the review of the tax arrangements of public sector appointees. This review revealed that more than 2,400 public sector appointees were engaged off-payroll in central Government Departments and their arm’s length bodies (ALBs).

Off-payroll workers play an important role in helping Departments meet short-term needs for specialist advice and interim service. The majority of these types of arrangements will have been in place for legitimate commercial reasons.

However, the number of off-payroll engagements found in the review, and the length and size of these contracts, suggested it was possible for artificial tax minimisation to be taking place.

The Government are committed to tackling tax avoidance and evasion and ensuring that everyone pays their fair share of tax. It is essential that Government Departments are able to assure themselves that their off-payroll workers are meeting their tax obligations.

The recommendations of the May 2012 review mean that the Departments’ most senior staff must now be on payroll, and Departments will have stronger powers to seek assurance in relation to the tax arrangements of their long-term, high-paid contractors.

In May of last year, I asked the Treasury to evaluate compliance with these new rules. The results of this evaluation are summarised below, along with any actions subsequently being taken.

Below board-level off-payroll engagements

The rules for new off-payroll engagements apply where the engagement is for more than six months with a daily rate above £220—or £58,200 per year. All new engagements from 23 August 2012 meeting these criteria must include contractual provisions that allow the Department to seek assurance that the worker is paying the right amount of tax and national insurance contributions and to terminate the contract if assurance is not provided. For any individuals where their engagement has been terminated, ended as a result of the assurance process, or ended after assurance was sought but before it was received, Departments have been asked to provide personal details of the worker to HMRC for further investigation of tax avoidance.

In accordance with the guidance, Departments adopted a risk-based approach in deciding which contractors to seek formal assurance from. Departments sought assurance on the tax affairs of 1,940 of their contractors and received satisfactory assurances from 1,815 of these engagements. In 125 cases contracts were terminated or came to an end before assurance was received.

Further details can be found in the table annexed.

The results of this review suggest that the majority of core Departments are operating the new rules effectively. This has resulted in a number of engagements, where adequate assurance was not provided, being brought to an end. Departments have referred all these individuals’ details to HMRC for further investigation.

Board-level and senior appointments

The guidelines set out in May 2012 also specified that, regardless of their tax arrangements, board-level officials and those with significant financial responsibility should be on the payroll of the Department or other employing body. This is unless there are exceptional circumstances, and such exceptions should not exist for longer than six months.

As a result of the recent review, I can announce that HM Treasury have uncovered three cases which have breached these rules. As a result I will be imposing sanctions on the resource budgets of two Departments equalling a total of £500,580.

I will be imposing a sanction of £102,080 on the Department for Environment, Food and Rural Affairs for a breach of the guidelines at the Animal Health and Veterinary Laboratories Agency (AHVLA). This related to a senior financial officer who was originally engaged off-payroll by AHVLA and brought onto payroll more than six months after being engaged.

I will also be imposing a sanction of £398,500 on the Department for Transport for two breaches. This relates to the chief executive and finance director at Directly Operated Railways Ltd who were originally engaged off-payroll and brought onto the payroll more than six months after the guidance came into effect.

Where this review has encountered below board-level appointments with significant financial responsibility that are in place to maintain the delivery of critical and time-limited projects, they have not been required to be on the payroll. This is subject to the strict requirement that all such engagements should be subjected to the assurance process to determine that they are paying the right amount of tax.

The Ministry of Defence has also brought to my attention two non-executive board members who have not been brought onto payroll within six months of the guidance coming into effect. The value of the salaries in question was considerably below the £58,200 annual rate at which we are normally interested in similar cases, the individuals involved have provided assurance as to their tax arrangements, and effective actions have now been taken to resolve these appointments. I have therefore decided not to impose sanctions in these cases.

It is also important that these rules are complied with in the wider public sector. I have, therefore, asked the Secretary of State for Health to conduct a full investigation into all senior off-payroll NHS appointments to ensure that all employers are taking adequate action to prevent possible tax avoidance.

The public sector needs to demonstrate the highest standards of integrity and it is essential that Government employers are able to assure themselves that their senior and highly paid staff are meeting their tax obligations. Each Department is responsible for seeking assurance as to the tax arrangements of the off-payroll appointees in the Department and arm’s length bodies, and judging whether the evidence presented is satisfactory to demonstrate that the appointee is meeting their tax obligations.

I will continue to monitor compliance with the HMT guidelines and intend to conduct a similar review for the 2013-14 financial year. I will report to The House on these conclusions.

Annex 1: New off-payroll engagements between 23 August 2012 and 31 March 2013, for more than £220 per day and for more than six months

Local Government Pension Scheme Regulations

Tuesday 11th March 2014 Written Statements

[The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis)]

The Government have laid before Parliament the Local Government Pension Scheme (Transitional Provisions, Savings and Amendment) Regulations 2014 which makes the transitional provision between the existing local government pension schemes and the new scheme which will come into force on 1 April 2014. They preserve benefits already accrued by scheme members under the existing schemes and make provision to ensure that members within 10 years of their normal retirement age on 31 March 2012 do not suffer any detriment.

Together with the local government pension scheme regulations 2013 introduced in September last year, the introduction of the regulations completes the regulatory framework for the new local government pension scheme. Implementing the new scheme a year ahead of the other major public service pension schemes represents a major achievement; we are very grateful to the Local Government Association, the scheme’s shadow advisory board and other key interested parties for the help and co-operation they have given to ensure the successful implementation of the new scheme.

In my written statement of 19 December 2012, Official Report, column 105WS, we announced our intention to abolish taxpayer-funded pensions for councillors. A statutory consultation to this effect was undertaken between April and July 2013.

The regulations we have laid also abolish such taxpayer-funded pensions for new councillors in England and other elected office holders from 1 April 2014, and terminate access for existing councillors at the end of their current fixed term of office (for example, from May 2014, in relation to councillors with elections this year). The rationale for the reforms is outlined in my statement from December 2012.

Taken together, I believe these necessary reforms deliver on the coalition Government’s pledge to reform public sector pensions and provide a fair deal for public service workers and taxpayers. The reforms ensure that local government pensions are fair, affordable and sustainable in the long term, particularly in the light of changing demographics, and are justifiable to taxpayers who foot the bill for employer contributions.

I have placed copies of the associated documents in the Library of the House.

Contingencies Fund Advance

Tuesday 11th March 2014 Written Statements

[The Secretary of State for Culture, Media and Sport (Maria Miller)]

I would like to inform the House that, as for a number of Departments at this time of year, the Department for Culture, Media and Sport requires an advance to discharge its commitments which are set out in its supplementary estimate 2013-14, published on 12 February 2014 as HC 1006—CG supply estimates, supplementary estimates.

Parliamentary approval for additional net cash of £262 million for existing services has been sought in a supplementary estimate for the Department for Culture, Media and Sport. Pending that approval, urgent expenditure estimated at £40 million will be met by repayable cash advances from the Contingencies Fund.

The advance will be repaid upon Royal Assent of the Supply and Appropriation (Anticipation and Adjustments) Bill.

EU Energy Council

Tuesday 11th March 2014 Written Statements

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

I am writing to report discussions at the Energy Council in Brussels on 4 March, where I represented the UK.

The Council discussed the Commission’s communication on energy prices and costs in Europe. Ministers welcomed the communication and noted the difference in energy prices between the EU and the rest of the world. I and a number of other Ministers noted that evidence, including from the International Energy Agency, showed that climate policy had had little impact on energy prices across Europe. I argued that the EU could best enhance competitiveness in Europe by completing the internal energy market, investing in research, rationalising the EU’s approach to state aid, developing indigenous supplies—including shale gas—and concluding an energy chapter to the EU-US free trade agreement. Other member states argued that the new climate and energy framework, if not carefully designed, would have a significant impact on energy prices.

The majority of member states accepted that renewable energy subsidies should be rationalised as part of the state aid modernisation process but were concerned that there was a risk of contradiction between European energy policy and the state aid guidelines.

The Council then debated the 2030 climate and energy framework. The presidency asked member states for their views on three issues: how the Commission’s proposals would contribute to the EU’s energy objectives of sustainability, competitiveness and security of supply; the new governance system; and the proposed set of indicators. The Commissioner argued that the 40% greenhouse gas target was very ambitious. The majority of member states endorsed a greenhouse gas target of 40%. I called for a 50% target in the event of an ambitious international agreement.

A number of member states called for more ambitious binding EU targets for renewable energy—of 30 to 40%—and binding energy efficiency targets. Others called for a technology neutral approach with no EU and national-level targets for renewables and energy efficiency. I and others supported an EU renewables target of 27%, on the condition that they would not become binding national targets.

A majority of member states argued that the new governance system should not encroach on the ability of member states to determine their own energy mix. On indicators, the majority of member states were positive about the indicators for competitiveness and security of supply.

The Commissioner informed the Council of the role of energy in the crisis in Ukraine; 14% of Europe’s gas needs were met by gas that had crossed Ukraine. However, Europe was in a better position to deal with a gas crisis than it was in 2009 when supplies through Ukraine were last interrupted as it had diversified supply and built more storage facilities. A number of member states emphasised the need to support Ukraine and the importance of diversifying the EU’s energy mix to improve security of supply.

Natural Capital

Tuesday 11th March 2014 Written Statements

[The Secretary of State for Environment, Food and Rural Affairs (Mr Owen Paterson)]

The Natural Capital Committee has today published its second state of natural capital report. A copy will be placed in the Libraries of both Houses.

The committee was established in 2012 as an independent advisory body to Government. It formally reports to the Economic Affairs Committee and was one of the commitments in the Government’s 2011 natural environment White Paper (NEWP).

The role of the Natural Capital Committee is to:

provide advice on when, where and how natural assets are being used unsustainably;

advise the Government on how they should prioritise action to protect and improve natural capital, so that public and private activity is focused where it will have greatest impact on improving well-being in our society; and

advise the Government on research priorities to improve future advice and decisions on protecting and enhancing natural capital.

The three key messages made in the report are:

Some assets are currently not being used sustainably. The benefits we derive from them are at risk, which has significant economic implications;

There are substantial economic benefits to be gained from maintaining and improving natural assets. The benefits will be maximised if their full value is incorporated into decision-making; and

A long-term plan is necessary to maintain and improve natural capital, thereby delivering well being and economic growth.

The Government intend to provide a response to the committee’s report once they have considered its content fully.

NATO Parliamentary Assembly (Membership)

Tuesday 11th March 2014 Written Statements

[The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)]

My hon. Friend the Member for Newbury (Richard Benyon) has replaced my hon. Friend the Member for West Worcestershire (Harriett Baldwin) as a member of the United Kingdom delegation to the NATO Parliamentary Assembly.

NHS Charges

Tuesday 11th March 2014 Written Statements

[The Minister of State, Department of Health (Norman Lamb)]

My hon. Friend Parliamentary Under-Secretary of State for Health, Earl Howe, has made the following written ministerial statement:

Regulations have been laid before the House to increase certain national health service charges in England from 1 April 2014.

This Government have made tough decisions to protect the NHS budget and increase it in real terms, but charges for some items remain an important source of revenue to support the delivery of high-quality NHS services. This is particularly important given the increasing demands on the NHS, with spending on medicines alone almost doubling since 2000.

Over 90% of prescription items are dispensed free. This includes extensive exemptions from charging for people on low incomes, such as those on specific benefits or through the NHS low-income scheme. We want to ensure that, of those who pay, people with the greatest need are protected, such as those with long-term conditions. As such, we have decided to freeze the costs of both prescription prepayment certificates (PPCs) for the next two years. This means the price of the 12-month PPC has been frozen for the lifetime of this Parliament. The three-month certificate will therefore remain at £29.10 this year and next, and the cost of the annual certificate will remain at £104.

This year, we have increased the single prescription charge by 20p from £7.85 to £8.05 for each medicine or appliance dispensed. We also intend to increase the charge by 20p to £8.25 in the following year.

The regulations will also increase NHS dental charges from 1 April 2014. The dental charge payable for a band one course of treatment will increase by 50p from £18 to £18.50. The dental charge for a band 2 course of treatment will increase by £1.50 from £49 to £50.50. The charge for a band 3 course of treatment will increase by £5 from £214 to £219.

Dental charges represent an important contribution to the overall cost of dental services. The exact amount raised will be dependent upon the level and type of primary dental care services commissioned by NHS England and the proportion of charge paying patients who attend dentists and the level of treatment they require.



Charges will also be increased, by an overall 2.7%, for wigs and fabric supports.

The range of NHS optical vouchers available to children, people on low incomes and individuals with complex sight problems are also being increased in value. In order to continue to provide help with the cost of spectacles and contact lenses, optical voucher values will rise by an overall 2%.

Details of the revised charges are in the following tables.

Justice and Home Affairs Council

Tuesday 11th March 2014 Written Statements

[The Secretary of State for the Home Department (Mrs Theresa May)]

The Justice and Home Affairs (JHA) Council was held on 3 and 4 March in Brussels. My hon. Friend the Secretary of State for Justice and I attended on behalf of the United Kingdom. The Lord Advocate, Frank Mulholland, attended on behalf of the Scottish Administration. The following items were discussed.

The interior day began with a debate on the new Europol regulation. Member states welcomed the good progress made in the Europol negotiations, but agreed that the proposed merger between the European Police College (CEPOL) and Europol should not take place. The Commission (Malmström) defended its initial proposal to merge the two agencies, but acknowledged the importance that both the Council and European Parliament attached to keeping them separate.

Member states were asked whether the Commission should be invited to propose a new regulation to update CEPOL’s tasks and take account of the Lisbon treaty. The UK, while agreeing that CEPOL and Europol should not be merged, questioned whether there was a genuine need for further reform of CEPOL (other than agreement of the member state initiative currently being negotiated to approve its relocation to Budapest). Some other member states agreed that any reform should not be brought forward simply for the sake of new legislation. However, the majority agreed that a new regulation should be proposed, and the Commission undertook to do this in due course.

The Council then discussed the replacement for the Stockholm programme (the EU’s five-year JHA work programme, which is due to be replaced at the June European Council). The Commission stated that its forthcoming communication on the new programme, due to be published later this month, would contain provisions on facilitating migrants’ access to the labour market and the mutual recognition of asylum decisions.

Some member states argued for a “burden sharing” mechanism, under which asylum seekers would be relocated from member states whose systems were deemed to be under pressure, but others felt solidarity was best demonstrated through practical co-operation. Some member states called for the EU’s common visa policy to be strengthened, for the establishment of an EU electronic system for travel authorisation (ESTA), for more automated criminal record exchanges and for the Commission to maintain its focus on anti-corruption. While encouraging the programme to focus on practical co-operation, the UK welcomed the focus of the programme on strengthening the external border, trafficking in human beings and counter-radicalisation but called for it also to tackle the abuse of free movement. The UK noted that the Commission had accepted that the issue of abuse of free movement was within the scope of the JHA and that a number of member states had asked for it to be included in the programme. With the support of some other member states, the UK stressed the importance of an EU-wide passenger name records system. Finally, the UK emphasised the need for the Council to have a key role in determining the programme.

The presidency summarised the emerging areas of consensus as a preference for quality over quantity when considering legislation, an evidence-based evaluation process, increasing practical co-operation, coherence between the internal and external aspects of justice and home affairs and action to tackle trafficking in human beings, cyber-crime and terrorism, and to return those with no right to remain in the EU.

Before lunch, the mobility partnership with Tunisia was signed by Belgium, Denmark, Germany, France, Spain, Italy, Portugal, Sweden and the UK.

A discussion took place over lunch on co-operation in the area of returns. The UK agreed that EU agreements could add value in some cases, but stressed that individual member states’ bilateral returns arrangements could be more effective in other cases, and that one size did not fit all. The UK agreed that it was important to share best practice and support approaches that had been shown to work, such as assisted voluntary returns programmes.

The Council then discussed migratory pressures, and in particular the Task Force Mediterranean measures that were agreed following last year’s tragedy in Lampedusa. Ministers received presentations from the European Asylum Support Office and Frontex on recent trends at the external borders, and asylum pressures, with a particular focus on developments in Syria.

The UK, supported by some other member states, called for clear time frames to be put in place for ensuring that the actions agreed under Task Force Mediterranean were carried out. The UK reiterated its commitment to support information campaigns in countries of origin or transit, to dissuade individuals from travelling illegally to the EU. Some other member states called for more assistance for member states facing migratory pressures.

Under AOB the Council briefly discussed the situation in Ukraine. The Commission outlined possible actions that would be taken, including the acceleration of dialogue on visas with the new Government and a possible mobility partnership.

The presidency gave legislative updates on the draft directives on intra-corporate transfers, seasonal workers and students and researchers (none of which the UK has opted in to), and on the draft regulations on Schengen visa policy, operational rules for Frontex maritime operations and on the smart borders package (from all of which the UK is excluded as they build on those parts of the Schengen acquis in which we do not take part).

Finally, during the AOB in the mixed committee, Switzerland gave a brief update on the legal implications of its recent referendum on migration by EU nationals.

The justice day, attended for the UK by the Justice Secretary, started with a lengthy state of play debate on the proposed general data protection regulation. The Commission reminded Ministers of the importance of the proposals, but the presidency accepted that further work is required at technical level before any text could be agreed. Ministers agreed that questions on international transfers of personal data, pseudonymisation of personal data, data portability and the relationship between “data controllers” and “data processors” should be referred back to the official-level experts’ group.

Next, the presidency sought views on three core questions regarding the proposal to create a European Public Prosecutor’s Office (EPPO). The UK has not opted in to this measure and believes the creation of the EPPO to be unnecessary. We did not intervene in the debate. The first question concerned structure: the clear majority of member states who intervened favoured including a college in some form, comprised of prosecutors appointed by the participating member states. Secondly, views were sought on the EPPO’s jurisdiction. The vast majority of intervening member states thought the EPPO should not have exclusive competence over minor cases of fraud against the Union’s financial interests, where it would often be more efficient and proportionate for these to be dealt with at national level. The final question, concerning the protection of individual rights in EPPO proceedings, had been added at the Commission’s request. While Ministers who intervened agreed with the proposition that individual rights merited the “highest standard of protection” there was a wide range of views on how to achieve this, with a number disagreeing that it was achieved by the Commission’s proposal. Vice-president Reding said she would ask the President of the European Council to add the EPPO to the Justice and Home Affairs matters which would be discussed at the June European Council. The presidency concluded that a clear majority favoured including a college in some form and that minor cases should primarily be dealt with at national level, but that more discussion was needed on procedural safeguards.

During lunch, Ministers exchanged views on the proposed regulation simplifying the acceptance of certain public documents in the EU. While there was support in principle to the idea of reducing bureaucratic burdens associated with the legalisation of documents in different member states, there was general consensus that the Commission’s proposal raised a number of practical implementation issues. In particular, the UK remains concerned about the possible costs of the proposal.

After lunch, the presidency asked the Council to consider various questions on the proposed directive on the rights of children in criminal proceedings. Options on the approach were presented and the Council gave opinions on which of the options were preferred, with the aim that these could be helpful to steer ongoing negotiations in Council. The first question asked whether the directive should still apply, in whole or in part, to persons who cease being minors during the course of proceedings. There was a difference of opinion on this question with a number of member states agreeing with the UK view that the directive should not apply at all after a suspect becomes an adult. The issue was remitted back to the technical level to be considered further. On the question of whether minors should be able to waive the right to a lawyer, the majority of member states seemed to favour the mandatory presence of a lawyer, although many thought there should be exceptions possible in minor cases. Again, this was remitted back for further technical level discussion. Finally, on the question of how the child’s right to privacy and the right to open justice should be balanced and specifically whether trials involving minors should be held in public or private, the majority view was that this should be decided by national law and this was agreed as the principle to guide further consideration of these aspects of the proposal.

Then the presidency summarised emerging areas of consensus on the future of justice policy in the EU in advance of the European Council adopting strategic guidelines in June. These included quality of legislation over quantity; ongoing evaluation of legislation; mutual recognition at the heart of the Union’s justice policy; and coherence between internal and external policies. Differing views remained on further approximation of criminal law, including via codification of existing instruments, and some further assessment was needed on the role of fundamental rights and the rule of law in specific areas. Commissioner Reding introduced the main thinking behind the forthcoming Commission communication on this matter, which centred on the objectives of trust by citizens in Government decision-making, mobility and growth. She said that codification of EU law should remain a guiding principle.

The UK, together with certain other member states issued a note of warning over further codification. The UK also reiterated its call for a strong Council ownership over eventual guidelines. The UK could not agree with some of the Commission’s proposals, including the reference to creating a common justice area by 2020. For the UK, the focus was on practical co-operation, implementation and evaluation. Specifically, implementation of existing EU measures to return prisoners to their countries of origin, and to exchange criminal records, were priorities for the UK.

Commissioner Reding then set out her plans to produce a 2014 justice scoreboard later this month. She explained that for 2014, the Commission would use the same indicators and scope as the 2013 scoreboard, while taking into account the comments of the European Parliament. Subsequently, in agreeing Council conclusions on civil and commercial justice systems, the Council set out the significant concerns of member states about the approach adopted by the Commission on the scoreboard and reiterating respect for independence of the judiciary.

The presidency provided updates on a number of legislative files, including counterfeiting the euro, the European account preservation order and the Brussels I (patent) amendment. These instruments should be approved by the European Parliament at plenary in April and subsequently adopted by the Council. Work on the insolvency regulation, supported strongly by the UK to support a rescue culture for businesses, would continue as a priority.

On-the-Runs Scheme

Tuesday 11th March 2014 Written Statements

[The Secretary of State for Northern Ireland (Mrs Theresa Villiers)]

I am today informing the House that, following consultation with the Lord Chief Justice, Lord Thomas of Cwmgiedd, the right hon. Lady Justice Hallett DBE has been appointed to conduct an independent review of the administrative scheme to deal with so-called “on-the-runs” (OTRs).

On 25 February, Official Report, column 16WS, and on 28 February, Official Report, column 38WS, I laid before the House statements relating to the decision of Mr Justice Sweeney, sitting in the Crown court, in the case of John Downey.

In light of the error identified in the case of John Downey, the Prime Minister announced on 27 February that he would appoint a judge to provide an independent review of the administrative scheme.

The terms of reference of the review are:

to produce a full public account of the operation and extent of the administrative scheme for OTRs;

to determine whether any letters sent through the scheme contained errors; and

to make recommendation as necessary on this or related matters that are drawn to the attention of the inquiry.

Lady Justice Hallett is asked to make every effort to meet the timetable of conducting the inquiry and reporting to me by the end of May 2014, for the purpose of its full publication. In any event, the review will conclude by the end of June 2014.

Grand Committee

Tuesday 11th March 2014 Grand Committee

Tuesday, 11 March 2014.

Arrangement of Business

Tuesday 11th March 2014 Grand Committee

Announcement

15:30

[The Deputy Chairman of Committees (Baroness Gibson of Market Rasen) (Lab)]

My Lords, if there is a Division in the House, this Committee will adjourn for 10 minutes.

Medical Act 1983 (Amendment) (Knowledge of English) Order 2014

Tuesday 11th March 2014 Grand Committee

Motion to Consider

Moved by

[Earl Howe]

That the Grand Committee do consider the Medical Act 1983 (Amendment) (Knowledge of English) Order 2014.

Relevant document: 21st Report from the Joint Committee on Statutory Instruments, 31st Report from the Secondary Legislation Scrutiny Committee.

[The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con)]

My Lords, this Government recognise that overseas doctors make a valuable contribution to the NHS, and we are keen to ensure that highly skilled professionals do not face unnecessary barriers. However, it is vital that all doctors practising in the UK have the necessary English language skills in order properly to care for and communicate with patients.

Due to the legislation that governs the regulation of doctors, the General Medical Council is not able to apply language controls to applicants from the EU as a pre-condition to registration as a medical practitioner. This is of great concern to the Government and to the General Medical Council, as it raises a clear risk to patient safety.

The same restrictions in law do not apply to international applicants from outside the EU. Therefore, the General Medical Council is able to require all international applicants to provide evidence of their English language capability—for example, by taking an English language test—before being registered and given a licence to practise in the UK.

We have worked with the General Medical Council to identify a system of language controls which provides greater patient safety while being compliant with European law. We believe that the proposed legislative changes contained in the draft order will achieve this outcome. The draft order gives the General Medical Council appropriate powers to ensure that only those doctors who have the necessary knowledge of English to do their jobs safely and competently are able to practise medicine in the UK.

The draft order makes changes to the Medical Act 1983 to do two things: first, to give the General Medical Council the power to refuse a licence to practise in circumstances where a medical practitioner from within the EU is unable to demonstrate the necessary knowledge of English; and, secondly, to create a new fitness-to-practise category of impairment relating to language competence. This will strengthen the General Medical Council’s ability to take fitness-to-practise action where concerns are identified.

The licensing amendments will enable the General Medical Council to require evidence of English language capability as part of the licensing process where language concerns have been identified during the registration process. This is compliant with EU law, which sets out under the mutual recognition of professional qualifications directive that a professional’s qualifications must be recognised by the host member state before any language checks can take place.

The order makes amendments to Section 29G of the Medical Act 1983 which will require the General Medical Council to publish guidance setting out the evidence, information or documents which a medical practitioner must provide to demonstrate that they have the necessary knowledge of English. Any person who is refused a licence to practise on the grounds that they have failed to demonstrate they have the necessary knowledge of English will have a right to appeal.

The process for determining whether a person has the necessary knowledge of English will be set out in the General Medical Council (Licence to Practise and Revalidation) Regulations, which will be amended by the GMC in due course to enable the policy to be implemented.

With regard to the fitness-to-practise amendments, a new category of impairment relating to English language capability will be created. This will allow the General Medical Council to request that a doctor undertake an assessment of their knowledge of English during a fitness-to-practise investigation where concerns have been raised, which it is currently unable to do. These changes will strengthen the General Medical Council’s ability to take fitness-to-practise action where concerns about language competence are identified in relation to doctors already practising in the UK.

The proposed amendments to the Medical Act 1983 are designed to complement and further strengthen the existing language controls imposed through the responsible officer regulations, performer list regulations and checks undertaken by employers at a local level. These amendments will enable the General Medical Council to carry out proportionate language checks where there is cause for concern, and ensure that all doctors practising in the UK have the necessary knowledge of English to do their jobs well and reduce the risk to patient safety. I commend this order to the Committee, and beg to move.

[Lord Walton of Detchant (CB)]

My Lords, I cannot say how welcome this order is. Forty-three years ago I was elected dean of the medical school of the University of Newcastle. By virtue of that election, I was immediately appointed to the General Medical Council. I became a member of its education committee and three years later I became the chairman of that committee. By virtue of being chairman of the education committee of the GMC, I was then appointed, under the new arrangements for the European Union, to the Advisory Committee on Medical Training, which met twice a year in Brussels and was required to make recommendations on basic medical education, specialist medical education and the mutual recognition of qualifications.

That was an interesting experience. Under the treaty of Rome, the first directive derived from that treaty said—I am not quoting exactly but the meaning is clear—that in the movement of doctors across the European Union there should be mutual recognition of qualifications and registration should be granted, but that it should be up to the host country to see to it that the incoming doctor had such ability to communicate with patients to make him or her safe to practise. That seemed to give us at the GMC full authority to embark upon establishing a language test.

At that time, for historical reasons, some doctors from outside the European Union—from Commonwealth countries such as Australia, New Zealand, the West Indies and many others—had enabled the General Medical Council to inspect their examinations and qualifications so they were automatically granted full registration under the Medical Act. But doctors from many other countries who had not had that ability to have inspections were required to apply for temporary registration if they wished to come to the UK, and they had to take a test set by the Professional and Linguistic Assessments Board, which established tests of not only clinical and academic competence but language capability. That was the so-called PLAB test.

It is important to make the point that the rights of doctors graduating in any other member country of the European Union applied only to those who had graduated in those countries but who were also nationals of EU member states. For instance, if a doctor from a country outside the European Union graduated from, say, Heidelberg, they were not entitled under that treaty to come to the UK and had to go through the same procedure as a doctor from India, Pakistan or other parts of the world.

Indeed, there was one such doctor, an Iranian, who qualified in medicine in Heidelberg. He applied for registration with the General Medical Council and was turned down. He took the GMC to a judicial review. Of course, he lost because he did not qualify. The result of this was that I was interviewed by Special Branch because he had made serious threats against my person, including threats of violence. However, we will leave that alone for a moment.

The point I wish to make is that it is so important that we have this language test. We at the GMC, having read what the directive said, tried to impose a language test on incoming doctors from the European Union, but we were threatened with being taken to the European Court because we were told very clearly by our lawyers and by the lawyers from Europe that this was contrary to the treaty of Rome. We tried again 10 years later when I became president of the General Medical Council, again with a total lack of success. All we were able to do then was to persuade the employing authorities in the UK, through the Department of Health, that they could impose a language test as a condition of employment. Regrettably, that agreement with the Department of Health was never properly or widely fulfilled across the UK, so a language test as a condition of employment for European doctors was not widely employed. Our attempts at that time were lost.

The great thing about this order is, first, that it makes it clear that the GMC can properly design and employ a test of the language ability of an incoming doctor from the EC as a condition of registration. Secondly, the responsible officer can make certain that any doctor coming up for revalidation speaks English adequately. Finally, when any doctor who is already a specialist from the EC or is working either in general practice or in a specialist grade and is brought before the GMC on the question of fitness to practise, the fitness-to-practise procedures can take note of the doctor’s ability to speak English. These are extremely welcome developments. Perhaps I am wrong about the condition of registration but the GMC, I think, is hoping that that is the effect of this order. Perhaps the Minister can clarify it for us. The whole process set out in this paper is extremely welcome and long awaited.

[Lord Turnberg (Lab)]

My Lords, it is always a challenge to follow the erudition of my noble friend Lord Walton, who certainly has no difficulty with the English language. I am sorry to add to the noble Earl’s load of potential medical speakers this afternoon but it is a pleasure to welcome this initiative which at long last gives the GMC the powers to ensure that doctors coming to work in the UK can speak and understand English. It has been long awaited and although it has always been part of the assessment of non-EU doctors it will now be a requirement for EU doctors too. After all that, it might sound a little churlish to say that there remain some things to be done about long-running issues that are not addressed in this statutory instrument. I hope the noble Earl will forgive me for mentioning them here.

I go back a little while, not quite as long as my noble friend Lord Walton, to when I was chairman of the Specialist Training Authority and the EU directives were being produced in the 1990s. Since those directives governing the free flow of workers across the EU came in, doctors trained in other member states can come to practise in the UK quite freely. However, we recognised from the very beginning that we know relatively little about the training of specialists in other EU countries. We have no knowledge of the curriculum they go through or the skills and knowledge of, for example, cardiologists, neurosurgeons and paediatricians from a selection of EU counties such as France, Italy, Spain and Germany. They may be perfectly fine, of course, and they probably are, but apart from knowing that they have spent a certain minimum number of years in training, we are not allowed in the UK to assess any of their knowledge or skills before they are put on the register of specialists. That is not the case for specialists coming from, say, America, Australia, New Zealand or any other non-EU country; they have to have their training and skills properly assessed and they may be required to take more.

Questions about the safety of our patients as far as EU doctors are concerned have been raised in this House in the past, but I have little confidence that we will be able to change the arrangements now when we would, it seems, have to convince the other EU member countries of this problem. Will the noble Earl seek advice from the GMC on how it intends to check on the safe practice of specialists from other EU countries? It is possible that its system of responsible officers may help. However, the GMC can act only after a doctor is already on the specialist register. There is a question of whether there is sufficient capacity in the responsible officer network. It would helpful if this issue could be aired a little further. I hope that the noble Earl will be able to find out from the GMC how far it can go on this.

15:45

[Baroness Finlay of Llandaff (CB)]

My Lords, I rise, somewhat cautiously, as the third medical speaker in a row. I welcome the order.

It is worth noting that in 2013, the GMC had 13 fitness- to-practise cases that involved concerns about the language skills of doctors. In its 2011 review, the England Revalidation Support Team found 66 cases where the responsible officer has dealt with linguistic concerns. Part 3 of the order is therefore particularly important because it relates to fitness to practise. I hope that we will have an assurance today that in a fitness-to-practise procedure the doctors will not themselves be paying for the English language competence test. I have a bit of a concern, if they are paying for it themselves, that there may be a seeking out of a centre that is different from another centre, so it has to be fully conducted by the GMC, although it seems completely reasonable that the payment for the test prior to licence to practise is borne by the person applying for a licence to practise.

I understand from the GMC that it will be using the International English Language Testing System—IELTS—which costs from £130 to £145 depending on where you sit it, and that that will remain valid for about two years, on the recommendation of the Commonwealth. There is evidence that language skills, if they are not used, begin to decay after about two years.

It is also important to recognise that in this order we are talking about “ordinary” English language; we are not talking about testing medical English. It has been suggested that the dictionary for medical English is about the same size as the dictionary for another European language. It is a huge language. However, many of the words are very similar across the different European languages—although, of course, they are very different in some other languages.

We are talking about the ability of a doctor to take their medical knowledge and translate it into what you could call everyday English so that they can communicate it to patients. One point that I hope will be part of a fitness-to-practise procedure, however, is a recognition that communication involves far more than language. In terms of communication skills and communicating, although about 20% of communication is verbal, much of it is non-verbal. When you look at complaints against doctors in relation to the way they have communicated, although they sometimes have very good English language skills, other aspects of their non-verbal communication might reveal an attitude that is below the standard that one would expect from somebody on the GMC register.

I have to say, from my experience of teaching postgraduate students, that at Cardiff University they are required to sit the IELTS. It is a good test of English language skills. Since it was introduced as a statutory requirement by the university, we have found that it has become easier to teach and to mark the work done by those whose first language is not English. When teaching communication skills, it is easier to separate out the non-verbal problems from the verbal problems.

My view is that this is an important regulation. The ability to look back at those currently practising in the UK about whom there are concerns is crucially important and the GMC needs to be empowered to do so. I would just sound a note of caution following on from the remarks of the noble Lord, Lord Turnberg; of course we do not know what is set out in the curricula of different places. Medical students can graduate from some universities with almost no patient contact at all. If they are moving into training jobs, there is a concern that the baseline level of their medical training may be very different. This order may be the first step towards looking at the competences that we expect of a doctor coming from anywhere in the world in relation to practising in the UK.

[Lord Kakkar (CB)]

My Lords, I declare my interest as a member of the General Medical Council and I would like to take this opportunity to congratulate the noble Earl and Her Majesty’s Government on dealing with this important issue in what I think we can all agree is a very sensitive way. There is no question but that our health services are vitally dependent on a steady flow of doctors coming from all parts of the world, including the European Union. Not only can they learn from our healthcare system, they can also serve in it. But it is absolutely right that a professional regulator must enjoy the confidence of the public, and it is the responsibility of the General Medical Council first and foremost to ensure that patients are protected and that clinical practice in our country is safe.

For that confidence to exist, the public have to be sure in their own minds that the elements of what they would consider to be essential clinical practice—the ability to practise in a responsible and safe way—are met and tested by the General Medical Council whenever it feels the necessity to do so. The ability to communicate effectively, and therefore to use our language in a way that the public and patients appreciate and would expect, is an essential part of the responsibility of the regulator of the medical profession. As we have heard during this short debate, it is anomalous that the GMC is able to ask that question of potential registrants and licensees from outside the European Economic Area, but has not been able to do so of those who come from within the European Union. It is quite right that the Government have focused on this issue and decided to act in this fashion.

The fact that this order makes provision not only for the question at the time of licensing of a professional, when concerns about language skills might have been raised during the provisional registration process, but also that the new category of considering the ability to use language and to communicate becomes part of the broader question in fitness-to-practise considerations, is vitally important. It means that not only at the time of coming on to the register and being licensed to practise in this country, but throughout the practice itself, the public and patients can now feel confident that the General Medical Council will be in a position to act if it needs to do so. The importance of that cannot be overestimated.

We have heard about the additional question of competence skills, which is a matter that your Lordships have considered in the course of a number of debates in the Chamber over the past few years. The issue remains to be addressed, but I think that most would agree that ultimately, wherever a doctor comes from in the world, whether they have trained and qualified in our own country, elsewhere in the European Union or elsewhere in the world, they should be expected to demonstrate their skills to the same standard and to deploy those skills throughout their professional career in a way that enjoys the confidence of the people of our country.

[Viscount Bridgeman (Con)]

My Lords, I rise with some diffidence as the first layman to address your Lordships in this debate. I, too, thank the Minister for his statement and pay tribute to his department for the leadership that it has shown in securing from the Commission the remedying of what was a glaring and potentially dangerous anomaly in the 2005 directive. The Commission has produced a very satisfactory outcome.

I believe the United Kingdom is among the first member states, if not the first, to incorporate the changes introduced by the revised directive into legislation. I note that the order is headed:

“Health Care and Associated Professions”.

I hope the new language-testing arrangements will be incorporated as early as possible into other branches of healthcare—I have nursing in mind in particular. I think it is the experience of many that nurses from the EEA are almost invariably pleasant, caring and considerate. They of course play a huge role in this country, but I know that many patients have had difficulty in communicating and in making themselves understood.

There are many reasons why this is a matter of some urgency, but I will suggest just one. I think I am right in saying that the practice of putting great emphasis on patients’ notes goes back a long way in the UK; possibly more emphasis than some other member states, even those with advanced healthcare arrangements. It is therefore all the more important that nurses from the EEA are proficient not only in spoken but in written English, a point which the noble Baroness, Lady Finlay, made in connection with doctors. As one facetious journalist put it,

“the difference between a microgram and a milligram is a coffin”.

I hope the Minister can give your Lordships the assurance that progress is being made in extending the provisions of the revised directive right across the healthcare profession, not least with nurses. I hope that this will include the fitness-to-practise hurdle, which is so important in reinforcing the ongoing responsibility of the relevant regulators for their members.

[Baroness Brinton (LD)]

My Lords, I am also a layman so the noble Viscount, Lord Bridgeman, need not feel completely alone. However, I preface my remarks by saying that my grandfather was the dean of St Mary’s Hospital Medical School. I remember him trying to explain to me why a bedside manner was not just about translating medical language but was all about speaking and listening. The one point I would add to the many that have been made by noble Lords this afternoon is the one about communication. A technical knowledge of English on its own is not enough—it needs to be one that picks up not just the body language but the nuance, including of regional language. If a Yorkshireman says he is “probably alright”, you know that you would want to question him further, whereas somebody coming from overseas might take that at face value.

I leave the rest of the medical comments to the medical professionals, who have spoken amply in that respect, and want to speak very briefly on freedom of movement in the EU. My party certainly believes that it is vital but—in true liberal tradition—it is fine up to the point at which it harms other people. It has been quite clear, certainly with one very celebrated case but also with others that may not have hit the public eye, that the capacity to cause harm is now at a level where action needs to be taken. These changes are well overdue and I am very pleased that they will set a new framework for the General Medical Council and restore confidence in foreign doctors from the EEA, wherever they are from and whatever level of language they have.

I end on the point that proportionate language competence must not only be checked but be checked more frequently than the BMA perhaps would like, because language and communication skills can get rusty.

16:00

[Lord Hunt of Kings Heath (Lab)]

My Lords, I, too, welcome the order. It comes, of course, from a report which followed the death of David Gray in 2008 after he received medical treatment from Doctor Ubani, a German national working his first shift as an out-of-hours doctor. Doctor Ubani gave David Gray an overdose of diamorphine which was 10 times the recommended maximum dose. A Select Committee investigation followed, looking at the use of overseas doctors in providing out-of-hours services, which was published on 8 April 2010. This recommended that the Government make the necessary changes to legislation that would allow the GMC to language-test those applying for registration. The order follows that and we welcome it. I commend the GMC and the noble Earl’s officials for their work in this area.

A number of points have been raised. I was interested in the BMA briefing on this matter which encapsulates some of the issues to which noble Lords have referred. It particularly concerns the area of fitness to practise. I agree with the noble Lord, Lord Kakkar, that the fact that the order covers the fitness to practise of doctors who are practising rather than those who are wishing to practise is a significant advance.

The BMA is right to ask for safeguards to ensure that testing for language competency is not abused. As it points out, a doctor’s language competence may not be a cause for concern but may be used as a conduit to prevent a doctor working where an employer may have more general concerns. One can recognise the circumstances in which this could be used. I would be interested to know what safeguards the GMC proposes in this area. Clearly, careful differentiation is required between situations when language is the main cause of concern and when there are other underlying problems such as professional or personal issues.

The BMA also states that an assumption has been made in these proposals that if someone is found not to hold a sufficient standard of English following a fitness-to-practise investigation, the situation is remedial and language competence could then be improved sufficiently over time to allow the doctor to continue to work in the UK. The BMA points out that while this may indeed be the case, it is concerned that the quality of English tuition may be very variable and that some responsibility might need to be taken by the GMC to signpost doctors to expert language training.

My next point was raised by both the noble Baroness, Lady Finlay, and the noble Baroness, Lady Brinton—namely that language competence is not the sole area which determines the likelihood of a doctor not trained in the UK experiencing difficulties. Effective communication is far broader and, indeed, has been highlighted by the GMC’s programme for doctors new to the UK, which looks at professional and ethical standards along with the importance of effective communication. I agree that it is essential that those new to the UK understand and apply the ethical and professional standards expected of them. That reinforces the point made by my noble friend Lord Turnberg that in the case of specialists from other countries, we sometimes do not know what we are getting.

I refer the noble Earl to a further briefing from the General Medical Council which stated that, by January 2016, the Government will have the opportunity to implement into UK law the new language requirements in directive 2013/55/EU on the recognition of professional qualifications. These clarify that competent authorities throughout Europe, such as the GMC, should have explicit powers to assess the language competence of all health professionals after their qualifications have been recognised but before they are allowed to practise.

The GMC considers that at that point we should be able to produce a more comprehensive scheme for language controls before doctors are given a licence to practise in the UK. Will the noble Earl confirm the GMC’s interpretation and can he say anything more about the timelines for this country implementing directive 2013/55/EU in the UK? Will he also confirm that, in so doing, we will be able to meet the point raised by the noble Viscount, Lord Bridgeman, in relation to other health professions? The point he raised about nurses is very well taken, particularly in view of the fact that they are very mobile in terms of where they work. It would be good if the noble Earl could confirm that as well.

[Earl Howe]

My Lords, I am very grateful for the welcome that this order has received from all noble Lords who have spoken. Perhaps I may begin by making clear one critically important point relating to the order prompted by a comment made by the noble Lord, Lord Walton. It is important to understand that the English language test is not a condition of registration. If a language test is required of a doctor, it would be a condition for that doctor receiving a licence to practise. Registration is granted on a full basis and language is assessed after registration.

The noble Lord, Lord Turnberg, questioned the quality of the training of specialists who come from other EU countries and asked what was being done to assure the safety of those doctors. If the specialism of a doctor is listed as a specialism under the directive then he or she will be required to comply with the minimum training standards set out in the directive. However, I will seek the advice of the GMC on this matter and will write to the noble Lord accordingly. A similar point was made by the noble Lord, Lord Kakkar, around the competency of EU doctors. I am sure he will know that it is not possible for the GMC to assess the competency of an EU doctor on registration. However, the council could assess an EU doctor’s competency in fitness-to-practise proceedings if questions are raised about the competence of that practitioner.

The noble Baroness, Lady Finlay, asked who would bear the cost of the fitness-to-practise case where there were language concerns. I can confirm that a doctor will not be required to pay for his or her own assessment in fitness-to-practise cases. The GMC has confirmed that it will bear this cost. She made the point, rightly emphasised by a number of noble Lords, including my noble friend Lady Brinton, that good communication skills are about more than just language competence. The issue is one that falls squarely to the GMC and we look to the council to ensure that it is addressed in guidance. If communication skills result in deficient professional performance, that matter could certainly be considered as part of a fitness-to-practise issue.

The noble Baroness spoke with her customary experience about the International English Language Test. On 25 February, the GMC announced a change in the score it requires in the English language test. As she pointed out, this is a test that many international medical graduates currently use to demonstrate their knowledge of English when they apply to join the register. Currently, IMG applicants must achieve a minimum score of seven out of nine in each of the four elements, and an overall score of seven. From the middle of June 2014, doctors will have to achieve a higher overall score of 7.5. They will continue to have to achieve scores of at least seven in each of the four domains. The new requirements for IELTS will be the same for all those applying to join the register. This move follows research commissioned by the GMC which suggested that the level should be enhanced. Moreover, IELTS will be one of the pieces of evidence that European doctors can use to demonstrate that they have the necessary knowledge of English.

My noble friend Lord Bridgeman asked about the extent to which the principle behind this order will be extended to other medical professionals, including nurses. The Government believe that in order to maximise patient safety, nurses coming to work in the NHS should not be able to work unless they have the necessary knowledge of English to perform their job well. Departmental officials are having ongoing detailed discussions with the NMC to seek to establish a system that will enable them to carry out proportionate language checks which are in line with EU law. I cannot give him further detail at this point but I can assure him that this matter is very definitely under scrutiny.

It must also be remembered that registration with the Nursing and Midwifery Council does not guarantee employment in the UK. Individual organisations are responsible for ensuring that the people they employ have the necessary skills for the post for which they are applying. EU legislation does not prevent the employer from assuring themselves that the nurse being recruited is competent, safe to practise, has up to date and contemporary knowledge, and has the necessary language and communication skills.

The noble Lord, Lord Hunt, raised the concern that the test for language competence should not be abused, and asked what safeguards the GMC was proposing in this area. As I mentioned, the GMC will be issuing guidance to provide absolute transparency of what evidence and documents are needed to demonstrate the necessary language competence. That should provide not only the necessary clarity for all applicants but also minimum scope for the kind of abuse that he referred to. It is for the GMC as the independent regulator of medical practitioners in the UK to decide the necessary knowledge of English to practise safely in the UK. As regards the guidance, in its recent consultation it suggested that where there is a cause for concern, similar evidence may be required to what is currently required for IMG doctors—for example, the required score in the academic version of IELTS or that the doctor has a primary medical qualification taught and examined in English. But, of course, in making that determination, the GMC will need to be mindful of EU law and ensure that such requirements are necessary and proportionate in view of the job to be performed.

The noble Lord, Lord Hunt, also asked whether the language requirements will be in any sense new. Systematic language checking is not permitted under the new directive. Any testing, as I mentioned, must be proportionate, and we anticipate that the new directive is likely to come into force in January 2016.

As regards the noble Lord’s other question, about the quality of language tuition where a doctor has been found to be deficient—and he asked whether the GMC will be signposting such doctors to good language schools—I have no doubt that this is an issue that the GMC will consider. However, it is ultimately an issue for it.

I hope that I have succeeded in answering most if not all of noble Lords’ questions. If I have not I will of course write. I conclude by thanking noble Lords for their very constructive and helpful comments.

Motion agreed.

Contracting Out (Local Authorities Social Services Functions) (England) Order 2014

Tuesday 11th March 2014 Grand Committee

Motion to Consider

16:15

Moved by

[Earl Howe]

That the Grand Committee do consider the Contracting Out (Local Authorities Social Services Functions) (England) Order 2014.

Relevant document: 22nd Report from the Joint Committee on Statutory Instruments

[The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con)]

My Lords, I remind the Committee that in 2011 an order was passed by noble Lords under the Deregulation and Contracting Out Act 1994 to allow local authorities taking part in two pilot schemes to contract to outside organisations certain adult social service functions.

The House agreed to amend the original order in November 2012 to allow local authorities to continue this contracting-out activity in respect of the pilot programmes beyond the period provided by the original order. The pilots were: adult social work practices pilots and right to control pilots. The order before noble Lords today seeks to set out the policy intentions for general delegation of functions in relation to adult social care, and will in effect mark the end of the social work practice pilot programme.

I am presenting this order today, not to extend the social work practice programme itself but instead to roll out the general policy intentions for delegation of statutory functions in adult care and support. There are three main reasons why this order is required: first, to ensure that organisations set up under the SWP programme can continue to operate legally and carry out statutory functions on behalf of the local authority; secondly, to give any other local authority the power to delegate specified functions to a third party; and thirdly, to support our policy intention for delegation, bearing in mind the general power of delegation within the Care Bill.

I shall now set out more detail on each of the three points. The social work practice pilots were announced in 2010 and saw the creation of seven social worker-led organisations, which discharge the functions of the local authority in providing adult social care services. Five of these organisations continue to exist today. On a day-to-day basis, the pilots were independent of the local authority but worked closely with it and in partnership with other providers. The local authority paid for the services provided but maintained its strategic and corporate responsibilities though its contract with the social work practices.

We were looking at the pilot sites to test the potential benefits of the social work practices and delegation of statutory functions, and whether these innovative approaches improve outcomes and experiences for the people who use them. The intention of the programme was to bring people who need health and care support closer to those who provide the services they need by reducing bureaucracy, encouraging innovation and increasing the personalisation of services. The pilots were an opportunity to test different models to see what works well, and they were fully evaluated by King’s College, London.

My officials have now seen the draft final evaluation report. On the whole, the evaluation was positive, finding some evidence that the SWP model could work well. Because each pilot was set up and operated differently, it was difficult to make generalised findings, but the evaluation found evidence of better continuity of care and co-ordination; a more personalised “offer” to people in need of care and support; opportunities for reducing bureaucracy, often through greater autonomy; and increased job satisfaction and empowerment for staff working in the pilots. Ultimately, the evaluation found that the success of the SWP was largely dependent on the quality of the contract and the relationship with the host local authority. It found nothing to negate our policy intention to make such powers available to all local authorities.

This order is crucial to allow the organisations set up under the SWP programme to continue to operate legally, subject to contractual arrangements with the host local authority. Not creating the order would mean that the functions would have to come back to local authority control, undermining the hard work and progress made under the pilot programme and potentially impacting on people receiving services through this route.

As the evaluation was largely positive, this new order seeks to extend the powers of delegation to all local authorities. We know from working closely with the Cabinet Office mutual support programme—a £10 million fund to support the creation and growth of public service mutuals—that several local authorities are already keenly watching the SWP programme, as they are also interested in gaining these powers. Others have contacted us about early adoption of such powers to support them in preparing for implementation of the Care Bill. The order will allow them and others to put in place necessary mechanisms to develop innovative service models, such as mutuals, to serve local populations in advance of the Care Bill. The findings from the SWP evaluation will be beneficial to all local authorities, and we shall publish them in full in due course.

This proposed extension to all local authorities is also consistent with the future policy of delegation of certain statutory adult social care functions. Clause 78 of the Care Bill provides for a general power of delegation of adult social care and has been developed through engagement with local government colleagues and wider social care stakeholders. Indeed, it has been part of the Bill from the very first iteration that we published. Furthermore, this clause has also been agreed by noble Lords and in the other place. The order therefore also bridges the policy gap until the Care Bill comes into force. Subject to Parliament, we plan for this to be on 1 April 2015. When enacted, Clause 78 will provide for a general power of delegation and the order will serve only for any transitional arrangements.

We know from working with the SWP pilots and through the evaluation that setting up a contracting-out process takes time. The order allows interested local authorities to begin this process now to assist them in preparing for implementation of the Care Bill, as well as providing security for the existing SWP sites. We are also currently working on statutory guidance to accompany the Care Bill, and the findings from the evaluation will be valuable in informing the guidance on delegation. We are working closely with adult social care stakeholders on the development of this guidance and will publish it for consultation in May of this year. This will also be useful for any local authorities seeking to consider use of this power in advance of the Care Bill being enacted.

In considering the need for the order, we have listened to the advice of representatives from the SWP sites, to ADASS and to colleagues from the Cabinet Office mutuals programme. In conclusion, we see the order as one that fully supports the aims set out in the Care Bill and the general adult social care reform programme. It will allow the continuation of existing innovative ways of working and the creation of new ones in order to benefit individuals and communities as a whole. I commend the order to the Committee.

[Baroness Brinton (LD)]

My Lords, it is encouraging that the results from the social work practices pilots are very positive. Phrases like “innovative”, “flexible” and “less bureaucratic” are very important to begin to change the culture in the way people work. It is also as important that the real personalisation of services is balanced by the job satisfaction of staff.

The Explanatory Notes that accompany the order are almost entirely positive. I picked up a slight nuance in the Minister’s comments. I wonder if there were any identifiable less positive or concerning features about which it might also be worth advising local authorities in how they are going to be commissioning work in the future. Apart from that, it is inevitably unfortunate that there is a short notice period that this is intended to cover, before the Care Bill comes in. At least there will not be a gap now, which is to be praised.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I should have declared on the previous order—and do on this order—my chairmanship of the Heart of England NHS Foundation Trust and that I am president of GS1 and a consultant and trainer with Cumberlege Connections. I am happy to support this order. I think it is the third time the noble Earl has been before the Committee to present such an order and, as I understand it, it is an interim measure until the Care Bill is enacted; the noble Earl has said that that is expected to be on 1 April 2015.

To pick up the point raised by the noble Baroness, Lady Brinton, I suppose it would have been helpful if we could have seen the draft of the final evaluation report at this point—it is now not going to be published until April. The noble Earl referred to some of the main findings of the draft final evaluation report from King’s College. He said that it was mainly positive although there were clearly some issues, which are identified in paragraph 7.6. Perhaps he might like to say a little more about that.

Perhaps I could also ask the noble Earl about right to control. This was considered in the previous order, and in this order a reference is made to the fact that decisions on the future of the right to control pilot scheme have yet to be made and hence no provisions are included in the new order in this regard. When we debated this on 20 November 2012, the noble Earl referred to the interim evaluation of the right to control programme, published in February 2012, which showed that disabled people were benefiting but there simply was not enough evidence to make a decision on a wider rollout. He went on to say:

“Clearly, an extension of the kind that we seek will give us more evidence. The early signs are positive but that does not provide the basis for a robust decision on permanent arrangements”.—[Official Report, 20/11/2012; col. GC 150.]

Has the department now given this further consideration? Can the noble Earl say why no decisions on the future of right to control have yet been made and when he thinks such decisions will be made?

[Earl Howe]

My Lords, I am grateful to both noble Lords for their comments and questions. They both asked whether in the draft report from King’s we found any negative advice about the results from the pilots. I think the answer is no but it is worth repeating what I alluded to in my initial remarks—that King’s commented that the success of the pilots critically depended on the quality of the contract and the relationship with the local authority. The pilots that worked best were those where those two things had been got right. However, there was nothing to negate our general policy intention to roll out the right of delegation more widely. When the evaluation is published—I, too, have not had the opportunity to have sight of it yet—I am confident that it will be helpful to local authorities looking to delegate functions and I am sure we can be grateful to the team who put the report together for a very thorough piece of work.

The noble Lord, Lord Hunt, asked me about the right to control pilots. As he will have noticed, the order before us does not cover the right to control them. The pilot finished in December 2013. It was considered that there was no need to continue the pilot, which is currently being evaluated. Unfortunately, I cannot tell him when an announcement will be made on that issue but as soon as I am made aware of the date I will be happy to inform him of it. However, we were clear that the order before the Committee today need confine itself only to the matters to which I have already referred.

Motion agreed.

Legislative and Regulatory Reform (Regulatory Functions) (Amendment) Order 2014

Tuesday 11th March 2014 Grand Committee

Motion to Consider

16:32

Moved by

[Viscount Younger of Leckie]

That the Grand Committee do consider the Legislative and Regulatory Reform (Regulatory Functions) (Amendment) Order 2014.

Relevant document: 20th Report from the Joint Committee on Statutory Instruments

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie) (Con)]

My Lords, I beg to move that the Committee considers the two complementary instruments that the Government have laid. I will discuss each instrument in turn.

First, the Regulators’ Code is an update of the Regulators’ Compliance Code, which was first published in December 2007, and I acknowledge the work that the previous Administration did on this. This is a statutory code of practice which sets out principles that should be applied by regulators when they are determining their policies and when they are setting standards and giving guidance.

16:33

Sitting suspended for a Division in the House.

16:42

[Viscount Younger of Leckie]

My Lords, the code provides a flexible framework that individual regulators can apply in a proportionate manner. It supports and enables regulators to design their service and enforcement policies to best suit the needs of their service users, while allowing resources to be focused on the non-compliant. The Regulators’ Code encourages greater transparency in the way regulation will be delivered, encouraging trust, open dialogue and accountability between regulators and those that they regulate.

The code applies to a wide range of people exercising non-economic regulatory functions, including more than 60 national regulators, from the large regulators, such as the Health and Safety Executive and the Environment Agency, to much smaller regulators, such as the Sports Ground Safety Authority and the assay offices, which happen to be part of my intellectual property portfolio.

The code also applies to a number of regulatory functions exercised by Ministers and those exercised by all 433 United Kingdom local authorities. Such diversity, not only in size and resource but in purpose, has been considered in developing the code, which is flexible in its nature. It does not add burdensome requirements, and regulators can apply the principles in a proportionate manner to suit local demands. Regulators are obliged to have regard to the code, but this duty is subject to any other requirement affecting the exercise of regulatory functions. This means that the duty to comply with the code is a secondary objective. It does not undermine the regulator’s primary protection duties.

This revised code has been produced in response to a post-implementation review carried out in 2012 and an eight-week consultation on a revised code in 2013. Both the review and the consultation found that regulators had generally accepted the code and its principles-based approach. National regulators had by and large adopted the principles into their enforcement policies. The Health and Safety Executive, for example, has a clear explanation on its website detailing how it meets the provisions of the code, including the use of risk assessment to guide its regulatory activity. The Forestry Commission is also a good example of a regulator which has adopted the code principles. Its enforcement policy details how enforcement activity is carried out in accordance with the code and principles of good regulation.

However, we found that there was nevertheless room for improvement. First, we found that many local authorities had not consistently adopted the principles. For example, enforcement policies could not be located on 15% of the local authority websites reviewed. Where local authorities had published enforcement policies they were not fully compliant with the principles of the code. Secondly, there was a lack of transparency about how regulation would be delivered, and we received feedback that some of the code’s provisions were overly prescriptive and burdensome. Thirdly, business representatives felt that the code had failed to promote open and early dialogue with regulators because visibility of the code among businesses was low. Many businesses had little or no knowledge of the code’s existence.

The updated Regulators’ Code builds on the experience of and lessons learnt from the existing Regulators’ Compliance Code. It adopts five principles which were in the previous code. The first principle is that regulators should carry out their activities in a way that supports those they regulate to comply and to grow. The second principle is that regulators should provide simple and straightforward ways to engage with those they regulate and to hear their views. Thirdly, regulators should use risk assessment methodologies to support their regulatory activities. Fourthly, regulators should share information about compliance and risk, and fifthly, regulators should ensure that clear information, guidance and advice are available to help those they regulate to comply. In response to the feedback we received, the new code also includes a sixth and final principle that regulators must ensure that their approach to their regulatory activities is transparent. The code encourages regulators to do this by publishing service standards which set out what business and the public can expect from their regulators. The other significant difference is that the provisions in the revised code have been simplified so that the code is now clearer in setting out expectations and, as a consequence, it is also much shorter.

The revised code was published in draft in July 2013 and the Better Regulation Delivery Office has organised a series of UK-wide awareness-raising events and training sessions since then. This has ensured that regulators have had time to review their existing policies and procedures and they have been assisted to meet the provisions of the code. In addition, the Better Regulation Delivery Office is continuing to work with regulators and bodies such as the Local Government Association to develop tools, including enforcement policy and service standards templates, to help regulators to comply with the code provisions. We have also worked extensively with the business community and trade associations to ensure that they are aware of the new code. As a result, we are confident that regulators will comply with the new code and that businesses will know what they can expect of their regulators when the code comes into force as soon as early April. In the unlikely event that a regulator does not comply with the provisions in the code and it is not able to provide any justification for departing from the principles, the Better Regulation Delivery Office will work closely with the individual regulator to remedy the non-compliance.

Businesses and their representatives will also be able to hold regulators to account by challenging any non-compliance with the code principles. In the first instance this could be through dialogue with regulators, and if that was insufficient, they could of course seek permission to judicially review any non-compliance. We believe that this will provide a sufficient incentive to encourage regulators to adopt the principles in the code.

I would like to stress that the introduction of this code will not add additional burdens or introduce more bureaucracy for regulators or businesses. As I have stated, the Regulators’ Code shortens and simplifies the provisions contained in the existing Regulators’ Compliance Code to make it easier for regulators to comply. It does not override any existing statutory requirements but sits alongside them. It will enable regulators to direct limited resources to the areas of greatest need, thereby reducing the bureaucracy and burdens on low-risk, compliant businesses.

I turn to the second instrument. The purpose of the regulatory functions order is to update the regulatory functions which are within the scope of the Regulators’ Code. These functions are subject to the statutory principles of good regulation set out in Section 21 of the Legislative and Regulatory Reform Act 2006.

The better regulation principles provide that regulatory activities should be carried out in a way which is transparent, accountable, proportionate and consistent. In addition, regulatory activities should be targeted only at cases where action is needed. The Government believe the better regulation principles and the Regulators’ Code should be applied by the broadest possible range of national regulators, Ministers and local authorities exercising non-economic regulatory functions.

To this end, we have consulted Monitor, the Groceries Code Adjudicator, the Regulator of Community Interest Companies and the claims management unit of the Ministry of Justice, which have agreed that their functions should be in scope of these statutory provisions. The 2014 order therefore adds these bodies to the list of those already in scope.

It is my firm belief that the revised Regulators’ Code and order extending coverage are important parts of the Government’s overall package of better regulation measures. They are an important step in developing modern, open and transparent approaches to regulatory delivery. I therefore commend this order and the Regulators’ Code to the Committee.

[Lord Curry of Kirkharle (CB)]

My Lords, I support this change. I need to declare an interest. I chair the Better Regulation Executive and work very closely with the Better Regulation Delivery Office. I am tempted to say that I regularly meet the regulators, both individually and collectively. I have created a forum, the better regulatory outcomes group, where we meet regulators on a three or four-monthly basis. It was at such a meeting that we floated the concept of revising the code in the first instance. The regulators were very supportive of this, in that many of them are already adopting the principle of the code, as the Minister has said—but it was inconsistent. They recognise that, today, with better regulation being a high priority for government and the encouragement of economic growth being of paramount importance for the economy, for regulators to be seen to be supporting growth and encouraging companies to grow is of higher priority than it was when the original codes were introduced. I therefore commend this change to the Committee and firmly support it.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I thank the Minister for introducing the draft order and the code, and particularly for the extension in scope to the other regulators. It is perhaps worth the Committee remembering, as it is perhaps not evident from the code or from what has been said, that the main purpose of regulation is to promote and protect the interests of consumers, particularly in sectors where market forces alone would not deliver the best outcome or where consumers cannot effectively alter service delivery. That is what regulators are all about: in a way, they are standing in the shoes of users or consumers to make sure that they get a fair deal.

Just 52 years ago this month, on 15 March 1962—which is why we will have World Consumer Rights Day this weekend—in a special message to Congress on protecting consumer interests, President Kennedy wrote that all of us deserve to be protected against fraudulent or misleading advertisements, of the right to be protected against unsafe or worthless products, and of the right to choose from a variety of products at competitive prices. He went on to outline the steps taken in America to increase the inspection of foods and improve safety on the highways, and to cut back on deceptive trade practices and high utility bills—it all sounds familiar, does it not?—while recommending,

“a law to require consumers to know how much they are being charged in interest”,

plus,

“laws to tighten safeguards against monopolies and mergers which injure the consumer interest”.

Some of those measures are not caught by what we are looking at today, but it is interesting that he described them as being,

“immensely important to the well-being of every American family”.

That is what we should concentrate on today because similar things are of interest to every British family. Therefore, it is worth looking at whether the code measures up to what is demanded of it.

As has been suggested, there is much in the code to be applauded. It calls for clarity of language, clear expectations, reduction of unnecessary bureaucracy and petty rules, and less duplication of information requests, which is clearly very important. These things are vital for the effective working of any regulator. However, I wonder whether the Government have looked at the code as it applies to themselves, given the incredible red tape they introduced under the transparency Act that was imposed on trade unions and charities where no mischief had been identified. It would be interesting to know whether the Better Regulation Task Force could look at the Government to see whether they had measured up to their expectations of the code.

Perhaps the concern of any consumer representative is that this code seems to be all about working with the regulated community. We should remember that on the whole we are talking about industries which, for whatever reason, cannot be trusted to treat the customer fairly without a regulator, or to be responsive to the needs of users. However, there is nothing in anything we have heard or read about the regulator listening to or consulting those whose interests the regulators are meant to promote. This is very different from the position of the two other main regulators for financial services and legal services respectively, where consumer panels are required by statute to ensure that the end user’s view is fed into the regulators’ work. There are also, quite rightly, practitioner panels because obviously we want regulation, as far as possible, to work with the grain, to be practical, and to encourage the provider to do the right thing without the regulator having to come knocking on their door.

However, consumers also have a role to play. Without an input from consumers and their representatives, we would not have achieved redress for tenants and landlords who use letting agents, or for complaints against CMCs. What was not being done by the regulator of CMCs is now covered, fortunately, by this code. We know that the regulation of letting agents and CMCs was inadequate. The regulators had not addressed consumer needs adequately, as evidenced by the amount of complaints and consumer detriment which built up. Therefore, I worry about whether we are listening only to providers and not to the people affected by them.

It is the case that regulators need real teeth to be effective. It was, of course, your Lordships’ House which managed to convince the Government to give the Groceries Code Adjudicator proper teeth from day one. That success improved the legislation, so having real teeth matters in order to protect consumers. It is our contention that regulators and those who oversee them should feel the need to hear from and represent the consumer interest. Under the Legal Services Act 2007, the regulator’s objectives include,

“protecting and promoting the public interest”,

and “the interests of consumers” as well as “promoting competition”. The Act requires the Lord Chancellor, when appointing the LSB board members, to have regard to the desirability of appointing people with experience or knowledge of consumer affairs, the handling of complaints, and the differing needs of consumers.

17:00

That contrasts with the code in front of us—the old version, I have to confess, as well as the new—which does not even mention consumers. It is all about engaging with business. Indeed, in the introduction, the Minister, Michael Fallon, writes that the code is to enable,

“regulators to design their service and enforcement policies in a manner that best suits the needs of businesses”.

There is no mention of consumers. It is all about,

“effective dialogue and understanding between regulators and those they regulate”.

That sounds very cosy, and I wonder whether it is at variance with Section 23(3) of the Legislative and Regulatory Reform Act 2006, which requires the Secretary of State to consult, “persons … he considers appropriate”. Surely those whom regulation is there to help are also “appropriate” persons? Which user and consumer groups were consulted and, if any were, can the Minister tell the Committee what feedback was received? Can he tell us how many of the 95 responses were from end users? How many meetings took place with representatives of businesses in the drawing-up of the new code and how many with representatives of consumers?

Regulators are there for a purpose—to protect consumers. We must make sure that the way they do their work and the codes that they work to actually have the consumer in mind.

[Viscount Younger of Leckie]

My Lords, I thank the noble Lord, Lord Curry, and the noble Baroness, Lady Hayter, for their comments and, if I read it correctly, their broad support for this order. It is particularly nice to have good support from the noble Lord, Lord Curry, in the light of his current role.

At the beginning of her speech, the noble Baroness, Lady Hayter, quoted some interesting comments from President Kennedy back in 1962, which I thought was really rather nice. It shows that this is something that goes back decades, and not just in this country. Consumer interests and consumer-facing issues are matters that cross boundaries and continents and remain, as we know particularly in this country, quite a live issue. Following that, the noble Baroness raised the issue of proper protection for the consumer. The Regulators’ Code promotes proportionate, consistent and targeted regulatory activity in relation to consumer regulation and other protections. We believe it takes appropriate action when non-compliance is identified. The noble Baroness also raised the issue of letting agents. She is well aware that there have been debates recently—indeed there is one this very day—in the other place on the Consumer Rights Bill. I know she is definitely well up on that particular issue and indeed takes a lead in debating it.

The noble Baroness asked a substantive question about the consultation, and I will spend a little time explaining the length and depth of the consultation. As I said earlier, the public consultation lasted eight weeks. It opened on 8 March 2013 and closed on 3 May 2013, with 95 responses received from a variety of organisations. There were 14 responses from national regulators, 37 from local authorities, 20 from business and trade associations, and 17 from professional bodies. To give a general overview, business respondents were generally supportive of the draft revised code and the provisions contained within it. They highlighted the shorter, clearer nature of the revised code, which would make it easier to know what they can expect from regulators. The substantive responses included the following: businesses welcomed the focus on the need for regulators to provide advice and guidance. They suggested that publication of service standards would lead to increased transparency and accountability, but felt there was a need for greater clarity around the notion of growth. This was also raised by the noble Lord, Lord Curry. They were also concerned that the revised draft code did not have sufficient strength and that regulators would not fully comply with the provisions.

Local authorities were generally supportive of the principles but expressed concerns that the detailed provisions were too prescriptive and would therefore impose additional burdens. The authorities stressed the fact that the revised code put too much emphasis on requirements for regulators and not enough on recognising the responsibilities of businesses. They were also concerned about the potential use of the code as a mechanism for challenge and the cost considerations of additional appeals procedures.

National regulators held rather more mixed views. Some felt that the provisions were too burdensome and were concerned about possible legal challenges, while others were positive about the opportunity to engage with the business community. National regulators commented on the need for any measurement and process to be proportionate to regulatory activity. Finally, they argued that culture change was important—I add my own strong support for that—to embed the code’s principles, and that training and leadership can assist with this. I could go on but I hope that gives a substantive and full overview of the response. I will be more than happy to write to the noble Baroness should she wish for more substantive detail.

[Baroness Hayter of Kentish Town]

Will the Minister confirm that no views were sought or received from consumer representatives?

[Viscount Younger of Leckie]

There are no consumer representatives mentioned in my brief. However, in addition to the ones I have mentioned, 20 business and trade associations responded to the consultation and there were meetings with the National Consumer Federation. I am more than happy to write to the noble Baroness to clarify the relationships and contacts we have had on this with consumer representatives.

[Lord Curry of Kirkharle]

I am not sure whether it is on the list, but Citizens Advice is in the forum I established with regulators. It was represented and certainly took part in the initial discussions regarding the revised code.

[Viscount Younger of Leckie]

I thank the noble Lord, Lord Curry, for that intervention and hope the noble Baroness, Lady Hayter, will find it helpful. The noble Baroness also raised the issue of legal services. The Legal Services Board is subject to the regulatory principles in the Legal Services Act. The Regulators’ Code sits alongside those principles and does not override them.

I remind noble Lords that the purpose of these two complementary instruments is, first, to revise and update the current Regulators’ Compliance Code with the draft Regulators’ Code. The second instrument updates the regulatory functions that are currently within the scope of the Regulators’ Code and the principles of good regulation. The Regulators’ Code encourages transparency and accountability in the relationship between regulators and those they regulate. It enables regulators to direct resources to the areas of greatest need, reducing bureaucracy and ending the culture of tick-box regulation. I commend both the Legislative and Regulatory Reform (Regulatory Functions) (Amendment) Order 2014 and the Regulators’ Code to the Committee.

Motion agreed.

Regulators’ Code

Tuesday 11th March 2014 Grand Committee

Motion to Consider

17:08

Moved by

[Viscount Younger of Leckie]

That the Grand Committee do consider the Regulators’ Code.

Relevant document: 20th Report from the Joint Committee on Statutory Instruments

Motion agreed.

Income Support (Work-Related Activity) and Miscellaneous Amendments Regulations 2014

Tuesday 11th March 2014 Grand Committee

Motion to Consider

17:09

Moved by

[Lord Bates]

That the Grand Committee do consider the Income Support (Work-Related Activity) and Miscellaneous Amendments Regulations 2014.

Relevant documents: 20th Report from the Joint Committee on Statutory Instruments, 29th Report from the Secondary Legislation Scrutiny Committee

[Lord Bates (Con)]

My Lords, these regulations were debated in the other place on 3 March 2014 and I am satisfied that they are fully compatible with our obligations under the European Convention on Human Rights.

The Government have made clear their commitment to improving sustainable employment opportunities and reducing worklessness, while supporting those who are unable to work or who are looking for work. Helping more people into work is essential to the recovery of the economy and to ensuring that people can achieve their aspirations and those of their families. Given this, we remain committed to giving people the support they need at the time it is needed.

The Government have already taken steps to provide additional support for lone parents but believe that more could and should be done to help them prepare for work. This is the reason for these regulations, which essentially provide for two separate changes. First, these regulations would bring income support into line with employment and support allowance by making the work-focused interview regime more flexible and responsive to individual needs. Secondly, they would make changes to income support, employment and support allowance, and universal credit in order to offer more support for lone parents with children aged three or older by requiring them to undertake appropriate activities that will help them prepare for work.

Since 2008, the age threshold for the youngest child has changed so that from May 2012 lone parents with a youngest child aged five or over have no longer been entitled to claim income support solely on the basis of being a lone parent. Such lone parents should either be in work or looking for work. We know that many lone parents are already taking steps in preparation for a return to work but we also know that many more lone parents would benefit from additional support to overcome barriers to future employment.

It is worth reflecting on the current position for attending mandatory work-focused interviews, which varies according to the benefit an individual is awarded. Lone parents with a child aged one to five who are entitled to income support are usually required to attend mandatory work-focused interviews every six months. In the year before entitlement ends, interviews take place on a quarterly basis. Lone parents on employment and support allowance with a child aged one to five attend flexible work-focused interviews, with the frequency determined by their work coaches. Under universal credit, lone parents and responsible carers with a child aged one to five also attend flexible interviews, the frequency of which is determined by their advisers.

From April, these regulations will bring in mandatory work-focused interviews for lone parents on income support, in line with the approach already taken for employment and support allowance and universal credit. The frequency of interviews will be determined by the adviser based on the needs of the individual. It means that a tailored package of support can be offered to lone parents at the time they need it rather than at predetermined times set by an inflexible appointments system. The Government believe that this approach will better serve lone parents to prepare for work. As the House has already agreed to this principle in universal credit and employment and support allowance, I trust that noble Lords will not see any reason to oppose this measure.

Secondly, these regulations change the work-related activity requirements for income support, employment and support allowance and universal credit. It might be helpful if I remind noble Lords of the current position. In the existing system, there is no requirement to undertake work-related activity within income support for any claimant. The current position in employment and support allowance is that lone parents in the work-related activity group can be required to undertake work-related activity when their youngest child is five. Currently, there are no requirements in universal credit for lone parents with a child aged one to four to undertake activities to prepare for work.

The mandatory work-related activity changes will affect lone parents and responsible carers with a youngest child age three or four who are entitled to income support solely on the basis of being a lone parent, those in receipt of employment and support allowance—in both the work-related activity group and new-style employment and support allowance—and those in receipt of universal credit.

The regulations remove the cliff-edge effect of going from not having any work requirements to having full work requirements that is currently faced by many lone parents when their youngest child reaches the age of five. The Government recognise that for many lone parents the main barrier to work or preparing for work has been the lack of affordable childcare. However, the Government have taken steps to improve this position. All children in England aged three and four are now entitled to free childcare for 15 hours a week. We expect lone parents and responsible carers to take advantage of this provision where they can so that they can start preparing for work. Childcare is a devolved matter and Scotland and Wales have their own equivalent offer.

17:15

I will take some time now to explain work-related activity in detail, as I know that noble Lords are interested in how conditionality would be applied. First, I want to make it absolutely clear that work-related activity is not the same as work search and work availability requirements. We are not asking lone parents with young children to apply for or look for jobs. What we would ask them to do is to start thinking about work and what steps they need to take in order to improve their skills and help their chances when they do start looking for work. Lone parents and responsible carers in scope of this change will receive work preparation support based on individual need, which will better prepare them for looking for work in a competitive labour market.

The type of work-related activity that is identified as being necessary for the individual’s prospects of finding work will be at adviser discretion and must have regard to any limitations that the individual may have due to health, disability or the availability of suitable childcare. The work-related activity required of the lone parent or responsible carer must be reasonable and appropriate to improving the individual’s future prospects of finding work. Such activities could include, for example, undertaking skills training relating to literacy, numeracy or IT. Advisers will not mandate lone parents or responsible carers to Scottish or Welsh-funded skills training, although advisers will have the opportunity to send them to DWP-funded skills provision where it is available. Where it is determined that some work-related activity is necessary, the lone parent or responsible carer will be able to restrict their availability for such activity to the hours that their youngest child is in school or in the care of a responsible adult.

These regulations are intended to open up opportunities for more parents to prepare for work and to support them in achieving a better standard of living for themselves and their families. It is therefore right that individuals should accept more responsibility by taking advantage of such support. To make sure that the welfare of parents and their children is not compromised by sanctions which might otherwise escalate too quickly, we have included an easement in the regulations which will ensure that lone parents claiming income support cannot be sanctioned if a failure to meet a requirement occurs within two weeks of a sanction being applied for a previous failure. This is similar to the position in universal credit. A further easement means that, for income support, we will remove any sanctions at the point at which a lone parent re-engages with their adviser. We have retained “good cause” in the income support regulations, which set out a non-prescriptive list of matters to be taken into account when considering whether a sanction is appropriate. This includes, for example, the availability of childcare, transport difficulties, health and whether the person has understood the requirements, taking into account any learning, language or literacy difficulties.

I conclude by saying that the Government believe that providing more flexible support to meet the needs of the individual is the right thing to do and will have a valuable impact on the lives of lone parents and responsible carers up and down the country. We aim to implement this from 28 April this year to ensure that lone parents and responsible carers can benefit from it as soon as is possible. Jobcentre Plus preparations are well advanced. These regulations are an important part of our efforts to make Jobcentre Plus support more flexible and personalised. I hope that noble Lords will agree with me that this is a right and necessary change, and one which is appropriate to the nature of employment and parenthood in Britain today. I beg to move.

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for that explanation. Labour supports the aim of these regulations. Indeed, the leader of the Opposition said in a speech last June that in a workless household, both partners or a single parent should use some of the time while their children are at nursery to make some preparations that would help them get back to work. He also stressed that there would be no requirement to go back to work until the youngest child is five years old. So we support the aim of these regulations.

When this order was debated in another place, my right honourable friend Mr Stephen Timms asked a series of questions of the Employment Minister, Esther McVey. She was able to answer only two of them and perhaps not in the depth that my right honourable friend had hoped for. I shall therefore put some of the same questions to the Minister in the hope that the intervening week will have enabled his officials to brief him to answer them perhaps more fully than was possible on that previous occasion.

First and most seriously, why is there no easement in the regulations for lone parents who have suffered domestic violence? I acknowledge that the Government have taken domestic violence seriously. In this very Room not so long ago, we debated the new cross-government definition of domestic violence and I was pleased to give the Government support for aiming to do precisely that. In the Universal Credit Regulations 2013, there was a clear easement for domestic violence which stated that, for 13 weeks, there would be no work-related requirements. In jobseeker’s allowance, the claimant is exempt for four weeks, which can be rounded up to 13 weeks. But in these regulations, there is nothing.

On 3 March in the Delegated Legislation Committee in another place, Stephen Timms asked Esther McVey this question:

“Can she confirm that it is her intention that there will be guidance that makes it clear that there will be the 13-week easement for people who suffer domestic violence, in line with other regulations?”.

The Minister replied:

“I will indeed; it is right that, as such support is given in other areas, it should be given in this area”.—[Official Report, Commons, First Delegated Legislation Committee, 3/3/14; col. 14.]

Can the Minister confirm that it is indeed the Government’s intention that there will be guidance that makes it clear that there will be the 13-week easement for people suffering domestic violence? If so, can he explain why that is not in these regulations, as it is in the corresponding regulations on income support and jobseeker’s allowance? Finally on this first point, can he explain what a lone parent would have to do if a decision-maker should require her to undertake some work-related activity despite suffering domestic violence? After all, Gingerbread reports many cases of lone parents being pushed to do things which they are not required to do by regulations or by guidance, perhaps because of a misunderstanding among generalist advisers in jobcentres. What should a lone parent do in these circumstances?

The second question that I want to ask is on the issue of parents of children aged five who have not started school and are not legally required to receive full-time education. Parents have to explain why it would be unreasonable for them to find other arrangements for the care of the child until he or she is in full-time education. Why is that easement not in these regulations?

Thirdly, under the regulations and as the Minister explained, single parents cannot restrict their availability for work-related activities during their child’s normal school hours—which is to be expected—or when their child is under the temporary supervision of another adult. Gingerbread is concerned that the latter issue causes a potential problem, because it means that a single parent could be sanctioned for being unable to undertake work activities because informal childcare arrangements had broken down. The Minister may say that childcare is covered in the “good cause” provisions, but that is not acceptable because of the process that would have to be gone through to try to sort that out. In JSA, informal childcare is not taken into account when compliance is being determined, presumably for precisely this reason, so why is it here?

What would happen to a single parent asked to attend an interview or other work-related activity whose three or four year-old was not in nursery and who did not have access to reliable free childcare? How should she pay for childcare? In another place, when Stephen Timms asked about this, Esther McVey referred to the childcare subsidy available for the first year when a parent first starts work. She also referred to Childcare Assist, which helps with childcare costs in the week before a single parent starts work. What about someone who is not working and not required to work? How should she pay for her childcare in these circumstances? Gingerbread suggests that Jobcentre Plus should pay for the childcare. What does the Minister think of that?

Finally, there is the question of travel time. The JSA and universal credit regulations place a limit of 90 minutes’ travel time to and from an interview. Can the Minister confirm that that limit will apply also to single parents undertaking work-related activity? If so, will that be made clear in the guidance to decision-makers? I look forward to the Minister’s reply.

[Lord Bates]

I am grateful to the noble Baroness for her response and for generously saying that support for this initiative in preparing people for the world of work is shared across parties. When we are dealing with some of the most vulnerable people in the country, it is important that, as far as possible, such agreement exists.

The noble Baroness referred to domestic violence. Again, I preface my remarks by welcoming the fact that she acknowledged that the Government had taken this very seriously and it was of great concern. We do not believe it is necessary to put an easement for domestic violence into these regulations. The draft regulations are flexible enough for advisers to apply the policy when appropriate. The income support guidance will reflect the position in jobseeker’s allowance and universal credit by stating that when a person satisfies the policy requirements, they are eligible to receive the easement, which includes deferring interviews and not setting mandatory work-related requirements. Providing the domestic violence easement in guidance mirrors the current approach taken for claimants who are victims of domestic violence and abuse who are entitled to old-style employment and support allowance.

We believe that these regulations are broadly enough worded for that to be taken into account as a good reason why certain requirements may not be met. We do not think it is necessary to put it in the regulations, as has been requested. But in response to Stephen Timms in the other place, my colleague Esther McVey, who is the Minister responsible for this area, has said that she will issue guidance in this area to the workplace advisers. I hope that will go some way towards reassuring the noble Baroness on this point.

The noble Baroness asked what would happen if the coach made a claimant do something despite them being subject to restrictions. The requirement to undertake activity when subject to domestic violence would be a matter of good cause to be considered, and would also be subject to appeal if that was something that was disputed.

[Baroness Sherlock]

I just want to be sure that I have understood this correctly. Three questions occur. First, why would the Government use as their comparator the position in old-style ESA rather than JSA or universal credit—the creature of their own invention, which they have just introduced? What is the difference between somebody on universal credit and somebody on income support? Secondly, will the Minister clarify that the guidance he has just referred to will be for a 13-week easement? That was the question asked by my right honourable friend Stephen Timms. Thirdly, if a lone parent who had suffered domestic violence was then inappropriately asked to engage in work-related activity, she could appeal, but would her benefits be sanctioned in the mean time, and how long does the average appeal take? What would happen to her while she was trying to sort that out?

[Lord Bates]

While I am getting some guidance myself, I will move on to some of the other points that the noble Baroness raised. She asked: if childcare is not available, is this an excuse not to undertake a work-related activity? We have no power to mandate claimants to place their children in childcare in order that they can undertake work-related activity. Claimants may also restrict their availability for work-related activity to times when they do not have childcare responsibilities. However, claimants cannot use the unavailability of childcare as a reason for not undertaking work-related activity. Even with the ability to restrict their availability, the requirement to undertake work-related activity remains. Claimants must accommodate this requirement or face the possibility of sanction. Claimants would therefore need to be reasonable about what they could do, which may involve taking up the offer of free childcare. If a claimant fails to comply with work-focused interview or work-related activity requirements, the regulations prescribe that the availability of childcare must be taken into account in determining whether that is a good cause, although it is not determinative of good cause in itself.

The noble Baroness asked about comparisons with jobseeker’s allowance and universal credit and the limit of 90 minutes’ travel time to and from the place of interview. A 90-minute travel time to work in each direction applies to those claimants who are expected to look for, and be available for, work. It does not apply to lone parents affected by this change, not does it apply to claimants on employment and support allowance. Any work-related activity which a claimant is required to undertake must be reasonable, taking the claimant’s personal circumstances into account, including the time that it would take for the claimant to get there. When determining what is reasonable, matters such as the availability and practicality of using public transport, the location of work-related activity and childcare responsibilities must be considered. Guidance will be updated to ensure that advisers are aware of this and take account of claimants’ individual circumstances.

Another question was about what support the group could get from the flexible support fund. The flexible support fund can be used in a number of ways, including paying for travel and replacement adult or child care to enable lone parents to undertake training, attend interviews or start work.

On why we use comparator old-style ESA, not JSA or universal credit, the JSA easement is for jobseekers. The ESA easement is in guidance. We will consider the need to place this in regulations.

17:30

[Baroness Sherlock]

I thank the Minister. I urge him strongly to take the question of domestic violence back to his colleagues and to think again. I take the Minister’s line as possibly a hint that Ministers may indeed be doing that; I hope very much that I have not overinterpreted it. I look forward to hearing some more information about that. I do not think that the distinction between someone being a jobseeker or not seems to be a good reason why someone who has suffered domestic violence should be treated any differently. If one is coming out of that circumstance, the ability to look for a job, whether mandated to do so, or just to prepare for it, would both seem to be of comparable difficulty and ought to be treated similarly. I look forward to hearing some good news on that before long.

I want to clarify a couple of the Minister’s other points as I may have misheard them. When this matter was discussed in another place, the question of childcare—particularly the position of someone whose child was not in nursery having to use informal childcare—my understanding was that the Government’s position was that the additional childcare offer for two and three year-olds is an offer, not a requirement. I understood the Minister to say that, effectively, a lone parent would not be able to use the fact that he or she might not have access to any suitable childcare as a reason not to engage. Therefore, if they could not find anything else, they would have to take that offer up, whether they wanted to or not, or have their benefits sanctioned. Can the Minister clarify that?

On travel time, I am quite surprised to find that there is no limit. Can the Minister at least reassure the Committee that the guidance will say that one should not be expected to travel for three hours each way to do a brief interview or course? In a sense, the point of having a timeframe is that it is a time limit. If that time limit applies for a job, why would it not apply to a course or some other thing that the department might require the lone parent to do? Can the Minister reassure the Committee that there will be some limit, or some guidance, at least, given to decision-makers as to what a reasonable limit would be?

[Lord Bates]

On that point, we can safely say that that limit is consistent across JSA and ESA, and therefore the 90 minutes would continue to be the restriction. The whole point of this is to encourage an engagement to prepare people for their place of work, and therefore there is a degree of flexibility on both sides. On whether the 13-week easement in the case of domestic violence would still apply, the answer is yes.

On whether that guidance is still being formulated, of course, we introduce regulations and I would like to think that where we have had drawn to our attention certain lacunae in the regulations, particularly where they affect vulnerable people, we have shown a willingness to pause and look carefully at that. I am sure that when the guidance is issued, that will provide an opportunity for that to happen.

[Baroness Sherlock]

I thank the Minister for his graciousness in allowing me to intervene. There was one more issue, which was that of parents of children aged 5 who have not started school and are not legally required to receive full-time education, and why that easement was not in the regulations. I suspect the answer may be patterned on some of his previous answers.

[Lord Bates]

I wonder whether the noble Baroness will bear with me and allow me to write to her on that specific point. I will also seek to follow up on some of the other points which have been raised. I understand the point and want to give an accurate response as opposed to a rushed or hasty one. I am very grateful to the noble Baroness for the interest she has shown in this change.

I hope that I have set out for the Committee the matters behind the regulations and have responded to the issues raised by noble Lords. Therefore, I commend these regulations to the Committee.

Motion agreed.

Occupational and Personal Pension Schemes (Automatic Enrolment) (Amendment) Regulations 2014

Tuesday 11th March 2014 Grand Committee

Motion to Consider

17:36

Moved by

[Lord Bates]

That the Grand Committee do consider the Occupational and Personal Pension Schemes (Automatic Enrolment) (Amendment) Regulations 2014.

Relevant document: 21st Report from the Joint Committee on Statutory Instruments

[Lord Bates (Con)]

My Lords, I am pleased to introduce this draft instrument, which was laid before the House on 3 February 2014. I am satisfied that it is compatible with the European Convention on Human Rights. The instrument makes amendments to two of the 2010 automatic enrolment regulations. These are technical amendments but the consequences of the changes are not insignificant. Broadly, they seek to ensure two things: first, that employers using good-quality career average pension schemes are able to do so without any unnecessary impediments; and secondly, that all employers using hybrid pension schemes under automatic enrolment are treated alike in terms of phasing in minimum contributions.

First, I will set out the reasons for the more substantial changes to the regulations, which relate to the revaluation of benefits in career average pension schemes. To be used as a qualifying scheme for automatic enrolment, in addition to satisfying the quality requirements for defined benefits schemes, a career average pension scheme is required to revalue accrued benefits by at least a minimum level while the member is in employment. This is so that the value of the benefits is given a degree of protection against the effect of inflation. Final salary schemes do not need this revaluation in service because historically salaries have tended to at least keep pace with, if not outstrip, inflation.

The minimum level required by the regulations is an annual increase by reference to the general level of price inflation—either the retail prices index or consumer prices index—up to a ceiling of 2.5%. There are problems with this requirement, which, without the amendments we are proposing today, would prevent good-quality career average schemes from being used as qualifying schemes. Schemes that revalue accrued benefits by reference to the change in average earnings rather than prices cannot guarantee that they will meet the minimum level required going forward, so would currently be excluded from qualifying by regulations.

The amendments would allow a longer-term view to be taken. Schemes in the scenario I have described—those that revalue by the change in average earnings or potentially by reference to another measure—will not be excluded from being qualifying schemes so long as the scheme’s funding and statement of funding principles assume that revaluation will be at or above the minimum in the long term. This provides consistency within regulations with schemes that revalue by reference to a discretionary power where funding assumptions can already be considered. It also allows schemes maximum flexibility over the method of revaluation they use, so long as it can be assumed from the scheme’s funding that the minimum level will be provided.

New public service career average schemes could have been excluded from qualifying under the current regulations; for example, if they revalue by average earnings. The new schemes are, of course, of sufficient quality to be used for automatic enrolment, and revaluation in service for all the schemes concerned will be by at least the change in prices or earnings uncapped. New public service schemes that revalue by reference to the planned annual Treasury order are explicitly provided for. If they revalue at the rate specified in the order, they will not be prevented from being a qualifying scheme. Explicit reference was needed in this way because such schemes are not able to consider funding assumptions in the same way as funded private sector schemes, which are required to have a statement of funding principles or an equivalent.

The technical issue regarding hybrid schemes was brought to our attention last year by stakeholders. We are grateful to members of the Society of Pension Consultants for raising it. Employers using hybrid schemes that provide money purchase benefits are intended to be able to phase in contributions during the transitional periods under automatic enrolment. The policy aim here is to allow employers to stagger their costs in the initial years of the workplace pension reforms. However, currently, where the money purchase element of hybrid schemes is certified against one of the sets of alternative requirements, schemes have not been able to do this. Schemes that certify against one of the sets of alternative requirements do so because, for example, the definition of pensionable pay in the scheme is not the same as qualifying earnings. The policy intention is that they be treated just the same as those schemes that explicitly meet the quality requirement. The amendment would ensure that hybrid schemes are able to phase in contributions regardless of how they demonstrate that they meet the money purchase quality requirement. This means that all hybrid schemes will be put on the same basis going forward. I commend this instrument to the Committee. I beg to move.

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for that explanation and I do not propose to detain the Committee long on this order.

For many years Governments of all complexions have looked at ways to encourage the UK workforce to save for their retirement. There have been several changes to pension legislation but none as big as the Pensions Act 2008 and the pension reforms that will affect every employer in the UK. Since October 2012 new regulations require every employer in the UK to enrol automatically their eligible workers—which will be almost everyone—into a workplace pension scheme.

I want to say how much I appreciate that this Government have given such strong support to auto-enrolment, which was begun by the previous Government but taken forward by the present one. We also welcome the Government’s policy intent in these regulations to allow schemes providing career average salary benefits to be used as qualifying schemes for the purposes of automatic enrolment. This is a positive step and has the support of the Opposition. The Opposition will continue to support the Government to ensure that auto-enrolment is a success and the move to ensure that both average salary benefits schemes and hybrid schemes are a part of auto-enrolment is also positive.

[Lord Bates]

I am grateful to the noble Baroness, Lady Sherlock, for that support. Auto-enrolment is very much a success story. The credit for the figures that are coming in transcends parties and Governments. It is also very encouraging for people providing for their retirement. With that support, I commend the regulations to the Committee.

Motion agreed.

Financial Assistance Scheme (Qualifying Pension Scheme Amendments) Regulations 2014

Tuesday 11th March 2014 Grand Committee

Motion to Consider

17:44

Moved by

[Lord Bates]

That the Grand Committee do consider the Financial Assistance Scheme (Qualifying Pension Scheme Amendments) Regulations 2014.

Relevant document: 22nd Report from the Joint Committee on Statutory Instruments

[Lord Bates (Con)]

My Lords, I am satisfied that these regulations are compatible with the European Convention on Human Rights. The Financial Assistance Scheme provides financial assistance to members of certain occupational pension schemes who have lost a significant part of their pensions as a consequence of their scheme winding up or being underfunded. Generally, the FAS is limited to schemes that began to wind up before 6 April 2005. This is because the Pension Protection Fund deals mainly with schemes with insolvent employers from that date. However, schemes have been discovered which, for various reasons, fall between the two schemes: they do not qualify for the PPF, but they cannot get access to the FAS. There has been a long-standing principle that schemes should enter the PPF only if they have been subject to all the protection provisions such as funding and employer debt, and have been subject to the PPF levy. Nevertheless, successive Governments have accepted that it is not reasonable to leave members with neither assistance from the FAS nor compensation from the PPF simply because the qualifying events did not happen in a specific order. These regulations deal with one of these situations.

In order for a scheme to qualify for entry to the PPF there must be a qualifying insolvency event on or after 6 April 2005 relating to what is known as the “statutory employer”. To be such an employer, you must employ at least one active member of the scheme. In 2009, a scheme applied to be considered for the PPF. However, it was discovered that while the employer attached to that scheme did become insolvent in 2009, it was not the statutory employer. On further investigation it was found that the actual statutory employer became insolvent in 2002, before the PPF was established. Unfortunately, as this scheme did not begin to wind up until 2009, it is also unable to look to the FAS for help. Rather than leave the members uncovered, the Government have decided to extend the coverage of the FAS to encompass this scheme and any other scheme in these circumstances. That is what these regulations do.

Specifically, the regulations extend the FAS qualifying conditions to cover schemes which began to wind up between 23 December 2008 and before these regulations come into force, where the employer ceased to be a statutory employer before 10 June 2011, and where the employer became insolvent before 6 April 2005. These dates may appear to be very specific and perhaps I should explain why they have been chosen. The first condition of winding up between 23 December 2008 and before these regulations come into force reflects the fact that schemes which commence wind up before 23 December 2008 due to an insolvency event prior to 6 April 2005 are already catered for in the FAS regulations. The second condition is that the employer must have ceased to be a statutory employer before 10 June 2011. This date is the date that we announced our intention to make the extension. It was important to limit the potential scope of the extension in this case to prevent any incentives for employers to break links with schemes that they were supporting. The third condition of the insolvency event occurring before 6 April 2005 prevents overlap with the PPF qualifying conditions.

I hope that I have explained that these regulations are designed to ensure that members receive assistance from the FAS and I commend them to the Committee. I beg to move.

[Lord McKenzie of Luton (Lab)]

My Lords, perhaps I may put two brief questions to the Minister. There is no impact assessment attached to these regulations, but my recollection is that the FAS is funded from the public purse and not, as is the case for the Pension Protection Fund, from the levy. It may be that it is just de minimis in the scheme of things because we are dealing with only one identified scheme at the moment. However, I would be interested to know what the costs of this in terms of additional FAS spending might be. Perhaps the Minister might take this chance to update us on what the annual ongoing costs of the FAS currently are. Can the Minister also clarify for me, in relation to the particular scheme that has been identified, whether it had been paying the protection levy? If not, why was it outside of that?

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for his explanation and my noble friend Lord McKenzie for his, as always, insightful questions. I am very pleased to see the Government’s ongoing support of the Pension Protection Fund set up by the previous Labour Government. The PPF has made a substantial difference to people’s lives. As regards schemes including Woolworths, MG Rover and Turner and Newall, the members would all have had much lower pensions had it not been for the PPF and the Financial Assistance Scheme. I also welcome the Government’s continued support for that scheme.

I would like to ask a couple of specific questions. First, I recognise that the Minister is trying to close a specific loophole and obviously the changes relate to a particular case. I must confess that the Opposition are therefore unsighted on some aspects of this. Following on from the question of my noble friend Lord McKenzie, can he explain a bit more about the Government’s thinking in deciding to plump for the FAS as opposed to the PPF, rather than leaving the members of a scheme ineligible for either, because that would seem to be the key question?

Secondly, obviously, the Government have not brought forward an impact assessment for these regulations. The Explanatory Note was helpful in explaining the long gap between the consultation process and these being brought forward, but will the Minister confirm that there is a timescale for further consolidation of the regulations on which the Government consulted in 2011, and that an impact assessment will be brought forward to accompany those changes?

[Lord Bates]

I am grateful for those questions. In terms of context, we are talking about a specific scheme with a number of members—the George and Harding pension scheme. To answer the point made by the noble Lord, Lord McKenzie, the scheme had not been contributing to, or paying, the PPF levy and therefore was not able to claim under that procedure. Therefore, we are changing the relevant dates so that we do not break the contributory principle of the PPF but ensure that financial assistance is made available. The noble Lord, Lord McKenzie, is as astute as ever and I am sure that the noble Baroness, Lady Sherlock, as a former adviser in Her Majesty’s Treasury, will also be aware that Her Majesty’s Treasury did seek to have some idea of what the impact would be on the Exchequer. The estimated full cost of the FAS contribution is £600,000, which comes out of the Exchequer over time because, obviously, that will be the way that people will be compensated as and when the funds will need to be drawn down. That is also the reason for the specific dates because we are trying to cope with a specific scheme rather than giving an open-ended commitment. Having demonstrated this, I hope that we can point to the fact that, should similar gaps in certain schemes arise in the future, we will look very carefully at them without giving any cast iron guarantee.

[Lord McKenzie of Luton]

Can the Minister clarify whether the £600,000 is the net present value?

[Lord Bates]

That is the net present value of the cost of the scheme. Annual ongoing cost differs depending on the schemes taken in. I do not know how helpful that is but we try to be as fulsome as we can. Has the relevant firm been paying the protection levy? I have covered that point but that does not mean that it gets entry into the scheme. It was thought that the employer supporting the scheme was a statutory employer. I think that is the point we are dealing with here—the definition of a statutory employer. It was realised that it was not only after investigation. When will we consolidate the FAS regulations? As noble Lords know, there is a great deal happening in the pensions area, to be continued on Centre Court tomorrow, I think. This requires the department to prioritise its resources. The consolidation of the FAS regulations remains on the department’s work plan but I cannot give a definite date as to when the draft consolidation regulations will be laid before Parliament. I am grateful for the probing questions I have been asked. The noble Baroness, Lady Sherlock, looks as though she wants to come back in.

[Baroness Sherlock]

I thank the Minister for those answers but just want to push a little bit more on consolidation. Is there a difference in principle with how long one might wait after consulting before consolidating legislation? I am glad things are on the departmental work plan, but I gather it is rather a busy work plan at the moment and would be grateful for any hints. The other question I asked is whether, whenever that happened, an impact assessment would be brought forward at that point.

[Lord Bates]

I think I will probably need to write to the noble Baroness on those two points, again to ensure that we get absolutely the right answer. They are good questions and we want to make sure we get a correct response. I am grateful to the noble Baroness and the noble Lord, Lord McKenzie, for raising their concerns. I commend these regulations to the Committee.

Motion agreed.

Committee adjourned at 5.55 pm.

House of Lords

Tuesday 11th March 2014 Lords Chamber

Tuesday, 11 March 2014.

14:30

Prayers—read by the Lord Bishop of Peterborough.

Health: Care Homes

Tuesday 11th March 2014 Lords Chamber

Question

14:36

Asked by

[Baroness Pitkeathley]

To ask Her Majesty’s Government whether they have any plans to abolish the practice of payment of retainer fees to general practitioners for providing services to care homes.

[Baroness Jolly (LD)]

My Lords, my honourable friend the Minister of State for Care and Support has written to the chief inspector of general practice and to the chief inspector of adult social care to ask them to consider this issue. Let me be clear: GP practices should ensure that any services provided to care homes for which a retainer is charged are not those currently provided under their contract with NHS England. NHS England is responsible for ensuring that the terms of the GP contract are being met.

[Baroness Pitkeathley (Lab)]

I thank the Minister for that reply, but does she agree that, since all patients in care homes are, as she says, entitled to NHS services anyway, to charge them for an enhanced service and then not provide it is actually fraudulent? Moreover, it causes a great many problems in the NHS as well. If an old person is not adequately treated in the care home, that often results in unnecessary admission to hospital through A&E, unnecessary distress for the older person and unnecessary cost for the NHS when they could have been treated simply and quickly in the care home had the GP been doing a proper job. Will the Government take further action on this?

[Baroness Jolly]

The noble Baroness is right, and the Government have made clear their commitment to improving care for vulnerable old people. As I said in my Answer, any GPs who provide services should do so free of charge, and any money paid by care homes to practices should be for something over and above that. The sort of thing that we might be thinking of is assistance with training or possibly helping out with something like a health and safety audit, but certainly not basic NHS care.

[Baroness Brinton (LD)]

My Lords, there is a huge disparity in the fees paid by care homes and a variation in the services that they receive from GPs. Given the evidence of arbitrary levels of retainer fees and variability in the definition of “enhanced services”, can my noble friend tell your Lordships’ House what the Government are doing to prevent what appears to be double-charging?

[Baroness Jolly]

It certainly does appear to be double-charging, and the department is working with both CQC and NHS England to get to the bottom of it. Guidance is in the process of being written and disseminated.

[Baroness Finlay of Llandaff (CB)]

Can the Minister inform us whether consideration is being given to the model of nursing home medicine as a distinct specialty, combining the best of general practice with the best of community geriatrics? This was developed in the Netherlands to provide nursing home medicine care and intermediate-level care, and it has been shown to drive up the standards of care available to those with multiple co-morbidities and frailty.

[Baroness Jolly]

Certainly. I cannot give chapter and verse on the particular instances the noble Baroness outlines but we are more than aware that proper care in care homes actually helps to drive down inappropriate hospital admissions. Out-of-hospital care can also be applied. That is an enhanced service under the new GP contract.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I refer noble Lords to my health interests. There appear to be two different issues from the work by Care England. First, some GPs are charging nursing homes for work that ought to be provided free at the point of use. Secondly, other GPs are calling services “enhanced services” when they are no more than the normal services that should be provided free of charge. Will the noble Baroness say a little more about what action should be taken? As this appears to be fraud, as my noble friend has stated, should this not be a matter for referral to the police?

[Baroness Jolly]

In the first instance, rather than referring it to the police, NHS England needs to find out exactly the extent of what is going on. The whole business of enhanced services is slightly confused because under the new GP contract there are several enhanced services that would be appropriate within a care home which should not be paid for. Also, “enhanced services” is used as a generic term to imply some sort of value added. Maybe we need to think about how we use language to better differentiate.

[Baroness Gardner of Parkes (Con)]

My Lords, today I had a letter through the House of Lords system on contacting your Member, or whatever it is called, which was referred to me by some other Member of the House. It is about a 91 year-old dentist in a care home who knows that he needs dental care. He has been referred to the community service and told that he must wait 16 weeks for an appointment. Of course, that is very hard. What is the relationship? The National Health Service for services in the care homes should be not only medical but dental.

[Baroness Jolly]

Dental services are provided by NHS England, and community dental services fall into that area. In the first instance, I would probably contact my local CCG and ask it to talk to the local NHS England on its patch.

[Lord Foulkes of Cumnock (Lab)]

My Lords, will the noble Baroness or one of her colleagues in the Department of Health arrange to meet Alex Neil, the Scottish Health Minister, to discuss the position there and what we can learn from each other?

[Baroness Jolly]

In the world of care there is a lot to learn from everybody. There are probably regular conversations with NHS Scotland and NHS Wales. The noble Lord shakes his head. I will go back to the department and suggest that such a meeting might be a possibility.

[Lord Mawhinney (Con)]

My Lords, given that most people in care homes are either paying to be in the care home or the local authority is paying for it, will the Government consider making it a requirement that all care homes have to tell those who are funding it how much, if any, of the fee is as a result of so-called enhanced GP services?

[Baroness Jolly]

Certainly none of the fees should be towards enhanced GP services. That is rather the point that the Question asked by the noble Baroness outlined. What needs to happen is that NHS England must look at it quite seriously to ensure that no GPs are sending a bill to any care home on their patch for delivering services they should be providing freely.

Justice: Cautions

Tuesday 11th March 2014 Lords Chamber

Question

14:44

Asked by

[Baroness Gardner of Parkes]

To ask Her Majesty’s Government how many offenders received multiple cautions in the past year; and what plans they have to review the guidance to the police on the use of cautions for serious crimes.

[The Minister of State, Ministry of Justice (Lord Faulks) (Con)]

My Lords, of the 181,000 offenders cautioned in the 12 months ending September 2013, 9,700—that is, 5%—had received a previous caution in the preceding year. The Government recently announced amended guidance for police forces on the use of cautions, following the conclusion of the Review of Simple Cautions, published on 14 November 2013. We are now legislating, in the Criminal Justice and Courts Bill, to restrict the use of repeat cautions. The Government are clear that cautions should not be used where a criminal has received a caution or conviction within the previous two years, in the absence of exceptional circumstances.

[Baroness Gardner of Parkes (Con)]

I thank the Minister for his reply. How effective does he think the present caution is? The young offender programme, led by the National Grid, has successfully trained more than 2,000 people to be good employees in good jobs in the past 10 years. Bearing this in mind, is there a place, in the case of less serious crimes, for early intervention before a criminal conviction, to help those under caution—particularly young people—through mentoring or courses such as those that are used with driving offences, where I understand that the courses are offered to prevent the need for further cautions or prison sentences?

[Lord Faulks]

My Lords, there is a range of available options. For example, there is a youth conditional caution, where a caution can have conditions attached. These conditions must be rehabilitative, reparative and punitive; punitive conditions can include unpaid work and a financial penalty. However, the most widely used community sentence for those under 18 is a referral order which has a clear basis in restorative justice. A youth rehabilitation order, which can include as many as 18 different requirements, is also an alternative to custody.

[Baroness Hamwee (LD)]

My Lords, does the Minister agree that what is important, as well as the aspects he has shared with the House, it that there should be consistency across police forces in the use of cautions?

[Lord Faulks]

I do agree with my noble friend. The Ministry of Justice has hitherto given administrative guidance but, in order to provide transparency and clarity for both the police and public, we are legislating. Clause 14 of the Criminal Justice and Courts Bill sets out restrictions on the use of cautions and makes quite clear the circumstances in which cautions are appropriate, to encourage the very consistency to which the noble Baroness refers.

[The Lord Bishop of Peterborough]

My Lords, the Minister mentioned restorative justice. Does he agree that, alongside limited use of cautions, a greater use of restorative justice interventions could be of great help, both in reducing reoffending and in supporting victims?

[Lord Faulks]

My Lords, I agree with the right reverent Prelate. There is a great case for restorative justice in appropriate cases, and it is indeed an option for it to be part of the conditional caution. There is increasing approval in this House and outside of its use.

[Lord Beecham (Lab)]

My Lords, with a nod to the next Question from the noble Lord, Lord Horam, given the apparent increase in the use of cautions by police forces in the past few years, might it be desirable for the Office for National Statistics to look at the figures for reported crime and for cautions? People may well be suspicious that the recorded crime statistics are depressed by the use of cautions.

[Lord Faulks]

My Lords, the House may be interested to know that the use of out of court disposals rose significantly between 2003 and 2007 but has fallen significantly since 2007 and continues to fall under this Government. The use of cautions is at its lowest point for almost 30 years, and nearly at half the level seen in 2007. Furthermore, crime continues to fall. Recorded crime is down by more than 10% under this Government and the independent Crime Survey for England and Wales shows crime is at its lowest level since records began.

[Lord Foulkes of Cumnock (Lab)]

My Lords, would the Minister, or one of his colleagues in the Ministry of Justice, arrange to meet with Kenny MacAskill—

[Noble Lords]

Oh!

[Lord Foulkes of Cumnock]

Well, I am consistent. Will he meet the Scottish Justice Minister to look at the position in Scotland and see what we can learn from each other?

[Lord Faulks]

I am sure—as was the Minister who previously answered Questions—that there is a great deal to be learnt from Scotland. Should the opportunity arise, I will certainly take advantage of it.

[Lord Phillips of Sudbury (LD)]

Might the decline in statistics—I hate even to question it—be down to the almost complete absence of the bobby on the beat?

[Lord Faulks]

I do not accept that. The use of cautions is widespread. One of the reasons we are making absolutely clear on the statute book the circumstances in which cautions should be used is that it will enable local scrutiny of the use of cautions. Indeed, this will enable the much maligned police commissioners to look at the figures, to be answerable to the community and to ensure that the statistics remain at a satisfactory level.

Economy: Inflation

Tuesday 11th March 2014 Lords Chamber

Question

14:50

Asked by

[Lord Horam]

To ask Her Majesty’s Government what assessment they have made of the latest report of the Office for National Statistics on the consumer prices index and its impact on household budgets.

[Lord Newby (LD)]

My Lords, the consumer prices index measure of inflation decreased on an annual basis to 1.9% in January 2012 from 2% in December. This is the lowest rate since November 2009, which is good news for families and businesses. In its December economic and fiscal outlook, the Office for Budget Responsibility forecast average nominal earnings growth to rise more rapidly than CPI inflation this year.

[Lord Horam (Con)]

I wonder whether my noble friend saw the excellent speech by the chairman of the Engineering Employers’ Federation last week in which he said that he thought now was a good time for employers to give a good wage increase to their employees to make up for the restraint they had exercised during the years of Labour’s great recession. Does he agree with this sentiment? Does he further agree that it would be even more excellent news if, in the Budget next week, the Chancellor thought it fit to raise, once again, the income tax threshold, thus reinforcing our commitment to the low paid?

[Lord Newby]

My Lords, I agree with the EEF on the desirability of wage increases, particularly for those on lower incomes and not only, as has happened all too frequently in recent years, for those on the board. I also agree that raising the income tax threshold further is an excellent way of helping people on modest incomes and I hope that we can do more of it.

[Lord Barnett (Lab)]

My Lords, I take it that the noble Lord agrees with Robert Peston of the BBC—I am not referring to my dear and noble friend Lord Peston—who said that, on the figures given by the Government, the change from RPI to CPI would cost £83 billion over 15 years. That would mean substantial losses in retirement for pensioners in private sector businesses, not those in the public sector. This is a substantial loss in revenue for those people. What plans do the Government have to compensate those pensioners in retirement, who will suffer considerably?

[Lord Newby]

My Lords, the noble Lord knows that this Government and the previous Government decided to move to CPI from RPI as a measure of inflation simply because we believe it is a more appropriate way of measuring inflation. It is as straightforward as that. Everyone who is affected by CPI rather than RPI will be affected by a better measure of inflation.

[Lord Lawson of Blaby (Con)]

My Lords, while the operational independence of the Bank of England on monetary policy is of the first importance, would my noble friend consider saying gently to the governors that their authority would be greater and the effectiveness of monetary policy enhanced if they were to talk rather less about matters that are market sensitive?

[Lord Newby]

There is a tension as far as the Bank of England is concerned. If it does not say anything it is criticised for not giving any indication of what it thinks; and when it does say something, it is criticised for saying what it thinks. That is an inevitable problem. On balance, it is better to have the governor and other members of the senior management of the Bank of England explaining what they think is happening to the economy, what they are doing and why they are doing it.

[Lord Sugar (Lab)]

My Lords, the average family has paid £1,350 extra in VAT since it was increased by the Government. I am hearing noises from the Government that the economy is supposed to be looking up a little. If that is the case, would the Minister consider asking the Chancellor to revert back to a rate of 17.5% in his Budget next week?

[Lord Newby]

The noble Lord is not alone in hearing that the economy is improving: the economy is indeed improving. The British Chambers of Commerce increased their growth forecast to 2.8% only yesterday; the growth in permanent jobs, according to KPMG, was last month at its second highest since records began. As far as VAT is concerned, the noble Lord is asking the Government to spend somewhere in the region of £12 billion to £14 billion extra. We have not eliminated the budget deficit: the only reason we have what now looks like sustainable growth is that we have a credible path for the public finances and interest rates and we are not going to throw that away.

[Baroness Humphreys (LD)]

My Lords, the items which undoubtedly have the greatest and most disproportionate impact on the household budgets of those on low incomes are energy bills. Will my noble friend give some indication as to what action the Government can take to reduce these bills for low-income households?

[Lord Newby]

My Lords, as my noble friend is aware, we took action in the autumn to reduce household energy bills. In the longer term, the key aim is to ensure that we have sustainable energy supplies; the Government’s energy policies are designed to do just that.

[Lord McFall of Alcluith (Lab)]

My Lords, the figures indicate that in four years’ time, in 2018, typical living standards for a household will be 3.5% lower than they were in 2007, before the financial crash. Does that not indicate that the Government have to be open and honest about the situation, so that, in the Budget next week, the Chancellor will bring forward policies that will assist hard-working families and households in this country who feel the pressure ever so much as the months go past?

[Lord Newby]

My Lords, the GDP is going to be higher in the second half of this year than it was before the crash. We are going to have more people in work. These are the two key determinants of how the average household is going to feel. In the mean time, by taking actions such as freezing fuel duties and increasing the threshold for income tax, we have given some relief to tens of millions of individuals and we intend to maintain those policies.

[Lord Higgins (Con)]

My Lords, in respect of my noble friend Lord Lawson’s question, is it the Government’s view that forward guidance by the Governor of the Bank of England on interest rates was helpful or not?

[Lord Newby]

Yes, my Lords, the Government welcomed the decision by the current governor to issue forward guidance last August. We continue to support the concept of forward guidance.

[Lord Davies of Oldham (Lab)]

My Lords, the Minister might try to wear his rose-tinted spectacles, but he knows the facts. He knows that ordinary working people on average have lost £1,600 a year since this Government came into office. He knows that families, through the Government’s tax and benefit changes, have lost £891 pounds a year and he knows from the most recent statistics that zero-hours contracts have increased threefold since this Government came into office. By heavens, they have a lot to do to make up for those deficits.

[Lord Newby]

There is a question over whose deficit we are talking about here. The noble Lord knows that since the 2010 election, employment has increased by 1.3 million; unemployment is down by 152,000; there are more women in work than ever before; and every single survey for the future suggests higher income, more people in work and a growing economy. That is a record to be proud of.

[Lord Spicer (Con)]

This has all become a little bit distorted. Does my noble friend agree that inflation is a bad thing and that keeping it down is the rightful priority of the Bank of England?

[Lord Newby]

Indeed, my Lords. Whatever the forward guidance of the Bank of England, it does not detract from its basic purpose, which is to keep inflation at or around 2%. That is the position we are now in and we believe that it will be the position going forward.

[Lord Grocott (Lab)]

My Lords, I hope I will not alarm the Minister too much if I say that I have been listening carefully to what he has been saying and, if I had come from outside, I would find it impossible to answer the question as to whether the Minister was a member of the Liberal Democrat party or the Conservative Party. Bearing that in mind, does he agree that, come the next general election, if people want a Conservative Government, the best thing to do is to vote Conservative; if they want a Labour Government, the best thing to do to vote Labour; and if they are thinking of voting Liberal, that is probably a waste of time?

[Lord Newby]

The noble Lord knows that I speak from the Dispatch Box for the Government. I am sure that he will not be surprised to know that I am extremely proud of this Government’s record on the economy.

Employment: Universal Jobmatch

Tuesday 11th March 2014 Lords Chamber

Question

15:01

Asked by

[Baroness Sherlock]

To ask Her Majesty’s Government what steps they are taking to ensure that all vacancies advertised on Universal Jobmatch are genuine.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con)]

The vast majority of employers post genuine jobs, and we do not hesitate to take action against those who do not follow our rules. We regularly monitor Universal Jobmatch to ensure that accounts comply, including that vacancies are genuine. If there is any cause for doubt, we will remove the vacancies until we have investigated. We continuously improve the service and are working with the provider to enhance our validation of employer accounts and vacancies.

[Baroness Sherlock (Lab)]

I thank the Minister for that very reassuring Answer. How does he then explain the fact that the media are reporting that a third of a million jobs on that website are ghost jobs? The Government were warned. The site has been found to be vulnerable to hackers. In the National Online Recruitment Awards, it won the wooden spoon for being a,

“mongrel of a recruitment website”,

that,

“commits almost every online recruitment crime, and then some”.

Channel 4 investigated last month. It found that one in 50 jobs had been placed by one man in Coventry. He could not prove that they existed, but it turned out that he made money every time he passed on a CV to a real agency. Channel 4 found out that, of the 600,000 jobs there, 118,000 were from one door-to-door catalogue company. This is a disgrace. You could not make it up. Will the Minister tell the House two things: first, when did the Government first know that there were problems with ghost jobs on this site; secondly, can he assure the House that no jobseeker has been sanctioned for refusing to apply for a ghost job or a job which they feared was there just to harvest their personal details?

[Lord Freud]

My Lords, Universal Jobmatch has revolutionised the service of Jobcentre Plus. It is a transformative service. We have many people registered on it on a paperless basis. Half a million employers are on that service. As I said, we monitor it the whole time. We are now looking at 179 employers who may be in breach of our conditions and will suspend them if they prove in breach. I can assure noble Lords that no jobseeker will be sanctioned for not applying for a job that does not exist.

[Lord German (LD)]

My Lords, this website is crucial to people seeking to find a job, and many tens of thousands of people have found jobs as a result of it, but obviously there are concerns about people’s personal information and the security of it. What action has been taken against hackers, particularly those who seek to spread individuals’ personal information in their CVs to people to whom they have not applied for jobs?

[Lord Freud]

We have a thorough communication exercise to jobseekers to make sure that they look after their information online, just as anyone else needs to be careful with their information online, and we are currently looking to enhance our service through Universal Jobmatch to make sure that we do not have this kind of problem.

[Lord Davies of Stamford (Lab)]

My Lords, there is quite a lot of anecdotal evidence, certainly in Lincolnshire and I suspect elsewhere, that it is disproportionately difficult for older people in their 50s and early 60s to get jobs through the jobcentre system. In the event that there is evidence of age discrimination against applicants, it is very unreasonable to expect the applicant, who may be a man or woman without means or with very slender means, to pursue his or her own legal redress. Is it the Government’s policy in such circumstances to pursue the case and if possible to prosecute? Have there been any prosecutions for age discrimination instigated by or supported by the department?

[Lord Freud]

The Government do not support age discrimination of any kind, particularly in looking for jobs and we are vigilant to make sure that people do not experience such discrimination.

[Lord Lea of Crondall (Lab)]

Does the noble Lord recognise that some jobs advertised at the minimum wage do not get the minimum wage—not because of national insurance but because of deductions of commission or something like that? What steps are the Government taking to investigate practices along those lines?

[Lord Freud]

That is one of the specific areas in which our terms and conditions rule out going on to Universal Jobmatch. We will look at those jobs and employers and suspend them and withdraw those jobs.

[Baroness McIntosh of Hudnall (Lab)]

My Lords, the Minister did not answer my noble friend Lord Davies on the subject of prosecutions for age discrimination. Does he have that information?

[Lord Freud]

I do not have to hand how many prosecutions we have made, but I will of course write when I know that information.

[The Earl of Listowel (CB)]

My Lords, as more people are being encouraged into work, is the Minister aware that unidentified mental health needs are becoming more apparent? How can these people be helped to address their mental health needs so they can benefit from the services of the kind he is discussing?

[Lord Freud]

The greater intensification of the relationship between the jobcentre and claimants as a result of universal credit and the claimant commitment has begun to unpick some of the challenges and barriers that claimants face. One of those, clearly, is mental health and we are undertaking an exercise to look at how we can help such claimants. That is not easy. No one in the world has managed to achieve this. We are currently looking at doing a series of pilots to find out how best to help people with mental health problems.

Access to Justice Act 1999 (Destination of Appeals) (Family Proceedings) Order 2014

Tuesday 11th March 2014 Lords Chamber

Crime and Courts Act 2013 (Family Court: Consequential Provision) Order 2014

Justices’ Clerks and Assistants Rules 2014

Motions to Approve

15:07

Moved by

[Lord Faulks]

That the draft orders and rules laid before the House on 27 January be approved.

Relevant document: 20th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 3 March.

Motion agreed.

Non-Domestic Rating (Levy and Safety Net) (Amendment) Regulations 2014

Tuesday 11th March 2014 Lords Chamber

Motion to Approve

15:07

Moved by

[Baroness Stowell of Beeston]

That the draft regulations laid before the House on 27 January be approved.

Relevant document: 20th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 3 March.

Motion agreed.

Co-operative and Community Benefit Societies Bill [HL]

Tuesday 11th March 2014 Lords Chamber

Third Reading

15:08

Bill passed and sent to the Commons.

Offender Rehabilitation Bill [HL]

Tuesday 11th March 2014 Lords Chamber

Commons Amendments

15:09

Motion on Amendment 1

Moved by

[Lord Faulks]

That this House do agree with the Commons in their Amendment 1.

1: Clause 1, leave out Clause 1

[The Minister of State, Ministry of Justice (Lord Faulks) (Con)]

My Lords, I start by expressing my regret that I did not have the benefit of being on the Front Bench when the Bill was last considered by your Lordships’ House. It was of course my noble friend Lord McNally, whom I am glad to see is in his place, who had the privilege of debating the Bill with noble Lords. I have, however, read the Official Report of those debates very carefully. I am struck by the expertise and passion displayed by all noble Lords who spoke. I have myself sat as a recorder so I have some experience of the issues that offenders face when trying to turn their lives around. However, my own experience pales in comparison with the experience and careers of many who have been involved in the justice system who have spoken during the passage of the Bill. I am sure that the collective experience of all those noble Lords will inform today’s debate, just as it has informed previous debates.

Commons Amendment 1 returns to the issue that dominated discussion when the Bill was last in your Lordships’ House: the Government’s reforms to probation under the Transforming Rehabilitation programme. It may help if I briefly summarise those reforms. Their aim is to reduce our current high reoffending rates. Almost half the offenders released from our prisons, and around one-third of those serving sentences in the community, offend again within a year, and of course prisoners released from short custodial sentences, who have the highest reoffending rates, receive no statutory supervision at all. I pay tribute to the excellent work that is already done by the probation staff with offenders subject to supervision in the community. They do important and difficult work. However, I am sure all noble Lords will agree that there is much more that we could do to address the causes of that reoffending, whether that is housing, physical and mental health issues, substance abuse or literacy, numeracy or employment skills.

It is unfortunately the case that we have to do so in the context of financial constraints on government spending. We spend around £800 million a year on probation services, a significant part of the Ministry of Justice’s budget and one that cannot be exempt from these pressures. We have a choice: either to make cuts to the current system, which of course does not provide supervision to the short-sentenced offenders who need it most, or reform the system so that our resources can provide support to all the offenders who need it. The current Lord Chief Justice put this challenge well last week when he said:

“The starting point is that we must be radical in our thinking”.

The Transforming Rehabilitation reforms rise to that challenge. We are seeking to draw on the experience and expertise of a wider range of organisations from across all sectors to support low-risk and medium-risk offenders in the community. We want to give probation staff working in those organisations much greater autonomy to support offenders as they see fit and to encourage innovation. We are creating a new National Probation Service—the NPS—directly to manage all offenders with a high risk of causing serious harm, together with any other sexual or violent offenders subject to multi-agency public protection arrangements—MAPPA.

The efficiency savings that these reforms will generate will be reinvested in two major prizes that many noble Lords have long argued in favour of. The first is a through-the-gate system of support for everyone released from prison, so that the same organisation is working before their release and afterwards. The second is the extension of supervision after release to short-sentenced prisoners, which is at the heart of the proposals in the Bill and which will allow us to support some of the most prolific offenders in our criminal justice system.

It was clear at Second Reading and beyond that many noble Lords wanted a greater chance to scrutinise these changes that the Government are making to probation services. That is what I understand to be the purpose of the amendment tabled on Report by the noble Lord, Lord Ramsbotham, which Commons Amendment 1 would remove. I remind noble Lords that the Secretary of State’s powers to commission services from a wide range of organisations already exist in the Offender Management Act 2007. Those powers, which both Houses approved, do not provide for parliamentary scrutiny of the services that the Secretary of State commissions. Nevertheless, I understand why the House might have taken the position that it did in June last year. At that stage, while the Government had announced their intention to commission probation services from a wider range of organisations, we were still developing the detail of how the new system would work. Nine months on, the position is different.

15:15

The Government have published extensive information about the reforms. That includes full details of how the operational processes in the new system will work, a list of organisations that have passed the first round of the competition for rehabilitation contracts, and draft contracts. Copies of all those documents—they form a significant pile: I have them here—have been placed in the Libraries of both Houses. I have also discussed the detail of the reforms with a number of noble Lords in recent weeks and offered opportunities to meet to noble Lords of all parties. That information addresses, I hope, the many questions that noble Lords raised about the reforms in May and June last year. Let me summarise some of the most important of them now.

First, there is the crucial issue of engaging with and supporting those already working in probation—what the noble Lord, Lord Ramsbotham, described at Report stage as “taking people with you”. We are working closely with probation trusts to make sure that probation staff have the information and support they need while these changes take place. We are committed to treating staff fairly during this period of transition. I am pleased to say that we have reached agreement with the trade unions and the employers’ side over a national agreement for staff transfer, which will protect the terms and conditions of staff transferring to new rehabilitation companies or the NPS.

There is then the important issue, raised at Second Reading and beyond by the noble Lord, Lord Beecham, and my noble friend Lady Linklater, of making sure that rehabilitation providers and the NPS work effectively together. In particular, there is the need to avoid offenders whose risk category changes falling through the cracks. In the autumn of last year we placed in the Library details of how the new system will prevent that. Once an offender has begun to be supervised in the community by the NPS, that offender will continue to be supervised by it, even if their risk of serious harm decreases later in their sentence. Responsibility for low or medium-risk offenders whose risk escalates to high will transfer to the NPS, but the transfer will happen in a way that minimises the risk of destabilising the offender. For example, the rehabilitation provider will generally continue to be involved in delivering some interventions to the offender, even though the overall case responsibility has moved.

There is the important issue of the skills and training of staff supervising offenders, raised in particular by the noble Lord, Lord Ramsbotham. The NPS will continue to use the probation qualifications framework—PQF—to ensure staff competence. For the new rehabilitation companies there will be a contractual requirement to maintain a workforce with appropriate levels of training and competence. They can use the PQF or—for cases where there might be an excellent member of staff such as an ex-offender, who has gained skills from a non-traditional route—an alternative framework to evidence that. I am sure noble Lords will agree that we should not lose particularly valuable experience just for the sake of a qualification, provided that those who are responsible are satisfied that those who are unqualified have the ability, experience and skill to perform the relevant function. The Government are also supporting probation representative bodies to establish an independent probation institute, an idea raised by my noble friend Lord Marks at Second Reading. That will help to promote the development of innovation and share good practice across those working in the NPS and the rehabilitation companies.

There is also the need, raised by my noble friends Lord Dholakia and Lady Hamwee, to ensure that we have a diverse market and that bigger organisations do not crowd out smaller voluntary or community groups. Thirty bidders have now been shortlisted as lead providers, covering 50 organisations from a wider range of sectors, including 10 probation mutuals. A further 800 organisations have expressed an interest in playing a role as part of the wider supply chain, with more than 550 voluntary sector organisations among that number. We have published a set of market stewardship principles that demonstrate our commitment to ensuring that these organisations are treated fairly by larger providers.

Finally, there is the question, raised by the noble Lord, Lord Ponsonby, in Committee and on Report, of how the new rehabilitation companies will take part in existing statutory and non-statutory partnerships. I can now confirm—this is set out in clause 3 of the draft contract which he may well have seen—that they will be contractually required to participate in the relevant statutory partnerships. For example, companies will be designated as a responsible authority under Section 5 of the Crime and Disorder Act 1998 and as such will be subject to the associated statutory requirements with regard to community safety partnerships. They will also be contractually required to engage in non-statutory partnerships aimed at protecting the public from harm and safeguarding vulnerable adults.

All of what I have just described is set out in extensive detail in the documents the Government have provided to both Houses. It builds on nearly 20 hours of debate on this Bill in your Lordships’ House and 26 hours in the other place, much of which focused on the detail of the Transforming Rehabilitation reforms, and there were four votes in the other place in support of the reforms. We will, of course, continue to make more information available to Parliament as the reforms progress. This will include final versions of contracts, a revised version of probation national standards and details of the organisations which are successful in winning contracts.

I conclude by stressing again that the position now is different from that in June last year when the House last debated this issue. The probation reforms are being implemented under powers that both Houses agreed as long ago as 2007 and which are settled law. While those powers do not require parliamentary scrutiny, the Government have stuck to their commitment to provide extensive information to both Houses about the reforms. We have acted on the concerns raised when the Bill was last in this House, for example, through supporting the establishment of a probation institute and by publishing a consultation on the statutory and non-statutory partnerships that rehabilitation providers should be required to participate in. The elected House has made its support for the reforms clear.

At Second Reading, the noble Lord, Lord Ramsbotham, drew on the words of Caliban in “The Tempest”, fearing—inverting his words, I think—that the Transforming Rehabilitation reforms would,

“give hurt and delight not”.—[Official Report, 20/5/13; col. 664.]

I cannot promise the House a thousand twangling instruments, but if I may turn to the words of Prospero to conclude my remarks, I hope I can,

“promise you calm seas, auspicious gales, and sail so expeditious”.

I hope that the commitments and reassurances I have set out today have calmed the tempest of noble Lords’ concerns and urge the House to agree with Commons Amendment 1.

Amendment to the Motion

Moved by

[Lord Ramsbotham]

As an Amendment to the Motion on Amendment 1, at end insert “, and do propose Amendment 1B in lieu of the words so left out of the Bill”.

1B: Insert the following new Clause—“Probation servicesProbation reform: Parliamentary approval(1) No alteration or reform may be made to the national structure or the provision of probation services unless the proposals have been laid before, and approved by resolution of, both Houses of Parliament.(2) For the avoidance of doubt, nothing in section 5 of the Offender Management Act 2007 (power to establish probation trusts) shall be interpreted as granting power to the Secretary of State to make structural changes to probation provision unless the conditions of subsection (1) have been met.”

[Lord Ramsbotham (CB)]

My Lords, I have to admit that I have been seriously concerned about the Transforming Rehabilitation agenda ever since the White Paper and this Bill were published at the same time as its announcement in the Queen’s Speech last May. That may seem perverse when, like, I suspect, every other noble Lord, I also admit that I have no quarrel with the Government’s intention to do something about the group of offenders with the highest reoffending rate—namely, those sentenced to less than a year’s imprisonment without any subsequent community supervision—the previous Government’s announced plan for doing this having proved unaffordable.

My concerns began with the consultation that preceded the White Paper. As in too many other Ministry of Justice consultations, I have come across no one whose contribution has been acknowledged, nor any evidence of any notice being taken of any expressed concerns. Following that sham, neither House has been given an opportunity to debate the White Paper because its agenda is not the subject of this Bill. When I tabled an amendment asking for that to be rectified, the noble Baroness, Lady Hamwee, pointed out quite rightly that my wording was faulty because the Offender Management Act 2007, already quoted by the Minister, which the Government claim allows them to alter probation provision in any way they wish without consulting Parliament, did not mention “the probation service” but rather “probation services”. I pressed my amendment to a vote because I thought that my error could easily be corrected and I hoped that the House would understand that I was seeking an opportunity for it to exercise its constitutional duty. Secretly, I hoped that the Justice Secretary, if he was as confident of the viability of his proposals as he made out, might be happy to debate them, first, because he would feel that he need not fear any query and, secondly, because of the legitimacy that such a process would give them. I hoped in vain. Since then, an increasingly long list of subsequent happenings have served to increase my concern that the Ministry of Justice would be unable to deliver what was being announced without prejudicing the ability of probation services to protect the public.

When the previous Government brought before Parliament their proposal to change responsibility for the national structure and provision of probation services from counties to trusts in the 2007 Act, I remember the debates about what would happen should a probation trust fail. Ministers said that the Bill gave the Justice Secretary the power to dismiss a failing trust and make other arrangements for the provision of probation services in its area without having to come back to Parliament. However, that power was limited to “a probation trust”—words used several times in Section 5 of the Act, quoted by the Minister in another place. I submit that for the Government to press ahead asserting that “a” means “all” is a wilful misinterpretation of the Act, not least because, had there been any indication that that was what the previous Government had intended, I am sure that the point would have been vigorously debated in this House.

My concerns are not about the intention behind the Bill but the practicalities of delivery and the denial of any opportunity for either House to scrutinise them. If the proposals go horribly wrong, the public, whose protection will suffer, will rightly blame Parliament, and I can just imagine the ministerial blame-dodging that will follow—not least following the leaked internal Ministry of Justice assessment of the high risk of launching something so far-reaching but as yet unproven, a disclosure resented but still not refuted by the Government. Parliament has every reason to seek discussion of its potential position. As the late Paul Goggins MP, a former Prisons and Probation Minister, said in the other place on 3 December:

“Our electorate expects us to ask questions, not simply to take at face value the kind of proposals that are being offered to us”.—[Official Report, Commons, Offender Rehabilitation Bill Committee, 3/12/13; col. 225.]

To prove that I am not alone in my concerns—some of which are set out in a list of 50 questions that I have given to the Minister and will willingly share with any noble Lord who is interested—I will cite a number of recent happenings. Last November, three chief executives of probation trusts took the bold step of writing open letters to the Justice Secretary asking for delay. Last December, the Chief Inspectors of Prisons and Probation published a damning report on offender management in prisons, doubting whether it could deliver future NOMS expectations. They believed that the current position was no longer sustainable and should be subject to fundamental review as part of the transforming rehabilitation agenda. That was without the addition of offender supervisors employed by community rehabilitation companies responsible for sentence planning both in their contract package areas and in resettlement prisons.

The Justice Select Committee in the other place, having already drawn attention to the inability of the Ministry of Justice to manage contracts—witness high-profile cases involving G4S and Serco—said in its interim report on the proposals, dated 14 January that,

“there is a lack of systematic information about the risks they might encounter during implementation and full operational conditions and the steps that they will take to mitigate those risks. They also do not appear to have devised clear contingency plans in the event that the competition fails to yield a viable new provider for a particular area … We wished to examine the affordability of the reforms … but we have been unable to determine whether sufficient funding is in place on the limited information that the Government has provided. Furthermore, a key question for the Government is how the focus on reducing reoffending will be maintained while the restructuring of the market that is necessary to create the desired efficiencies takes place”.

15:30

The lack of funding information includes how much it will cost to supervise 50,000 short-term prisoners per year. The Government refuse to publish their estimate because they claim that to do so would inform those who might be bidding for contracts. Informed estimates by people who know the current cost of supervision are that it will cost between £75 million and £130 million a year. Is it realistic to expect that such a sum will be raised from the competition to provide probation services? If it is, it appears to anticipate a pretty hefty profit margin. Bearing in mind its track record and how long such things take, is it also realistic to expect the Ministry of Justice to satisfactorily let 21 community rehabilitation company contracts in two months? Four days ago, the National Audit Office, in a landscape review of probation, said:

“Although organizational changes can be implemented relatively quickly, implementing deeper changes to working practices, system developments and cultures will take months and years. In addition, if the system is to achieve real efficiencies and planned cost savings, then departments, agencies and local criminal justice partners need to implement as a priority an agreed and coherent plan to address problems with the flow of information”.

On information flow, the National Probation Service currently operates some 2,000 separate IT programmes which require co-ordination. What faith can one have in the ability of the Ministry of Justice to do that, when only last Thursday it announced the collapse of a £1 billion tagging scheme launched by the Justice Secretary last August as the start of a revolution in how we supervise offenders? The preferred contractor said in response that the Ministry of Justice had wanted the development of a project that did not yet exist and went on to say:

“The MoJ have been an extraordinary diversion of much of our resources for two years now and this cannot continue, and we are excited for the prospects of the business now we are free of this unproductive and frustrating relationship”.

Finally, I will quote from one of the many letters I have received from senior probation officers, who are now leaving in worrying numbers:

“It would be a deep personal bereavement to leave probation behind, but both the new National Probation Service and community rehabilitation companies look so bleak, so awful in prospect, and neither constitute that to which I committed my career and loyalty”.

I am most grateful to the Minister for two long meetings with him and the Prisons Minister, and for the amount of paperwork that he has given to me and placed in the Library. However, I must say that while long in aspiration, it is short on proof that the proposed revolution is achievable without damaging the provision of probation. For example, quality assurance arrangements are still missing from the draft services agreement, as is ICT and data management from the latest version of the target operating model. However, far more serious is the total lack of any evaluation of how long it would take to implement all these reforms were they not under the cosh of the admittedly aggressive timetable imposed by the Justice Secretary.

Surely someone, somewhere was told to work out such details. Before taking and announcing decisions, responsible Ministers, convinced that their changes are for the better, must know how long it will take to bring about sustainable change. The facts that there are so many questions about the achievability of the published timings, and that the Justice Secretary has already been forced to impose one two-month delay, suggest that this essential process was ignored.

I end with another quotation from the late Paul Goggins, who on 26 November said:

“Surely it would be sensible for the Minister to unite this Committee and unite the House by running a pilot, with the support of the Opposition, to prove whether or not he is right. If the Justice Secretary is right, and the result is that the pilot works, we would all have to hold up our hands and accept that”.—[Official Report, Commons, Offender Rehabilitation Bill Committee, 26/11/13; col. 33.]

Hear, hear to that. However, because public protection is as stake, not only would it be sensible, but it is essential that the Government’s proposed changes to the structure and provision of probation services are united with confirmation of their achievability by allowing them to be scrutinised and approved by both Houses. I accept that that will entail delay, which could have been avoided had the agenda been debated at the start. However, surely measured evolution is a more responsible approach to a duty to protect the public than the avoidable upheaval of an enforced unproven revolution. I beg to move.

[Baroness Browning (Con)]

My Lords, at this stage in the Bill, I shall be brief. I feel strongly about the probation reforms being proposed by my noble friend, but particularly those for offenders who have served less than 12 months. I say this having served in the Home Office and having spent some time looking at some of the rehabilitation programmes needed for problems such as drugs and alcohol. Many people suffering from these problems had been in custody and—particularly those with drug addictions—had contributed to the figures that we cite in this House. I quote only one: 58% of adult offenders released from sentences of less than 12 months reoffend. Governments in the past have not addressed this. There is rightly a lot of focus on those who have served longer sentences for more serious crimes. However, if my noble friend now wants to address reoffending after shorter sentences, we have learnt in both the Ministry of Justice and the Home Office that if you can find the methodology to address something at the beginning, when it is low level, you can prevent it becoming something much worse. Although in this House we often talk in terms of statistics, we are talking about lives. We are talking about the lives of victims, and in this case about the life of someone after discharge from prison. Finding a way in which we can bring people from short prison sentences to taking their place in society and reducing the recidivism that often goes with such offenders is worth while.

I listened carefully to the noble Lord, Lord Ramsbotham, whose experience we all respect. It seemed from what he said that a lot of information unavailable when this legislation was introduced is now available. However, he has concerns about government contracts. He particularly mentioned those issued by the Ministry of Justice, but I think that over many years people in both Houses would put a question mark over their confidence in government contracts of many kinds. We have all seen that they do not always deliver as promised. As somebody who has served on the Public Accounts Committee for six years, I am only too well aware, having dug into many government contracts, just how badly some of them have turned out. That applies to Governments of all political persuasions.

I wonder if there is some way, in responding to the concerns of the noble Lord, Lord Ramsbotham, and to the House, in which my noble friend can make sure that a light shines on those contracts that can be followed by Members of this House after the legislation is passed. Clearly, payment by results is built into these reforms, which in itself will give a very factual account of how successful they are. However, if I have understood the noble Lord, Lord Ramsbotham, correctly, he is looking for something that happens earlier than that, before we get to the end of the process. He is looking for reassurance that the process itself is as robust as it can be.

I say respectfully to the noble Lord that preventing the legislation progressing as it should is not perhaps the only option that the Minister could consider in making sure that those in this House who are interested in not only the outcome but the process have an opportunity to have much more information available to them. That is not to say that any process will be perfect from start to finish, but I think the noble Lord is trying to say to the Minister that we should pick up any problems earlier rather than later. If that is what he is saying, it is a very valid point to make. Could my noble friend find a way to look at this so that, if the legislation progresses as my noble friend has outlined, we could be particularly careful that the process that is followed is transparent, notwithstanding the fact that, as we all understand, commercial confidentiality is in place when contracts are initially awarded?

I hope that my noble friend will accept from me that I believe that this is a very worthwhile reform for the probation service. Many years ago, long before I came into politics, I undertook a course with the probation service and worked with it in a voluntary capacity. As a Member of Parliament, I had a great respect for, and often had to call on, the probation service on behalf of constituents. So I am somebody who values its work greatly, and I would hate to see the proposals for reform that my noble friend is bringing to the House today in any way undermined by a delay in their implementation. I am sure that he will have heard what the noble Lord, Lord Ramsbotham, said, and I hope that he will find a way through this so that the House can proceed. I believe that these reforms are much needed and that the sooner they can start, the better.

[Lord Ponsonby of Shulbrede (Lab)]

My Lords, I, too, wanted to concentrate, like the noble Lord, Lord Faulks, on what has changed since a very similar amendment was debated on 25 June last year, having been moved by the noble Lord, Lord Ramsbotham. It is worth recalling that, as the noble Lord, Lord McNally, pointed out, on that vote not a single Cross-Bencher supported the Government’s position. Since then, the Bill has been through the House of Commons, the vote has been reversed and the Government have done a lot of work, as I acknowledge.

In the debate on 25 June, the noble Lord, Lord Ramsbotham, concentrated his remarks on a leaked government risk register. Since then, a second risk register has been published by the probation service in November 2013, which spoke of the likelihood that the government programme would fail to be,

“delivered either in scope or within the timescale set by ministers”.

It should be noted by noble Lords that, if it were not for the work of the noble Lord, Lord Ramsbotham, and my noble friend Lord Beecham, there would be no debate at all on the timetable for the privatisation of the probation service. It is through their initiative that we are having this series of debates in the first place.

The noble Lord, Lord Ramsbotham, quoted the Justice Committee chairman, Sir Alan Beith, so I shall not repeat that. We have also seen the Government slit the timetable, which was alluded to by the noble Lord, Lord Ramsbotham.

What I really want to say is that, although we have heard about the changes that the Government have made and about some reports, what we have seen is a sense of increasing alarm in the probation service and among probation officers themselves. The noble Lord, Lord Faulks, is shaking his head, but I, like many noble Lords, have an 18-page document from the National Association of Probation Officers which goes through the concerns that it has in detail. These concerns are now more specific than they were, as it has been able to respond to the Government putting more flesh on the bones. There is no doubting the sense of alarm among probation officers.

I believe, as I am sure do all noble Lords, that the probation service deals with some of the most dangerous people in our country and some of the most vulnerable people in our society, and that everyone who joins the probation service does so with the best of motives. We have heard about the concerns that they have about their careers changing course and being asked to take on responsibilities that they did not expect. This House owes it to the probation service to review the timetable and to follow the recommendations of the noble Lord, Lord Ramsbotham, so that we can be satisfied that we are not wrecking a probation service that has served us so well over many years.

15:45

[Baroness Linklater of Butterstone (LD)]

My Lords, I, too, will say a brief word in support and admiration of the probation service, with which I have worked for most of my professional life. I know how important that infrastructure has been, across the country, to the provision that has been given to people who have been at risk of, and have come out of, offending. It will still exist in a minute way, as 20% of the staff will be left to deal with the most challenging offenders. Thank God for that. The 80% who will no longer be part of this organisation will be reborn through the CRCs, which I hope will be able to do as constructive a job as has been done in the past.

This is a moment to recognise that we are seeing the passing of an organisation that has served this country well for the past 100 years, with a breadth and depth of experience that only time can give. I am sad about that and I want to pay tribute to the service that it has given. I hope that in the brave new world it will still have enough of a voice to allow it to serve us as well as it has in the past.

[Lord McNally (LD)]

My Lords, first I declare an interest as chairman designate of the Youth Justice Board.

I am breaking a promise that I made to myself not to intervene in MoJ legislation after leaving the Front Bench. However, I do so here because of unfinished business. When I spoke last, I warned the House that the amendment tabled by the noble Lord, Lord Ramsbotham, was defective, and so it proved to be. I also promised to keep the House fully informed about developments. I was mightily impressed by the amount of documentation that was provided in both Houses. I congratulate my successors Simon Hughes and the noble Lord, Lord Faulks, on the progress that has been made, as outlined in great detail by the noble Lord in his opening remarks. The truth is, as the noble Lord, Lord Faulks, said, there have been many hours of parliamentary debate on these matters, and the idea that somehow they have been smuggled past Parliament is plainly absurd. Hours of ministerial time have been afforded to the critics. The noble Lord, Lord Ramsbotham, acknowledged that in written submissions and meetings Ministers have been willing to discuss his concerns in detail.

I say to the noble Baroness, Lady Linklater, that it is not about our admiration or otherwise for the probation service. I am in awe of the work that probation officers do, and will continue to be so. However, we face a situation in which we could stay where we are, with the probation service as it is but probably facing increased pressures on expenditure and capacity to deliver—the same old same old—or we could embark on radical reforms that would release the resources to carry through proper reforms. The progress we have made is truly remarkable—30 bidders covering some 50 organisations, including 10 probation-based mutuals. This really is the dawn of a new era. I disagree with the noble Baroness; this is not the passing of the probation service.

I remember in the early part of this century following the debates about the probation service. What happened to it? It was turned into the poor relation of NOMS. In these reforms we are going to have a national probation service for the first time: the head of probation will have direct access to the Secretary of State, whereas NOMS does not even have a probation officer on its senior board. That is real progress for the probation service. We are going to have, as initiated by my noble friend Lord Marks, what I hope will become a chartered institute for probation, which will promote professional standards and best practices, not just in the National Probation Service but across the sector. As has been said several times—and each time everyone says how much they agree with it—we are going to have for the first time through-the-gate supervision and treatment for those sentenced to less than 12 months, a group populated mainly by young offenders and women offenders. That is another bonus.

I understand the concerns; it is very easy, when opposing things, to roll out the risks. We are dealing with a risk business. There are risks at the moment in the way in which we deal with very difficult, violent and vulnerable people but I do not believe that those risks are such that we should throw aside the opportunity radically to reform this sector to achieve the supervision we want for those with sentences of less than 12 months, which goes to the heart of reoffending.

It may be embarrassing to remember, but this legislation is being carried through under Labour’s 1997 Act. I followed the reports as the legislation went through: Labour carefully never guaranteed to the probation service that there would be no further reforms after 2010. I suspect that it was because Labour Ministers then realised that to open the door to reform of the under-12-months sector, get those crucial reforms and provide through-the-gate treatment, they also had to reform the probation system itself. That is why, when Labour proposed treatment for those with sentences of less than 12 months, the proposal had to be abandoned because it could not be afforded under the system at the time.

That is the reality. I have to say to the noble Lord, Lord Ramsbotham, that the delay that he wants offers no way forward. It would deliver an unreformed service exposed to further cuts with, as I said, no supervision for those with sentences of less than 12 months and no through-the-gate service.

The Government have put forward a package. Since the Second Reading of this Bill, I have presented it to this House as a package of probation reform where a whole range of voluntary and charitable organisations, as well as private sector providers, have brought forward these new ideas and initiatives into the sector to tackle reoffending and to promote rehabilitation. It is a reform of which I am proud. It is an honourable package offering protection for the staff and a chance to enhance the influence and professional standing of probation. It takes into account the protection of the public, and I have seen the testing of the various structures in that regard.

I agree entirely about the problem of government contracts but it is a problem that is not new to this Government or to the MoJ. A lot more work needs to be done and I believe it is already under way in the Cabinet Office, which is looking at upskilling public services to manage public contracts. However, that is not a reason for delay. These reforms open the door to new ideas, new methods and new technologies from the charitable, voluntary and private sectors, while preserving what is best in our probation service.

I will vote against the amendment proposed by the noble Lord, Lord Ramsbotham, and I will vote with the Government because I am willing to vote for the means as well as the ends. I urge all noble Lords who support those ends to join me in the Lobby today.

[Lord Beecham (Lab)]

My Lords,

“the Government claim that the aim of the Bill is to reduce reoffending ... Its real objective is to secure more centralised … control over the commissioning of offender management services. It centralises everything on the Home Office and removes responsibility from local people who govern the Probation Service”.—[Official Report, 17/4/07; col. 126.]

Those words were uttered from the Opposition Front Bench by no less a person than the noble Baroness, Lady Anelay, in a previous incarnation, when the House was debating the Offender Management Bill.

Nor was she the only opposition spokesman to criticise that measure on similar grounds. David Davis, who in the words of a famous movie character was “once a contender”, said that that Bill was,

“about more centralised Government control over offender management … a recipe for disaster”.—[Official Report, Commons, 28/2/07; col. 1027.]

A second reason for opposing that Bill was that it focused on “yet another organisational restructuring”. Those are interesting observations because, in a characteristically cavalier and disingenuous way, Ministers—until now not yet including the noble Lord, Lord Faulks—are now seeking to rely on provisions which they opposed and which they now deliberately misrepresent.

The Government chose to undertake this massive and highly controversial reorganisation of the award-winning probation service without seeking any degree of parliamentary approval. If it had not been, as my noble friend Lord Ponsonby remarked, for the efforts of the noble Lord, Lord Ramsbotham, and, if I may say so, my efforts, there would have been no debate about the issue before the noble Lord, Lord McNally, who is continuing to promote the cause from the Back Benches in his new capacity. The whole House will join me in wishing him well in his new role, and I have every confidence that he will carry out that role very satisfactorily.

The Government pretend that the Labour Government’s intention—and the noble Lord, Lord McNally, has hinted as much today—was quite consistent with what the present Government are doing. Yet the then Home Secretary, who is now my noble friend Lord Reid, said explicitly:

“If, at some future point, any Government were to decide that the time was right to open up that area of work”—

that is, offender management—

“they would have to make the case to Parliament, and Parliament would have the final say”.

He went on to describe it as a,

“double lock meaning that any movement after that will require a vote of both Houses”—[Official Report, Commons, 28/2/07; col. 1024.]

That is something that the present Government have been at pains to avoid.

16:00

In addition to this critical procedural issue, my noble friend Lord Reid was also clear about the policy. He said that the 2006 Bill was about “supplementing” the public sector. He said:

“The public sector already has, and will continue to have, a key role to play in the management and rehabilitation of offenders”.

He pledged that the then Government would maintain their,

“sustained commitment to our probation services”,

and would enable,

“specialist providers in the voluntary, charitable and private sectors to supplement—not supplant—the public sector, where appropriate”.—[Official Report, Commons, 28/2/07; col. 1018.]

The Government wanted to increase, not reduce, local accountability.

By no stretch of even a vivid ministerial imagination could these words, or the legislation which they describe justify the interpretation that has been deliberately and misleadingly applied to them. Caliban’s explanation, if I might revert to “The Tempest”, as the Minister has done, slightly modified, could be applied: “O brave new world that has such legislation in’t”.

We should not be surprised. The Lord Chancellor—, like his predecessor, never knowingly understated, but without Ken Clarke’s knowledge, understanding or respect for the legal system or questions of justice—, frequently implicitly criticises the probation service for high rates of reoffending. In the Second Reading debate in the House of Commons, he acknowledged:

“The probation trusts are currently hitting many targets, but there is one simple reality at the heart of all this: reoffending is currently increasing”.—[Official Report, Commons, 11/11/13; col. 665.]

Of course, he chooses, either deliberately or carelessly, to ignore the fact that this is true of those offenders who are not supervised by the probation service—notably those serving short sentences. We applaud the determination to extend supervision to such offenders, but we are deeply concerned at the way in which the Government propose to tackle the problem—a concern made the more profound by the procedure that they have adopted. They have repeatedly refused to disclose the risk register, but have not denied a leak which asserted that there was an 80% risk of an unacceptable drop in operational performance, nor have they contradicted HM Chief Inspector of Probation’s warning of,

“an increased risk to the public”.

This is no way to treat a matter of high political salience and public concern, a professional and dedicated workforce, or indeed, Parliament itself.

We are now in a position in which the Government have for months been pressing ahead with their ideologically driven agenda, having made it clear that they have no intention of listening to the views of this House, as expressed in the amendment carried last year. They have ignored the criticisms and reservations expressed by a wide range of bodies, from the service itself to the inspectorate and the Justice Select Committee. The original timetable has been extended because of the difficulties encountered. The Government continue to rely on assertion rather than evidence, and they have signally failed to answer many of the questions their policy has provoked, including 50 posed by the noble Lord, Lord Ramsbotham.

The most telling of their failures is that they have failed to pilot the changes—notably the introduction of the payment by results system. Indeed, they chose instead to halt the pilot in the West Midlands and Staffordshire which involved the probation trust commissioning services and working with external providers. Instead they put their faith and public money into organisations with pretensions of having the capability of delivering any kind of service, from welfare administration to prisons, health to IT, despite repeated evidence of their shortcomings and in some cases highly dubious practices, not least in relation to financial matters. It is to those organisations that the Government wish to consign the management of a service, or more accurately 70% of a service, which has to address the needs of hundreds of thousands of individuals every year as well as the wider community, and which has to measure and deal with the risk to public safety that a fluctuating proportion of offenders represents.

It is this very issue of risk, and the change in risk category that has raised such profound concerns. It is still unclear how the binary system which the Government are hell-bent on creating will work in practice—the more so especially since it would appear there will be no requirement for the community rehabilitation companies to train their staff to the standard of the probation qualifications framework, although the Minister said they might do so if they wish, or indeed to any other specific standard.

Major questions arise about the handling of domestic violence issues, work within prisons and how the system of court reports will work, given that this will remain the responsibility of the probation service although, by definition, many of the 250,000 court reports required every year will be for offenders managed by CRCs, not by the probation service itself.

There is also the question of accountability. In the sphere of offender management, we are seeing the development of the same massive, top-down reorganisation which the Prime Minister promised would not be inflicted on the NHS but which the Government nevertheless imposed. Like the nine massive regions of NHS England, we will have six regions for probation and supervision in England and another in Wales, with 21 CRCs, and little or no co-terminosity with other agencies, notably local government and the police. I hope that Liberal Democrat Peers, who thought they had moderated their partners’ proposals for the NHS, will not allow themselves to be taken for a ride for a second time.

In particular, will the service be subject to local authority scrutiny, like the NHS, at local level, or that of combined authorities where these exist? We need to know just how the tendering process is going, how many areas will have competitive, or any, bidders, how many organisations will be allowed more than one contract and precisely how payment by results will work, both in terms of the percentage of the contract price and the timeframe over which results will be measured, as well as what would constitute a failure in terms of the character and number of repeat offences.

We also need to know what is happening to the current staff. How many do the Government think will opt for redundancy—or have already done so—or fail to secure appointments either to the residual service or to CRCs? Is it correct that the Government announced in the week before last a voluntary redundancy scheme with a budget of £35 million, only to withdraw it last Thursday on the grounds that the money is not available?

The whole House will share, indeed applaud, the Government’s objectives in seeking to reduce reoffending and close the gap into which short-sentence offenders currently fall. The noble Baroness, Lady Browning, was speaking to a House which fully supports everything she said about the desiderata in that respect. I invite the House to support the noble Lord’s amendment in seeking to ensure that this important goal is achieved safely, within a measured—not rushed—timescale, properly costed, in a way which recognises the strengths of the existing service and its staff and preserves a significant element of local accountability. The only way to ensure this outcome is to require parliamentary approval for the changes which the Lord Chancellor has been at such pains to avoid and not accept a government fait accompli.

[Lord Faulks]

Before the noble Lord sits down, could he help the House with how he sees the form of the amendment? Does he interpret it as requiring almost any change, of any sort, in the probation service to come before Parliament?

[Lord Beecham]

That is not my interpretation of it. That could have been levied against the amendment originally moved by my noble friend, but this amendment makes it clear that we are talking about a national change to the structure of the service, not every individual detail. It is consistent with the description I have already read to the House—quoting Hansard—from the Home Secretary at the time, about the requirement for parliamentary approval for changes of the very kind that the Government are promoting without having sought such approval.

[Lord Faulks]

My Lords, this has been an excellent and important debate. The noble Lord, Lord Ramsbotham, said that he wanted a debate on the probation service and he has got one. However, there have been a number of criticisms of the Government’s approach. Among other things, they are said to have delayed but then gone too fast. It is said they have not been sufficiently transparent and that the contract management is not sufficiently secure or not prospectively secure. I will deal with some of these criticisms without wearying the House too much. I have dealt with them in a number of meetings and documents sent to noble Lords but, for the convenience of those who may not have had those documents—or had a chance to read them—I will try and summarise some of our answers.

Since my noble friend Lord McNally committed to placing documents in the House Library, we have deposited 12 sets of letters, papers and publications about the reforms, including most recently all the draft contracts for the new CRCs. The noble Lord, Lord Ponsonby, raised the question of how CRCs will interact with statutory and non-statutory partnerships. We published a consultation paper about this and all his concerns are now reflected in the operating model.

Many Peers raised concerns about big private providers outmanoeuvring smaller charities. We have made changes to the number of contract areas to allow for smaller bidders; placed a cap of 25% on market share; engaged with potential tier 2 and tier 3 organisations so that 800 are now registered; and we have decided to accept the suggestion made by my noble friend Lord Marks to set up an independent institute.

It is said that the approach has lacked transparency and there was reference in debate to the risk register. Both this and the previous Government have agreed that there is a strong interest for the Government in having a safe place to formulate and develop policies for extensive reform. To remove that space and to challenge and manage risks internally would risk damaging confidence in the programme and could lead to a culture where risks are not even raised and properly managed through fear of the implications of doing so.

I should emphasise that the risk register is by no means a list of things that will happen, only of things that might conceivably happen if we take no action and we should therefore plan for and mitigate the possibility of happening. That is simply good management. The risks are given an inherent score: the score when the risk is first identified without any controls or mitigations in place, and a current score with controls in place. A target score is also agreed. Risks are reported weekly to the departmental board, and throughout the course of the programme Ministers have been kept closely informed of emerging risks and actions being taken to mitigate them. Programme officials regularly meet Ministers—on average twice weekly—on various aspects of the programme, as well as having close and regular informal contact with Ministers’ private offices.

It is said that there is a lack of clarity about the costing of these reforms. The Cabinet Office and Her Majesty’s Treasury are full members of the programme board before the reforms and attend regular monthly meetings. They have been closely involved with our decision regarding the launch and the invitation to negotiate. The Chief Secretary to the Treasury approved the payment mechanism, the launch of the invitation to negotiate and the outline business case. The programme has been given Treasury approval.

The question of scrutiny was raised. How, the question was effectively asked, will we make sure that the new system is open to public and parliamentary scrutiny? The reform system will be regulated and held to account through a combination of independent inspection, audit and commercial account management. Her Majesty’s Inspectorate of Probation will inspect services delivered by both the National Probation Service and contracted sectors. NOMS will have the right to audit CRC delivery, and the CRC contracts will also allow the National Audit Office access to CRCs’ financial systems where public reassurance is needed.

The audit schedule in the draft contracts, which the NAO approved and commented that it provides far-reaching audit powers, provides NOMS with wide powers of access to information, IT premises and personnel, including emergency audit. The NAO scrutinises public spending on behalf of Parliament and holds government departments to account for the way they use public money by reporting the results of its audits direct to Parliament.

There was a suggestion that staff were not being well managed and that some of them, at least, were reporting to individual noble Lords that they were unhappy with the process of transition which will inevitably happen. We have transition managers working with every probation trust, whose sole role is to be the link between the MoJ and trusts. There are weekly updates sent to probation chiefs; weekly teleconferences are held with senior leaders; testing and pilots of key elements of the programme have been and are taking place; and experts from probation have been seconded to the programme to add their valuable experience.

In addition, the new heads of CRCs have now been appointed and meet on the MoJ’s sounding board, which is helping to manage the transition process. The Secretary of State corresponds regularly with probation chiefs both through letters and via video message. Ministers and the programme management regularly visit trusts and maintain informal contact with probation chiefs throughout the programme.

16:14

The noble Lord, Lord Ponsonby, referred to engagement with the unions. I did grimace slightly because there has been agreement and complete liaison with the unions. Officials meet regularly with the unions—every two weeks—through a specially established forum devoted to discussing the reforms. Alongside the meetings with the forum—which is our formal engagement body—fortnightly meetings with the unions have taken place since September to look specifically at our pensions proposals. Trade union officials have attended a number of workshops, training sessions and meetings with programme officials to look at specific elements of our reforms. Informal discussions have also taken place on a regular basis and negotiations over the national agreement on staff transfer always took place with a departmental representative in attendance. Ministers have regular meetings with unions every eight to 12 weeks.

The matter of local partnerships was raised. As was already indicated, CRCs will be contractually required to participate in the relevant statutory partnerships. I indicated in my opening remarks that Section 5 of the Crime and Disorder Act 1998 means that CRCs will be designated as a responsible authority and will have a contractual duty to co-operate with MAPPA. They will be expected to have in place arrangements that reflect the importance of safeguarding and promoting the welfare of children, and will be designated as board partners for child safeguarding boards. They will be required to support the NPS to ensure the continued effective implementation of both the statutory and probation victim contact schemes and associated statutory responsibilities. They will also have to follow the established good practice in relation to discretionary victim contact, including identifying and providing key information about offenders to NPS staff so that they can communicate this to victims and, if applicable, allow them to make representations. The same goes for non-statutory partnerships, such as the IOM with the police: CRCs will be contractually required to engage in non-statutory partnerships with working arrangements aimed at protecting the public from harm, safeguarding vulnerable adults or potential victims of domestic abuse and promoting service integration. I hope that I can allay any anxiety that may exist in that respect.

There has been, ironically, little criticism of what this Bill is about. The through-the-gate idea—to change the system to allow there to be support through the process of resettlement and beyond—is generally accepted as highly desirable. That is what this Bill is about; it is accepted that it is not just about cutting costs. I know there was some concern that perhaps there might be some perverse incentive for sentences to send people to prison whom they might not otherwise have sent there—a point made by the noble and learned Lord, Lord Woolf, at an earlier stage—because they would then have the benefit of the support that would now be provided. My answer to that very understandable concern is that, of course, no judge or magistrate would send someone to prison unless they had passed the custody threshold. Furthermore, there are a number of sentencing options by way of community orders which would give offenders the same benefits of support without actually having to send them to prison. The judiciary and Sentencing Council are very much engaged and aware of that possibility, so I hope I can allay that fear.

It is difficult to understand why there is apparently—so the noble Lord, Lord Ponsonby, says—discontent among the staff, because a deal has been negotiated with the unions. We have been undertaking negotiations with probation trade unions and the employers’ representatives over a national agreement for staff transfer that will protect the terms and conditions of staff transferring to the CRCs or the NPS. Probation trade unions and the Probation Association, which represents trusts, ratified the national agreement on staff transfer on 29 January 2014. Trade unions have also withdrawn all local trade disputes.

The national agreement offers a very good deal for existing staff, and demonstrates our commitment to fairness by going much further than we are legally required to do. Staff will transfer to the new probation structures with their existing terms and conditions in place. The additional protections set out within the agreement include a guarantee of employment in the new probation structures from 1 June 2014, no compulsory redundancies for a period of seven months following share sale and an enhanced voluntary redundancy period of up to 67.5 weeks. Alongside our negotiations, the programme has put in place a dedicated consultative forum for effective engagement with trade unions and employers’ representatives. We will continue to engage closely with trade unions and employers throughout the transition to the new probation structure.

I want to deal with the anxiety about the pace of these reforms. It is said that they have been going too quickly, although we say that that is not the case. We have drawn significant learning from earlier initiatives and have tested aspects of the reform programme. For example, our experience with the payment-by-results pilots at Her Majesty’s Prisons Peterborough and Doncaster has increased our confidence about designing robust payment-by-results contracts that drive the required behaviours and help generate improved value for money.

There is a suggestion that we should have piloted the scheme further. I gave this answer to the noble Lord, Lord Beecham, across the Dispatch Box when he asked a question. There is a difficulty about providing different sentencing options in different parts of the country. Nevertheless, we of course accept that it is important to pilot the system to make sure that it will work, and that is what we have done. We have engaged extensively with probation trusts to ensure that their operational expertise informs our approach. Twelve trusts have helped shape our policy approach through five test gates, including trusts that have built significant expertise in payment-by-results approaches and new delivery arrangements in preparation for participating in our planned community payment-by-results process. The pilots tested operational systems, including the risk assessment tool and live systems testing.

The noble Lord, Lord Ramsbotham, asked: what is the risk if the market fails and some contract package areas do not have sufficient interest? What will the Government do if no bidder meets the required standard? We have a robust and diverse market: 30 bidders passed the prequalifying process in December 2013, representing more than 50 organisations of various types, including the private sector and potential mutuals. I am sure that a number of noble Lords will be well aware of the explosion of interest and innovation available in all sectors to deal with the apparently intractable problem of rehabilitation. It is most important that we should be able to take advantage of that.

Approximately one-third of the bidders include a potential mutual organisation within their consortium. We have a minimum of three bidders in each contract package area. We will work intensively with bidders during the competition to help them understand our requirements, engage with local stakeholders and understand the issues in their CPAs. We are assessing bids on both quality and price, not simply seeking the lowest-cost provider. In the long term, the best value for money for the taxpayer will come through having rehabilitation providers who can deliver reductions in reoffending.

In the event that there are no acceptable bids in a CPA, we do not need to award contracts in that area. One of the benefits of our approach is that the CRCs will be operating as going concerns in public sector ownership before share sale, and it will be possible for the CRC to continue in public sector ownership for longer if needed, pending further competition.

There was a suggestion that we had not consulted sufficiently. The list of those consulted is very long, so I am very surprised that that was suggested. It included probation trusts, members of the public, voluntary and charitable organisations, local stakeholders, the judiciary, offenders, victims and the market, including private, PCS, trust fund and social innovators and police and crime commissioners.

There are many other points that I could make in response to noble Lords’ comments. I hope that the House will forgive me if I do not answer every point, although answers are contained in all the documents that we have provided.

I am concerned about the nature of the amendment and—to put it this way—at the very least the ambiguity as to what will be required in terms of going before Parliament for even a relatively slight alteration. If that is right—and this is a last-minute amendment—such a provision could bring the probation service to a grinding halt. I know that that is not the intention of the noble Lord but I am concerned that that might be the effect.

I said in my opening remarks that there was a prize to be had in this Bill. We should not lose sight of that prize. Support for offenders released from short sentences, as part of our wider plans to reform the supervision of all offenders in the community, will change the lives of thousands of people. It will reduce the 85,000 crimes that those in this group commit within a year of leaving custody. It will also provide long-overdue support to some of the most vulnerable people in our criminal justice system, who are affected disproportionately by mental health issues, by lack of education or training and by drug and alcohol abuse.

We need to get on with the changes in the Bill to make that difference. I come back to the recent speech of the Lord Chief Justice that I quoted in my opening remarks, in which he said that,

“we simply do not have that luxury of time. The financial imperative that is part and parcel of the recasting of the State does not give us the time to take such an approach”.

We have not rushed this change. However, we must move on. Most of all, we have the need to reduce the number of victims who suffer as a result of our current reoffending rates. I hope that the House will give its support to Commons Amendment 1, just as it gave its strong support to the Bill at Second Reading.

[Lord Ramsbotham]

My Lords, I am grateful to the Minister for the care that he has taken to sum up. I am very grateful to all those noble Lords who have contributed to this short debate. If I may start at the very end of the Minister’s comments, the last thing that we want is to bring the probation service to an end. Probation is far too important a public service to be risked in that way. The very last thing that any ex-Chief Inspector of Prisons would want is a failure to continue to improve the provision of proper services to offenders that enable their rehabilitation into the community and the prevention of reoffending, whether that involves the Prison Service or the probation service.

I listened with great care to all the points the Minister made. If there is just one point I would like to make—because it comes up over and over again and it is inaccurate—it is that to cite the Peterborough experiment in this situation is false. It is not a probation experiment: it is a prison and it is not funded by the companies that are taking the risk. It is funded by social impact bonds. Therefore, it is entirely false to cite it. I wish that that would stop because it distorts arguments.

I accept that there are all sorts of processes that the Minister has described: meetings, papers, discussions and so on. However, that has not been the same from the start. Those who were concerned about the morale and the worry of members of the probation service should think back. The loss of trust and good will in the Government—those were two of the saddest words I heard used by the probation service as to what had happened—was because, in the early stages, and from June onwards, they were not kept informed. Indeed, there were several complaints, when members of staff were allocated either to the National Probation Service or community rehabilitation companies, that they had not been told why they had been allocated. As a soldier, I find that man management is something that has been drummed into me, and I do not regard that as man management. It is extremely unfortunate if you lose the support of those whom you are seeking to lead.

I agree that it is essential that we do something about the reoffending rate, but I am afraid that what the Minister has outlined to the House is, as I said at the beginning, long on aspiration but short on confirmation that this is achievable. I remember a definition of “affordable” that I was taught a long time ago by a former head of the Army for whom I worked. He said, “There are two definitions of affordable: can you afford it, and can you afford to give up what you’ve got to give up in order to afford it?”. I submit that a whole raft of structures dealing with offenders has enabled the probation service to reduce the reoffending rate among the people for whom it is currently responsible, who are being put at risk by what is happening now. I do not believe that the victims and the others to whom the Minister referred can afford to have the degree of public protection reduced.

As the Minister said, the Bill is not really about the subject that we have been discussing. He mentioned the 20 hours in this House and the 26 hours in the Commons on the subject, but in fact those debates were not about this subject; virtually every one of those hours was filled with amendments and questions put down by Members seeking information. They were not deliberate discussions introduced by the Government to explain what was going on. That is why, as I say, the purpose of my amendment is to try to ensure that this particular measure, which has such important public protection involvement, should be given true scrutiny by all the people who feel so passionately about what could and should be done for both offenders and their victims.

I fear that, despite all that has been said, I do not believe that this House could responsibly allow the Bill to go forward at this stage, because too much is still unknown about its actual delivery possibilities. Therefore I wish to test the opinion of the House.

16:33

Division 1

Ayes: 243

---

Labour: 155
Crossbench: 68
Bishops: 5
Independent: 4
Democratic Unionist Party: 1
Green Party: 1
Liberal Democrat: 1
Plaid Cymru: 1

Noes: 263

---

Conservative: 167
Liberal Democrat: 77
Crossbench: 13
Independent: 2

Motion on Amendment 1 agreed.

16:45

Motion on Amendments 2 to 17

Moved by

[Lord Faulks]

That this House do agree with the Commons in their Amendments 2 to 17.

2: Clause 3, page 3, line 2, leave out “an officer of a provider of probation services” and insert “a person”

3: Clause 3, page 3, line 5, at end insert—“( ) In relation to a person subject to supervision requirements under this section following a sentence of detention under section 91 of the Sentencing Act, the supervisor must be—(a) an officer of a provider of probation services, or(b) a member of the youth offending team established by the local authority in whose area the offender resides for the time being.( ) In relation to any other person, the supervisor must be an officer of a provider of probation services.”

4: Clause 5, page 5, line 13, at end insert—

“( ) In subsection (2)(c), omit “if the offender is under the age of 18 years at the date of release,”.”

5: Clause 6, page 5, line 41, leave out “264A” and insert “264B”

6: Clause 6, page 6, line 13, leave out “After that section” and insert “Before section 265 (and the italic heading before it)”

7: Clause 6, page 6, line 14, leave out “264A” and insert “264B”

8: Clause 6, page 6, line 31, at end insert—“( ) In section 249(3) (duration of licence)—(a) for “sections” substitute “section”, and(b) for “and 264(3)” substitute “and sections 264(3C)(a) and 264B”. ( ) In section 250 (licence conditions), omit subsection (7).”

9: Clause 7, page 7, leave out lines 44 and 45 and insert—“(4) “The supervisor”, in relation to the offender, must be—”

10: Clause 10, page 9, line 7, at end insert—“( ) in subsection (4), for “that period” substitute “the automatic release period”,”

11: Clause 12, page 10, line 14, leave out subsection (2) and insert—“(2) In section 64 (release on licence: drug testing requirements)—(a) in subsection (1)(a), omit “for a trigger offence, and”, (b) in that subsection, at the end insert “, and(c) the Secretary of State is satisfied of the matters in subsection (1A).”,(c) after that subsection insert—“(1A) Those matters are—(a) that the misuse by the person of a specified class A drug or a specified class B drug caused or contributed to an offence of which the person has been convicted or is likely to cause or contribute to the commission of further offences by the person, and(b) that the person is dependent on, or has a propensity to misuse, a specified class A drug or a specified class B drug.”,(d) in subsection (2), after “conditions” insert “mentioned in subsection (1)(b)”, and(e) in subsection (3), after “specified Class A drug” insert “or specified Class B drug”.”

12: Clause 12, page 10, line 21, leave out subsections (4) and (5)

13: Clause 13, page 11, line 16, leave out “imposed on the offender’s release” and insert “mentioned in subsection (1)(b)”

14: After Clause 13, insert the following new Clause—“Drug testing and appointments: offenders transferred within the British Islands(1) Schedule 1 to the Crime (Sentences) Act 1997 (transfer of prisoners within the British Islands) is amended as follows.(2) In paragraph 8 (restricted transfers from England and Wales to Scotland)— (a) in sub-paragraphs (2)(aa) and (4)(aa), for “and 64” substitute “, 64 and 64A”, and(b) at the end insert—“(7) Sections 64 and 64A of the Criminal Justice and Court Services Act 2000 (release on licence etc: drug appointments), as applied by sub-paragraph (2) or (4) above, have effect as if any reference to an officer of a provider of probation services were a reference to a relevant officer as defined by section 27(1) of the Prisoners and Criminal Proceedings (Scotland) Act 1993.”(3) In paragraph 9 (restricted transfers from England and Wales to Northern Ireland)—(a) in sub-paragraphs (2)(aa) and (4)(aa), for “and 64” substitute “, 64 and 64A”, and(b) after sub-paragraph (5) insert—“(5A) Sections 64 and 64A of the Criminal Justice and Court Services Act 2000 (release on licence etc: drug appointments), as applied by sub-paragraph (2) or (4) above, have effect as if any reference to an officer of a provider of probation services were a reference to a probation officer.””

15: Clause 15, page 13, line 23, at end insert “, such as restorative justice activities.(7A) For the purposes of subsection (7)(b) an activity is a restorative justice activity if —(a) the participants consist of, or include, the offender and one or more of the victims,(b) the aim of the activity is to maximise the offender’s awareness of the impact of the offending concerned on the victims, and(c) the activity gives a victim or victims an opportunity to talk about, or by other means express experience of, the offending and its impact.(7B) In subsection (7A) “victim” means a victim of, or other person affected by, the offending concerned.”

16: Clause 23, page 19, line 6, at end insert—“( ) So far as sections 20, 21 and 22 confer power to make provision amending or otherwise relating to Schedule 1 to the Crime (Sentences) Act 1997, they also extend to the Channel Islands.”

17: Clause 23, page 19, line 13, at end insert—“( ) The power conferred by paragraph 19 of Schedule 1 to the Crime (Sentences) Act 1997 (power to extend to Isle of Man) is exercisable in relation to any amendment of that Act that is made by this Act.”

[Lord Faulks]

My Lords, in moving Amendment 2, I shall speak also to Amendments 3 to 17 and 19 to 25. Although this is a relatively large group of amendments, most make minor or technical changes to the Bill and I will try to deal with them as concisely as I can.

I will start with the most noteworthy amendments in this group. Amendment 15 focuses on restorative justice. As I said earlier, I know that there is support across the House for the important role that restorative justice can play both in helping victims to move on from crime and in rehabilitating offenders. The amendment makes explicit that rehabilitative activities carried out under a community order, suspended sentence order or post-sentence supervision can include restorative justice. Noble Lords may already have spotted that this amendment is very similar to one originally tabled by the noble and learned Lord, Lord Woolf. Having debated the issue once again in the other place, the Government have been persuaded that it would be helpful to make explicit in the Bill our intention that rehabilitative activities can include restorative justice activities. This reflects the Government’s desire to see much greater use of restorative justice in appropriate cases. I pay tribute to the noble and learned Lord for first raising this issue and I hope that your Lordships’ House will welcome this statutory foundation for the use of restorative justice as part of the rehabilitation offered to offenders.

Amendments 2, 3, 4, 9 and 22 also pick up on an issue first raised in your Lordships’ House, this time by my noble friend Lady Linklater. Together the amendments deal with young offenders who are imprisoned for serious offences as a juvenile but are then released after they have turned 18. The Bill provides that this group of offenders, like others released from short sentences, will receive 12 months of supervision after release. The amendments make it clear that this supervision can be delivered either by an adult probation provider or by a youth offending team—YOT—as the Bill already provides for detention and training orders. There will be circumstances where a YOT may be better placed to deal with the needs of a young adult offender and it is absolutely right that the Bill should give flexibility to allow for this. In that way we can avoid the cliff edge of a sudden transition from youth to adult services. Again, I pay tribute to my noble friend for having championed this issue during the Bill’s original passage through the House.

Amendments 11, 12, 19 and 20 focus on drug testing requirements imposed as part of licence or the new post-release supervision period. Currently, an offender released on licence can be required to submit to compulsory testing in cases where the offender’s conviction offence is on a trigger list. The trigger offences are those crimes that are most likely to be linked to misuse of drugs. They include theft and fraud offences as well as drug offences.

Since the introduction of the Bill, we have looked in more detail at the evidence on drug use by prisoners in the Government’s Surveying Prisoner Crime Reduction survey. It suggests, as one might expect, that there is a strong correlation between prisoners who report use of class A or class B drugs before sentence and those who go on to reoffend. However, it also suggests that using the trigger offence as a filter omits around half of all prisoners who are class A drug users and the majority of those who are class B drug users. In short, where an offence is not on the trigger list but is linked to the offender’s use of illegal drugs, there is no power to require the offender to take drug tests where that would support their rehabilitation. Similarly, in a scenario where a persistent offender who is abusing drugs commits an offence that this time happens not to be on the trigger list, there is no testing power either after they are released from custody.

These amendments replace the trigger offence threshold with a new, two-limbed test: first, the offender has a propensity to misuse specified class A or B drugs; and, secondly, the misuse by the offender of any specified class A or B drug caused or contributed to any offence of which he has been convicted, or is likely to cause or contribute to the commission of further offences. That mirrors the threshold in place for the drug appointment requirement also contained within the current Bill. It continues to provide safeguards to ensure that testing requirements are not imposed in inappropriate cases.

Amendments 14, 16, 17, 21, 24 and 25 collectively allow for the transfer of the post-sentence supervision period created by the Bill to Scotland, Northern Ireland and other UK jurisdictions. Currently, terms of imprisonment and associated licence periods after release can be transferred to and from UK jurisdictions under provisions in the Crime (Sentences) Act 1997. That can happen on a restricted basis, where the sentencing provisions of the exporting jurisdiction apply in the receiving jurisdiction, or it can happen on an unrestricted basis, where the offender transfers on to an equivalent sentence in the receiving jurisdiction’s legislation. This gives flexibility for both the exporting and receiving jurisdiction to agree a transfer in the way that is most appropriate for an individual case.

These amendments make the necessary changes to the law to allow for post-sentence supervision, the supervision default order that is available as a sanction for breach of that supervision and the new drug appointment requirement to be transferred to other UK jurisdictions. The Government have worked very closely with the Scottish Government and the Northern Ireland Executive to agree the detail of these amendments. We have agreed with both Administrations that we will work with them in advance of commencement to review the existing operational guidance that exists on transfer of sentences. The existing position, where all transfers are agreed between the relevant jurisdictions, and where jurisdictions retain the right to refuse transfers, will continue.

Finally, Amendments 5 to 8, 10, 13 and 23 are technical changes to the clauses of the Bill that deal with consecutive sentences, drug appointments and fixed-term recall. They simply make clarifications to the way in which the clauses are drafted rather than any changes of substance. I can provide further details if any noble Lord has a particular question about them. However, to keep our proceedings concise, at this point I beg to move.

[Lord Beecham]

My Lords, I am happy to confirm the Opposition’s support for these amendments and I am grateful to the Minister for his explanation of them.

Motion agreed.

Motion on Amendment 18

Moved by

[Lord Faulks]

That this House do agree with the Commons in their Amendment 18.

18: Clause 24, page 19, line 25, leave out subsection (2)

[Lord Faulks]

My Lords, Amendment 18 removes the privilege amendment that your Lordships’ House added to the Bill before sending it to the other place. I beg to move.

Motion agreed.

Motion on Amendments 19 to 25

Moved by

[Lord Faulks]

That this House do agree with the Commons in their Amendments 19 to 25.

19: Schedule 1, page 21, line 26, leave out paragraph (a) and insert—“(a) the Secretary of State is satisfied of the matters in subsection (2A),”

20: Schedule 1, page 21, line 30, at end insert—“(2A) Those matters are—(a) that the misuse by the offender of a specified class A drug or a specified class B drug caused or contributed to an offence of which the offender has been convicted or is likely to cause or contribute to the commission of further offences by the offender, and(b) that the offender is dependent on, or has a propensity to misuse, a specified class A drug or a specified class B drug.”

21: Schedule 3, page 27, line 23, at end insert—“Crime (Sentences) Act 1997 (c. 43)A1 Schedule 1 to the Crime (Sentences) Act 1997 (transfer of prisoners within the British Islands) is amended as follows.A2 (1) Paragraph 6 (effect of transfers: preliminary) is amended as follows.(2) In sub-paragraph (2)(b), for “and possible recall following his release” substitute “, possible recall following release and any supervision default order”.(3) In sub-paragraph (2)(c), for “and possible recall” substitute “, possible recall and any supervision default order”.(4) In sub-paragraph (3), at the end insert—“(c) in relation to a person who is supervised under section 256AA of the 2003 Act, being ordered to be committed to prison or detention for failure to comply with a requirement imposed under that section or by a supervision default order;(d) in relation to a person who is supervised under section 256B of the 2003 Act, being ordered to be detained for failure to comply with a supervision requirement imposed under that section.”(5) In sub-paragraph (4), at the appropriate place insert—““supervision default order” has the meaning given in section 268(1) of the 2003 Act;”.A3 (1) Paragraph 8 (restricted transfers from England and Wales to Scotland) is amended as follows.(2) In sub-paragraph (2)(a)—(a) for “264A” substitute “264B”,(b) after “267B of” insert “, and Schedules 19A, 20A and 20B to,” and(c) after “104” insert “and 106B”.(3) In sub-paragraph (4)(a)—(a) for “264A” substitute “264B”,(b) after “267B of” insert “, and Schedules 19A, 20A and 20B to,” and(c) after “104” insert “and 106B”.(4) In sub-paragraph (6)(f), for “paragraphs (b) and (c)” substitute “paragraph (c)”.(5) At the end (after the sub-paragraph (7) inserted by section (Drug testing and appointments: offenders transferred within the British Islands) of this Act) insert—“(8) The supervision provisions, as applied by sub-paragraph (2) or (4), have effect—(a) as if any reference to something listed in the first column of the Table in sub-paragraph (10) were a reference to whatever is opposite it in the second column of that Table,(b) with the modifications in sub-paragraph (11), and(c) in a case falling within section 106B of the Powers of Criminal Courts (Sentencing) Act 2000, with the further modifications in sub-paragraph (12),(and see also paragraphs 8A, 19A and 19B).(9) In this paragraph “the supervision provisions” means—(a) sections 256AA to 256E of, and Schedule 19A to, the 2003 Act,(b) the provisions of the 2003 Act mentioned in section 256AC of, and Schedule 19A to, that Act, as applied by that section and that Schedule, and(c) section 106B of the Powers of Criminal Courts (Sentencing) Act 2000.(10) The references mentioned in sub-paragraph (8)(a) are—

TABLE
Reference	Substituted reference
Crown Court Justice of the peace Local justice area Magistrates’ court Officer of a provider of probation services Summons Young offender institution	High Court of Justiciary Sheriff court Local government area within the meaning of the Local Government etc (Scotland) Act 1994 Sheriff court Relevant officer as defined by section 27(1) of the Prisoners and Criminal Proceedings (Scotland) Act 1993 Citation Young offenders institution provided under section 19(1)(b) of the Prisons (Scotland) Act 1989

(11) The modifications mentioned in sub-paragraph (8)(b) are—(a) section 256AA(2)(b) of the 2003 Act has effect as if it also referred to a licence under the Prisons (Scotland) Act 1989 or the Prisoners and Criminal Proceedings (Scotland) Act 1993,(b) section 256AC(7)(b) of the 2003 Act has effect as if for “the Secretary of State” there were substituted “the Scottish Ministers”,(c) paragraph 2 of Schedule 19A to the 2003 Act has effect as if—(i) sub-paragraph (d) referred only to section 215(1) and (2) of the 2003 Act, and(ii) sub-paragraph (e) were omitted,(d) paragraph 3 of Schedule 19A to the 2003 Act has effect as if, after sub-paragraph (7), there were inserted—“(7A) Section 218(4)(a) applies as if for the words “has been notified by the Secretary of State” there were substituted “is satisfied”,(e) paragraph 7 of Schedule 19A to the 2003 Act has effect as if—(i) in paragraph 7(1), for “the supervisor must refer the matter to the enforcement officer” there were substituted “the supervisor may cause an information to be laid before a sheriff court in respect of the person’s failure to comply with the requirement”, and(ii) sub-paragraphs (2) to (5) were omitted, and(f) paragraph 12(3) of Schedule 19A to the 2003 Act has effect as if for “makes a community order or suspended sentence order” there were substituted “imposes any other sentence”.(12) The further modifications mentioned in sub-paragraph (8)(c) are that section 106B of the Powers of Criminal Courts (Sentencing) Act 2000 has effect as if—(a) in subsection (4), for paragraph (b) there were substituted a reference to an officer of a local authority constituted under the Local Government etc (Scotland) Act 1994 for the local government area in which the offender resides for the time being, and (b) after subsection (3) there were inserted—“(3A) Sections 256AA(3) and (6), 256AB(1) and 256E(2) have effect as if the references to the Secretary of State were references to the Scottish Ministers.”A4 After paragraph 8 insert—“Restricted transfers between England and Wales and Scotland: further provision about supervision default orders“8A (1) This paragraph applies if—(a) a person’s supervision is transferred to Scotland under paragraph 4 of this Schedule by means of a restricted transfer or transferred back to England and Wales under paragraph 7 of this Schedule, and(b) at the time of the transfer, or transfer back, a supervision default order is in force in respect of the person.(2) The supervision default order has effect as if, at the time of the transfer or transfer back, it specified the relevant area in which the person resides or proposes to reside in the new jurisdiction (rather than a relevant area in the jurisdiction from which the person is transferring).(3) The court acting for that relevant area in the new jurisdiction may amend the supervision default order to specify that area.(4) In this paragraph—“relevant area” means—(a) in England and Wales, a local justice area, and(b) in Scotland, a local government area within the meaning of the Local Government etc (Scotland) Act 1994;“supervision default order” has the meaning given in section 268(1) of the 2003 Act.”A5 (1) Paragraph 9 (restricted transfers from England and Wales to Northern Ireland) is amended as follows.(2) In sub-paragraph (2)(a)—(a) for “264A” substitute “264B”,(b) after “267B of” insert “, and Schedules 20A and 20B to,” and(c) after “104” insert “and 106B”.(3) In sub-paragraph (4)(a)—(a) for “264A” substitute “264B”,(b) after “267B of” insert “, and Schedules 20A and 20B to,” and(c) after “104” insert “and 106B”. (4) Omit sub-paragraph (8).(5) At the end insert—“(9) The supervision provisions, as applied by sub-paragraph (2) or (4), have effect—(a) as if any reference to something listed in the first column of the Table in sub-paragraph (11) were a reference to whatever is opposite it in the second column of that Table, and(b) with the other modifications in sub-paragraph (12).(10) In this paragraph “the supervision provisions” means—(a) sections 256AA to 256AC, 256D and 256E of the 2003Act, and(b) section 106B of the Powers of Criminal Courts (Sentencing) Act 2000.(11) The references mentioned in sub-paragraph (9)(a) are—

TABLE
Reference	Substituted reference
Crown Court Justice of the peace Information Local justice area Magistrates’ court Officer of a provider of probation services Young offender institution	County court Lay magistrate Complaint Petty sessions district Court of summary jurisdiction Probation officer Young offender centre

(12) The other modifications mentioned in sub-paragraph (9)(b) are—(a) section 256AA(2)(b) of the 2003 Act has effect as if it also referred to—(i) a custody probation order or licence under Part 2 of the Criminal Justice (Northern Ireland) Order 1996 (S.I. 1996/3160) (N.I. 24), and(ii) a licence under the Northern Ireland (Sentences) Act 1998, Part 3 of the Life Sentences (Northern Ireland) Order 2001 (S.I. 2001/2564 (N.I. 2)) or Chapter 4 of Part 2 of the Criminal Justice (Northern Ireland) Order 2008 (S.I. 2008/1216 (N.I. 1)),(b) section 256AC of the 2003 Act has effect as if subsections (4)(c), (5) and (10) (provision for supervision default orders) were omitted, and(c) subsection (7)(b) of that section has effect as if for “the Secretary of State” there were substituted “the Department of Justice in Northern Ireland”.”A6 (1) Paragraph 15 (unrestricted transfers: general) is amended as follows.(2) In sub-paragraph (4A), for “This paragraph has” substitute “Sub- paragraphs (3) and (4) have”.(3) After sub-paragraph (4A) insert—“(4B) A person who is subject to a period of supervision of a type or length which could not have been imposed on an offender in the place to which the person has been transferred is to be treated for the relevant purposes as the receiving authority may direct.(4C) In sub-paragraph (4B), “the receiving authority” means—(a) in relation to a person transferred to Scotland, the Scottish Ministers,(b) in relation to a person transferred to Northern Ireland, the Department of Justice in Northern Ireland, and(c) in relation to any other person, the Secretary of State.” A7 After paragraph 19 insert—“Service of process issued in Scotland19A (1) Section 4 of the Summary Jurisdiction (Process) Act 1881 (service in England and Wales of Scottish process etc) applies to any process issued by a court in Scotland under the supervision provisions.(2) “The supervision provisions” means the provisions listed in paragraph 8(9), as they are applied by paragraph 8(2) or (4).Electronic monitoring in Scotland19B (1) Section 245C of the Criminal Procedure (Scotland) Act 1995 (remote monitoring), and regulations under that section, apply in relation to the electronic monitoring of compliance with a curfew requirement in a supervision default order imposed under the supervision provisions as they apply in relation to the remote monitoring of compliance with a restriction of liberty order.(2) “The supervision provisions” means the provisions listed in paragraph 8(9), as they are applied by paragraph 8(2) or (4).”A8 In paragraph 20(1) (interpretation), for the definition of “supervision” substitute— ““supervision” means—(a) supervision under an order made for the purpose, (b) supervision under a detention and training order, (c) in the case of a person released from prison on licence, supervision under a condition contained in the licence,(d) supervision under section 256AA of the Criminal Justice Act 2003 (supervision after end of sentence), including supervision under that section as applied by section 106B of the Powers of Criminal Courts (Sentencing) Act 2000, or(e) supervision under section 256B of the Criminal Justice Act 2003 (supervision after release of certain young offenders serving less than 12 months).””

22: Schedule 3, page 27, leave out lines 33 to 35 and insert—“( ) For paragraph (i) substitute—“(i) post-release supervision in accordance with a licence under section 31 of the Crime (Sentences) Act 1997 or section 250 of the Criminal Justice Act 2003 of a person sentenced to detention under section 90 or 91 of the Powers of Criminal Courts (Sentencing) Act 2000, section 226, 226B or 228 of the Criminal Justice Act 2003 or section 209, 218, 221, 221A or 222 of the Armed Forces Act 2006;(ia) post-release supervision under section 256B of the Criminal Justice Act 2003;(ib) supervision under section 256AA of the Criminal Justice Act 2003 of a person sentenced to detention under section 91 of the Powers of Criminal Courts (Sentencing) Act 2000 or section 209 of the Armed Forces Act 2006;”.”

23: Schedule 3, page 29, line 20, leave out “264A(1)” and insert “264B(1)”

24: Schedule 3, page 29, line 23, at end insert—“15A(1) Section 302 (execution of process between England and Wales and Scotland) is amended as follows.(2) After “under—” insert—“section 256AC(1) or (3), section 256C(1) or (3),”.(3) Omit the “or” before “paragraph 6(2) or (4)”. (4) After “Schedule 12” insert “or“paragraph 8(1) or 10(5) of Schedule 19A,”.”

25: Schedule 7, page 37, line 25, leave out “and 13” and insert “, 13 and (Drug testing and appointments: offenders transferred within the British Islands)”

Motion agreed.

Anti-social Behaviour, Crime and Policing Bill

Tuesday 11th March 2014 Lords Chamber

Commons Amendment

16:55

Motion A

Moved by

[Lord Faulks]

That this House do not insist on its Amendment 112 and do agree with the Commons in their Amendment 112A in lieu.

112A: Page 121, line 24, leave out “was innocent of” and insert “did not commit”

[The Minister of State, Ministry of Justice (Lord Faulks) (Con)]

My Lords, the House will recall that Amendment 112 changed the definition of a miscarriage of justice for the purposes of paying compensation. At the heart of all our discussions lies the question: what is a miscarriage of justice? It is a strong term, which cries out for proper definition. There is general agreement, including from the Grand Chamber of the European Court of Human Rights in Strasbourg, that it is more than a simple acquittal. The fact that someone was tried and the evidence proved insufficient to convince a jury of their guilt does not mean that a miscarriage of justice took place. Nor do the Government believe that someone whose conviction was overturned because changes to the evidence against them, such as developments in expert knowledge, made that conviction unsafe has necessarily suffered a miscarriage of justice. Although following the quashing of a conviction someone will be presumed innocent, there may be a retrial on the basis of the remaining evidence, at which there is the potential for a new conviction. Justice cannot be said, in these cases, to have miscarried.

The Government firmly believe that a miscarriage of justice can be said to have occurred where someone who was innocent was convicted. The question therefore becomes: how do you know that happened? In our previous debates, some noble Lords have asked how applicants for compensation can be expected, sometimes years after their wrongful conviction, to prove their innocence. The answer is that they will not. In all cases, the Court of Appeal will have already considered a new fact—the new fact that led to the quashing of the conviction—and this new fact will exonerate those who are truly innocent. These are the people who have truly suffered a miscarriage of justice: people who were convicted because the fact which now exonerates them was unknown or unrecognised, be it the proof that they were somewhere else, the DNA that convicts a different perpetrator or the evidence that the offence simply did not take place. It is the nature of the new fact that demonstrates innocence, and the applicant for compensation does not need to provide any further evidence to prove themselves eligible for compensation within the statutory test.

The Government remain firmly of the view that the definition of a miscarriage of justice, which was inserted by Amendment 112 in your Lordships’ House, does not provide the necessary clarity. It is similar, although not identical, to the wording used by the noble and learned Lord, Lord Phillips, in the Supreme Court’s judgment in Adams and, as he said:

“This test will not guarantee that all those who are entitled to compensation are in fact innocent”.

We believe that the test should guarantee exactly that, because we believe that only those who are shown not to have committed the offence for which they were convicted have truly suffered a miscarriage of justice and deserve recognition and recompense for that. However, I am sure that none of your Lordships wants those who are in fact guilty to receive compensation.

The amendment adopted by your Lordships on Report would have required the new fact to show,

“conclusively that the evidence against the person at trial is so undermined that no conviction could possibly be based on it”.

Careful reading of this proposed definition makes it clear how difficult a burden this places on the Secretary of State. It would require him, when considering an application for compensation, to look not just at the new fact but at the whole of the evidence, and to decide whether there is any possibility that a conviction might result. The aim of the Supreme Court in the Adams judgment was both clarity and fairness but, with all due respect, I suggest that it did not in fact achieve either. Rather, it required an adjudication from the Secretary of State considerably more complex than that which we are now proposing.

During the debate that took place on the previous occasion when this matter was before your Lordships’ House, the noble Lord, Lord Pannick, indicated that it was very unsatisfactory that the Secretary of State should be asked to pronounce on guilt or innocence. I am not sure that, on that occasion, I gave a sufficient response. Let me do so now.

17:00

The applicant will have to satisfy the Secretary of State that he is eligible for compensation within the meaning of the statutory test. If your Lordships accept the government amendment, the word “innocence” is removed altogether from his consideration of the application. Let me make it perfectly clear that the difference between what we now suggest should be part of the Bill and what was originally there is only a question of words. It would not result in a different determination in any one case. But words matter in this context because there is a deep, visceral unease about anything that may be said to run contrary to the presumption of innocence—hence the changing of the words.

However, the question—I revert to the Secretary of State’s function—is what he will use to decide whether an applicant is eligible. That is the question. The Court of Appeal will have provided a detailed judgment explaining why, so long after a conviction, a new fact has enabled it to conclude that the conviction should be quashed. In my experience of reading the decisions of the Court of Appeal Criminal Division, the basis on which a conviction is overturned is always made perfectly clear. The Secretary of State will simply look at that judgment and be able to decide, in accordance with a straightforward test that we are proposing by this amendment, whether an applicant is entitled to compensation. It is clear that the Court of Appeal will have set out in detail why it has come to that conclusion and whether it fits the clear definition that we suggest is appropriate.

The test proposed in your Lordships’ House on Report is also highly ambiguous. What one person believes is evidence sufficient possibly to bring about a conviction, another may argue could never have had such a result. The effect of this would undoubtedly lead applicants to contest decisions denying them compensation. Applicants denied compensation following the Adams judgment have, in some cases, spent years attempting unsuccessfully to get those decisions overturned by the courts. Indeed, as recently as 27 February, the Court of Appeal rejected three further cases, so the effect of the test is clear to this extent: it will inform more litigation. We do not believe this is fair, either on applicants or on the taxpayer, who often funds both sides in this fruitless litigation.

Our objections to Amendment 112 are firmly based on points of principle; this is not primarily about saving money. That said, here as elsewhere, we must deliver value for money for the taxpayer and, accordingly, it is in no one’s interests for us to be spending at least £50,000 contesting each decision to refuse compensation. That, by the way, is an estimate of the Government’s average costs per case. The taxpayer also usually funds via legal aid the unsuccessful applicant’s costs of litigation, which, in many cases, are considerably higher than the Government’s. The total cost of each unsuccessful judicial review can, therefore, run into hundreds of thousands of pounds. If we maintain an ambiguous definition, we expect the flow of judicial reviews to continue, however many times the court ultimately concludes that the Secretary of State’s interpretation was the correct one. We believe that a simpler test, which focuses only on the new fact and what that new fact shows, will make it easier for all concerned, while ensuring that those who have truly suffered a miscarriage of justice will be quickly compensated for it. That said, we have listened to the concerns that noble Lords raised about how the clause was originally drafted.

The rationale for the presumption of innocence is that it is better that 99 guilty men go free than that one innocent man is convicted. That stems from our abhorrence of the idea of an innocent man losing his liberty. Here we are concerned not with liberty but with compensation or, in other words, money, so the considerations are different.

We recognise the difficulty around the use of the term “innocent”. The European Court of Human Rights has suggested that the presumption of innocence is engaged when considering whether a miscarriage of justice has taken place. All those who have not been convicted, or whose conviction has been quashed, are presumed innocent. To avoid any implication that this is not respected, or that the Secretary of State intends to adjudicate on this question, Amendment 112A uses different language. The issue now is not whether a person is considered innocent or guilty. The issue is whether a miscarriage of justice took place when the applicant was first convicted. This will be true only if the applicant did not commit the offence, if that is what the new fact shows. That is what Amendment 112A would achieve.

Your Lordships’ House has quite properly asked the House of Commons to examine this issue again. It has now done so and has clearly resolved both to reject Amendment 112 and to agree the government amendment in lieu. Now that the elected House has reaffirmed its view on this matter, I urge your Lordships not to insist on their amendment, to reject Motion A1 and to let this Bill now pass. I beg to move.

Motion A1

Moved by

[Lord Pannick]

As an Amendment to Motion A, leave out from “House” to end and insert “do insist on its Amendment 112”

[Lord Pannick (CB)]

My Lords, on Report your Lordships’ House supported an amendment to include in this Bill the criteria for the payment of compensation for a miscarriage of justice based on the judgment of the noble and learned Lord, Lord Phillips of Worth Matravers, speaking for the majority of the Supreme Court in the Adams case. The noble and learned Lord, Lord Phillips, himself spoke in favour of my Amendment 112 on Report. He has asked me to express his regret that he is unable to be in his place today to support Motion A1 because he is abroad.

We are concerned today with cases where an applicant has been wrongly convicted of a criminal offence. In many of these cases, he or she spent years in prison before the Court of Appeal overturned that conviction. Compensation is not paid, and rightly so, simply because the judge made an error of law or there was some other technical basis for the successful appeal to the Court of Appeal. The applicant must show, on the test stated by the Supreme Court—the test approved by your Lordships’ House—that a new fact has emerged that so undermines the prosecution evidence that no conviction could possibly be based on it. That is a very difficult test to satisfy, and rightly so.

I continue to believe that the test of the noble and learned Lord, Lord Phillips, for the Supreme Court is preferable to the Government’s approach, approved by the other place, and that the amendment approved by the other place, with great respect to them, is wrong in principle and would have very damaging consequences. That was true of the original criteria set out in this Bill and rejected by your Lordships’ House on Report—the criteria that the applicant must prove beyond a reasonable doubt that he or she is innocent of the offence—and it remains true of the variation introduced by the Government in the other place, that the applicant must prove beyond a reasonable doubt that he or she did not commit the offence. The Minister has very fairly acknowledged in his opening remarks that there is no substantive difference between proof that you are innocent and proof that you did not commit the offence.

I will first seek to explain why I say that the Government’s approach will have very damaging consequences. The Minister has suggested today that the judgment of the Court of Appeal will be the only evidence which the Secretary of State needs to see in order to form a judgment on whether the applicant did or did not commit the offence. However, the Court of Appeal very rarely says whether it thinks that a defendant has proved that he or she did not commit the crime. That is not the role of the Court of Appeal. It focuses on whether a new or newly discovered fact fatally undermines the case that is presented by the prosecution. The test of the noble and learned Lord, Lord Phillips, is consistent with what the Court of Appeal does. It has never been the role of Ministers in our jurisdiction—rightly so—to pronounce on whether a person has committed a crime.

The cases in which compensation is claimed for a miscarriage of justice will often be the most controversial and sensitive. When an appeal has been allowed in the Court of Appeal on the basis that the prosecution case has been fatally undermined by a new or newly discovered fact, and when the defendant is then released from prison, often many years after their wrongful conviction, it is very unwise for legislation to state that it is then for the Secretary of State to pronounce on whether she thinks that the defendant has proved that they did not commit the crime. I can think of nothing more likely to keep open the sore of a regrettable miscarriage of justice, and nothing more likely to involve a politician in controversial matters of criminal responsibility.

The Minister suggested that the Government’s approach would promote certainty in the law. I have to say to him that, far from promoting certainty, the Government’s approach will inevitably be a recipe for complex, expensive and highly acrimonious litigation. The Minister said that there had been a few cases since the Adams judgment, which, he said, itself suggested that the Adams criteria were uncertain. However, as the Minister recognised, none of those cases has succeeded, and he well knows that members of our profession are quite capable of litigating any statutory definition. I therefore agree with the Government that the Bill should define the criteria for receipt of compensation for miscarriages of justice but I cannot agree that the Government’s wording, approved by the other place, is sensible in practice. It will have disastrous consequences.

Perhaps I may also say something about the issue of principle because the Minister emphasised this point in his opening remarks. He suggested that only those who are truly innocent should receive compensation for a miscarriage of justice. I say to him with the greatest of respect that that approach is wrong in principle. Our law does not ask people to prove that they did not commit a crime; it is for the state to prove that they did commit a crime. The noble and learned Lord, Lord Hope of Craighead, who I am pleased to see in his place, addressed this point with characteristic clarity at paragraph 97 in his judgment in the Adams case. He said that a person against whom there is no sufficient and admissible evidence on which a conviction can be based should not be the subject of the criminal process in the first place. Therefore, if a new or newly discovered fact fatally undermines the prosecution evidence, it is,

“right in principle that compensation should be payable”.

My noble and learned friend added at paragraph 102 that if the evidence against the defendant is conclusively shown to have been completely undermined, then there has been a miscarriage of justice which is as great whether or not the defendant committed the crime because in neither case should the defendant have been prosecuted.

17:15

The Minister emphasised in his opening remarks that these Adams criteria may occasionally result in compensation being paid to a person who may in fact have committed the crime. My noble and learned friend Lord Phillips powerfully answered that point in his judgment in Adams at paragraph 55. He recognised that his test—the test approved by this House on Report—

“will not guarantee that all those who are entitled to compensation are in fact innocent. It will, however, ensure that when innocent defendants are convicted on evidence which is subsequently discredited, they are not precluded from obtaining compensation because they cannot prove their innocence beyond reasonable doubt”.

I commend the analysis of my noble and learned friend Lord Phillips to your Lordships as plainly correct in principle.

In the other place the Government did not address— far less answer—the concerns about the practical consequences and the issues of principle which I have summarised. I cannot—again, with respect—agree with the attempts by the noble Lord, Lord Faulks, to respond to those points today. This House should invite the other place to think again on such an important issue. I beg to move.

[Lord Brown of Eaton-under-Heywood (CB)]

My Lords, I supported the Government on the clause at Second Reading and again in Committee and on Report. At the risk of wearying your Lordships and displeasing, yet again, those who procured the original amendment of the noble Lord, Lord Pannick, I support the Government again on their proposed amendment and I resist that of the noble Lord, Lord Pannick.

For my part, I, too, accept that this reformulation is in substance no different from its predecessor. Because it avoids the explicit language of guilt or innocence, it may be regarded however, as better able to resist what at one stage was suggested to be its vulnerability to challenge under Article 6 of the European Convention on Human Rights.

I do not propose to repeat all the arguments that I canvassed in support of the Government’s approach at the earlier stages. I now make just three basic points. First, there is all the difference in the world between, on the one hand, a person’s right to be acquitted and thereafter presumed innocent whenever there is any lingering doubt as to his guilt and, on the other hand, the right to monetary compensation for his incarceration pending that eventual acquittal. On Report, the noble Lord, Lord Cormack, reminded us all, and indeed the noble Lord, Lord Faulks, reminds us again, that it is better that 10—the noble Lord, Lord Faulks, says 99—guilty men go free than that one innocent man be convicted. Of course, that is so and it is integral to our criminal justice system, but it by no means follows that it is better that 10, let alone 99, guilty men get financial compensation rather than that one innocent man goes uncompensated. That illustrates the total distinction between the presumption of innocence and the right to go free if there is any doubt at all about the safety of one’s conviction and, on the other hand, the right to monetary compensation for the period of incarceration until that innocence can be established.

Secondly, the present formulation put forward again by the noble Lord, Lord Pannick, is, as has been explained, essentially that of the majority in the Supreme Court in Adams—a majority of five votes to four. The then Lord Chief Justice, my noble and learned friend Lord Judge, who, alas, cannot be here today, and I were in that minority of four. The majority preferred it to the test of the minority that the claimant should have to establish his innocence. In truth the majority’s formulation is a fudge—indeed, an unprincipled fudge. None of the parties in the case argued in support of it—not even leading counsel who appeared as interveners for Justice. They were all arguing for compensation to be paid to all those whose appeal eventually succeeds. Now no one pursues that absolutist view. Of course, under this fudge, compensation would still be required to be paid even to those who, albeit entitled to succeed on their appeals, can nevertheless be seen clearly to have committed the offence.

I have given various examples of this at earlier stages. Today I shall give just one. Let us suppose that a defendant confesses his guilt and in his confession discloses facts of which only the perpetrator of the crime to which he is confessing could have knowledge. Later, however, on a late appeal, he is able to establish that that confession was induced by, for example, a promise that if only he would confess his guilt he would get bail. Once that is established the confession has to be set aside as one induced by guilt, even though it is self-evidently true as a confession. He is entitled to succeed on his appeal but is he really to be regarded as entitled to compensation, which could run to hundreds of thousands of pounds? I would suggest not.

My third and final point is on certainty. Again, the noble Lord, Lord Faulks, has made this point. I should have said earlier that, alas, I missed the first few minutes of his speech as it never occurred to me, in common with one or two others, that this Bill would be reached at the stage that it was. I apologise for that but I think I heard everything that he said that needed to be heard by somebody supporting his case. The proposed formulation is very far from easy to apply. Perhaps a good illustration of that is the tragic case of Sally Clark—a case about which the noble Baroness, Lady Kennedy of The Shaws, spoke more than once at earlier stages of the Bill. It is a case which raises considerable and understandable emotions. On my reading of that case—I believe this to be correct—the Court of Appeal never went further than to say that on the fresh evidence that had come to light a jury might well not have convicted her. It was not said, in the words of the proposed amendment of the noble Lord, Lord Pannick, that the fresh evidence showed—let alone showed “conclusively”—that the evidence against her at trial had been so undermined that no conviction could possibly have been based on it. Maybe, in the light of all the material, the jury would have convicted; maybe it would not.

If it is said that I am wrong in my understanding of that case, it just goes to show that the proposed formulation will lead, not to the desired clarity and certainty in the law, but to further protracted litigation on this issue. As the Minister said, based on the Court of Appeal judgment, it is perfectly simple for him to form a view —yes or no—on whether, in the light of all the material, this defendant was indeed innocent of the charge and therefore whether or not it was a clear miscarriage of justice in that sense. The elected Chamber rejected this House’s amendment first time round and I respectfully suggest that we should not challenge it again.

[Lord Hope of Craighead (CB)]

My Lords, I had the advantage of listening to the whole of the Minister’s address with great care. I respectfully say that it was very well put across. However, I remain of the view, advanced by the noble Lord, Lord Pannick, that the Commons amendment should not be accepted. I have spoken on this matter on a number of previous occasions, so I will make a few short points.

I agree entirely with the Minister that the issue before us is what is meant by the phrase “miscarriage of justice”. This still remains in Section 133 of the 1988 Act because in this Bill we are adding a new subsection to try to explain what the basic rule, set out in subsection (1), is all about. Therefore one has to consider how that works out in practice, given the nature of our criminal appeal process. In effect, it is an element of working out the court’s function in the appeal and the position the Secretary of State must take, given the material in the Court of Appeal’s judgment.

The noble and learned Lord, Lord Brown of Eaton-under-Heywood, has confirmed that the Court of Appeal does not have to ask itself whether the appellant was innocent: it has to consider whether the conviction was unsafe. No one is suggesting that that should be the test applied when working out whether there has been a miscarriage of justice. The problem with the test which the Minister is now suggesting and which is in the Commons amendment is that it is striving for something which is, in nearly every case, almost impossible to demonstrate. I prosecuted for four years in the course of my career at the Bar and secured a number of convictions. It frequently occurred to me that we—by which I mean the jury, the prosecutors and everyone else who was looking on—were not there. It is so difficult to work out what actually happened: one can only proceed on evidence. The Crown’s function is to demonstrate guilt as best it can on the evidence but it is extraordinarily difficult to work out whether somebody did not commit the crime and put it in a positive way in favour of the accused if you did not actually see what happened when the crime was committed. You have to rely on other people to demonstrate that fact. That is the basic problem with the test being suggested.

In my judgment in the case to which the noble Lord, Lord Pannick, referred, I recorded that when Article 14 of the covenant, from which we take the phrase, was being discussed it was suggested that the test of innocence should be put in to elaborate what was meant by miscarriage of justice, but it was not put in to the final draft. The matter was considered then but it was taken out and we are left with a phrase which we now have to construe and apply.

Without going on any further, I suggest that a better way of approaching it would be to tie the phrase, as carefully as we can, into the way our criminal process works, in a world where there can rarely be absolute certainty. We cannot achieve mathematical certainty in our system of criminal justice: we are not expected to. Because of that, I suggest we take the practical approach embodied in the phrase proposed by the noble Lord, Lord Pannick. I support his amendment.

17:29

[Lord Brennan (Lab)]

My Lords, I remind the House that I served for 10 years as an assessor for compensation for miscarriages of justice. That role required me to assess compensation, not to determine eligibility. However, in order to determine compensation I was equipped with the factual basis for the ministerial decision to allow compensation to be awarded.

We are here faced with a choice between two different ways of seeking to achieve justice, and the key test for this House should be which way better serves the interests of justice. The Lords’ amendment creates a stiff test: you have to show conclusively—it is a tough obstacle—that the evidence was so undermined that no conviction could possibly be based on it. The evidence so undermined is a matter for judicial assessment in this context. Whether it makes a conviction impossible to sustain is a matter for judicial decision. Both the assessment and the decision arise in the process of whether guilt has been established, not whether innocence has been shown.

Because of that well established system, judges, both at trial and in the Court of Appeal, look at these matters of assessment and decision very carefully. The process is a fundamental part of the system; it is well established. The judges, the lawyers and the legal commentators know what is happening. It accords with what we have traditionally thought to be the best of legal principle in applying our criminal law. A miscarriage of justice is an aberrant product of our criminal law going wrong in its process. The system I have just described has sufficient clarity in its process so that when the test in the Lords’ amendment is applied to it, justice will usually be done if there is a miscarriage of justice.

What of the government test? The words “innocent” and “did not commit” we can treat as synonymous for the purpose of this argument. The government test involves the Minister looking for material to show innocence from proceedings that were designed to establish guilt. Other than the Criminal Cases Review Commission, of the potential sources the key source of his or her approach will be what happened in court then, or afterwards if there was an appeal, or a newly discovered fact well after that. So the context of the ministerial decision will be outwith our present system.

Indeed, the Minister will be applying himself or herself to making a quasi-judicial decision: should this person, in justice, be given compensation for this miscarriage of justice? It is a very serious decision most pertinently determined by solid evidence, and from where is he or she to extract it in our present system? The new fact which establishes innocence or that someone did not commit the offence has to be very powerful indeed—for example, irrefutable DNA evidence or a subsequently discovered group of witnesses who prove a rock solid alibi. There are very few sets of circumstances.

It will be of significance to this House—and I trust to the other place if this goes back to it—that no one on the government side in any debate so far has chosen to illustrate by example how their test would work and why the Lords’ test is not appropriate. Although proceedings before the assessing Minister are confidential, it is open to the applicant to make them public. I shall refer to two public examples which show that the Lords’ test would work in justice and the government test would not.

The first is the “arms to Iraq” case, in which some of the defendants got to court and no evidence was ultimately offered against them—there never was a trial. Others of those cases were stopped during the trial and in yet more cases there were acquittals. The result of that set of circumstances meant that in the ones where no evidence was offered or the judge stopped the trial, there never was an appeal; there never was any new evidence because the scenario was well known. We did what we thought was legal because the government agents and people responsible said that we could do it.

In those circumstances, with no Court of Appeal judgment, on the test in the Lords’ amendment it is almost certain that those people would have received compensation. If you do not offer any evidence, how can you possibly say that the conviction could be sustained? If the judge stops it on the basis of the Lords’ test, why not give compensation? How could these men “prove their innocence” in the context of the government test?

There is another very telling example. Many of you will remember the case of Colin Stagg and the murder of Rachel Nickell on Wimbledon Common. She was stabbed to death, with 49 blows, in front of her two year-old child. Stagg was one of many arrested and he was eventually charged. The judge threw the case out at the end of the prosecution case. This was in the mid-1990s and Stagg was vilified in the national press almost from day one. When the judge stopped the case, he went back to Wimbledon and lived by night because he was hounded and harassed in the street by day. He lived a hermit life for years. Eventually the Minister decided, on all the material before him, to grant compensation, and I made an award. It was only a year or two later that someone else, Robert Napper, was arrested for that murder. He pleaded guilty to manslaughter on the grounds of diminished responsibility and was confined to Broadmoor for the rest of his life.

How can anyone in this House plausibly suggest that Stagg should not have got compensation until someone else was proved to have been the person who killed Rachel Nickell? Who would not regard that as an affront to justice? The Minister at the time, in applying the law on eligibility at the time, gave Stagg an award. Under the Lords’ test he would get such an award today; under the government test he would not—he would have to wait and endure circumstances until someone else was shown to be the murderer.

[Lord Brown of Eaton-under-Heywood]

My Lords, I just ask my noble friend to agree that, under any test, neither of these cases would qualify for compensation because compensation is payable not on an initial acquittal, a first appeal or an appeal brought in time, but only ever on a late appeal. They would therefore not have qualified anyway: it is only for a restricted group of cases in which they are not included.

[Lord Brennan]

Now that I am in the same House as the noble Lord and not appearing in front of him as an advocate, I very firmly disagree. Compensation for miscarriages of justice does not depend on a successful appeal. For years, in certain cases, awards have been made without such an appeal. In the examples I have given, no contrary example has been given thus far to show why the other test proposed by the Government should be put forward. I make the following concluding submission: the Lords amendment is based on well founded principle—the Adams terminology—arising from a well established system of criminal law and criminal justice. The government test is neither of those things. The Lords amendment better serves the interests of justice and this House should send it back to the Commons for reconsideration by MPs and by the Government in the interim.

[Lord Beecham]

My Lords, I must first congratulate the noble Lord, Lord Taylor, who managed to escape the onerous task of replying or, indeed, of advocating the Government’s case. The noble Lord, Lord Faulks—the Minister—has, as it were, picked up a dock brief. He comes before the House as a poor man’s lawyer—or, I should say more relevantly, a poor Lord Chancellor’s lawyer.

It is instructive to consider how the debate on the Government’s proposal played out in the House of Commons. Deep concern and opposition to the original Clause 151 was voiced on all sides of this House in 19 speeches. Speakers included former Law Lords, lawyers of varying experience in this field and non-lawyers. Members may recall in particular the powerful speeches of the noble Lord, Lord Cormack, the noble and learned Lord, Lord Hope, who has addressed us tonight, and my noble friend Lord Brennan, who has also spoken to us, with his long history of involvement with this issue. These and other noble Lords voiced profound misgivings over the Bill’s requirement for those claiming compensation for a miscarriage of justice effectively to have to prove their innocence. I do not need to rehearse the arguments advanced at Second Reading, in Committee, on Report and again today. Only four speeches, other than those from the relevant Minister, supported the Government. Three of these, no less, were made by the eminent former Law Lord, the noble and learned Lord, Lord Brown of Eaton-under-Heywood, from whom we have heard again tonight. The other was made by the noble Lord, Lord Faulks, before his accession to ministerial office. One Member expressed doubts in a speech at Second Reading and did not vote on Report.

The overwhelming body of opinion in debate in this House—right through the progress of the Bill—was, therefore, opposed to a proposal that was at odds with our historic attachment to the presumption of innocence unless and until guilt is proved beyond reasonable doubt. It was a proposal that, as I have mentioned in previous debates, would save all of £100,000 a year, given the paucity of successful claims—some two a year, as the Government’s own impact assessment made clear.

The Government have consistently claimed that the law was uncertain: it was not, though the Supreme Court invited the Government and Parliament—having reached a conclusion by a narrow majority in the Adams case—to consider the matter. However, the decision in the Adams case was clear, and the noble Lord, Lord Faulks, was kind enough to advise me yesterday that it has effectively been followed and upheld by the Court of Appeal. Therefore, it was with some astonishment that I read the terms of the government amendment and the debate on it in the House of Commons.

The Minister, Damian Green, claimed:

“The Government have taken account of all the points that have been made and all the concerns that have been expressed and our position has changed as a result of the very good debates that have taken place in Committee as well as in the House of Lords”.—[Official Report, Commons, 4/2/2014; col. 163.]

The change, of course, is to drop the requirement for the claimant to establish that he was innocent of the offence and substitute the requirement to show that “he did not commit” the offence. I do not pretend to understand by what process of jurisprudential alchemy the base metal of proving innocence becomes converted to the gold of establishing that a claimant did not commit the offence. It is a distinction without a difference—an attempt to preserve the Government’s version of legislative maidenly modesty.

17:45

Ministerial sleight of hand, however, did not stop there. The Minister sought to pray in aid the noble and learned Lord, Lord Phillips, who, as the noble Lord, Lord Pannick, has reminded us tonight, actually voted for his amendment. If Mr Green were to be charged with attempting to gain votes by false pretences, I would have to advise him to plead guilty; I think that even the Minister would have to advise him to plead guilty. I cannot see how he could prove his innocence or establish that he did not commit the offence that I have just invented. This, however, is a serious matter, both substantively and from the perspective of how the Government conduct their legislative business. The cases are few, but the principle is important.

There is another factor: last week, to her great credit, the Home Secretary established an inquiry into the use of undercover agents by the police. Who knows at this time what doubts might be cast on convictions procured by such means? What miscarriages of justice might now come to light? Now, I submit, is emphatically not the time to dilute the careful, moderate position established by the Supreme Court in the Adams case. On the contrary, it is time to affirm it and I hope the House will do so.

[Lord Faulks]

My Lords, this has been an excellent debate once more, in which the House has shown its considerable knowledge, learning and experience of the issues raised by this amendment. Let me start by saying that there is general agreement on one thing: the Government were right to seek to enshrine in legislation the appropriate test for eligibility for compensation following a miscarriage of justice. The common law was undoubtedly in a state of confusion, notwithstanding the distinction of the judges engaged in the exercise of trying to provide a workable test. The decision in the Adams case, a resounding 5:4 victory, was described in a way that I could not possibly presume to describe it by the noble and learned Lord, Lord Brown, as an unprincipled fudge. It was, of course, a culmination of effort—an absolutely high-quality effort—to try to arrive at a workable definition. However, the noble Lord, Lord Pannick, says that the Government’s test will lead to disaster—to acrimonious litigation and uncertainty.

I have respectfully to disagree, because the Adams judgment has resulted in some 16 judicial review cases in the three years since the judgment. During the period from 2008 to 2011, when the case law laid down by the courts required, consistent with the Government’s position, that the applicant was clearly innocent, only two judicial reviews resulted from applications from those convicted in England and Wales. Therefore, there is likely to be acrimonious litigation. I am somewhat reluctant to be drawn on what the result would be in any particular cases, whether it is the Sally Clark case or other cases. The noble Lord, Lord Brennan, was, I think, referring to compensation under the ex gratia scheme, which was abolished by the Home Secretary in 2006. Here we are considering revisions of Section 133, which requires that the applicant has a conviction—whichever definition is adopted—and this will continue to be a requirement.

The difference of opinion on definition is simply what a claimant has to establish. It is said that the Court of Appeal Criminal Division is not primarily concerned in these cases with proving innocence—quite so. It may well decide that a conviction is unsafe, but in doing so, the Court of Appeal will, and does, provide cogent and comprehensive reasons for that decision. It does not simply declare it. That provides the basis on which the Secretary of State or those working under his direction will be able to make an assessment entirely in accordance with the very straight- forward and clear test that we suggest is appropriate.

The noble Lord, Lord Pannick, said that our law does not ask someone to prove their innocence. I agree entirely. Nor does this provision. It does not require an applicant to prove their innocence; it simply requires them to prove eligibility for compensation—money—when they are clearly innocent, to use the expression used in the common law or, as we describe it in statutory language, proof that they have not done it.

We ask the House to bear in mind that we have a position of uncertainty and litigation, which requires clarification by Parliament, as is agreed. Parliament has provided as clear a definition as can reasonably be arrived at, and one which we say is consistent with justice, does not offend the presumption of innocence and resolves the difficulties that judges have had in arriving at a workable conclusion.

The presumption of innocence is not in any way offended by the clause. I suggest to the House that it should agree that the House of Commons has considered carefully the high quality of the debate and the division of opinion among noble and learned Lords, and should respect and confirm the House of Commons decision.

[Lord Pannick]

My Lords, I am grateful to the Minister for the careful way in which he has addressed these matters and for the time and trouble that he has taken on this issue, not least in the helpful discussions that I have had with him over the past few months. My noble and learned friend Lord Brown of Eaton-under-Heywood spoke in favour of the Government's position. As he mentioned, he dissented in the Adams case. He did not approve of the test of the noble and learned Lord, Lord Phillips, in 2011 and he continues, as he is perfectly entitled to do, to dissent from the case made by the noble and learned Lord, Lord Phillips. The noble and learned Lord described the test of the noble and learned Lord, Lord Phillips, as a fudge. Some of us are quite partial to fudge, but I confine myself to reminding your Lordships of what was said in the Supreme Court in answer to the noble and learned Lord, Lord Brown, by the noble and learned Baroness, Lady Hale, in her judgment in the Adams case. She said:

“I do sympathise with Lord Brown’s palpable sense of outrage … But Lord Phillips’ approach is the more consistent with the fundamental principles upon which our criminal law has been based for centuries. Innocence as such is not a concept known to our criminal justice system. We distinguish between the guilty and the not guilty”.

A person does not have to prove their innocence in court, said the noble and learned Baroness, Lady Hale —I agree—and a person should not be required to prove their innocence when they apply for compensation after a miscarriage of justice has been established in the Court of Appeal.

As the noble and learned Lord, Lord Hope of Craighead, said this afternoon, the Government’s approach will inevitably mean that people who are in fact innocent will fail to obtain compensation for a wrongful conviction established in the Court of Appeal simply because they cannot prove—it is often very difficult and sometimes impossible to prove—that they did not commit the crime. The Minister said in his observations in reply that the Government’s test does not require an applicant to prove their innocence. That is precisely what the Government’s amendment does; that is precisely what is so objectionable.

I remain concerned not just about the principle; I remain very concerned about the practical consequences of the Government’s amendment. We are dealing here, as I said in opening, with the most sensitive, controversial cases in criminal law. The Court of Appeal will have allowed an appeal because the prosecution case has been fatally undermined. The defendant is released from prison. He or she may have been in prison for many years. Then, say the Government, the Secretary of State must pronounce on whether that applicant has proved that he or she did not in fact commit the crime.

Nothing is more likely to prolong the misery of the miscarriage of justice not just for the applicant but for the family of the victims of the crime, whoever committed it. Nothing is more likely to provoke further litigation. It has never been the role of a Secretary of State in our system of law to determine whether a person is innocent of an offence. I do not think that it is desirable that we should now make it the role of the Secretary of State to determine whether someone is innocent of an offence. I wish to test the opinion of the House.

17:57

Division 2

Ayes: 214

---

Labour: 149
Crossbench: 48
Independent: 5
Bishops: 2
Democratic Unionist Party: 1
Green Party: 1
Plaid Cymru: 1

Noes: 253

---

Conservative: 160
Liberal Democrat: 78
Crossbench: 11
Independent: 2

Motion A agreed.

Public Bodies (Abolition of the National Consumer Council and Transfer of the Office of Fair Trading’s Functions in relation to Estate Agents etc) Order 2014

Tuesday 11th March 2014 Lords Chamber

Motion to Approve

18:10

Moved by

[Viscount Younger of Leckie]

That the draft order laid before the House on 5 December 2013 be approved.

Relevant documents: 17th Report from the Joint Committee on Statutory Instruments, 26th Report from the Secondary Legislation Scrutiny Committee, considered in Grand Committee on 24 February.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie) (Con)]

My Lords, this order delivers better, more effective consumer advocacy and more joined-up supervision of the estate agency regime. It marks the final step in the Government’s three-year programme of consumer landscape improvements, and its merits were debated at some length in Committee on 24 February. I will now once more set out for your Lordships why these changes are sensible, necessary and in the very best interests of the consumer.

Since 2011 we have streamlined and brought coherence to a landscape that was previously confusing and duplicative, and therefore inefficient. We have made it easier for consumers to understand where they need to go to get help and have given enforcers, advocates, and advice providers the tools that they need to do their new jobs. On 24 February the noble Lord, Lord Whitty, accused the Government of making these changes solely to save money or abolish quangos. This is simply not true. We are driven by a desire to improve the offer for the consumer. That is why we have created a landscape in which it is much clearer who is responsible for what, and in which there is much better co-ordination between consumer bodies and enforcers. This is markedly better than the previous arrangements because previously the consumer could have tried to phone lots of different organisations—their local council, a regional trading standards team, their nearby Citizens Advice bureau or the Office of Fair Trading—but now they need only ring one phone number, the single Citizens Advice Consumer Service helpline, to raise a concern, whether it is about their rights, a problem about a good purchased or a service performed or, if unsure, how best to take forward a complaint.

We have established a more strategic approach to consumer enforcement, education and empowerment through the creation of the Consumer Protection Partnership. Resources are now focused where they are most needed and can have most impact because key partners within the landscape now collaborate to identify the most pressing risks to consumers and work together to eliminate this harm. We are already seeing the success from this approach. By working together to raise awareness of used-car scams during National Consumer Week last year, for example, members of the CPP reached significantly more consumers than if each had worked in isolation. So that is a good reason for change.

We have also acted to close a potential enforcement gap by establishing the National Trading Standards Board and Trading Standards Scotland. We are ensuring that complex criminal activity can be more effectively tackled by trading standards because these bodies co-ordinate and prioritise national and cross-local-authority-boundary enforcement.

I turn to the specifics of this order, which has three distinct purposes: to abolish the National Consumer Council and transfer its relevant functions to Citizens Advice, Citizens Advice Scotland and the General Consumer Council for Northern Ireland; to transfer the Office of Fair Trading’s estate agency functions to the Commissioners of Her Majesty’s Revenue and Customs and Powys Trading Standards; and to transfer residual OFT functions relating to its former consumer advice scheme to Citizens Advice and Citizens Advice Scotland. The scheme itself was transferred to the Citizens Advice service on 1 April 2012.

One or two noble Lords have already expressed sadness at the abolition of the National Consumer Council. As I said on 24 February, I personally recognise the great contribution that that body has made to consumer issues over many years and the fact that a number of your Lordships have played no small part in contributing to that, including the noble Lord, Lord Whitty, the noble Baroness, Lady Hayter, and my noble friend Lady Oppenheim-Barnes. However, no organisation is above change and improvement, and I firmly believe that the NCC’s strong track record will be enhanced when it joins the Citizens Advice service as a result of this order.

Citizens Advice will be established as the publicly funded advocate for consumers, bringing together its existing wealth of knowledge of the problems faced by everyday consumers and Consumer Focus’s technical knowledge on the regulated gas, electricity and postal services industries. This change will create an even stronger voice for consumers, challenging public policy-making more effectively. This will mean better consumer outcomes because the issues that they are complaining about, such as confusing energy contracts, misleading prices and aggressive sales practices, will now directly influence consumer protection policy.

The transfer of the Consumer Futures function is a testament to this Government’s confidence in the major role that Citizens Advice plays in our civil society. We firmly believe, contrary to some claims in the other place, that the leadership of Citizens Advice is best placed to deliver the Consumer Futures functions alongside its bureaux and helpline services. In 2012-13 the Citizens Advice consumer helpline dealt with almost 837,000 new cases, while 91% of consumers reported that they would use the service again and 60% said that they could not have resolved the problem without the help and advice that they received. So there is evidence that change both has been necessary and is working.

Last week the noble Lord, Lord Whitty, expressed concern about funding for Citizens Advice, implying that it would have insufficient resources to deliver these new functions. I can confirm that Citizens Advice will of course continue to receive the same amount of ring-fenced funding, from an industry levy, to allow it to enhance the delivery of this important work.

These changes will also create a stronger link between national enforcement of the Estate Agents Act 1979 and local intelligence from the trading standards community by appointing a lead enforcement authority to carry out the work on behalf of all trading standards authorities. This will be overseen by the NTSB, ensuring a strong connection between local enforcement trends and national cases.

This lead authority model has been extremely effective in delivering other trading standards services. For example, fraud worth more than £145 million has been tackled by the Scambusters and the Illegal Money Lending Team in the past 18 months. The Illegal Money Lending Team is a trading standards unit based in Birmingham City Council, but it provides an England-wide service and has received plaudits for its successes. The funds for policing the UK estate agency market will be transferred from the OFT to Powys County Council via the NTSB’s enforcement grant, and ring-fenced to ensure that it is used for the purpose intended.

When the order was debated in the other place, as well as in the previous debate in the Lords on 24 February, there was some concern about the process for appealing against warning and prohibition orders issued by Powys County Council. I confirm that the Government are not proposing any changes to the estate agents appeal process under the Estate Agents Act 1979 through this order. An appeal can be made to the First-tier Tribunal (Estate Agents), which forms part of the General Regulatory Chamber of the First-tier Tribunal. This is the same appeals process as applies to dozens of areas of civil law. I am pleased to report that Powys County Council has written to the noble Baroness, Lady Hayter, to clarify this point. I hope that consequently the noble Baroness is reassured on this issue.

Questions have also been asked, both here and in the other place, about whether Powys County Council has the capability to undertake its new lead enforcement role. When the decision was made to transfer the OFT’s powers to a single trading standards authority, an open competition was run to select the local authority best placed to discharge the functions. All England and Wales local authorities were invited to bid for the work. Six bids were submitted, all of which were scrutinised by a panel that was chaired by the noble Lord, Lord Harris, and involved senior representatives from trading standards. This panel judged Powys to be the local authority best placed to provide the function and I have every confidence in the ability of its trading standards officers to carry out the work effectively.

On 24 February the noble Baroness, Lady Hayter, also expressed concern about accountability for and monitoring of these functions within our new consumer landscape. Citizens Advice and Citizens Advice Scotland both have well established grant funding relationships with my department and are already fully accountable for the use of public and levy funding through conditions placed in their annual grant letter.

Powys County Council will also be accountable to my department via the annual grant letter process. Powys will report to the NTSB as the co-ordinator of trading standards and the NTSB will be accountable to BIS, my department, for delivery of that work. Accountability for the functions under the money-laundering regulations is discharged through HMRC cost controls. I hope that noble Lords will agree that these arrangements are clear and robust.

Another issue raised on 24 February by the noble Lord, Lord Harris, and the noble Baroness, Lady Hayter, concerned the approval processes for estate agent and letting agent redress schemes. As noble Lords will no doubt be aware, the Department for Communities and Local Government is responsible for introducing redress schemes for the letting and property management sector.

The procedure for approving redress schemes in both the estate agent and letting agent sectors are outside the scope of this public bodies order, which deals only with the transfer of responsibility for approving the estate agents’ scheme from the OFT to Powys County Council. However, I can confirm that officials from BIS and the OFT have been in contact with their colleagues in DCLG to help them take account of the lessons learnt from regulating estate agents when designing the new letting and property management redress scheme. Although the two sectors may have many different characteristics, the process for mandating letting and property management agents will mirror that for estate agents.

This order also creates efficiencies by transferring responsibility for oversight of estate agents’ compliance with the money-laundering regulations to HMRC. This capitalises on HMRC’s expertise in supervising other sectors for the purpose of money laundering and creates opportunities to exploit synergies to uncover other forms of non-compliance, which will give the taxpayer extra value for money. My understanding is that the Opposition welcome this change; indeed, at the debate on 24 February the noble Baroness, Lady Hayter, said herself at column GC 301, “this bit is brilliant”.

Section 8(1) of the Public Bodies Act provides that Ministers may make an order only where they consider that it serves the purpose of improving the exercise of public functions. Such orders must have regard to efficiency, effectiveness, economy and securing appropriate accountability to Ministers. The changes I am proposing meet all these criteria. I remind your Lordships that the Secondary Legislation Scrutiny Committee supported our view that we have thoroughly met all the relevant requirements. Indeed, the committee was satisfied enough to invoke the 40-day, rather than 60-day, scrutiny process.

In conclusion, the changes made by this order complete the Government’s programme of improvement to the consumer landscape. In abolishing the National Consumer Council and transferring relevant functions to Citizens Advice, and transferring the OFT’s estate agency functions to HMRC and Powys County Council, this order puts the finishing touches to a landscape that will work more efficiently and effectively for the public.

I commend the order to the House.

Amendment to the Motion

Moved by

[Baroness Hayter of Kentish Town]

As an amendment to the above Motion, at end insert “but this House regrets that the draft Order fails to produce a coherent framework or single voice to protect consumers; fails to harmonise redress for estate and letting agents; and fails to produce adequate parliamentary or ministerial accountability for the new framework”.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, contrary to what has been said, the decision to abolish the NCC was taken to implement the coalition’s promise in the coalition agreement to,

“reduce the number and cost of quangos”.

It was not taken in the interest of consumers, nor after any criticism of the NCC. Indeed, the NCC’s work has been widely recognised in the UK and beyond.

The Government said that they wanted to “simplify” the architecture of consumer representation; but they set about dismantling the NCC, and merging the OFT with the Competition Commission, before looking at the full range of responsibilities of each of those bodies. In fact, there was precious little overlap between the work of Citizens Advice and the NCC, while some of the OFT’s work—particularly on codes, anti-money laundering and redress—really does not sit happily with the Competition Commission.

The Government have now discovered this. They have replaced the NCC and the OFT with the CMA, CA, CAS, CCNI, SCOTSS, TSI, NTSB, PCC, CPP and HMRC. To help Hansard and others, that alphabetical soup stands for: Competition and Markets Authority; Citizens Advice; Citizens Advice Scotland; Consumer Council for Northern Ireland; Trading Standards in Scotland; Trading Standards Institute; National Trading Standards Board; Powys County Council; Consumer Protection Partnership; and HM Revenue and Customs. For some code approval there may also be the PSA—the Professional Standards Authority. That is hardly a clear and coherent system, either for business or for consumers. Our own Secondary Legislation Scrutiny Committee actually called for greater clarity for consumers about this new landscape. This mish-mash is not clarity.

Furthermore, none of those bodies has any direct representation from consumers. None of them has a consumer panel, nor any requirement to include someone with a background in consumer representation, despite our endeavours to ensure that for the CMA during the passage of the Bill. My concern might be driven by the need for any organisation funded to protect consumers to have some accountability to consumers; but I know that this House, quite rightly, has a broader concern about accountability to Parliament and to Ministers. Indeed, the test of the Public Bodies Act 2011 is that measures should lead to a more efficient, effective and appropriate level of accountability to Ministers. This order fails that test.

I will take the example of estate agents, which has been mentioned already. For some years they have had to belong to a redress scheme. The OFT approved such redress schemes and could ban estate agents who broke the rules. This responsibility for redress schemes—and through them for 25,000 estate agents across England and Wales—will move to Powys County Council, which is an authority responsible to its Welsh electorate. However, for estate agents in England and Wales the elected authority of Powys will be accountable to BIS; it will report to the National Trading Standards Board in its role as co-ordinator; and it will be responsible to the Trading Standards Institute for the administration of its grant. Our Secondary Legislation Scrutiny Committee raised serious concerns about how Powys could reconcile its accountability to several different bodies. The Government have yet to answer those concerns.

Furthermore, as the House may recall and as the Minister mentioned, the ERR Act now also requires letting agents to belong to a redress scheme. Obviously, the two existing OFT-approved estate agent redress schemes will apply to be approved for letting agents. Will it be the same body—namely, Powys—that will approve redress schemes for letting agents? No—that would be far too simple. The Department for Communities and Local Government is keeping that to itself and it will be handled quite differently, even if lessons are learnt.

Not only that, but there is a risk that Scotland, Wales and individual local authorities in England will all have different approval schemes for redress schemes for the rental sector, with a consequent lack of consistency for landlords and tenants. Landlords and agents with property in more than one area could have varying rules to apply in different parts of the country. That does not just sound like madness; it is madness. At the moment we have just two redress schemes handling estate agent complaints. It would have been so sensible for them to handle letting agent complaints, given that virtually every estate agent is also a letting agent.

Instead of that, the two existing schemes will have to seek authorisations from two or more different bodies, no doubt on slightly different criteria and over slightly different timescales, and report back annually to any number of different authorising bodies. Is this getting rid of red tape for redress schemes? Will it help consumers if there are different arrangements for handling complaints about buying as opposed to renting property, or if they are dependent on where people happen to live? The answers are, I think, obvious. Why on earth can these two almost identical redress mechanisms not be harmonised?

18:30

The choice of a single local authority—Powys—to undertake this national task raises some serious questions. The original bid to the NTSB was from Powys and Anglesey. The latter was, among other things, to have heard appeals from estate agents dissatisfied with a Powys ruling. We have been told, and I have been reassured, that that is no longer the case as the First-tier Tribunal will now hear appeals. Today, I received a letter from the Minister in the other House saying that Anglesey will not have any role, and I hear from Powys—which, I think, has still failed to set a budget—that it is still looking at how to set up the system, although I gather that it now has one officer seconded to the OFT to find out how on earth to do it.

However, despite the assurance about Anglesey, today I got a letter from Jenny Willott, the Minister in the other House, saying that Anglesey is no longer to have any part in this procedure, despite having been on the original bid. Later this afternoon, I heard that an officer from Anglesey was in London today, finalising its role in the oversight of the redress schemes. Perhaps the Minister will clarify this for us. We need clarification before we agree this order. Is it now simply Powys that is due to oversee this or is it Powys and Anglesey, to which the committee chaired by my noble friend awarded the contract?

I note that the Minister said that he had confidence in this set-up. It is so important to house buyers that the complaints system should work. If he has that confidence, perhaps he will explain what exactly the role is and whether anyone is clear that Powys knows what it is doing. When my honourable friend in the other House asked whether we could see all the documents on the bid in time for this evening’s debate, the Minister’s colleague in the other House said that it was an FoI request and the documents would not be available until next month—so we have not been able to have the full bid papers and documents pertinent to the consideration of this order for today’s debate. Surely we should know the exact arrangements before we agree the order.

I turn to the transfer to Citizens Advice of the NCC’s policy work and statutory information-gathering powers. I should first say that, the merger having happened, we clearly wish Citizens Advice and Citizens Advice Scotland well with their remit. Citizens Advice Scotland has sent me an impressive list of its consumer education, advice and campaign work. We hope that the Government will fund both of them properly and we look forward to them working to enhance consumer protection. However, we remain concerned about European consumer policy, non-functioning markets, vulnerable consumers and future input into legislative work. Traditionally, the NCC was very active on longer-term policies, and I fear that without a single powerful consumer voice to shape public policy, the consumer interest may be weakened.

Furthermore, there is the issue of the accountability to Ministers of an independent charity, rightly and properly overseen and directed by its charitable trustees, for the use of public money and statutory powers. For example, what would happen should Citizens Advice, driven by the inexhaustible demands of desperate clients, underuse its powers simply by force of circumstance? We argued unsuccessfully during the ERR Bill that the CMA should have reserve powers to ensure that sufficient attention was paid to this new element of the CA’s remit and to ensure that it linked sufficiently with all the other players, such as trading standards, Powys and TSI, but we did not get it, so it remains unclear what would happen should Citizens Advice fall down on this part of consumer protection. I do not suggest it will, but who would know? Who would check? Certainly not consumers, as they no longer have an independent voice.

Vincent Cable’s letter of 17 January to the noble Lord, Lord Goodlad, said that the Consumer Affairs Minister will hold Citizens Advice to account for the effective delivery of these functions on behalf of consumers—but how will that happen? Will it be simply through the terms of the grant? How will the Minister hear consumer views, and what action could she take if Citizens Advice failed to prioritise, for example, users of government-provided services? How could Parliament exercise any oversight on this?

There is also the issue of whether Citizens Advice will remain an independent charity, because the ONS has said that because it is spending public money, it is in fact now a public body. Has Citizens Advice become a quango? Therefore, have we gone through all this to get rid of a quango called the NCC and see Citizens Advice turned into a quango—so we have not reduced even by one the tally that the Government wanted to get rid of?

Much consumer law is made in Europe, and we worry whether the new architecture will ensure the continuation of the European work undertaken so effectively by the NCC. There is no mention of the EU in the explanatory document, or in the Secondary Legislation Scrutiny Committee report. Who will influence and help shape the rules coming out of Brussels on behalf of UK consumers?

The decision to wind up the NCC having been taken, we want the new system to work as well as it can for consumers. Our regret is that this order implements an overhasty, ill thought-out change caused simply by the Government wanting to reduce the number of quangos, and that it fails to produce a coherent framework or a single voice to protect consumers. It fails to harmonise redress for estate agents and letting agents, and it fails to produce adequate parliamentary or ministerial accountability for the new framework. I beg to move.

[Baroness Oppenheim-Barnes (Con)]

My Lords, I quite naturally have a great interest in this debate as not the mother or even the grandmother but probably the great-grandmother by now of the introduction of the very first National Consumer Council. My noble and learned friend Lord Howe was the Minister in charge and I think the first chairman was John Methven. The next chairman was the noble Lord, Lord Borrie. I had just come to office as a Minister of State and to establish my neutrality all my senior officials said, “You won’t want to reappoint him. He’s a supporter of the Labour Party”. I said, “I want to reappoint him because he’s the best for the job and has always been the best for the job”. Right up to the very end, he was the best for the job. That is just establishing that I am not making very much in the way of party political points. However, I would be much more sympathetic to what the noble Baroness has said today if not for the fact that during the Committee stage of the Enterprise and Regulatory Reform Bill I had a strong amendment to take out the provision that virtually ended the life of the Office of Fair Trading and another for the Monopolies Commission but I received no support whatever from the party opposite. If I had received support—meaningful support—I would have been quite willing to table amendments at Third Reading that would have had a great deal more importance and significance. After all the things that the noble Baroness has said, I regret very much that I did not get that support at that time.

When one looks back over the years, when we started the Office of Fair Trading and when the Monopolies Commission existed and then the NCC—of which I subsequently became chairman—things were done in great detail for the benefit of consumers and to a very high standard by both those organisations, and no one is sure what exactly is replacing them. It looks extremely like just another government department, which is not exactly what we would have accepted as a replacement that would be as available and as important as those two bodies. They have had a very quick demise, considering the date of the Bill and what was then going to happen. I regret this very much indeed. However, I say on behalf of the Government and also on behalf of the Conservative Party that we have been the leaders in all matters of consumer protection. We did not have junior Ministers; we had Ministers of State, with their main responsibility being consumer affairs. We did not have secondary Ministers. For the whole 13 years that I was in your Lordships’ House in opposition, we did not have anything very important and the only Minister was a very junior Minister, who had other things in his portfolio—which I think included the little matter of Northern Ireland.

I feel that the noble Baroness has to be fair in these matters and explain why I received no support. We might have had a different outcome or influenced the Government in what they were going to do next. Now we have a big, new Consumer Rights Bill going through the other place, which I know the noble Baroness supports, as do I. We might want to tweak it here and there—indeed, that is quite likely—but it establishes that this party and this Government are not anti-consumer. As a past chairman of the NCC, I understand her concerns and I sympathise. I want to give the Government a chance to take note of what we are saying and of what we said in Committee and at Third Reading, but there are still some areas that are not clear and not satisfactory. It is not just the voice or anything of that nature but how it is going to work, which is the most important thing about it.

Therefore, I have a great deal of sympathy with this Motion of Regret. However, I still would like somebody on the Opposition Front Bench to give the right amount of praise to Conservative Governments over the years for what they have done for consumers and for the trails that they blazed, and to welcome the new consumer legislation, which is still in the other place but will be in your Lordships’ House, I believe, in the autumn. Those are my views. They are mixed, but the principle of the Motion is one with which I have to sympathise.

18:45

[Lord Borrie (Lab)]

My Lords, my noble friend Lady Hayter of Kentish Town gave a brilliant exposé and critique of the Government’s approach on this vital matter of organisations and their relationship with each other in the order. I want to concentrate on two matters. One is the National Consumer Council, which is to be abolished by the order; I regard that as a matter of regret. The other is concerned with estate agents. What I want to say about the National Consumer Council is, if you like, old stuff. The Government have heard not just from this side of the House but also from the other side, from people such as the noble Baroness, Lady Oppenheim-Barnes, that, in its day, the National Consumer Council, led by such as herself and the noble Baroness, Lady Wilcox, did a distinguished job with dedicated staff, reasonably well resourced. It did a great deal of research on behalf of the consumer with no ties of any other kind that would have spoilt that.

Being in charge of the Office of Fair Trading for many years, I remember that the pieces of research done by the National Consumer Council were extremely valuable to us. They were thorough and done from a consumer angle that enabled one to counter the other angles that the Government were always getting from the CBI, the Institute of Directors and so on. There needed to be a consumer voice, and the NCC gave it.

Where we have got to at the moment is that we have an order to abolish the National Consumer Council. The Government have made what efforts they can to pass some of its responsibilities on to other bodies. Citizens Advice has long had devoted workers in the field of advice and education, not just on consumer matters but on all sorts of other personal matters of welfare, social security and so on. I do not denigrate the work of the citizens advice bureaux or say that things should not be transferred to them from other bodies. However, the National Consumer Council provided more than simply advice and education, and we are losing something. The Government have never really explained who is to do it now because the other bodies referred to—the co-ordinating bodies such as the National Trading Standards Board, well chaired by my noble friend Lord Harris of Haringey—have other responsibilities. They do not have time, in many cases, to do lengthy research to help government departments and the Office of Fair Trading. Indeed, the Office of Fair Trading is also to disappear in three weeks’ time—on 1 April, I believe, which seems a very suitable date. It is to merge with the Competition Commission to form the Competition and Markets Authority. We have talked about that in the past and I, for one, am reasonably satisfied that what has been achieved in bringing those two bodies together will give them a good start on 1 April to progress their work. However, I still do not understand, and I seriously regret, the abolition of the National Consumer Council.

As far as estate agents are concerned, Members of the House will know that the Estate Agents Act 1979 was a very substantial Act dealing with dishonesty and other breaches of criminal law that required some attention; perhaps that attention should take the form of banning the estate agent from continuing to work as such. Prior to the banning order there would be warnings and so on. The Office of Fair Trading has done that throughout the existence of the Estate Agents Act.

Once the Office of Fair Trading had disappeared, as was intended by the Government through the order now before us, who was to do the work of enforcement, banning estate agents when they had proved themselves to be dishonest and ought not to practise as such any longer? The answer is Powys trading standards department, or Powys Council. I have nothing against Powys; I do not even need to look at an atlas to know where it is. It is, none the less, a smallish area—which happens to be in Wales rather than in England. I have no doubt that my noble friend Lord Harris of Haringey, who may speak in this debate, will say that a competitive tendering process was brought about by the Government, which many county councils responded to, and Powys turned out to be the best. I did not know the various detailed points, which seem to be continuing to change even today, meaning that the order before us is not finally complete. Those matters mainly concern Anglesey —I also happen to know where that is, and I know that it does not border on Powys. However, there we are; there might be some mutual arrangement between Anglesey and another county council.

Since there was a competitive tendering bid, I dare say that it has been clearly established, according to those who examined the matter, that Powys was better than any of the other applicants. That does not mean that it is better than the Office of Fair Trading has been over the past 20 years, or however long it is. Neither does it offer any help to the Minister in suggesting that it is a suitable recipient of the very considerable banning order powers that the Office of Fair Trading has had and used from time to time over all these years. However, the Government have not had much chance of doing anything else. No doubt they searched around to find a remedy, because there are no other national bodies they could latch on to, unless possibly they wanted to overwork the Competition and Markets Authority and give it something entirely different from competition. It is not very satisfactory. If Powys does a good job, which it may well, why does it then have to go through another process of competitive tender in three years’ time? Three years is hardly enough time to get established, let alone to be ready to fight one’s corner against competitors.

The whole Bill was ill thought-out from the beginning, as my noble friend Lady Hayter indicated. It has sorted some things out as regards Citizens Advice and the work of trading standards officers in different departments coming together on a national basis to work across the boundaries. That has gone on, and it is good. However, the whole episode has led to the unsatisfactory order which is before us today. If we pass it, we do so with my regrets.

[Lord Whitty (Lab)]

My Lords, I support the amendment to the Motion in the name of my noble friend Lady Hayter and her concerns about this order.

We are obviously at the final stage of this process, and the Government have determined for some time to transfer many of these functions as set out in the order. I make it clear that I hope that the new arrangements will deliver for consumers. I declare a past interest as the first chair of Consumer Focus, which was the expanded National Consumer Council, over the past four years, and as a vice-president of the Trading Standards Institute. As this is the final stage of the dismantling of Consumer Focus, which was only established under the 2007 Act, it provides for the responsibility for those issues which still remain with Consumer Futures, the successor of Consumer Focus, namely the regulatory area of energy and post.

I rehearsed at some length in Committee—I do not intend to repeat it entirely—why I felt that the coalition Government had missed a major opportunity of doing what the Minister claims this order does: namely, to create a comprehensive consumer advocacy organisation which is clear to consumers, to government and to business. When the new Government came in they rightly identified the complexity of the existing consumer landscape and the need to simplify it. I still believe that it was the intention of BIS Ministers—the noble Lord’s predecessors—to carry out that comprehensive reorganisation. However, that scheme was hijacked by the Cabinet Office, the desire for a cull of the quangos, and the consequent timetable of the passage of the Public Bodies Bill, and undermined by the squeeze on public expenditure.

It is now three years since the Public Bodies Act was passed. I am afraid that in that time there has been some salami-slicing of the government support for consumer advocacy and of the money available. That has not just hit Consumer Focus but some of the other bodies as well. Passenger Focus, which deals with passenger transport, has had its budget significantly cut, the Consumer Panel within Ofcom that covers communications has virtually disappeared, and there has been some narrowing of the role of the Consumer Panel in what was the Financial Services Authority and is now the FCA. Therefore there is a bit of a pattern. However, at least as far as the future of Consumer Focus’s responsibilities is concerned, we know that very soon Citizens Advice and Citizens Advice Scotland will take on those final responsibilities. That it would have been better to have had a comprehensive organisation which they could take over before transfer into the third sector is, in a sense, water under the bridge. However, we therefore still have a partial coverage and not the fully comprehensive system which the Minister was claiming we have.

As regards Citizens Advice, I do not think there are any noble Lords who do not have huge respect for its work. In one sense, to broaden its policy and advocacy function will turn it into an even more effective body. However, there have to be some anxieties about both its capacity and its resources. Contrary to what the Minister has said, the resources transferred from the previous Consumer Focus structure are significantly less than that which existed within Consumer Focus. Fewer than half the staff posts will be transferred. Although the level of funding for the energy and post side will more or less be kept up, the area to which my noble friend Lady Hayter referred, which is effectively the traditional area of the NCC—consumer interest within the non-regulated markets, the whole area of private services, goods, shopping, financial services, digital affairs and so forth—has been squeezed the most.

In its relatively short life, Consumer Focus produced 300 reports, 500 responses to government consultations, and 200 pieces of research work. That requires significant resources and concentration of effort. In the area of non-post and non-energy responsibilities, that will be severely cut. To take one example, reports of Consumer Focus—or the NCC, as for simplicity we had better call it—on cash ISAs and on travel money indirectly recovered £300 million for consumers.

19:00

The Minister has claimed in Committee, in a letter to me and again this evening that the resources will be the same: that the money from Consumer Focus for non-energy non-post work has transferred to Citizens Advice and Citizens Advice Scotland. Not so. Three years ago, that figure was £5 million a year. The £2.7 million to which the Minister has referred is therefore a cut of nearly half over the level of activity for traditional NCC work. We have therefore lost a significant part of the capacity to assess consumer detriment across all these fields, including the general field of consumer law and in particular, the area of European law in which Consumer Focus and the NCC were so prominent.

There are some parts of this order that I welcome. One of them is the transfer of powers which Consumer Focus had under the Consumers, Estate Agents and Redress Act 2007 to Citizens Advice. The Government were initially somewhat hesitant about that. It is important that Citizens Advice inherit those powers to require information from any provider of goods and services. As my noble friend has said, one of the consequences of this appears to be that the ONS has reclassified Citizens Advice as a quasi-quango, part of the public sector—so much for getting rid of quangos. Whatever we call it, I hope that does not mean that the independence of Citizens Advice as a charity and its ability to campaign for citizens and for consumer rights—if necessary against government policy—is thereby constrained. I hope that Citizens Advice can take on this wider role, and that in a few years’ time we shall see that organisation develop at least as strong a role in general consumer rights and advocacy as predecessor organisations. Regrettably it is somewhat hobbled in the way in which we are beginning this, but I wish it well.

Briefly, I have two other points. One transfer is that of the responsibilities for post to the Consumer Council for Northern Ireland. That should have been done five years ago. I am glad that the Government have eventually done it because it clarifies the position in Northern Ireland.

The Consumer Council for Northern Ireland is a comprehensive body. It covers all the regulated sectors: transport and water as well as energy and now post. It is also a complaints body and a consumer education body. It is exactly the kind of model that Ministers were after in the first place and that I should have liked to see here in Great Britain. It is therefore regrettable that some of the enthusiasm for culling public bodies has begun to infect Northern Ireland colleagues and that they are now looking at the Consumer Council for Northern Ireland with a view to curtailing, transferring or dismantling all or some of its functions. I hope that the Minister’s opposite numbers in Northern Ireland do not go down that road, because it is a very important body.

Finally, on trading standards, concerns have already been expressed by my noble friends Lord Borrie and Lady Hayter. There is an argument for devolving what were the functions of the OFT to local authorities and having a lead for local authorities in these areas, but that is very difficult to attain when there is such a squeeze on trading standards resources across the country. My noble friend Lord Harris reported to Committee—I hope he is going to repeat it in a moment—that there is effectively a 40% cut on the funding of trading standards in England over this period. Against that, it is difficult to see how trading standards organisations at local authority level are going to step up to carrying out the kind of job that the OFT has done in the past. I hope that we are wrong, but it is a bit of a diversion from some of the traditional role of local authorities. We are stepping into the unknown, whereas it was clear how important the OFT role in this field was.

To take one example in relation to Powys, budget discussions are continuing with Powys, but I understand that in parallel with taking on this enforcement responsibility, the likelihood is that Powys will cut its grant to Citizens Advice by at least half and possibly completely. That indicates the degree of squeeze there is on consumer activity at local authority level. At present all fronts are suffering cuts.

The Government are doing many positive things, and I join the noble Baroness, Lady Oppenheim-Barnes, not only in her defence of the history of the NCC but also in welcoming, at least in general terms, the consumer Bill that has been introduced in another place. I hope that we are moving into a more positive era. However, it is difficult to do this when capacity and resources are being squeezed on both the consumer advocacy and the enforcement front.

[Lord Berkeley of Knighton (CB)]

My Lords, I shall help the noble Lord, Lord Borrie, on one small point. Being Lord Berkeley of Knighton, I reside in Powys and have had considerable dealings with Powys County Council and indeed the trading officer. I was slightly pricked by the noble Lord’s comments, and should like to inform him that Powys is quite a long way from Anglesey. Having said that, I feel that I am not expert enough to comment on the central issue, but in my experience Powys is an exemplary council. In my dealings with it and with its trading standards office I have experienced great efficiency and courtesy.

[Lord Harris of Haringey (Lab)]

My Lords, I declare an interest as chair of the National Trading Standards Board, which a number of noble Lords have mentioned. I am pleased to take part in a debate where so many distinguished Members of your Lordships’ House who have played a significant and major role in the development of consumer affairs and consumer protection in this country have participated: the noble Baroness, Lady Oppenheim-Barnes, and my noble friends Lord Borrie and Lord Whitty. I am not going to travel down the historical road on which the noble Baroness, Lady Oppenheim-Barnes, took us. I recall when I was a very junior staff member of an organisation—abolished I think by a Conservative Government—called the Electricity Consumers Council, her rather grand appearance before us when she was Minister for Consumer Affairs. I also remind her that it was, I think, a previous Labour Government who had consumer protection as a Cabinet role fulfilled by my noble friend Lord Hattersley, who is not in his place today. That was some years ago—

[Baroness Oppenheim-Barnes]

It was not quite the same thing.

[Lord Harris of Haringey]

I accept that it was not quite the same thing.

The Minister in his introduction told us that the Government’s aim was to improve the offer to consumers. When we talk about the transfer of estate agent functions, essentially we are not talking about a change in the offer. What is happening is a transfer of what I am assured—I am not sure that the Minister actually said this in Committee—is the same sum of money that was expended by the Office of Fair Trading on the estate agent regulation functions, through the National Trading Standards Board, for the function which has now been awarded to Powys. It is, therefore, the same money, not new money. It is not an improvement in the offer. I shall come back to why that is important in a moment.

The £178,000 or thereabouts spent by the Office of Fair Trading has now passed to the National Trading Standards Board. As a board, we went through a commissioning exercise. As has been reported, six bids were received from local authorities around the country and Powys was selected by the selection panel to be the successful bidder. For the avoidance of any doubt, given some of the comments made in the other place, I should make it clear that none of those involved in the selection process was associated with the bids considered.

My noble friend Lady Hayter implied slightly pejoratively—I think that she was slightly overegging the case for the purposes of debate—that one officer from Powys had been seconded into the Office of Fair Trading to learn how to do it. I had the benefit earlier today of meeting a number of the officers from Powys who are responsible for this function. As I understand it, two officers from Powys are working in the Office of Fair Trading at present, for a very specific reason. Because of the problems that the government business managers have in processing business through your Lordships’ House and elsewhere, this order has not yet been made. As a consequence, it is not possible for preparatory work to be done in respect of how this function is to be carried out because the information cannot legally be transferred from the Office of Fair Trading to Powys County Council. So until your Lordships pass this order, the files cannot be moved and it is necessary for the officers from Powys to work through the Office of Fair Trading and carry out that function.

It is worth emphasising that this is a national function that will be delivered by a single local authority. That is not a unique model. There are a number of functions financed through the National Trading Standards Board where that is the model. The Minister referred to the illegal money lending teams for England and Wales, which are administered by a single local authority. The Illegal Money Lending Team for England is a very large organisation with a large number of staff, delivering services around the country, not only to consumers but in terms of outreach, and using the money seized under the Proceeds of Crime Act to improve consumer education. I was involved at a launch in a school in north-west London only a few days ago where a teaching pack for schools was being launched to ensure that pupils acquire the necessary skills to manage their own money and to understand the dangers of them and their families falling into the hands of loan sharks. That is a national function being delivered by a single local authority—in that case, the City of Birmingham.

There are similar examples in the work that is done on e-crime, on behalf of trading standards, which is delivered by North Yorkshire County Council, and the work being done on the national intelligence hub, which is delivered by Suffolk County Council. You can go through a list of functions that are delivered by agreement, by a memorandum of understanding, by individual local authorities in this way. So the Powys example is by no means unique. It is worth recording that and to recognise that this is about establishing and maintaining a single national state agency enforcement unit, providing an appropriate adjudication system, including a process to manage appeals; to provide and maintain a web-based public register; and to approve and monitor the approved estate agent redress schemes to which my noble friend Lady Hayter referred.

19:15

The fundamental issue that should be considered in the context of this order is the Minister’s initial opening statement about improving the offer to consumers. What is being enforced here is the Estate Agents Act 1979, which was no doubt right for its time—but a lot has happened since then. Increasingly, properties are bought and sold and the interactions take place through the web. There are still an awful lot of estate agents with a physical presence in high streets, but the nature of estate agency is changing, and the time may well have come for us to look at the legal basis on which this regulatory function takes place. We also have the increasing practice of estate agents who act both for the person who is selling their property and for the person who is buying the property, somehow managing to acquire fees from both of them in the process—which probably coincides with just about everyone’s caricature view of how estate agents behave. The question of how this regulation should go forward in future also requires a look at the legislative framework, and I would be grateful if the Minister could tell us whether, perhaps in the passage of the Consumer Rights Bill that is going through Parliament at the moment, we might want to look soon at whether the Estate Agents Act 1979 is fit for purpose.

That brings me to the point that my noble friend Lady Hayter raised about letting agents. I understand that there is a distinction, but in a large number of instances a letting agent and an estate agent is the same entity. It is not simpler to have one regulatory mechanism dealt with through the process that we are discussing today and another dealt with through the DCLG process; despite the no doubt wonderful interaction that is taking place between the officials of the two departments involved, that is not sensible. It certainly causes confusion. At a time when I know that the Government are committed to reducing the burdens on business, does it really make sense to have what may be one very small local agency deal separately with two regulatory systems maintained by two different departments? I suspect that it does not.

Interestingly, earlier today I met a representative from the Independent Network of Estate Agents. I do not know how many agencies that he relates to, but it was quite apparent that he was totally confused about how the estate agent regulatory system interacted—in fact, it does not—with the process for regulating letting agents. He had lots of questions about the new process for managing letting agents, which colleagues who are responsible for delivering regulation of estate agents could not answer. But that is a demonstration that this is going to cause confusion and problems on the ground.

The other interesting message that came across from a number of the organisations or stakeholders who had come along to hear how the new system worked was their amazement that the whole exercise was going to be valued at only £178,000. These are people who are to be regulated by these processes, who said that they thought that it should cost rather more because they thought that there was rather more to do.

The Minister has talked about improving the offer to consumers, but this measure is not doing that—this is transferring the offer to consumers and administering it in a different way. There is clearly work to be done both on the legislative framework about the interaction with letting agents and in terms of the resources that can be made available for this function, if we are genuinely to improve the offer to consumers.

[Viscount Younger of Leckie]

My Lords, this has been an interesting debate, and I thank all noble Lords for their contributions. Just before I go into the detail of the debate, I want to cover a couple of points. First, the noble Lord, Lord Harris, asked recently about the review of the Estate Agents Act. At present, we have no plans to review the Act. However, my colleague in the other place, Jenny Willott, has written to ask the ombudsman to review the issue of double-charging, which I agree is a worrying trend.

Secondly, I thank my noble friend Lady Oppenheim-Barnes for her general support for what we are doing in the Consumer Rights Bill. I very much welcome her support for the Government’s measures to modernise consumer law, which will make a major difference on behalf of consumers and has been widely supported.

I now return to this particular order. The Government believe that the changes introduced by the order will deliver more effective consumer advocacy and more joined-up supervision of the estate agency regime. Noble Lords have raised a number of points and I will seek to address these in a few moments.

The noble Baroness, Lady Hayter, stated that the measures that we are proposing lack coherence and fail to provide a single voice to protect consumers. I challenge that assertion. The consumer journey will not change significantly under the new arrangements. We are simply joining up the policy-making and regulatory oversight expertise of Consumer Futures with the existing consumer complaint handling abilities of Citizens Advice services. The changes do not mean additional burdens for local bureaux, as information on cases that they deal with is already collated centrally to inform Citizens Advice campaigns and reports. As a result of these changes, anyone needing impartial help or advice on a consumer issue will be able to phone the national helpline, contact their local bureau or use the interactive help on the Citizens Advice web pages.

The noble Baroness, Lady Hayter, and the noble Lord, Lord Whitty, suggested that we are simply abolishing quangos. Again, I challenge that assertion, as I did at the beginning of the debate. This is not simply about making a reduction in public bodies. Bringing together the in-depth knowledge of the regulated energy and postal service sectors with the wealth of intelligence on consumer problems available to Citizens Advice will bring coherence to public policy-making. For the first time, the consumer advocate will have detailed knowledge and understanding of the challenges facing real consumers across the country when campaigning to influence new regulation and policy development.

During the debate in Committee last week, the noble Lord, Lord Whitty, bemoaned the fact that a number of consumer bodies remained outside the scope of these changes. I reiterate that this is not about rearranging the deck-chairs for the sake of it. This is about achieving real benefits for society, by enabling consumer advocates to effectively influence energy policy, transport policy, telecommunications policy, financial policy and general consumer matters. Citizens Advice will collaborate with consumer representatives in the other regulated sectors to ensure that best practice is shared and that regulatory developments in the other sectors reflect insights from the experiences of people on the street. Trading standards officers already take enforcement action against local estate agents. Changes brought about by this order support the flow of information from local to national enforcement, bringing further coherence to enforcement in this sector.

The noble Baroness, Lady Hayter, implied criticism of the Government for failing to harmonise redress for estate agents with redress for letting agents through this order. I will say more about this in a moment, but such harmonisation was not an objective of this order and the estate agent and letting agent sectors have very different characteristics.

When the Enterprise and Regulatory Reform Act was debated in Parliament, the noble Baroness proposed an amendment that called for letting agents to be regulated in the same way as estate agents, much as she described in her speech today. This amendment was rejected by the Government on the grounds that overregulation reduces supply, which in turn reduces choices for tenants and could lead to rent increases. However, the Government recognised the value of introducing a mandatory redress scheme, and this part of the noble Baroness’s amendment is now part of the Act.

The Government have taken a consistent approach. The process to establish and approve the new redress schemes for letting agents will mirror that for the existing estate agency schemes. This follows discussions between BIS and OFT officials, with colleagues in the DCLG, to help them take account of the lessons learnt from regulating the estate agency market; such points have been made by noble Lords in today’s debate. The Secretary of State for Communities and Local Government will be responsible for approval and oversight of redress schemes for letting agents, reflecting his department’s responsibility for this sector. Oversight of the estate agency schemes, and approval for any future schemes, will reside with Powys, reflecting the extensive role of trading standards in the broader regulation of this sector.

Before I address some of the questions raised, particularly those of the noble Baroness, Lady Hayter, I will say that it is very good to have an endorsement of Powys by the noble Lord, Lord Berkeley. It was also particularly helpful to have an explanation of the changes and of the selection of Powys by the noble Lord, Lord Harris.

The noble Baroness, Lady Hayter, raised the issue of the line of accountability for Powys County Council and stated that it was convoluted and unclear. This is simply not true. Ultimately, Powys County Council will be accountable to BIS. Powys will report to the NTSB in its role as co-ordinator, and the NTSB will be accountable to BIS for the performance of its enforcement teams and projects, including estate agency work. For the avoidance of doubt, Powys-elected representatives will have no part in running the new estate agency functions—a point raised notably outside this House.

The noble Baroness raised the issue of the role of Anglesey and stated that the Government have still not made clear what the role of Anglesey is. Both the Consumer Affairs Minister, the Member for Cardiff Central, and I have made it clear that it is Powys County Council that will take on sole responsibility for delivering these estate agent functions. It is true that the original bid submitted by Powys County Council proposed that some of the work be carried out in partnership with Anglesey. However, during the development of the transition bid, as circumstances changed, a decision was taken to deliver all the necessary functions from within Powys County Council.

To avoid any potential conflicts of interest between its statutory responsibilities as the lead enforcement authority and local enforcement cases, Powys County Council has decided to second an official from Anglesey County Council to manage matters that relate to estate agents which operate within Powys County Council’s area. This officer will also investigate national cases under the Estate Agents Act, but will act under the authority of Powys County Council. The OFT currently operates a similar Chinese wall between its enforcement and investigative activities. If it is some reassurance to the noble Baroness, we will show the paperwork associated with Powys’s bid in due course, as promised by my colleague in the other place, Jenny Willott, in her letter to Stella Creasy today.

The noble Baroness also raised the issue of the delay in providing a response to the request from Stella Creasy on the FOI request for the paperwork on the Powys bid. I will clarify that her letter was received on Thursday night, requesting a significant amount of additional information. We issued a response to all the issues that she raised earlier today. We will provide the paperwork requested in accordance with the Freedom of Information Act 2000.

The noble Lord, Lord Borrie, asked why the estate agent powers passed to Powys. Currently, both trading standards and the OFT possess enforcement powers under the Estate Agents Act 1979. Transferring the OFT’s powers to trading standards will simplify the landscape by giving sole responsibility to trading standards. This is very much in line with the Government’s intention that trading standards be responsible for the co-ordination of national consumer enforcement. Under the oversight of the National Trading Standards Board, a lead local authority will utilise the network of national, regional and local intelligence provided by trading standards services to carry out this function. As I have said, there is a previous precedent for a local authority to discharge functions on behalf of a nation, as alluded to by the noble Lord, Lord Harris. For example, the illegal money lending teams for England, Scotland and Wales of the NTSB and Trading Standards Scotland are hosted by single local authorities.

The National Trading Standards Board ran a tender exercise in the summer of 2013, as the noble Lord, Lord Harris, has said, to appoint a lead enforcement authority to host the National Trading Standards Estate Agency Team. Each bidder was required to demonstrate how it would satisfy a number of criteria. As has been said, six applications were received in total, and these were reviewed by a panel of senior trading standards officers, supported by officials from BIS, the NTSB and the OFT. Each bidder was required to demonstrate how they would discharge the functions under the 1979 Act, and through careful analysis of bids, the panel was able to assess that Powys County Council was the authority best placed to provide the most efficient and effective management of the function. I hope that this extra information, on top of what I said earlier, gives some further reassurance to this House.

The noble Baroness, Lady Hayter, asked very clearly why Powys was not appraising letting schemes. I will reiterate that the lettings and property management work redress scheme under the Enterprise and Regulatory Reform Act 2013 is new, and only concerned with mandatory redress, as the DCLG has responsibility for letting and property management agents within government. It was decided that it would be best placed to manage the relatively straightforward redress scheme appraisal process. There is a distinct difference there.

19:29

The noble Baroness, Lady Hayter, raised the issue of some of the OFT’s functions, which she stated did not sit well with the Competition Commission responsibilities in the CMA. We agree that some of the functions of the OFT sit better with other organisations. That is precisely why we are moving responsibility for the redress scheme to trading standards so that the CMA can focus more on market-wide issues to benefit consumers and bring a closer link between front-line trading standards expertise and the estate agency redress scheme.

The noble Baroness also asked why Powys was responsible for regulating all estate agents. These functions are just two of a number of measures that the Government have in place to protect consumers from rogue estate agents. A wide range of formal actions can be taken against rogue estate agents under both sector-specific and general law. The noble Lord, Lord Harris, alluded to this.

The noble Baroness also asked whether statutory bodies should have consumer panels or consumer representatives. We completely agree that the organisations in the consumer landscape should take full account of the perspectives of consumers. We believe that this is best achieved, however, through open consultations and engagement, such as the CMA’s recent consultation on its business plan and the consultation by Consumer Futures on its work plan, rather than specifying the need for one person who represents consumers. The whole organisation should think about the needs of the consumer.

The noble Baroness had concerns about vulnerable consumers, and I agree that she raised a fair point. The Citizens Advice service also has substantial experience of addressing the needs of vulnerable people across a wide range of subject areas in which I am sure the noble Baroness will be well versed. We are confident that it will be able to deliver outcomes with no loss in quality. While Consumer Futures currently assists around 7,000 customers directly, the Citizens Advice service is advising and supporting millions of individuals.

The noble Baroness asked about measurements—in other words: how will we know that these arrangements are working? The bodies have well established grant funding relationships with BIS and are already fully accountable for the use of BIS funding and levy funding through conditions placed in their annual grant letters. Grant terms will be expanded to set out the requirements and key performance indicators relating to these new activities. Performance will continue to be closely monitored by BIS to ensure that the successor bodies are delivering good outcomes for consumers and achieving good value for money for levy funders and taxpayers. I should reiterate that these arrangements mirror those for the NCC.

The noble Baroness asked a question along the lines of: is Citizens Advice now a public body? We are confident that Citizens Advice remains a charity, and although we have recently been discussing its classification with the Office for National Statistics, the Government remain confident in their belief that Citizens Advice should remain outside the public bodies framework. I hope that that is some reassurance.

The noble Baroness also asked why the letting and management redress scheme rests in England only. She may be aware that housing is a devolved issue. It is up to the devolved Administrations to introduce the protections that are important to them and reflect their differing priorities and different housing markets. She also asked why the letting and management redress schemes simply use the estate agent scheme. It is important that the approval and redress schemes for letting agents involve a fair and transparent process. I should reiterate that simply extending the estate agent schemes to include letting agents would unfairly restrict any new provider from coming forward.

The noble Baroness asked whether Citizens Advice would play a role in Europe. Indeed, it will play a full role in Europe, working with other EU bodies to promote consumer welfare and combining the NCC’s experience with Citizens Advice’s knowledge of consumers on the ground. The CMA will continue to lead the UK regulators’ engagement by working with the NTSB to feed in the experiences of trading standards and its enhanced role in the new landscape.

The noble Lord, Lord Borrie, basically stated that the Government have not explained who will do the work of Consumer Futures. The majority of staff from Consumer Focus and the NCC will transfer into Citizens Advice. This includes the director, who will fulfil his role in Citizens Advice as well as most of the expert staff. We recognise the importance of ensuring that there is sufficient capability and capacity for this important work, and firmly believe that our plans will achieve this.

The noble Lord, Lord Whitty, raised the issue of local trading standards being inadequately resourced to take on new functions. The baseline cost of policing the UK estate agency market will transfer from the OFT into the NTSB’s enforcement grant. This amount will be ring-fenced from the main portion of the grant in order to ensure that the full funding will be used for the purpose intended.

The noble Lord also raised the issues of the lack of staff transferring to Citizens Advice and the trimming of resources. I hope that I can give him some reassurance that the vast majority of policy staff will transfer to Citizens Advice. Next year’s levy-funded budget will be the same as this year’s. The noble Lord stated that funding for general advocacy has been cut. Budgets have been squeezed since 2008 in the light of pressure on the public finances, but we are confident that efficiencies created by this transfer will enable Citizens Advice to step into this role.

[Baroness Oppenheim-Barnes]

My noble friend will remember that in Committee during consideration of the then Enterprise and Regulatory Reform Bill I cited the amount of money that I made available to Citizens Advice in 1979-80 because of a small increase in its duties. It was £3 million then, which, in terms of what is being given now, causes me great concern. All members of citizens advice bureaux are not necessarily well versed in consumer affairs—they have other qualifications. If situations arise in which they do not know what to advise, who are they going to ask to tell them?

[Viscount Younger of Leckie]

I should like to write to my noble friend to clarify that question and give her more detail about the transfer. I hope that I will be able to give her some figures and will copy in other noble Lords to provide further details. I hope that that gives my noble friend some reassurance.

The noble Baroness, Lady Hayter, suggested that the provisions in the order do not provide—

[Lord Whitty]

Before we leave the issue of the transfer of money and personnel, is the noble Viscount saying that he rejects my view that less than half the number of posts in Consumer Focus three years ago will actually reappear in Citizens Advice, and that the non-post, non-energy side has been cut significantly—almost by half—in that period? That is a considerably larger reduction than the general cut in public expenditure to which he referred.

[Viscount Younger of Leckie]

I will be writing to my noble friend Lady Oppenheim-Barnes to clarify the position on the transfer, and the letter will be sent to the noble Lord. That should directly address the issue of how many staff are likely to be transferring.

[Lord Whitty]

I accept what the noble Viscount said regarding transfer, but I was referring to the point about the transition over the past three years when compared with what the NCC was previously doing.

[Viscount Younger of Leckie]

I will write to the noble Lord. The noble Baroness, Lady Hayter, suggests that the provisions in the order do not provide adequate parliamentary or ministerial accountability. However, I dispute that, as the noble Baroness will know. In making an order under the Public Bodies Act, a Minister must have regard to a number of tests, including the requirement to secure appropriate accountability to Ministers. The Secondary Legislation Scrutiny Committee considers compliance with all these tests. I remind the noble Baroness that in the case of this order the committee concluded that it was content to apply the 40-day affirmative procedure rather than the more stringent 60-day process. However, I will again set out the measures that we have put in place to ensure clear lines of accountability, and I will do that in a separate letter on grounds of time.

I conclude by addressing the comments made by the noble Baroness, Lady Hayter, and the noble Lord, Lord Whitty, at the beginning concerning quango-cutting. On the one hand, we are being accused of having too many bodies; on the other hand, we are accused of being forced by the Cabinet Office to cull quangos. We think that our redesign of the consumer landscape strikes the right balance, including representation across all parts of the UK. The changes brought about by this order will deliver more effective consumer advocacy and more joined-up supervision of the estate agency regime.

[Baroness Hayter of Kentish Town]

First, I thank the Minister for doing as good a job as he could with the material at hand. I think that we know that he is batting on a sticky wicket but he did his best. I also thank the noble Baroness, Lady Oppenheim-Barnes, the noble Lord, Lord Berkeley, and my noble friends Lord Borrie, Lord Whitty and Lord Harris for their contributions to my regret Motion. I particularly thank the noble Baroness, Lady Oppenheim-Barnes. She called herself the “great-grandmother”. I think I would have to say “godmother”, because it sprinkles a bit of gold dust whence it goes. Consumers have an awful lot to thank her for.

I also express thanks to my noble friend Lord Stevenson, who, as we have been going along, has managed to find for me the debates that the noble Baroness referred to concerning her attempts to halt the merger. I am afraid that my memory is perhaps not as acute as it should be but we have looked quite carefully at them and it looks as though we were trying—maybe we took the wrong call—to improve what was being proposed. With our Amendment 24ZB, which I have just looked up, and another amendment, we were trying to get the CMA to take on and strengthen the consumer protection, enforcement and guidance role. We noted the comment that the noble Baroness made at that time about the possible lack of independence brought about by bringing the two organisations together. That is slightly different from our amendment but the call that we took was to try to improve what we thought was going to happen. However, looking through the speeches, it appears that we were on the same page for quite a lot of the time.

I shall try to be brief because it is now time to draw this to a close. There are questions remaining. We get a letter saying that Anglesey has no role; now we find, if I have understood it correctly, that someone is going to be put into Powys to sit there and do the job, but that person will presumably be answerable to employers in Anglesey. We need some clarity on this. We are told that elected councillors will have no role but it is their staff to whom they have a duty of care and other employment responsibilities. It would be extraordinary if elected councillors had no say on what was going on in their premises. Nor have we had a serious answer to why we are not using the same mechanism to approve redress schemes. I did not say “the same redress schemes”; we were talking about the same mechanism to approve them.

Contrary to what the noble Viscount said, I think that this is about getting rid of quangos. This happened under the Public Bodies Act and that was referred to in the coalition agreement. My noble friend Lord Harris of Haringey is right: this is not about improving the consumer offer, much as I would have liked it to be. I remain doubtful about whether delivering national functions via local trading standards is the most effective way of promoting consumer interests.

I also still have some concerns about the independence of Citizens Advice. I gather that there are still some discussions about whether it is going to be a public body, with all that that means with regard to procurement and the organisation’s way of working. Some clarification on that is necessary. I have no doubt about the role that Citizens Advice has in helping consumers who have detriment today. We have never questioned that. Our concern is about whether influencing today’s providers, regulators, the Government and Europe can be done by the same body which, every day, answers phone calls and e-mails and has visits from hard-pressed consumers.

I should say that I am known now as Lady Hayter of Kentish Town. I was, until my last relative died there, going to be Lady Hayter of Ystradgynlais. However, I thought that it would be a bit too much of a challenge to Hansard writers—hence Kentish Town. I also lived in Bodedern in Anglesey. Therefore, I am aware of the strength of those bodies but whether they are the rights ones to take this on, I remain doubtful.

Having said all that, we can only wish all these new organisations well for the sake of consumers, for the sake of the people whom the noble Baroness has looked after for so many years and for the sake of people whom my noble friends Lord Borrie, Lord Harris and Lord Whitty have done so much for. We can only wish them well. I know that what they need at the moment is speed. For those reasons, I beg leave to withdraw my amendment.

Amendment to the Motion withdrawn.

Motion agreed.

House adjourned at 7.45 pm.