Westminster Hall

Wednesday 2nd July 2014 Westminster Hall

Wednesday 2 July 2014

[Mrs Linda Riordan in the Chair]

Cross-border Rail Services in Wales

Wednesday 2nd July 2014 Westminster Hall

Motion made, and Question proposed, That the sitting be now adjourned.—(John Penrose.)

09:30

[Jessica Morden (Newport East) (Lab)]

It is a pleasure to serve under your chairmanship, Mrs Riordan. I thank other hon. Members and hon. Friends from Wales for showing up, and I know that more hon. Members would be here if it were not for the fact that the Select Committee on Welsh Affairs is considering other business.

Transport debates, by their nature, can be extremely parochial, but I make no apology for introducing this debate on rail issues that affect my constituents, because those issues are a big concern for the commuters I represent. I will concentrate on overcrowding and problems with the franchise in my area, but other hon. Members might want to make more general remarks about the franchise, the electrification of the valleys lines and related funding issues.

Like many hon. Members, I receive a lot of complaints from constituents who are frustrated by the day-to-day problems they face when they commute or travel for leisure. My constituency is near the border, so many of my constituents travel to the south-west, Bristol and Bath and to London. The debate is born out of great frustration with train companies and train operators, which is felt by me, by the excellent Severn tunnel action group—I know I am biased, but I believe that it is the best rail users’ campaign group out there—and by their fellow rail campaigners in the next village, the Magor action group on rail. Our frustrations are overcrowding, lack of connecting services and lack of information on electrification. We need to ensure that those concerns are heard as we approach the renewal of the franchises. The debate is a chance to get some of that on record.

The Severn tunnel action group was set up after the last Greater Western franchise, because its members felt that cross-border services were poorly covered. They have campaigned tirelessly for the reinstatement and protection of services, and their aim is to develop Severn Tunnel Junction station, one of the stations in my constituency, to encourage more people on to rail from cars by providing better services. They are a constructive and positive lot who have a lot of rail expertise, but I sense real frustration with the lack of engagement by rail companies. I want to convey that to the Minister as we approach the new franchises.

The latest figures from the Office of Rail Regulation highlight the importance of cross-border journeys to all Welsh rail users, with around a third of the 27 million annual journeys crossing the Wales-England border. Many of those journeys are back and forth to and from the south-west and London. My constituents commute to cities such as Bristol, which offer big employment opportunities, so we need reliable and affordable public transport. However, all too often, people face an unenviable choice: pay the Severn bridge toll—which is too expensive and should be reduced, although that is a topic for another debate and I am sure we will return to it—or run the gauntlet of an often overcrowded and inconvenient train service. Unsurprisingly, given the cost of fuel and the fact that the Severn tolls are whacked up every year, people are increasingly opting for the train service.

Partly as a result of that, we have seen substantial growth in passenger numbers. The Welsh Affairs Committee report “Crossing the border: road and rail links between England and Wales”, which was completed a couple of years ago, picked up on that:

“Cross-border services have seen significant growth in passenger numbers in recent years, and it is expected that demand will further increase in the future. First Great Western said that its Cardiff to Bristol service had seen particularly high growth”.

According to the Office of Rail Regulation, the number of passengers going to and from Severn Tunnel Junction station has increased by 72% in the past seven years. That growth is partly caused by commuters, students and tourists connecting from places such as Chepstow and Lydney. Connections have increased by 192% over the same period. That is a huge growth in usage, and it increases every year.

At the Monmouthshire end of my constituency, there are several new housing developments and more are planned. The same is true of Chepstow and Gloucester. Many occupants of those new homes will commute to Bristol and other cities in England, and they will end up at Severn Tunnel Junction station to catch connecting trains, but the rail service has not kept up with demand. For many years, we have received complaints from commuters, but the service remains the same or even gets worse. The main reason I applied for the debate was frustration with the lack of response from First Great Western to the chronic overcrowding on our commuter routes to Bristol; demand for services to Bristol has greatly increased. In fairness to First Great Western, I should say that I have finally got a meeting with the company next Monday.

After having received many complaints, I recently went out with Severn tunnel action group members to survey users on those commuter trains, and I am in no doubt about how frustrated they are. One of my constituents calls the service “the sardine express”. Commuter trains are always overcrowded and, sadly, it is not uncommon for large numbers of passengers to be left on the station because there is no space in the carriages. The 07.55 First Great Western service has been recorded as leaving more than 30 passengers behind at Severn Tunnel Junction station. Some of those passengers have paid more than £1,500 for an annual season ticket, so it is easy to imagine their frustration and anger. I will share a few comments from commuters whom I surveyed:

“Members of my family catch the 07.55 train from this station as they commute to Bristol. For several months now, the train has been made up of only two coaches instead of what used to be five. We have experienced overcrowding, standing room only, people unable to board, etc, etc. I have written to First Great Western on more than one occasion to complain in the strongest terms, but no avail.”

Another said:

“I sometimes catch a train on the opposite platform and have counted some 100 or so persons waiting on the 07.55 to Bristol! When there are only two carriages, the train is full before it arrives at Severn Tunnel. Completely unacceptable, particularly considering the exorbitant ticket costs in this country.”

Another person recently reported that a passenger had fainted:

“FGW must be in breach of health and safety standards at the very least. Something must be done about this.”

Another commuter directly linked the situation to the effect of the Severn bridges:

“It’s all inefficient. I can’t jump into my car because of the Bridge Tax of £120 per month on the most expensive toll in the country. If I could drive instead I would in an instant. I’ve suffered the pain of these trains for only 12 months. There is no innovation, no new trains, no new operators and prices are set high.”

I have many more examples, but will end on this e-mail from a constituent:

“They just need an extra coach on each train—it’s not rocket science!”

Why is that so hard to deliver?

There is an obvious lack of rolling stock, which has led to a lack of carriages on peak services. There should be five carriages, as constituents have said, on the 07.55 train, but frequently there are three or sometimes even two. I understand that the train company has looked into hiring additional rolling stock to address the shortfall while some of its stock could be away for months on heavy overhaul, but that has not happened. We can only surmise that, as a private business, its financial model means that to do so would not be financially viable, so it has decided not to go ahead. Will the Minister take the matter up with First Great Western following the debate? Does he agree that it is not acceptable for the company to ignore the problem and to ignore complaints from commuters who have legitimate concerns about services they have paid for?

My second complaint is the perennial problem of poor connections, which was covered in the Welsh Affairs Committee report on cross-border transport a couple of years ago, but which has still not improved. Poor connections are not only a problem for those of us who live on the border; they have knock-on implications for those further into Wales. Commuters from Caldicot, Chepstow or Lydney may face a lengthy wait for a connecting service, and poor connections at peak commuting times are common. For instance, there are no trains from Caldicot between 7.40 am and 9.40 am, which is bad for people who are trying to get to work. Stations such as Caldicot have huge potential, particularly among people who want to use them for work, but we need a service that is fit for purpose. Lots of people want to use that service. What can the Minister and his Welsh counterparts do to ensure that the First Great Western service connects better with the Wales and borders franchise, which is up for renewal in 2018? Better connections is a constant grumble, and the matter has been raised by the Welsh Affairs Committee. We need action on better connecting services.

[Albert Owen (Ynys Môn) (Lab)]

I congratulate my hon. Friend on securing the debate and on the work on connectivity that she does on behalf of her constituents.

In the north, we now have better services; there has been huge investment on the west coast over many years, which has provided extra trains. Does my hon. Friend agree that the connectivity between the franchises must be looked at? In north Wales, both are coming up for renewal at a similar time. I am sure that the Minister is aware of that, and that forward planning is being done. Does my hon. Friend agree that there is a need for a direct link from Liverpool to Holyhead, which would bring Dublin and Liverpool closer together? We need to look at the big picture, and we have time to plan to do so before the franchises are renewed.

[Jessica Morden]

I thank my hon. Friend for his intervention. He is exactly right: with the franchises coming up for renewal, we must think strategically. The Government and the Welsh Government must work together for the good of the transport system. They must be constructive so that we can iron out some of the problems. I also agree with his point about the link between Liverpool and Holyhead.

We all support electrification and hope that we will benefit from it soon. As the Welsh Affairs Committee pointed out, it has been an example of good collaborative working and has demonstrated what can be achieved when the two Governments work together on transport—apart from the row over funding the valleys lines. For constituencies such as mine, which will suffer much, it would helpful if the Minister let us know early on what the disruption will be, when the work is to be carried out and what form it will take. We hear talk of the closure of some stations so that work can be carried out on the bridges, but the lack of concrete information is causing confusion. When can we let communities know what will be going on as a consequence of electrification? Staff in my office have asked for information and timetables, but so far we have heard nothing. If would be helpful to know when local commuters will be informed fully.

An example of the uncertainty caused is that commuters at Severn Tunnel Junction raised the issue of the safety of the passenger footbridge, which many rail users feel is unsafe. In fact, an Arriva fire inspector expressed concerns a few weeks ago and Network Rail was forced to do remedial work. If it is unsafe, it must be sorted out, but the latest letter we received from Network Rail—it has been a lengthy correspondence—said that the delay in sorting it out was due to the electrification plans. We have been chasing information about the bridge for some time, but the situation is now critical. The new bridge is funded under the Department for Transport’s Access for All scheme, but is clearly unsuitable as it is now. Will the Minister please intervene with Network Rail, because his Department is funding the improvements? We need action quickly.

I want to discuss the renewal of the Great Western franchise. We have all recently been asked to respond to the consultation on the franchise, which I have done. Rail groups in my constituency want to reiterate to the Minister that whoever is awarded the contract needs to meet commuter demands. In my area that would include a half-hourly or better train service from south Wales to Bristol Temple Meads and Bath; an additional hourly service from Ebbw Vale via Newport and Severn Tunnel Junction to Bristol Parkway, which would provide new journey-to-work opportunities to take advantage of the development and employment sites planned for the area around Bristol Parkway; a minimum of five coaches on the peak services from south Wales to Bristol; a commitment to ensure that train capacity is sufficient for future demand; and greater emphasis in the franchise on working in partnership on interchanges, and on rail companies working together on timetables.

Getting rail services right in my constituency is an important part of the effort to increase economic and employment opportunities, but we should also give commuters the service they deserve, given how much they pay for it. The debate is focused on getting the cross-border services right, but I should also mention the great work that the Welsh Government are doing on the metro system, which could be of great benefit to communities in my area, such as the people of Magor who are campaigning for a new station through the Magor action group on rail.

It is so important for constituencies such as mine that the two Governments work together on rail as we depend on a properly co-ordinated approach and properly thought out train services. I know that other Members will make more general points about other cross-border rail issues, but I am grateful to the Minister for listening to my speech and hope that he will address some of my specific concerns about the franchise.

09:39

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

At the risk of sounding like Monty Python’s “Four Yorkshiremen”, the first job I ever had, at the age of seven, was casing on Rhyl railway station with my older cousins. We would take a pram, and the trains would roll in, 10 to 14 carriages long, and disgorge their passengers. People did not have cars back in the 1960s—or not many working class people did—so they would place their cases on our prams and we would take them to the guesthouses, hotels and caravan parks in Rhyl and round about.

The train has been good to Rhyl and Prestatyn. The train arrived in Rhyl, my hometown, in 1849. I was recently talking to a 94-year-old local historian from Prestatyn, Fred Hobbs, who has researched the topic. He told me that when the train came to Prestatyn, it opened up the Welsh seaside towns to the industrialists and merchants of Manchester and Liverpool, who came and lived in Rhyl and Prestatyn and commuted to Liverpool and Manchester. They brought with them their wealth and investment, and our local towns prospered.

Rhyl was just a fishing village back in the 1840s, but it grew and grew: between 1849 and 1900, there were 900 hotels and guesthouses. The train brought great wealth to the town. The west ward of Rhyl was one of the richest wards in Wales because of the investment in hotels and guesthouses. Unfortunately, those ex-hotels and ex-guesthouses are responsible for the deprivation of seaside towns, as they have now been turned into houses of multiple occupation, but that is a discussion for another day.

The train has been good to the coastal towns of north Wales, and especially to Holyhead. The route planned in the 1840s went from London to Dublin, which was still part of the British empire in those days. It was a very important route. We want to ensure that the primacy of that route in the 19th century is re-established in the 21st century. The trains and transport links to north Wales brought wealth and investment right through the 20th century, up until the 1960s when I was casing to make a few bob on a Saturday morning. The downturn came to the north Wales coast in the 1970s, when people stopped coming to coastal towns for their traditional two-week bucket-and-spade holidays in a coastal town and chose to go elsewhere—to Spain and France. That left a big hole in the north Wales economy for a 40-year period, and we are only just beginning to put that right.

The challenge for the 21st century in north Wales is better connectivity between north Wales and the north-west of England. There are 650,000 people living in north Wales, and 6.5 million people live in the north-west—it is a huge population centre, and if a bit more of the area across the Pennines is included, it becomes even bigger. That was an opportunity in the past, it is an opportunity in the present and it is an opportunity for the future. We must improve train and transport connectivity.

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

Does my hon. Friend agree that we must think about that now for the future? One problem is that rail has been something of an afterthought. Industry and a lot of other things have come, but the rail system is not up to the standard required to serve industry and the people of our area.

[Chris Ruane]

I agree with my hon. Friend to a certain degree, but he is no great user of the train, unlike me and my north Wales colleagues. I have witnessed a vast transformation from when I became an MP in 1997 and it took me four hours to arrive in London from Rhyl in my constituency. The trains then were grubby and had not been cleaned; there was chewing gum on the old and faded seats. Now, we have Pendolino and Voyager trains. There has been massive investment, for which I am grateful to Virgin and Arriva. There has been improvement, but I agree with my hon. Friend that we must not rest on our laurels.

Huge investment—something like £45 billion—is coming from HS2. I want to ensure that my area, the north Wales coast, gets its fair share of that investment—that we are electrified and our stations are improved. Big progress has been made: Chester, Flint and Prestatyn stations have been improved—a huge investment of £7 million was spent on Prestatyn. Last week Arriva, Network Rail and Denbighshire county council started a £2.5 million improvement programme for Rhyl railway station. Improvements have been made, but we must not rest on our laurels. We must push for further investment in our stations along the north Wales coast.

The big cities of Liverpool and Manchester were totally transformed under a Labour Government, and we did not make enough of that. Those cities were derelict and riot-strewn in the 1980s, and they are now vibrant communities. Manchester has one of the biggest student population bases in Europe, with 45,000 students. Liverpool is the same. Two principal airports serve north Wales, Liverpool and Manchester, and they have both grown exponentially over the past 10 years. They are the local airports for north Wales, and we need connectivity to them. It is difficult to get directly to those airports by train, so we need to consider a dedicated transport link from the north Wales coast to Liverpool and Manchester airports.

Liverpool and Manchester have huge population bases and huge research capacity at Manchester and Liverpool universities. We need to connect those universities with businesses in north Wales such as Airbus, the OpTIC incubation and research centre in St Asaph in my constituency and Bangor university. We need more co-operation, which would increase and improve if we had proper transport links. Connecting the science base of the north-west with the science base of north Wales would be helped tremendously by a proper transport system.

North Wales not only needs to be better connected with England; we need better connections inside Wales, including with the constituency of my hon. Friend the Member for Alyn and Deeside (Mark Tami) in north-east Wales. In 1998, the Labour Government made a £0.5 billion launch aid investment in Airbus, with the Welsh Government investing £25 million. That was a public-private partnership that produced one of the most expansive factories in western Europe. There are 6,000 engineering jobs at Airbus making the biggest wings in the whole world. We have to ensure that our population base in north Wales, especially in the bigger coastal towns that have large numbers of unemployed people, is better connected to the job opportunities at Airbus and the Deeside industrial estate in my hon. Friend’s constituency. Tens of thousands of jobs have been created and will be created, and they need to be made available to unemployed and underemployed people along the north Wales coast.

Ten years ago, the Department for Work and Pensions provided transport grants that helped people get to work. We should be drawing down grant money, European funding, DWP funding or Welsh Government funding to ensure that we have dedicated pull-in stations and dedicated trains early in the morning to take those workers to the huge factories in north-east Wales.

I will conclude on modal points, where trains connect with airports and hovercraft. I am probably one of only two MPs who can claim to have a constituency that has been, or will be, served by a hovercraft. The first passenger hovercraft service in the whole world was between Rhyl in my constituency and Wallasey. I mentioned that fact in a debate in this Chamber in December, and within three days, three hovercraft companies contacted me about restarting the service. The time taken to travel from Rhyl to Liverpool by train is one-and-a-half hours, possibly involving two changes. The time taken for a hovercraft connection to Liverpool would be 34 minutes. I would like to see people coming along the north Wales coast by rail, stopping at Rhyl railway station and getting on the hovercraft for a direct passage to Liverpool. The proposal is for a hover link that takes people from north Wales, through Rhyl, to Liverpool airport. That is a fantastic opportunity, but we need to ensure that we have the facilities to take people by rail, by car or by bus from Rhyl to Liverpool.

We are also blessed in Wales with a fine coastal path. We are the only country in the UK that has committed to, and delivered, a path along the whole coast. Walkers are coming to Wales, and in my constituency we are blessed with being at the northern end of the Offa’s Dyke footpath. We need to ensure that walkers can come to Rhyl or Prestatyn by train to do their rambling—I hope I am not rambling, but I intend to finish soon.

[Mark Tami]

You are hovering.

[Chris Ruane]

Yes, I am hovering about rambling. Thanks very much.

In Wales we are also blessed with fine cycleways, most of which are along the coast. The Sustrans bid for Big Lottery funding delivered a £4.5 million dedicated cycle bridge at Rhyl harbour. We need to make the most of the investments that have come to my town and north Wales by connecting them to rail users, which is a challenge for all of us. We have two well performing train companies. Virgin has massively improved the service over the past 14 or 15 years, and we north Wales Labour MPs campaigned to ensure that Virgin did not lose the franchise. We were highly concerned when it looked as if a second-rate company was going to take over the franchise, and I hope that Virgin continues to invest. Arriva Trains Wales is also investing heavily in north Wales, but we need to put pressure on the train companies to ensure that they deliver not for the past or for the present but for the future.

09:49

[Ian Lucas (Wrexham) (Lab)]

It is a pleasure to take part in this debate and to hear my hon. Friend the Member for Vale of Clwyd (Chris Ruane) tell us about Rhyl station. Big changes have happened in north Wales and in the rest of the country over the past 30 or 40 years. For the benefit of the Minister, it is important to appreciate that north-east Wales, and its economy, is among the most successful and progressive areas of the country. North-east Wales has world-beating companies in the aerospace, automotive and pharmaceutical sectors that compete internationally to secure jobs and high-quality investment for British industry. In a globalised economy, it is important that the world knows we have infrastructure that is competitive, enabling those businesses and people in north Wales to journey to north-west England and beyond.

There is good news for my constituency of Wrexham, because the Welsh Government are investing some £44 million in dualling the line between Wrexham and Chester. In the 1980s, the Conservative Government made the absurd decision to limit the infrastructure for rail services between the largest town in north Wales, Wrexham, and Chester, which therefore inhibited regular rail services. Ever since, we have been able to have only one train an hour between Wrexham and Chester. In fact, we re-established an hourly service only in 2007—the impact had been so negative that rail usage substantially diminished.

Since the reintroduction of hourly services in 2007, there has been a massive increase in the use of rail services, which I see every week when I travel to London. The economy of this important economic area has developed, Glyndwr university has been established and we have seen a large increase in rail usage.

It is important that we use this opportunity to introduce three trains an hour between Wrexham and Chester, which would provide a major boost to the local manufacturing and retail economies by increasing the connectivity between Wrexham and Chester. Businesses that operate on both sides of the border would benefit from access to new markets. Such investments are important, and there are massive further opportunities in the immediate area of north-east Wales.

Another cross-border line runs between Wrexham and Liverpool, and my hon. Friends from north Wales will forgive me for mentioning it again. It runs from Wrexham, the largest town in north Wales, by the Deeside industrial estate, which has businesses such as Toyota, and goes through the constituency of my hon. Friend the Member for Alyn and Deeside (Mark Tami), up through the Wirral, very close to the GM factory at Ellesmere Port, then up through to Birkenhead, and links in to Liverpool. The service is interrupted by a necessary change at the Bidston interchange. Direct access along that line would be a massive boost for north-east Wales, the Wirral and north-west England as a whole, so it is important that we consider looking at that line again and designing an improved infrastructure.

In my role as a shadow Foreign Affairs Minister, I visit other countries, particularly in the middle east and Africa, and it is striking to see the investment and support for infrastructure that our competitors are introducing to their economies. Those people are keen to secure the jobs that our own constituents have at the moment and that our young people wish to have in future, so we must focus on delivering improvements to our infrastructure. Although we have had some improvements, particularly on the longer journeys from north Wales to London, which my hon. Friend the Member for Vale of Clwyd mentioned, the connectivity between north-west England and north Wales is still limited and needs to be much better.

Focusing on the airports is massively important. The airports that serve north Wales are Manchester and Liverpool, but it is virtually impossible to travel to either by public transport. The region has an increasingly choked road system that was essentially designed in the 1970s and 1980s, and in substance has not changed since. It is absolutely imperative that we focus on delivering an improved public transport system to service the airports and to increase connectivity. If we do not do so, we will lose out in the longer term to our competitors.

For me the real frustration over the years has been the investment system, which is too centralised to be able to deliver local transport projects. I am pleased by the tone and content of the Adonis review, which was issued yesterday and talked about the importance of much more regional approaches to investment across England. The lesson also applies in Wales. We cannot have a top-down system only in Whitehall or Cardiff Bay—away from the localities that actually understand the need for local investment and how to facilitate it—determining investment in regional rail projects. That is one of the major reasons why our infrastructure system is so bad.

Contrast that with, for example, Frankfurt in Germany. On a recent visit, I saw the connectivity between the rail system and the airport system. The city is a major regional power player in Germany. There is a regionalised system of cities such as Hamburg, Munich and Berlin, which all contribute massively to their regional economies. The fact is that in the United Kingdom—this issue affects all our constituents—there is a massive focus on south-east England. The major transport infrastructure investments have gone to south-east England. That is unbalancing the economy throughout the country. It is a central issue not only for our constituents, but for the whole United Kingdom.

A tide is flowing in all political parties that recognises the importance of that issue. The practical impact of the policies we are pursuing is that we do not have the regional investment to facilitate projects that could create world class infrastructure. It is important that we have the capacity and the authority in north Wales to develop regional infrastructures. The development of lines such as Wrexham and Chester and Wrexham and Liverpool would facilitate investment in the rail system, which would support business and jobs in the local economy. Give us the responsibility, authority and power to make decisions, and we will continue to deliver a powerful economy in north-east Wales that will be able to compete in future.

10:05

[Glyn Davies (Montgomeryshire) (Con)]

Thank you, Mrs Riordan, for calling me to speak in an important debate on an important issue in mid-Wales. I, too, congratulate the hon. Member for Newport East (Jessica Morden) on securing the debate. She spoke about services in south Wales and there have been contributions on north Wales, but I specifically want to talk about the services that serve not only my constituency of Montgomeryshire, but mid-Wales.

The line from Aberystwyth, on the extreme west coast of Wales, to London runs in two parts: from Aberystwyth to Birmingham, and the direct service from Shrewsbury to London. They overlap to some extent, but the two lines are particularly important for that rail journey. As other Members have said, the line is very important for the economy of mid-Wales. Perhaps more so than in other parts of Wales, the railway tackles the perception of remoteness, which has always been a negative factor in attracting business.

My purpose today is not to make demands of the Minister. I am highlighting the importance of both parts of the line, and I want to make certain that the long overdue good news that we have had about the intention to invest in both parts comes to fruition and is beneficial.

First, on the Aberystwyth to Birmingham line, I have been involved in the campaign for an upgrade for about 30 years, so I have a reasonable right to call this a long overdue investment. The first issue was upgrading the line with passing places to enable an hourly train service. There has been only a two-hourly service, which is hopelessly inadequate. The campaign started 20 or 30 years ago, and money has been invested. It has taken a long time, but we now have a commitment from Arriva Trains and the Welsh Government that an hourly service will be introduced. I think the various people associated with running the trains are now being trained. The service is due to run from May 2015, just in time to bring the newly elected Members in the general election of 2015 from mid-Wales to London.

The second part of the line is the Shrewsbury to Euston connection, which is hugely important to mid-Wales. People will be able to drive to Shrewsbury, park, and then catch the direct service to London. Having to change is incredibly inconvenient and it discourages people from using the line. I would prefer to use the train and not drive to London, but that is simply inconvenient for me. However, the hourly train service will change that.

Such a service used to run, but it was stopped. We had a promise that it would run when there was an agreement with FirstGroup to provide a west coast main line service. The franchise was let, but it was cancelled. Now, of course, there is an agreement with Virgin Trains that the line will run from December. Perhaps the Minister will confirm how often that train will run and at what times. It is hugely important that it runs at convenient times that enable people who wish to work in and travel to London to use it. Otherwise, we would deliver on a promise but not deliver on the actual need.

So, there are two aspects. One is the line within Wales, which we anticipate will come into effect in May next year. I very much hope that that is the case. There is no reason why it should not happen, but we must always be vigilant to ensure that it does. Secondly, the Minister here today has responsibility for the direct line from Shrewsbury to Euston, and I very much hope that that line comes to fruition later this year, with times and frequency that are convenient for the people of mid-Wales.

10:10

[Nia Griffith (Llanelli) (Lab)]

I congratulate my hon. Friend the Member for Newport East (Jessica Morden) on securing the debate, which is extremely important to all of us in Wales.

First, I will speak about the main line that goes from London to Fishguard, connecting to ships going over to Rosslare in Ireland. The line goes right through my constituency, passing through the stations of Llanelli, Burry Port and Kidwelly. It is absolutely vital that we are part of the trans-European network and that we have good connections on the line.

Recently, the Welsh Government made significant investment in the Loughor bridge, which has enabled it to take two-way traffic, but what grieves me is how few through trains we have. I hope that, with the new franchise, the fact that we have this new bridge will enable us to have much greater connectivity and far more through trains. To have only one train from west Wales up to London and only one from London to west Wales per day is not good enough, and even those trains go only as far as Carmarthen; they do not go right up to the Pembrokeshire coast.

The problem that that poses for people is the lack of connectivity. There is the inconvenience of having to change trains and the fact that, often, the trains run by First Great Western are late, so people end up having to wait at stations for long periods—usually Cardiff, Port Talbot or Swansea—because there is simply no way to get from west Wales to London without changing, except for two trains, one each way, per day.

Let me give an example. If I got the 5.25 am train from Llanelli to come up to London morning, I would hope that I could make a 10 am meeting in London by getting to London at 9 am. However, only recently I had the experience of sitting on that 5.25 am train, which had been five minutes late, and being told that we were waiting outside Port Talbot station to let the First Great Western train go through, so the very train that I needed to catch to get to London was passing by my window. My only option, therefore, is to get the 3.25 am train if I want to get to an early morning meeting in London, which is quite inconvenient.

Rail is also vital for freight. We have refineries in Milford Haven and obviously the steel industry also uses the railway line. Last winter, storm damage closed this line for three or four days. Mercifully, that was all the time it was closed for. However, there is significant risk of closure because the railway line follows the coastline, which is exposed to the elements, and it will need continuing investment. I stress that that needs to be UK Government investment, because this line connects London with Ireland.

I look forward to electrification and remind those present that the Labour Government had a commitment to electrify as far as Swansea. I am sure that my hon. Friend the Member for Swansea West (Geraint Davies) will speak at greater length about what has happened since then and about the uncertainty over electrification.

I understand fully why we are not going for bimodal trains—trains that can be both diesel and electric. They are heavier than other trains and any investment in them would be a major investment, for what I hope would be only the short term. I want electrification to come not only to Bristol, Cardiff and Swansea, but right through west Wales. However, there will be an issue when part of the line is electrified: when that happens, where will we change trains and how will that change work?

To my mind, addressing that issue will be crucial to keeping passengers loyal to the service, because if the process of electrification is messed up and we end up with yet another, perhaps inconvenient change—bearing in mind that we already have one change for west Wales—that will make things very difficult.

I would like there to be only one change—a change off the train from where the line has been electrified up to and on to another train to take people all the way to west Wales. Whether that happens to be at Swindon or at Bristol, there should be only one change so that we do not end up with people having to make two changes to reach west Wales.

The line that goes from Pembrokeshire up to Manchester Piccadilly can be a useful service if I am going to conference, but I do not meet many passengers who go all the way from Pembrokeshire to Manchester. The argument that the train will not stop in some local stations such as Kidwelly because it is trying to get from Pembrokeshire to Manchester as quickly as possible seems to be completely fallacious. If someone is going to spend six or seven hours on a train anyway, an extra 10 minutes is neither here nor there. The fact that this train is going through stations at a very low speed but does not always stop at them is extremely annoying. If it stopped just on request, that would be a help. The argument about not stopping is fallacious, and I understand that some towns on the English side of the border are also concerned about the fact that some of those trains do not stop at their station.

I reiterate the comments on overcrowding made by my hon. Friend the Member for Newport East. I have constituents who commute to Filton Abbey Wood and to Bristol, and they have to change and catch very overcrowded trains. If they cannot get on those trains, they are disadvantaged as they are unable to get connecting trains back to west Wales, so they are very concerned about overcrowding.

We need a much greater number of Sunday services, particularly in winter, when it is impossible to get from my constituency to important places such as Twickenham, where rugby matches happen. People cannot get there on a Sunday, and I am sure the Minister understands the importance of such sporting events. Not to be able to get from west Wales to London on a Sunday in time to get to a match is obviously very much a disadvantage nowadays, when people do so much on a Sunday, from shopping to—of course—going away on holiday.

That brings me to the issue of the train that, last year, got stuck in remotest Wiltshire for six hours. It was a First Great Western train coming from the west country, but it could equally well have been a train from west Wales. I wrote to the Minister asking what lessons had been learned from that case, or perhaps I put down a parliamentary question, but it was too early to get a response because a report on the case had not been produced by that time. I hope that that report has now been produced; I could not understand how that case happened. We all allow for First Great Western trains being at least an hour late, if not two or three hours late, but when people are going away on holiday they do not allow time for a train to be six hours late. People were kept on that train without adequate water for all that time.

I understand that it was not necessarily possible to get a bus up to where the train had stopped, but it would have been possible to get other trains along the track, which would either have allowed passengers to be decanted and taken on or allowed water to be taken to the passengers. A six-hour delay is completely unacceptable, and I hope that steps have been taken so that my constituents do not have to face such a situation if they are going away and hoping to get to Heathrow airport or are going to London for any other reason this summer.

I will make one last point that may not seem terribly relevant to this cross-border debate, but is terribly relevant if people have to change trains: on Cardiff station and on Port Talbot station, it is impossible to get into a ladies toilet cubicle with a very large suitcase, probably because the cubicles are made to a specific design that came from one book. I would suggest that some quite large or portly women might find it difficult to get themselves into those cubicles. Of course, it becomes necessary for people to use the cubicles if they have to change trains, and for some passengers—in particular, some older passengers—using toilets on trains is quite difficult.

Will the Minister take note of the fact that, whenever stations are being redesigned, consideration should be given to that issue, so that we do not end up with the situation we used to have in Paddington, whereby people had not only to go down stairs, but get their suitcases over a turnstile before they could get to a cubicle. That has now been put right, and people can use the disabled toilet on the platform. Nevertheless, those issues need to be taken into consideration.

10:19

[Geraint Davies (Swansea West) (Lab/Co-op)]

I noticed an advert in London the other day that mentioned a Virgin train from London to Manchester costing just £19 and taking two hours and nine minutes, a train from London to Birmingham taking one hour and 24 minutes and costing £7.50 and, of course, one from London to Swansea that takes three hours and costs £78.

The Government have decided to invest more than £40 billion in High Speed 2. There is an issue about geographical equity in economic development, and we need to think about that. Some £5,000 per head is spent in London, versus £500 elsewhere. It is important to people from Wales—certainly, those from south Wales—to link up to the city regions in south Wales, which are also networked into the city regions in the south-west. As it happens, my father was the head of economic development in the Welsh Office many years ago—Rhodri Morgan used to work for him, interestingly enough—when a study was done showing that, in respect of the invoice network, the economy of south Wales was linked more to the south-west than to north Wales. Clearly, infrastructure investment in rail and road connectivity should follow that.

There has been talk about HS2 connecting to north Wales, but KPMG has suggested that it will be different in south Wales and that we in Swansea, for example, will be losing some £16 million a year and Cardiff will lose £70 million a year. There is a case for a Barnett consequential of approaching £2 billion to help connectivity to south Wales.

I appreciate that the Minister will mention electrification, and I was pleased that the Prime Minister promised to electrify the railway from Paddington to Swansea, but I should like some clarification on that, because there is a bit of a spat going on with the Welsh Government. It now seems that the Government are saying that they will electrify as far as Cardiff and then from Bridgend to Swansea, but not from Cardiff to Bridgend. The issue is who pays for the electrification of the valleys lines. In my mind, the bit that runs from Cardiff to Bridgend, which is not the valleys, does not seem to be involved in this spat and should be paid for by the Prime Minister’s undertaking. Although we welcome electrification, we will be worse off downstream in inward investment, as I have already said.

My focus is on acknowledging that we should be making connections between the economic clusters in, for example, Neath-Port Talbot, Swansea and Lllanelli, and Cardiff and the valleys, so that we can stimulate economic growth. My hon. Friend the Member for Newport East (Jessica Morden) mentioned tolls. Today is not the time to talk about tolls, but, again, that is a cost for south Wales that is not faced elsewhere.

We have a second-class service. In that regard, hon. Members have mentioned the frequency of trains, which is arguably equivalent to train speeds. From Swansea, there are two trains an hour to London Paddington, one at 28 minutes past the hour and one at five minutes to the hour, and people have to change at Cardiff from one of those trains. However, on the way back, at various times, particularly in the afternoon, there is only one train an hour. An inward investor thinking of investing, and going back and forth between Swansea and London, might have to wait nearly an hour at Paddington before getting a train, and they will then spend three hours on the train—a total of four hours. I urge the Minister to work with the Welsh Government on train timetabling. For example, in the other direction—I do not mean to be too parochial—people get the Manchester Piccadilly train one way, get off at Cardiff and then pick up another train and go on. On the way back, why can they not get the Cardiff train, then pick up the Manchester Piccadilly train or even a Bath train?

Hon. Members mentioned connectivity with Manchester. Looking at traffic flows, the economic network is, as I mentioned earlier, with the south-west, not with Manchester. It would be better to have much better, regular connectivity between Swansea and Bath and the south-west than connectivity with Manchester. Traffic flow and volume make the economic case for frequency and connectivities. I appreciate that it would involve working with the Welsh Government to get the train timetabling right. That is a simple thing that could be done within the next weeks, and overnight we could end up with an assurance of having two trains an hour from Paddington to Swansea. That would make a big difference to me when talking to inward investors who might want to go to Swansea bay city region.

There has been talk about nationalising Arriva Trains and about public ownership of various franchises. The Minister knows that the east coast main line is in public control and we are saving something like £700 million a year. It is worth looking at such cases around Britain. I understand that in Wales, we are spending some £170 million a year of taxpayers’ money on Arriva Trains. Again, the Welsh Government should look at that, not for the sake of it, but to deliver best value for money for the taxpayer.

I appreciate that Deutsche Bahn, the biggest railway company in Europe, has command over our freight system and, with a turnover of £39 billion, has the economic muscle to make the investment. I am particularly interested in investment in the south Wales rail network to make it part of the transnational transport network acknowledged by Europe. As Members will know, South Wales is not on the map of strategic European rail routes that people are willing to invest in; the connectivity just goes up the spine of England, not to south Wales, and one reason is that the criteria for such investment include core ports and airports.

In respect of the Silk report, there is a case for nationalisation of ports in Wales, in particular—the Minister may think this is an ideological point—so that Swansea port and the port at Port Talbot would be regarded as one port. Then we could increase the amount of freight to that port, triggering a process to make it a core port and in turn triggering its becoming part of the transnational rail network. That in turn would trigger European funding to provide connectivity that would then extend, transnationally, over to Ireland. My hon. Friend the Member for Llanelli (Nia Griffith) made those points.

The trouble is that, if the only way to get rail investment is on the basis of its being demand-led as opposed to supply-led, we will always have a problem in Wales. The reality of the economics of transport is that, when a rail or tube link, or whatever, is provided, more people use it and more people buy houses, so house prices increase and there is more economic activity. To a certain extent, we have to lead with greater frequency and greater investment, and I certainly want to see that.

I am asking the Minister about extra investment in Wales, so that we get our fair share; about the frequency of trains; about whether he has a balanced view of whether the public or the private sector should run particular train franchises; and about whether he is willing for the public sector to bid in, as with the east coast main line. That would, of course, be a question for the Welsh Government.

In passing, let me mention some other rail projects. We should look more imaginatively at opportunities for some trains to go directly to Swansea from Cardiff without stopping, or from Cardiff to Port Talbot Parkway, with a light rail route going all the way through to the Mumbles.

The Minister may or may not know about the conversations about the Swansea tidal lagoon. I saw a presentation recently about it—three new lagoons would be provided, stretching across Swansea bay city region, but not the whole way across. It would not go as far as Swansea bay itself, so as not to distort the view towards the Mumbles. There would be a reconfiguration of the road and rail networks and a visitor centre that would generate, in the view of the plan’s originator, some 3 million visitors a year.

Will the Minister explain whether the planning regime is merely some sort of incremental process of upgrading, extending or reducing existing networks, or whether it is part of a more creative vision of economic development, which perhaps embraces a vision of Swansea—the area I represent—as not only an economic and academic hub, with its universities and traditional industry, but a quality tourist destination, building on the city of culture bid, Dylan Thomas and so on? That vision is of a place in a global marketplace, in which increasing numbers of people from China, India, Russia and Brazil want to go to English-speaking non-sun cultural destinations. How should that infrastructure be planned? How should we provide multi-modal connectivity with road, rail and the development of Cardiff airport to ensure that that vision works in a holistic way, rather than keeping an incremental, slightly pedestrian approach to transport planning?

10:31

[Lilian Greenwood (Nottingham South) (Lab)]

It is always a pleasure to serve under your chairmanship, Mrs Riordan. I begin by congratulating my hon. Friend the Member for Newport East (Jessica Morden) on securing this important debate. Indeed, I thank all my hon. Friends for their contributions. Clearly, the transport infrastructure linking Wales and England is of great importance. In many ways the debate represents a continuation of the ongoing parliamentary scrutiny of cross-border transport links. It follows the publication of the Welsh Affairs Committee’s 2012 report on cross-border road and rail connections, which was debated in Westminster Hall in February and the Westminster Hall debate in November on transport infrastructure in north Wales, which was ably led by my hon. Friend the Member for Alyn and Deeside (Mark Tami).

My hon. Friend the Member for Newport East set out the real challenges for her constituents, including those who commute over the border. She spoke about the difficulties of aligning timetables so that connections can be made, and the overcrowding that some passengers still experience. I am familiar with some of those services, because the CrossCountry trains from Cardiff terminate in my constituency at Nottingham station. I have a sense of how overcrowded those trains can be. Clearly, however, there are significant issues with some First Great Western services in her constituency. It is clear from her contribution that more needs to be done, and it is important that the Department look closely at the rolling stock issues that she raised, which are giving rise to that overcrowding.

A similar message may well apply to all rail services in Wales and cross-border services. In the past 20 years, passenger numbers in Wales have more than doubled, and the increase in the number of people travelling between Wales and England has been almost as impressive. As my hon. Friends the Members for Vale of Clwyd (Chris Ruane) and for Wrexham (Ian Lucas) said—in fact, I think everybody has said this—it is vital that people in Wales can connect to airports and the jobs and educational opportunities available in places such as Manchester and Liverpool. Similarly, good connections are needed in south Wales to Bristol, Bath and other places in the south-west. The Welsh Assembly Government have successfully opened the Ebbw Vale line, where passenger numbers have exceeded all expectations, and there was the welcome news in April that hourly peak services will be funded between Aberystwyth and Shrewsbury, starting next year. The hon. Member for Montgomeryshire (Glyn Davies), who is no longer in his place, noted that that would be just in time to carry newly elected Labour MPs. The internal devolution within Network Rail is an important step towards achieving a more cost-efficient railway that is more responsive to local issues. My hon. Friend the Member for Wrexham described the welcome investment in the Wrexham-Chester line, and we have also seen funding committed for greatly improved cross-border inter-city services through investment in electrification and the new intercity express programme trains.

There are, however, real obstacles to overcome. The cuts of the Beeching era, a long time ago now, still cast a long shadow. The Heart of Wales line only narrowly evaded closure. It is well known that a rail journey from south Wales to the north is by necessity a cross-border trip, as passengers must travel into England first. As we have heard, there have been problems with timetabling onward connections. Given the number of services that cross the border at some point on their journey, there is a continuing need for close co-operation between Governments and transport authorities. One cross-border operator was lost in 2011, when Wrexham & Shropshire failed. Passengers as well as some of the excellent local rail user groups that have been mentioned hope that existing services can be improved across Wales. I know from colleagues that it can sometimes cause frustration if we talk about north and south Wales in isolation, but it is important that future service specifications take into account the needs of passengers in mid-Wales and west Wales. My hon. Friend the Member for Llanelli (Nia Griffith) described some of the frustrations facing her and her constituents and touched on issues to do with freight operations.

Welsh Ministers have spoken of their desire to play an active role in shaping service priorities after the Wales & Border franchise expires in 2018, and the National Assembly for Wales will be entitled to act as co-signatory under the Railways Act 2005. However, in their submission to the Silk commission of March last year the Government said that the Department for Transport

“is in discussion with the Welsh Government to assess the feasibility of devolving franchise responsibilities, the financial and legal requirements of doing so and how the UK Government’s interests in services affecting locations in England could be protected.”

Will the Minister update the House on any progress arising from those discussions? What form does he envisage that devolution taking, and would he compare the models under discussion to the control that the Scottish Government exercise over the ScotRail franchise? What proposals has he put forward for managing risk, and what protections would be in place for English customers whose services are provided by Arriva Trains Wales? His answers will be of keen interest to passengers and transport planners on both sides of the border.

Further discussions have so far yielded more heat than light from the Westminster Government, and I hope that the Minister will provide some illumination. In the official response to the Welsh Affairs Committee’s 2012 report, the Government said that they would

“work with the Welsh Government to explore how Wales can get the most out of the new national high speed rail network.”

My hon. Friend the Member for Swansea West (Geraint Davies) spoke about maximising Wales’s benefits from investment. Will the Minister update us on that work? We have heard Members speak about how High Speed 2 will bring direct benefits to Wales and its cross-border services—in particular, I have in mind the contributions of my hon. Friend the Member for Clwyd South (Susan Elan Jones)—but can we expect to see a strategy document from the Government? In the same official response, the Government stated:

“The UK Government will continue to work with the Welsh Government and train operators to identify cases where the frequency of cross-border rail services could be increased, without the need for additional public subsidy.”

Will the Minister tell us what progress has been made in that area? The Welsh Government have committed to funding hourly peak services from Aberystwyth to Shrewsbury in 2015, but have any additional cross-border services been identified by the UK Government since that commitment was made last May?

On transport investment, it is certainly true that the Welsh Administration have looked at additional projects, but it must be recognised that they are doing so in an extremely challenging climate. The Tory-led Westminster Government have cut the Welsh capital budget by almost a third, which has constrained the ability of Welsh Ministers to deliver important investment projects, and it is difficult to resist the conclusion that those restraints are holding back growth. My hon. Friend the Member for Wrexham described the importance of improving transport infrastructure to support economic regeneration, and the strong desire for more local decision making, closer to those who understand the population’s needs, is well known.

Notwithstanding the improvements that have already been secured, we believe that the Government’s proposals for devolution, as set out in the Wales Bill, do not go far enough. In particular, Ministers have not explained why Wales must have a borrowing cap that is more constrained, on a like-for-like basis, than that of Scotland. The Silk commission concluded that the Welsh Government should have

“the capacity to borrow for capital investment on a prudent basis subject to limits agreed with HM Treasury.”

That investment could well be in public transport schemes, such as the rapid transit proposals for Cardiff mentioned today which have secured additional funding. Such projects could attract investment to deprived areas and deliver much needed skilled jobs, but the allocation of that funding should be decided by Welsh Ministers and the Welsh National Assembly. Long-term funding settlements could deliver the certainty needed to keep costs low and to ensure that projects are actually delivered, as would the political stability that would be established were the Welsh Government’s powers moved from a conferred to a reserved basis, as my colleagues in the shadow Wales team have set out.

That desire for stability contrasts with the reality under this Government. Electrification of the great western main line is a case in point. Despite the previous Labour Government committing to the project in 2009, it was paused after May 2010. We then faced a drawn-out process by which the plans were slowly reconfirmed. Electrification to Newbury was announced in November 2009, but the project’s extension to Cardiff was not announced until March 2011. Ministers said then that the line to Swansea would not be electrified, as originally planned. A year later and in the face of public pressure, however, they agreed that the route to Swansea would be electrified after all. In other words, thanks to the Government’s prevarication, a project initially announced in July 2009 was not confirmed until three years later. Following the delay in bringing forward that investment, will the Minister offer an assurance that the reported hold-ups in the initial works elsewhere on the line will not cause the timetable for electrification to Wales to slip? I hope that he will also assure my hon. Friends the Members for Swansea West and for Llanelli about future services and connections.

Similarly, the Government’s position on valley lines electrification has also changed somewhat. Ministers need to demonstrate that they are working in a spirit of constructive collaboration with their counterparts in Cardiff, and I hope that the Minister will provide an update on progress in the talks between the two Governments and answers to the questions posed by my hon. Friends.

Finally, I have a technical question for the Minister. Level 2 European rail traffic management system technology—ERTMS—has been trialled on the Cambrian line, but teething problems have been reported. What conclusions have been drawn from the trial? Is ERTMS fully operational again on the line following the extreme weather damage in January and the reopening of the line to Harlech in May?

In conclusion, the railways helped to forge the industrial strength of both England and Wales. As my hon. Friend the Member for Vale of Clwyd described in interesting terms, the tourism industry in Welsh seaside towns depended on the development of the railways—and obviously provided employment for young boys in Rhyl. From the world’s first passenger rail services on the Swansea and Mumbles railway to Brunel’s Severn tunnel, Wales has a railway heritage to be proud of. Cross-border services make a vital contribution to the modern economy of Wales and those of its neighbouring English city regions. It is clear from today’s debate that hon. Members of all parties want to see those services improved.

10:43

[The Parliamentary Under-Secretary of State for Transport (Stephen Hammond)]

It is a pleasure to serve under your chairmanship, Mrs Riordan. Today’s debate has shown the importance of transport and the rail industry to economic growth and the lives and livelihood of so many people across the country. I congratulate the hon. Member for Newport East (Jessica Morden) on securing the debate.

Many of the questions that hon. Members have posed this morning reflect the challenges of success. Since the Conservative Government took the decision to privatise the railways back in 1993, the number of people using the railways has doubled. The hon. Lady raised issues of great importance to the economic development of both England and Wales. From her service as a member of the Select Committee on Welsh Affairs, she will know that cross-border links have been the subject of several inquiries, as have tolls on the Severn bridge, and I am grateful that she did not raise that matter today.

I will now address several of the points that hon. Members have raised during the debate. The hon. Member for Newport East asked some specific questions about her constituency, some of which I will answer in writing, if I may. On timetabling, however, franchise agreements require train operating companies to co-ordinate services, but that co-ordination clearly has not been as strong in certain areas as it might. There has been dialogue between the Severn tunnel action group, Arriva Trains Wales, Arriva and the Welsh Government, but I am disappointed that no sensible conclusion has been reached thus far. I urge the groups to continue to talk, because meeting the obligation is possible.

On connectivity, some of which is determined by constraints on the Cardiff to Cheltenham and Birmingham to Bristol routes, if there is a solution, which is possible, it will require some substantial work by Network Rail, the TOCs and the Welsh Government to investigate the options and then agree on one.

The hon. Lady also mentioned her constituents’ desire to be able to use the Bristol service to work there. Some substantial work has been done with local authorities in the west of England to fund additional services, including those to Portishead, which will introduce a metro service to the area. While that is of benefit to the Bristol area, as the hon. Lady is right to say, we are currently encouraging the Welsh Government and the West of England local enterprise partnership to talk to ensure greater connectivity between the two schemes, which would be of benefit to her constituents.

The hon. Member for Vale of Clwyd (Chris Ruane) spoke of his time as a casing boy, as I think he described it. Although probably not as glamorous as that of the hon. Gentleman, I too had a job on the railways and spent two rather hot summers as a carriage cleaner many years ago during my university career. He was right to mention the potential of connectivity to Airbus in Deeside to generate jobs, but that is unfortunately a matter for the Welsh Government, so I urge him to take the matter up with them to see whether it can be improved.

[Chris Ruane]

The Minister will recall that I said that the Department for Work and Pensions had grants available 10 years ago to improve transport from areas of high unemployment to areas of employment. Is that not another possible source of funding?

[Stephen Hammond]

Most issues concerning rail services wholly inside Wales are now a matter for the Welsh Government, which is the key point here.

The hon. Member for Alyn and Deeside (Mark Tami), who is no longer in his place, suggested that rail is an afterthought. That may or may not have been the case previously, but it is certainly not the case under this Government. Rail is at the heart of both our economic and transport strategies.

The hon. Member for Wrexham (Ian Lucas) referred to the scale of investment that he had seen elsewhere. The scale of investment proposed in the current control period between now and 2019 dwarfs any of the investment that he has seen in any other country, because £38 billion is being invested in this country’s rail system. On top of that, £30 billion is going towards the road system. He mentioned regional input, and we will soon be announcing local growth funds, into which local authorities will bid. We have also encouraged local authorities to come up with local rail projects, and there is also the local pinch point fund, so there is much local activity.

The hon. Gentleman also referred to the Wrexham to Bidston line, and I recognise and understand his desire for its electrification. At the moment, however, the aspiration should be to get a more frequent diesel service so that plans can move forward. The hon. Gentleman is right to have such hopes and I promise to work with him, because increasing frequency on that line would be of substantial benefit to his constituents.

My hon. Friend the Member for Montgomeryshire (Glyn Davies) spoke of his campaign for an hourly service from mid-Wales so that newly elected Conservative MPs can actually get to London, and I am delighted that that service is in place. He also asked about the new Virgin direct award deal and direct services from Shrewsbury to Euston. I confirm that he is absolutely right: there would be little point in putting in place a service that did not allow for economic growth and for easy movement from London to Shrewsbury, and the other way around, to do a day’s work. The first train in the morning leaves before 6.30 am, but gets into London by 9.15 am; the last train back in the evening leaves around 6.30 pm—I think at 6.32 pm—which gets someone back into Shrewsbury for 9 o’clock, allowing a full day’s work in London if necessary.

The hon. Member for Swansea West (Geraint Davies) made a number of points, some of which I will cover later in my speech. He talked a little about his aspiration for renationalisation of certain parts of the line. I am not entirely sure where that fits with the shadow Chancellor ruling it out on the television on Sunday. I am happy to reaffirm to him, however, that the Government’s view is that franchising, and the creation of partnerships between the public and private sectors, is the best way to get value for money and better services for the fare payer and the customer, as well as the taxpayer. That is clear.

[Geraint Davies]

What I was getting at was that the east coast main line is now in public ownership, or publicly run, and we are saving £700 million, so does the Minister have an open mind on individual franchises? There was a basis for competitive tendering to include the public sector, so that we got the best value for money. I am not talking about total nationalisation for the sake of it; I want best value for the taxpayer. Does he agree with that, or does he want to give money away willy-nilly to the private sector because he is the one that is ideologically driven, not me?

[Stephen Hammond]

I absolutely disagree. The east coast franchise, however, will be out of public hands and back into private hands as a result of the franchising. By the end of the year, we will have announced the winner of that competition.

The hon. Gentleman must have noted the Rail Delivery Group report that came out on Monday, which pointed out that, since privatisation, the level of private sector profits for the rail companies has fallen, while the premium going to the Government has risen by more than £400 million. The facts show not only that privatisation has seen a doubling of passenger numbers, but that franchising has benefited both passenger and taxpayer. He should agree that those facts bear out the point that the process is not ideologically based at all.

The hon. Member for Llanelli (Nia Griffith) talked about the Pembrokeshire to Manchester stopping service, but that is a matter for the Welsh Government, because the stops would be inside Wales. I am sure that the Welsh Government will read her comments, and I hope that they will take them on board. As hon. Members know, it is true that co-operation on and, where appropriate, co-ordination of transport matters between the Department for Transport and the Welsh Government is important to the success of cross-border links. Relationships have advanced significantly and co-operation under the joint parties agreement occurs regularly. The Welsh Government and the Department have a good working relationship. Officials can therefore provide Ministers with the best advice possible to deliver some of the aspirations that we are discussing.

Co-operation between the two Governments is clearly vital if we are to secure the best possible benefit from the record levels of investment now going into the rail network. The investment for 2014 to 2019 that I mentioned—the details were published in July 2012—is built around four priorities: further electrification; increased capacity and faster journey times between key cities; facilitating commuter travel between and into major urban areas; and improving the major railway links to ports and airports. More specifically in Wales, the strategy includes the £1.35 billion electrification of the Great Western main line between London and Cardiff, on which services are expected to be electric by late 2017, and the electrification of the valley lines, which is due to be completed by 2019. Furthermore, the UK Government are specifying and funding electrification of the line from Bridgend to Swansea, thereby completing the 47-mile main line electrification from Cardiff to Swansea.

[Geraint Davies]

Is there, therefore, an undertaking for the Government to finance it all the way from Paddington to Swansea? The Minister also seems to be suggesting the valley lines will be included, but is there now at least a commitment that the UK Government will pay from Paddington all the way through to Swansea? Is there clarification of who is paying for the valleys bit?

[Stephen Hammond]

As the hon. Gentleman knows, that discussion is ongoing. The Welsh Government have raised issues about the arrangement signed with my right hon. Friend the Member for Putney (Justine Greening), who was Secretary of State for Transport at the time.

[Nia Griffith]

Will the Minister flag up in all franchise discussions the issue of people having to change trains as the line is gradually electrified, so that we do not end up with more changes than necessary? We want one simple change, if necessary, in Swindon, Bristol or Cardiff, according to how far the electrification has gone, and then to go right through to west Wales.

[Stephen Hammond]

With regard to that and to First Great Western, we have undertaken a consultation this year about what the services might be and how they might be improved in the next direct award. I hear what the hon. Lady says, and I am keen not only to specify services that provide the best value and best opportunity for travellers, but to allow the privatised companies the best advantage to ensure that they can look at new services and new opportunities for new markets, using innovation within the franchise.

Other elements of our strategy will also be of benefit to Wales. The Heathrow western access scheme will reduce journey times between Cardiff and Heathrow airport by about 30 minutes from 2021. The UK Government have committed to the introduction of super-express trains on the Great Western main line by 2018, which will reduce the journey time between Cardiff and London from about 2 hours to 1 hour and 42 minutes. Crossrail will then speed up access between Paddington and central London from 2019, which will provide a fast, one-change journey from south Wales to the City of London, the docklands and beyond. Welsh stations will also share in the £100 million of station improvement funds and the £100 million of Access for All funds from 2014 to 2019. Overall, therefore, Wales stands to benefit directly and indirectly from almost £2 billion of investment in modernising the rail network.

Cross-border rail services between England and Wales are provided by four franchised train operators. The Department for Transport has a statutory obligation to consult Welsh Government Ministers before issuing any invitation to tender for a franchise agreement that includes cross-border services. As I said in response to a number of questions, where a service is provided wholly within Wales, the Welsh Government must be a signatory to the franchise.

The Arriva Trains Wales franchise is not due to expire until October 2018. The Welsh Government specify and fund services within Wales and across the border, and they carry out the day-to-day management of the franchise and have the powers to fund improvements. Train operators are of course free to run additional services if they consider that is the right thing to do. The Department is working with Arriva Trains Wales to provide additional cross-border services from December 2014.

On Silk and further devolution, which came up several times, the Government support the decision to devolve Welsh services in the Wales and Borders franchise to the Welsh Government. A joint agreement governs joint management of the existing franchise to 2018. In our evidence to part 2 of the Silk commission, the UK Government noted the strong case in favour of modifying the devolution boundary in respect of the Wales and Borders franchise. The Silk commission subsequently reported that further devolution of the rail network in Wales would be possible and desirable, although it would require close cross-border co-operation. Our response to Silk made it clear that recommendations that did not require primary legislation could be implemented early if we were satisfied that the case for change had been clearly made and there were support across Government for its implementation.

We recently held a consultation on the second direct award, and I recognise the concerns that have been expressed about the First Great Western franchise. That was why we carried out the public consultation, so that it could inform us of some of the concerns and issues so that they can be addressed when the award is made.

A number of Members raised the issue of the high-speed network. High Speed 2 will deliver significant benefits for Wales through the interchange at Old Oak Common and the improved journey times to London and the north via Birmingham and Crewe. It will also allow for greater commuter, freight and local services from the capacity released on the existing networks. Intercity express programme trains will also be coming to Wales from 2017—

[Mrs Linda Riordan (in the Chair)]

Order.

To allow the next debate to begin, I ask Members leaving the Chamber to do so quietly.

Rural Paper Industry

Wednesday 2nd July 2014 Westminster Hall

11:00

[Mr Iain McKenzie (Inverclyde) (Lab)]

It is a pleasure to serve under your chairmanship once again, Mrs Riordan. I thank the Minister for coming along to give his thoughts on the Government’s position on securing and enhancing our rural economy.

Creating business opportunities and increasing jobs rightly continues to be an important focus of this Parliament. There is no greater challenge than bringing jobs and business to all areas of the UK, be they rural or urban. My constituency has both rural and urban communities, and the more rural areas are growing. Although those communities can be sustained by people travelling to towns and cities for employment, for various reasons we still need to provide work for the rural population.

With that in mind, I recently visited a new business venture in my constituency called West Coast Woodfuels. The business, which was set up in the hills behind the village of Inverkip, uses sustainable forestry management to produce and supply wood chip for biomass energy. However, the sustainable forest maintained for that purpose relies on servicing a limited number of biomass customers. The plan was always to establish a green industry, acknowledging that the UK’s forest and timber industries are virtually carbon neutral.

Forestry management maintains vital investment in rural economies and plays an important role in the construction, renewable energy, paper and tourism sectors. Historically, forests were planted, maintained and harvested to provide wood and building materials, as well as tools and timber for industry. Britain saw a serious decline in its forested land in the 19th century, when deforestation occurred at an alarming rate to meet agricultural and industrial demands. The 19th century also saw wood pulp from trees gradually replace other sources of fibre used for paper making, such as straw, grasses and rags. Our history shows that the recovery from world war two did much to focus minds on the need to rebuild industries and the economy. As a result, forests were intensively harvested primarily for timber production.

[Guy Opperman (Hexham) (Con)]

I congratulate the hon. Gentleman on securing this important debate. I speak as the representative of the constituency with the largest forest in the United Kingdom—Kielder. Egger, in my constituency, has a cross-border interest in Barony, which is in Ayr, and in Hexham. As a supplier of wood chip, it is very dependent on the businesses the hon. Gentleman is talking about. Does he agree that this and future Governments must consider the commercial forests of the future so that we have an ongoing forestry ecosystem?

[Mr McKenzie]

The hon. Gentleman is absolutely spot on: forestry must be managed for the future, to provide not only raw materials but jobs and industry in the areas I am talking about.

The trend towards deforestation has now been arrested, but even though the UK has favourable growing conditions, only 12% of its land is forested, compared with 28% in France and 32% in Germany. Since the 1950s, increasing quantities of paper have been made from recycled sources, but the rest comes mainly from virgin wood fibre from coniferous trees grown in sustainably managed and certified forests. On the whole, that makes good economic and environmental sense in the densely populated but under-forested UK.

Of the timber extracted in the UK, less than 5% is used in paper and pulp production, compared with about 11% in other countries. That timber is lower-grade conifer logs and forest thinnings. Higher-grade timber is generally used by other industries, such as construction and furniture making.

Clearly, the paper industry depends on trees and needs new, thriving forests. It is very much in the industry’s interests for trees and forests to be used sustainably and to remain available as a raw material for future generations and as a source of future employment. The industry employs thousands of people across the UK and indirectly provides even more jobs in sectors such as publishing and packaging. That helps to generate wealth, and it creates jobs in predominantly rural areas, where it can be the only source of revenue for local populations.

In many ways, the pulp and paper industry is a business model of sustainability, and 2013 was relatively successful for it—more so than recent years. Increased consumer spending helped the packaging sector and other sectors. Looking to the recent past, we see that peak employment directly in the paper industry was reached in 1959, when it employed 100,000 people. By 1960, UK paper consumption exceeded 4 million tonnes per annum for the first time. However, by 1981, imports of paper and board exceeded UK production for the first time. Since then, this employment has declined, along with the number of mills. However, tonnages have continued to increase. By 2012, there were 53 mills in the UK, producing an estimated 4.4 million tonnes of paper and board.

Paper mills use recycled paper to produce 70% of the fibre for paper making in the UK. However, paper can be recycled only a set number of times—I am told the maximum is about seven. After that, the paper loses its fibre and is no longer useful for making good quality paper, so forestry still underpins the industry.

Virgin pulp comes from northern England, Scotland and abroad, and 5% of harvested UK timber is used in paper making. As I said, UK timber can also be used in biomass energy production, making biomass an ever-growing additional competitor of the paper industry for new wood, and suggesting that more forests are needed. Forests are a renewable, sustainable resource. They are carbon neutral, and they also create pleasant environments for leisure activities. In the UK, there is consensus that improved forest management would increase rural employment.

What, then, of the impact of recycling as we steadily improve our performance on our recycling targets up and down the country? Since the 1950s, UK paper makers have steadily increased their use of recovered paper, and nearly 70% of the fibres used to make paper in the UK now comes from paper that has been collected and recycled. As I said, however, there is a limit to the number of times paper can be recycled. There is also an ever-growing and fiercely competitive market for recycled paper, so new pulp needs to be sourced.

It is not only the paper industry that requires access to new pulp. The UK packaging manufacturing industry also requires it. It has annual sales of £11 billion and employs 85,000 people, and represents 3% of the UK’s manufacturing work force. It is a powerful addition to those demanding access to new sources.

I have visited a packaging firm in my constituency. McLaren Packaging, which produces packaging for more than 100 whisky products, has invested in cardboard tube manufacturing with great success. In fact, most of the whiskies that are on display in shops or exported will feature distinctive packaging from McLaren Packaging in Port Glasgow.

The cardboard packaging industry’s main product segment, however, is corrugated cardboard boxes, with additional cartons and cases. Such products are made of three layers of cardboard sheeting, with a corrugated sheet in the middle, making the box more durable than standard containers. Cardboard boxes have a wide variety of applications and are used to package many products across a range of sectors. Its customers include manufacturers, wholesalers, storage owners and retailers. In general, demand for cardboard boxes correlates with demand for consumer goods as greater manufacturing output triggers a greater need for packaging.

In my part of the UK, forestry is sometimes described as the secret industry. About 40,000 jobs would disappear from the area if there were no forests or forest industries. Every week, some 4,000 lorry loads of harvested wood are transported to mills for conversion into timber for house building, quality paper and many other essential products. After felling, more trees are planted and the cycle continues. That makes forestry truly sustainable. It promotes economic activity in rural areas in ways that protect and conserve the natural environment and wildlife. Forests also support a network of interdependent businesses, including those of forest owners and managers who produce wood while creating wildlife habitats and providing recreation facilities. There are forest nurseries, where young trees are grown. In addition, contractors harvest the wood, and hauliers transport it, and there are businesses that process wood, such as the paper industry.

The development of wood-processing industries really took off in the 1980s. That was when the forests created during the middle part of the 20th century began producing significant volumes of softwood. However, careful management of the forests can also produce the energy for manufacturing of paper through energy biomass. Thus there is a natural resource that can not only be transformed into a product but can fuel the manufacturing process to create the product. More than half the energy used in the EU paper industry now comes from biomass, and the UK paper industry is using biomass with increasing frequency. That means that more forests will be needed to provide adequate supplies for both energy biomass and other industries, such as paper. Creating a rural paper industry next to a forest would seem as natural and logical as it was in the past to match up a mill with a stream for hydro power.

The European pulp and paper industry is in many ways a business model of sustainability, and it is largely rural.

[Guy Opperman]

The industry experts to whom I have spoken on both sides of the border are opposed to Scottish independence and the impact that that would have on the businesses we are concerned about. Does the hon. Gentleman agree?

[Mr McKenzie]

I thank the hon. Gentleman for bringing in the Scottish question, which I think will come into just about every debate from now until September. Yes, clearly, as he pointed out, in the context of the industry, independence would create another problem for the population of Scotland.

A need has been identified for more forests in the UK, and it would seem that a clear start could be made by creating more forests in the rural north of Britain. Related manufacturing industries could then be attracted to forested rural areas, bringing even more jobs and business to areas of the UK where we can tap into a sustainable natural resource. The Confederation of Paper Industries, which has 68 member companies employing 25,000 people directly, tells us that there is a need for access to new sources of paper, to sustain demand and enable the industry to grow. Also, the paper industry is said to support a further 100,000 jobs indirectly. The turnover of CPI member companies is reported to be in the region of £6.5 billion. Competition for recycled paper and the limits on the number of times paper can be recycled mean that new sources are increasingly in demand. Great quantities of paper are never recycled—we need think only of the volume of paper being flushed away each day that will never be recycled.

Will new technologies ever truly replace paper? That idea is used as a counter-argument—against increasing the number of sources of new paper and pulp fibre. We strive for the paperless office, but we are miles away from achieving it. Merely looking around Parliament provides evidence of that. Paper and card will always be necessary for packaging. Paper is more environmentally undisruptive than plastic. Even paper for print and writing is unlikely to die out, despite e-books. Some 80% of social network users—diehard committed onliners—say they still require paper. Demand for paper and paper products can only increase. Even the mighty iPad requires packaging.

Rural and semi-rural areas can only benefit from sustainable management of their forests and attracting a paper industry with access to new material and an energy source. That would hopefully mean an increase in jobs, business and population for rural areas. Let’s try to see the wood from the trees.

11:15

[The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)]

I congratulate the hon. Member for Inverclyde (Mr McKenzie) on securing a debate on this important matter. As he said, the paper industry is an important one and always has been. The hon. Gentleman gave historical figures, and he might like to know that I was brought up in a paper mill village. Bullionfield paper mill in the village of Invergowrie supplied high-quality paper for more than 100 years, including, as I recall, paper for the Tokyo Olympics programmes.

The Government recognise the challenges facing all the energy-intensive sectors, including paper, and I welcome the industry’s positive recognition of Government support in its June 2014 review. That review commended the steps being taken by the Government to ease the direct and indirect costs that climate change policy places on the industry. Improving economic conditions have fed through, as the hon. Gentleman said, to a more successful year for most paper sectors. The data show that measures to help the paper industry have resulted in real growth in the sector. I want to comment specifically on what we are doing to help the paper industry with its energy costs and respond to what the hon. Gentleman said about the importance of job creation in rural areas. If there is time, perhaps I will give a little more detail on what we are doing to promote sustainable forestry.

The Government are increasingly concerned about the effects of high energy prices on the competitiveness of our energy-intensive industries, including paper. That is why we now make compensation payments for the indirect costs of the EU emissions trading system. We intend to make the first payments for the indirect costs of the carbon price floor this summer. Further measures were announced in the Budget: a cap of £18 per megawatt-hour on the carbon price support mechanism, which will benefit all sectors of the economy; and compensation for the costs of the renewables obligation and small-scale feed-in tariffs from 2016. That is the most significant policy cost affecting the price of electricity. The Chancellor also announced the continuation of the ETS and CPF compensation schemes until the end of 2020.

We have paid some £32 million in ETS compensation to 53 companies so far, across the UK, including £5 million to eight companies in Scotland, operating 17 sites between them. The paper industry shared £8 million between 28 companies, including three in Scotland: Ahlstrom Chirnside in the borders, UPM-Kymmene near Kilmarnock, and Tullis Russell paper makers, near Glenrothes. Those companies have been benefiting from the support that we are making available. I am pleased that paper, as an energy-intensive industry, is eligible for compensation across the whole spectrum of measures. The industry recognises that those Government support measures will save it up to £170 million over the coming years.

The hon. Gentleman said some important things about the role of the paper industry in helping to stimulate jobs in rural areas. That is a priority for the Government. We have introduced a range of policies and initiatives to promote growth in rural areas by helping to deliver new infrastructure, particularly broadband; by raising skill levels; and by supporting small and medium-sized enterprises. We are also trying specifically to support the rural economy by investing in rural tourism and supporting micro-enterprises. We have five pilot rural growth networks—not in Scotland but in Cumbria, in the north-east of England, and in the south of England—aimed at tackling specific barriers to growth in rural areas such as a shortage of work premises, slow internet connectivity and fragmented business networks. Those pilots are expected to create up to 3,000 jobs and support up to 700 new businesses. We want to share the lessons we learn from them with local authorities and local enterprise partnerships.

Tourism is an important driver of the rural economy. We must ensure that we are doing more to take advantage of the predicted growth in the tourism sector as a whole to ensure that the rural part of the tourism sector does not lose out. We are making funding grants available to tourism businesses to boost the rural economy through the rural economy growth review and rural broadband. We are also providing support for a high-quality tourism visitor economy through a £25 million package of support, including £6 million for partnership projects funded by the rural development programme.

I turn to the creation of sustainable forestry that can feed back into the industry. Forestry is a devolved matter, so any specific concerns the hon. Gentleman has relating to Scotland should be raised with the Scottish Government and Scottish Parliament. Throughout the United Kingdom, we are working to promote the future success of our woodlands by ensuring their sustainability. In January 2013, we set out our vision in a forestry and woodlands policy statement, which included our priorities for future policy implementation, focusing on protecting, improving and expanding public and private woodland, and recognising the multiple benefits that woodlands provide to the economy, to society and to the environment. Alongside that, we recognise that a strong timber industry helps to deliver the core objectives of protecting, improving and expanding woodland, and contributes to the growing strength of the rural economy.

[Guy Opperman]

We all agree that we need more forestry to cope with existing businesses and the enhanced and expanding subsidised biomass businesses. Post-world war one, we planted Kielder in my constituency specifically to accommodate the need for large forestry infrastructure. I am worried that the Government do not have the big project ideas for large forestry planting going forward. Will the Minister expand on that? It is very much what businesses that I speak to, including forestry businesses, are looking for a steer on.

[Michael Fallon]

My hon. Friend is right, and I will address the steps that the Government are taking.

The forestry industry makes a significant contribution. It provided some £230 million gross value added in the latest year for which figures are available, an increase of 52% over the two or three preceding years. We are committed to invigorating the woodland economy, bringing neglected woodland back into management and helping to create jobs and growth. We support and are encouraged by the new sector-led “Grown in Britain” initiative, which is creating increased market demand for British wood products. Although it was launched only in October 2013, it already has the support of 200 organisations, ranging from forestry suppliers, processors and product manufacturers to big-name high street retailers and UK construction firms.

“Grown in Britain” is driving a change in forestry that could see the management and new planting of woodland become more economically viable. Strengthening and expanding our forestry supply chains is not only creating new market opportunities but, crucially, creating an incentive for increased private investment in woodlands. We are working with “Grown in Britain” to pioneer ways of making it easier for businesses to direct their corporate responsibility investments into projects that improve the ecosystem services delivered by woodlands and result in more tree planting.

We are also making good progress in expanding the woodland cover across England. It is now as high as it has been since the 14th century. We want it to increase by planting the right trees in the right places for the right reasons. We also want more of our woodlands to be managed sustainably to maximise their public benefits. We estimate that if we work together with the sector, we could help to achieve 12% woodland cover by 2060, provided that private investment in woodland creation increases in line with our expectation.

We continue to do our bit in supporting woodland creation. The total area covered by the woodland creation grant in the year to March 2014 was 2,691 hectares, which is more than the seven-year rural development programme target of an average of 2,200 hectares a year. In this financial year, some £30 million of rural development programme funding is being invested, £24 million of it on management of the existing resource and £6 million for planting about 4 million trees on 2,000 hectares of new woodland.

Our woodland carbon code also provides a mechanism further to enhance private sector investor confidence in woodland creation projects for carbon benefits. More than 142 projects have sought certification to the code, representing more than 14,000 hectares of new woodland being planted that will sequester more than 5 million tonnes of carbon dioxide during its lifetime. That is a huge increase from the position a year ago and reflects the growing interest in domestic carbon emissions projects and the success of the woodland carbon code.

On improving woodland management, more than 50% of England’s woodlands are now managed under the UK forestry standard, which sets good practice guidelines for sustainable forest management. The UKFS is a world-class forestry standard administered by the Forestry Commission, and is the foundation for good forestry practice throughout the United Kingdom. It is therefore fundamental to the delivery of sustainable forest management. It provides a valuable toolkit for helping woodland owners to manage their woodlands productively and sustainably. Its application can lead not only to increased timber yields but to better flood risk management, the safeguarding of clean water supplies and the conservation and enhancement of biodiversity.

Our ambition is to increase the proportion of existing woodland under the UKFS. In our forestry and woodlands policy statement, we estimated that working effectively together with the sector could bring two thirds of woodlands into active management in the next five years, with the potential to reach some 80% if markets develop. Good progress is being made, and already the area of woodland under active management has increased from 52% three years ago to 55% in March this year. The key to bringing more woodland into such management is economic viability, and a range of measures are promoting sustainable woodland management, underpinned by the UKFS.

We are actively supporting the sector-led “Grown in Britain” initiative in its efforts to increase demand for and supply of British wood and wood products. Although still in its early stages, the initiative is beginning to make a difference. For example, to date some 19 major UK contractor group companies with a collective turnover of more than £24 billion have pledged to look into ways of procuring more British timber for their construction projects. Their buying power will help to stimulate demand for British wood products, which should lead to more woodland management and economically sustainable woodlands, and in turn to more private investment in woodlands, which we all want to see.

I am grateful to the hon. Member for Inverclyde for raising these important topics. The paper industry is important to us, and we recognise the challenges it faces and the high cost of the energy that it necessarily uses. I have outlined the measures we have taken to alleviate those costs. I have also explained how we see rural development as a major part of our economic recovery and our pilot work to improve the success rate of small businesses in rural areas. Finally, I have explained what the Government are doing to increase investment in private woodland and to drive up the proportion of woodland that is under active, sustainable management to increase the supply of timber to our own industries.

11:29

Sitting suspended.

Disabled Students Allowance

Wednesday 2nd July 2014 Westminster Hall

[Mr Jim Hood in the Chair]

14:29

[Mr Jim Hood (in the Chair)]

Before I call Dr Julian Huppert, I inform hon. Members that I already have 12 speakers on my list, plus the two Front Benchers, and I will be calling the Front Benchers at 20 minutes to 4. After Dr Huppert has made his speech, I will then work out a time limit and advise hon. Members of it. I hope that interventions, if they are taken, will be brief, and I may have to remind Members of that if they try to make speeches in their interventions.

[Dr Julian Huppert (Cambridge) (LD)]

It is a pleasure to serve under your chairmanship, Mr Hood. I will do my best to abbreviate my speech in deference to the large number of Members who have shown up. It is good to see everybody who has come here. We are united by a belief that everybody, regardless of who they are, should be able to aspire to go to university. Regardless of disability, whether it is physical or mental, visible or invisible, there should not be a barrier as a result of it. There have been improvements on widening participation. At the university of Cambridge, where I used to be and which I now have the pleasure to represent, in 2007, only 4% of students were disabled. That has gone up to 10% now, and it is a trend that we see across the country. Universities have worked very hard to try to get disabled applicants to apply, to support them and to get rid of barriers. As a former director of studies and supervisor, I have seen some of that work and engaged in some of it to try to support students.

We have to ensure that the progress continues, because there are challenges. In general, life costs more for people who are disabled, and the same applies to student life. The disabled students allowance is a lifeline for many students with disabilities. That is why I sought the debate and why I am pleased to have secured it, after having seen the Minister’s proposals and heard the concerns that many people have expressed to me.

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

I congratulate the hon. Gentleman on securing this important debate. Does he share my alarm that that National Union of Students has said that as many as 55% of students with disabilities have seriously considered giving up their courses, many of them precisely because of financial concerns?

[Dr Huppert]

I do indeed share that concern—I will now take that point out of my speech—and the key point is that that number is significantly higher than it is for non-disabled students. I have been working with the National Union of Students, Anglia Ruskin university students’ union and Cambridge university students’ union on that. I want to draw Members’ attention to early-day motion 48, which was tabled by the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett). It is a pleasure to work with him on that—I am one of the co-sponsors—and we have now reached 99 signatures to that motion. I hope we can get over 100 today, because it shows that the issue matters to Members across parties.

In 2012-13, the payments helped 54,000 students up and down the country, doing so at a slightly lower cost than was necessary in 2011-12.

[Mr Mark Williams (Ceredigion) (LD)]

I congratulate my hon. Friend on securing the debate. He talks about “the country”, but has he considered the implications of the policy for students studying in Wales and in Scotland, where there is great concern about the Government’s proposals? Although the review is England-only, it has dire implications for Wales and Scotland.

[Dr Huppert]

My hon. Friend is absolutely right. I have mostly been focusing on the effects in England, and mostly on the effects in my constituency, but he is right that there are concerns about what might happen in Wales and Scotland. Of course, students study across the borders.

The support helps students with all sorts of equipment, such as computer software, but also with non-medical helpers, note-takers and all sorts of travel costs. It helps people to reach their potential, and it works. Figures from the Equality Challenge Unit report the year before last showed that disabled students who get the support are more likely to achieve a first or upper second-class degree than students who do not get that sort of help.

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

Does the hon. Gentleman share my concern that although an equality analysis of the proposals has not yet been carried out, the Minister, in a letter I have just received, states that it is the detail of the implementation of the proposals that is yet to be decided?

[Dr Huppert]

The hon. Lady raises an absolutely reasonable concern, and I will, again, take that point out of my speech.

We should be able to help people, and there are so many advantages to attending university; as well as the human benefits, the economic benefits are clear. It boosts the national economy, and it boosts personal earnings by something in the order of £100,000 over a lifetime.

As the Minister said in a speech to the Higher Education Funding Council for England last year:

“Going to university increases the chances that you will vote and appears to make you more tolerant. It improves your life expectancy. You are less likely to be depressed, less likely to be obese and more likely to be healthy. These are benefits for individuals and for society.”

He went on to say that

“I said it would be a tragedy if anybody were put off from applying for university”

because of costs. That is what this modernisation could do; it could act against those excellent words from the Minister.

[Kate Green (Stretford and Urmston) (Lab)]

Will the hon. Gentleman give way?

[Dr Huppert]

I will make some more progress.

Although the Minister will, I am sure, make it clear that the changes are not due to come in for another 18 months, and that current students will be protected for 2015-16, they are already having an effect. Paddy Turner, from the National Association of Disability Practitioners, said that his staff are already seeing prospective students who are rethinking 2015 entry applications because they are concerned about the changes. Open days are already under way. Many students are visiting universities to find out what will happen, and universities simply do not know what to say. The changes could mean that people are put off, or that they struggle when they get to university.

[Jack Dromey (Birmingham, Erdington) (Lab)]

Will the hon. Gentleman give way?

[Dr Huppert]

I would like to make some more progress, if I may.

I have spoken to many people about the issue. I pay tribute to the three unions—from Cambridge university, the National Union of Students, and particularly the union from Anglia Ruskin—that organised a fantastic event with a large number of people who have been supported by DSA. They spoke very movingly about the experiences that they have had. I was intending to say a bit more about individual cases, but in the interests of time I will not. However, I was struck by how many of the cases involved mental health issues rather than just the physical health issues that people so often think about. There were people with dyslexia who had not had the support that they needed. It was only quite late on that they discovered the help that was available. They would never have been supported otherwise; they would have never have been able to do what they wanted to do.

At Anglia Ruskin university, 1,800 students are eligible for DSA, so there are 1,800 stories of people being helped. There are similar numbers at the university of Cambridge. It has made a huge difference, but that is at risk, because universities are being expected to provide the support themselves. Where will they get the extra money? There is to be no additional funding—indeed, the right hon. Member for Sheffield, Brightside and Hillsborough has had that confirmed through a written question.

[Mr Ben Bradshaw (Exeter) (Lab)]

How far does the hon. Gentleman think that the reasons for this decision go back to the Government’s mismanagement of the student loan book and student finance as a whole?

[Dr Huppert]

That is a somewhat broader question. There have been issues with the student loan book dating back some 15 years, as I am sure the right hon. Gentleman will know. Rather than arguing about that broader debate—he will know that I am staunchly against the fee system that his Government set up, which is being expanded—we should fix the problem in question. I am always happy to discuss those issues with him, as he well knows.

We have heard concerns from the National Autistic Society about what support will be available for people who are on the autistic spectrum. How will they be able to hold universities to account?

[Mr Robert Buckland (South Swindon) (Con)]

I commend my hon. Friend for securing the debate. In the course of proceedings on the Children and Families Act 2014, there was much discussion about whether the duty in it should extend to higher education. We were assured that in light of the particular grants that are available, we need not worry. Does he agree that it may be necessary to reconsider extending the duty to higher education, to cover students between 19 and 25 years of age?

[Dr Huppert]

I agree completely. My hon. Friend makes an essential point. He is a dedicated campaigner on autism issues—and I will now remove page 12 of my speech.

What sort of support will there be? I have some sympathy for the Minister’s comments about the provision of basic computers. The world has changed since I was an undergraduate. Most people have a computer now, but a lot of the software that is needed simply will not run on a basic computer. What happens if people need software that is not compatible with the perfectly reasonable computer that they have? What about technical support—how would that work? What about support for scanners if optical character recognition is needed? What about training? There are many, many questions.

[Several hon. Members]

rose—

[Dr Huppert]

I will take an intervention from the hon. Member for Birmingham, Erdington (Jack Dromey), then I will continue.

[Jack Dromey]

I congratulate the hon. Gentleman on securing the debate. He is absolutely right about the importance of access for disabled people. Does he agree with the comments of the Muscular Dystrophy Campaign that young women such as Keisha Walker in my constituency—she is from a modest background, and no one in her family had ever gone to university before—simply could not have gone to university, stayed at university and become a success, as she is determined to do, without the help of DSA?

[Dr Huppert]

I agree completely. The Muscular Dystrophy Campaign’s trailblazers case studies have been incredibly powerful. I hope that the Minister has had a chance to look at them. I will not go through them in any detail, in the interests of time, but there are many of them.

[Duncan Hames (Chippenham) (LD)]

Will my hon. Friend give way?

[Lucy Powell (Manchester Central) (Lab/Co-op)]

Will the hon. Gentleman give way?

[Dr Huppert]

I will take these two interventions and then try to finish my speech. I will take the hon. Lady’s intervention first.

[Lucy Powell]

The hon. Gentleman has been very generous with his time. I agree entirely with his point about computer facilities. I met my constituent Suzannah last week. She suffers from autism and described to me exactly what the hon. Gentleman is saying, but she also said that the desire for students to use banks of computers is not appropriate for those with autism and other problems, who find public areas too distracting and too difficult to work in.

[Dr Huppert]

The hon. Lady is absolutely right. We need to tailor the support to the individual. What is suitable for people on the autistic spectrum can vary substantially, which is why they need assessment and the help that is right for them. For some people, a bank of computers will be perfectly fine; for others, it will not be.

[Duncan Hames]

I thank my hon. Friend for giving way and for securing this important debate. My constituent, a member of the British Assistive Technology Association, points out that whoever is providing the support, whether it is the Government or higher education institutions, it is vital that students have the support that they need to use the technology—hardware and software—as effectively as possible, to get the maximum benefit from it.

[Dr Huppert]

My hon. Friend is absolutely right. As it happens, my mother is registered blind and relies on assistive software. It takes a huge amount of support for her to be able to use it, and I often have to provide that support. My hon. Friend is absolutely right to raise the point about the need for that.

I will make further progress, because I understand that many hon. Members want to speak. The NUS has highlighted a number of specific concerns about how the system will work, and I would be interested in the Minister’s specific response. There is a risk that the reforms could deter institutions from actively recruiting disabled students, because if the institutions are responsible for paying the extra costs, there will be an incentive not to take people who will be a bit more expensive. Although universities have a duty to provide reasonable adjustments for their students, there is no clear definition of what “reasonable adjustments” mean and no funding available to provide them.

The NUS makes another point, which is about the routes of redress for disabled students when there is a problem. There is only a finite amount of time available to fix that. Who would provide advocacy—would it be the disability support office? It could cause huge internal tensions if one part of the university is having to fight another.

[The Minister for Universities and Science (Mr David Willetts)]

I am grateful to the hon. Gentleman for giving way; he is rattling through a lot of important points very quickly.

It is important to recognise that universities are of course under an equality duty. The House has voted under successive Governments to introduce that duty, and at no point has there been the suggestion that extra funding has to be given to a public or private body to enable it to discharge its equality duty. Fortunately, the resources available to universities for teaching are increasing from £7.9 billion at the beginning of this Parliament to £9.9 billion at the end of this Parliament. That is a result of the changes that the hon. Gentleman “steadfastly opposed”, to use his words. They are among the few major national institutions that are seeing increases in cash, and they have a clear equality duty. Along with the retention of DSA, does he not accept that we should expect them to discharge that duty?

[Dr Huppert]

The Minister makes a valid point about the total cash being spent on teaching. As he knows, my problem is with the method of payment rather than the existence of the extra money for teaching. We should be keeping DSA—he is right about that, and we will talk further—and universities should apply the equality duty, but there will still be pressures on them and there will still be changes. I look forward to his detailed answers to the concerns.

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

Will the hon. Gentleman give way on the Minister’s point?

[Yasmin Qureshi (Bolton South East) (Lab)]

Will the hon. Gentleman give way?

[Dr Huppert]

No. I would like to make more progress.

Universities themselves are not content with what the Minister has been saying. I spoke to the head of the disability resource centre at the university of Cambridge, John Harding, who highlighted the fact that the real concern for higher education institutions, including Cambridge and all the Russell Group institutions, is the significant lack of clarity in the announcement and the complete lack of prior consultation. The Minister would have been better able to make his case had there been formal consultation and discussions. How will “complex” be defined? What is “the most specialist support”? There are many concerns about how this will work for people.

[Yasmin Qureshi]

Will the hon. Gentleman give way?

[Dr Huppert]

I will give way if there is time towards the end, but I know that many hon. Members want to speak.

Mental health problems are more common among students than the general population, and we must take action on that. Some 3,500 people applied for support last year citing mental health issues. It can help people to develop realistic study patterns and with organising their time and setting goals—things that are easy for some, but much harder for others. Students can require support from specialist autism mentors. It is unclear what band those would fall into and whether people would still be able to get support.

There are many concerns about how the new system will work. We know that people are likely to drop out if the cuts occur while they are at university. Randstad, an organisation that works with many institutions, surveyed students and found that more than one third would not have attended university without DSA and that about the same number would be more likely to drop out without it.

[Kate Green]

Will the hon. Gentleman give way?

[Yasmin Qureshi]

Will the hon. Gentleman give way?

[Dr Huppert]

I will try to finish.

We have many problems, and the Open university is concerned. It has about 20,000 disabled students. Where will it get the funding to support them? The university of Cambridge has short, intense terms, which changes the nature of the help that is needed. DSA is tailored at the moment. I am sure that some universities will provide good support, but I fear that others will not.

[Mr Willetts]

Will the hon. Gentleman give way?

[Dr Huppert]

I will always allow the Minister to intervene.

[Mr Willetts]

There is no picking or choosing. Universities have an equality duty. They have more funding for teaching, and they also have more funding in relation to access agreements—more than £700 million. Under the hon. Gentleman’s approach, that funding might not exist. Does he accept that, in my letter to the Office for Fair Access on how universities discharge their access obligations, I specifically identified disabled students as one group to whom they had to reach out in access agreements, for which extra funding is available?

[Dr Huppert]

I do not have the Minister’s letter to hand, but I do not doubt the facts of what he says. However, there is a concern among higher education institutions, among students and among Members of this House—about 100 of them—that the system will not work and will result in a less even playing field and less of the support that people need. I therefore urge the Minister to rethink it some parts of it.

I have asked many questions—I realise that I have rushed through a number of them—that the Minister will have heard before in letters from me and from other right hon. and hon. Members and seen in comments from the National Union of Students and all sorts of other organisations. I hope that he will consider them and rethink the cuts, the way they are being made and the pace of them. I hope that he will then return with alternative proposals that achieve what we surely all want to see, which is that support is available and we do not leave people out as we are trying to develop them through the university system.

[Several hon. Members]

rose—

[Mr Jim Hood (in the Chair)]

Order. As I said earlier, there are 12 hon. Members on the list of speakers, and I would like to get through everyone, so I will begin with a four-minute limit on speeches. I may have to cut that down if there are too many interventions.

14:39

[Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)]

I congratulate the hon. Member for Cambridge (Dr Huppert) on obtaining the debate and on rushing through his speech, which I will also have to do. The sadness about this move is that it is clearly driven by the desire of the Department for Business, Innovation and Skills to cut £117 million from its budget. That is a tragedy for those who will be affected and a failure of Ministers, whom I like, to have fought the battle with the Treasury on this matter.

Let us be clear: the pre-consultation was non-existent. The review was not undertaken with or on behalf of those affected, those who support those affected or those who will have to pay out. It was not, in my view, honest, because the Government, during the passage of the Children and Families Act 2014, which has been referred to already, gave reassurances that there was no need to extend the Act’s requirements precisely because of DSA. Baroness Northover wrote to the Royal National Institute of Blind People and said that disabled students in the higher education sector are already successfully supported by institutions and directly by the Government through DSA. DSA is not means-tested, is awarded in addition to the standard package of support and does not have to be repaid. We should not seek to duplicate or replace the system. Either the Government meant it or they did not.

[Kate Green]

My right hon. Friend will be interested to know that it is not only in the context of the Children and Families Act that the Government said one thing before and are saying another now. In relation to the independent living fund, Ministers in the Department for Work and Pensions are citing DSA as an alternative source of support.

[Mr Blunkett]

And if we want another contradiction in relation to Government policy, I have to say to the Minister, who has always been extremely helpful and respectful to me, that it is not acceptable to use the argument that the universities have a lot of money and therefore can afford to replace DSA under the Equality Act 2010. If that were the case, the Department for Work and Pensions—God forbid it should hear this and do it—would remove the access to work requirements, on the grounds that quite a lot of individuals who receive the support could go to a potential or actual employer and say, “You have a lot of money swilling about with your shareholders. Why don’t you use some of that to fulfil the equalities requirements on you?” That would include public services. Please, please do not get the idea that universities have got money so it can be diverted from somewhere else and benevolently given to support students who have a right not to some sort of benevolent charity, but to be supported properly.

[Stephen Lloyd (Eastbourne) (LD)]

For profoundly deaf students, DSA pays for note-takers. Without a note-taker, how on earth would a profoundly deaf student be able to take notes during their lectures when they are at university?

[Mr Blunkett]

Absolutely, and that would entail employing someone, not simply diverting a bit of resource. My support systems, back in ’69 to ’72, were funded by the local authority; at the time, the local authority had a duty to support students under the grant system. Even though the local authority was helpful, however, I had to organise reading circles of volunteer students to assist me. That was a mutual arrangement and it was obviously socially responsible, but it should not have been necessary. Under the proposals, we will find ourselves going back to a bygone era where people have to plead for help rather than receiving it directly.

[Mr Willetts]

Will the right hon. Gentleman give way?

[Mr Blunkett]

I just want to make this point, because I think others want to speak. I emphasise what the hon. Member for Cambridge has already said. When it comes to taking a student in, the access provisions of universities and other higher education intuitions will always contain a subliminal question: can this student manage? That question was asked of me all those years ago. If the answer is, “Yes, if I have the support systems necessary: the equipment, the extra readers and other provision that other people will not need”; if the university thinks, “Is it worth it?”; and if the department thinks, “What imposition will this cause? Will resources be diverted from somewhere else? Will this responsibility be devolved to this department?”, there is a chance that that student will not be offered a place. If that were to be the case, I say to the Minister: be it on your conscience. Go back to the Treasury and say that the money in its existing budget should be retained. The rights and opportunities of individual students should be retained, and the Government should be ashamed of themselves if that does not happen.

14:52

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

For the avoidance of any doubt, I will not take any interventions to ensure that as many people speak as possible. I am pleased to speak in the debate, because I am one of the few MPs who benefited from DSA, as a student in 1994. I had some problems and I had to use a computer for part of my course. I thought I would get a laptop, but when I went to my assessment, I was given a half-screen word processor. I say that not to underpin the point that we do not need laptops any more, but to agree with the Minister that we should not gold-plate the provision. The fund is limited, and we cannot write a blank cheque for it.

I accept that, after 25 years, we have to look again at disability living allowance in particular, and I accept that public bodies have to adhere to their duties under the Equality Act 2010. However, I have concerns about the detail of the proposals. The Minister is thoughtful, good and decent, and I urge him to listen carefully to what we have to say before he places his regulations before the House.

I will try not to repeat myself too much. The report from the Muscular Dystrophy Campaign’s trailblazers team, a key member of my all-party group on young disabled people, has been mentioned. That report stresses that DSA was the area of the university experience that worked best. What concerns me most is the language of written communications from the Minister. It may seem obvious, for example, to translate the language of disability from the 2010 Act into DSA, but there are real concerns that that leaves, for example, dyslexia, dyspraxia and dyscalculia outside the remit of DSA. Will the Minister guarantee that no disability that was previously covered by DSA will be left out under the new regime?

I am also worried about the laxity of some of the language, which has caused real concern among those with the most complex disabilities. If, for example, someone requires a non-medical helper to stay with them overnight, the language is not clear enough to give that person confidence that they will be covered under DSA. That is causing a lot of anxiety.

More widely—the hon. Member for Eastbourne (Stephen Lloyd) has mentioned note-takers—I am greatly worried by the idea that a course can be delivered in such a way as to allow the student to benefit from it without having to participate in the same way as the other students. I want students to be able to attend lectures, participate fully and enjoy full integration in student life. If one goal of DSA is to enable them to complete the course at the lowest possible cost, it will reduce the university experience almost to the level of a correspondence course. I am sure that that is not the Minister’s intention whatever, but that is where the language appears to be leading us.

I also stress my concerns about augmentative and assistive communications software. I urge the Minister to consult with the Communication Matters forum, which is the specialist in that regard. It is a fallacy to think that much of that technology can be used even on the most complex laptops, let alone on iPads. As technology, particularly AAC technology, advances ever faster, the computing technology required advances equally.

Finally, in the 30 seconds that remain, I draw the Minister’s attention to the document “Fulfilling Potential: making it happen”, published by the Department for Work and Pensions. Great strides have been made in increasing disabled students’ participation in higher education, but one key indicator measured in “Fulfilling Potential” is the number of students who abandon their course after one year. If that number goes up as a result of the changes, that will be a serious concern and we will need to look again at what we are doing. I urge the Minister to have regard to “Fulfilling Potential”. I will write to him with everything else that I wanted to say.

14:56

[Mr Andrew Smith (Oxford East) (Lab)]

It is a pleasure to follow the hon. Member for Blackpool North and Cleveleys (Paul Maynard). His powerful arguments and testimony, like those of my right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett), underline the argument made by the hon. Gentleman who represents the other place, the hon. Member for Cambridge (Dr Huppert). I agreed with everything he said in his opening speech.

I was particularly keen to take part in the debate because in our area we are lucky to have not only two great universities but ACE centre south—ACE stands for aids to communication and education—which has achieved great things working with students with severe communication disabilities and giving them a voice. Twenty years ago, many of them would have been locked in a world without communication and unable to go to school, let alone university. Now, however, some of the young people whom the centre has helped have got PhDs. Quite rightly, there was cross-party support to save the ACE centre when it had financial difficulties in 2012. We need a big cross-party effort to stave off the cuts to DSA. It is heartening to see so many Members present and to hear the arguments from both sides of the Chamber.

The cuts risk rolling back what has been achieved and blocking access to education for many disabled students from poorer backgrounds, in particular, including those who have dyslexia and other specific learning difficulties.

[Yasmin Qureshi]

Bolton university in my constituency is not rich and has 900 students who receive DSA. Imagine the impact of the proposals on those students and the university, which has not got the resources to look after them if they do not have enough money.

[Mr Smith]

My hon. Friend makes a very good point. As has been said, there is a real danger that the proposals will provide universities and other institutions with a perverse disincentive, with the best will in the world, to accommodate all the students that they would like, especially those who have the most severe disabilities. Like other hon. Members, I have been contacted by many students, academic support staff and lecturers who are appalled, as I am, by the proposed cuts. I recently had the pleasure of speaking to the disability officers of the two university student unions in my constituency. They brought powerful testimony of how students at both Oxford’s universities have benefited from DSA and are well on their way to building fulfilling careers. Their determination to help ensure that young people with disabilities have the same opportunities in future is inspiring. One of them told me:

“I pretty much failed the first year of my law degree due to my disability and not being fit to study. I couldn’t afford to buy any of the accessibility items I needed. DSA gave me a lifeline. With the specialist equipment including a specialist mouse bar, laptop, dictaphone, extra-large screen, specialist software, printing and book allowance and various other provisions, I was able to retake everything the following year and actually cope with the work load. Without DSA I wouldn’t be where I am now.”

Even under the current system, it is not easy to get support. One student in my constituency is having to get an unnecessary diagnosis of dyslexia because his diagnosis undertaken the previous year in the sixth form was not accepted by the DSA authorities. Since there is no clinical need for a new diagnosis, he is having to apply to the university hardship fund to pay for it privately.

For all its difficulties, DSA provides an essential lifeline for people with disabilities who without it would have to give up on their education and ambitions, or would not have been able to apply in the first place. Cutting it will make many disabled students’ lives much more difficult, but, worst of all, it will result in a country where people with disabilities begin to think that they cannot even aspire to higher education and must limit their ambitions. It will do incalculable damage to equality. I urge that the proposed cuts be abandoned.

15:00

[Kate Green (Stretford and Urmston) (Lab)]

I congratulate the hon. Member for Cambridge (Dr Huppert) on securing such an important debate. Since so many others wish to speak, I shall make only four points. I endorse the comments made by colleagues from all parties.

First, I want to repeat the point about how vague the specifications are for access to support. That is true for computers but also for accommodation. Will the Minister comment on the guidance in the Student Loans Company handbook in relation to the non-medical help manual? Are there any plans to revise the guidance on what makes someone eligible for the help outlined in bands 3 and 4?

Secondly, students need access to good quality advice, and not just in relation to the disabled students allowance. When this debate was announced and I posted on Twitter to say that it would be taking place, I was contacted by someone who told me that they had been told that they could not access DSA unless they were on employment and support allowance or in receipt of personal independence payments. That is clearly incorrect, but it suggests that someone in the university advice service is misinformed about eligibility and the welfare benefits system. What support is going to be given to university advice and welfare services to ensure that they are properly equipped to support students who might have an entitlement?

Thirdly, what will happen to students who begin a course in 2014 when the new provisions come into effect in 2015-16? Will they be able to maintain any support that they have been receiving ahead of the changes right through to the completion of their studies after 2015-16?

Finally, what assessment has the Minister made of the effect that the changes may have not only on disabled students’ access to university but on their choice of university? We already know that access is a key criterion for disabled students when they select a university, and these changes could further constrain choice by further restricting the courses that disabled students can consider if universities that offer their desired courses are not supportive with access and in facilitating their studies. Has the Minister paid any attention to the question of choice and the need to maximise access to not just any university but the university and course that would be right for the student? That should be disabled students’ driving criterion, not whether or not they get disabled student support.

15:03

[Sarah Champion (Rotherham) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hood. I thank the hon. Member for Cambridge (Dr Huppert) for securing such an important and timely debate.

I begin by addressing the reality of what it means to be a disabled student. Despite living in what we assume is an open and inclusive society, disabled young people often face problems that do not make the headlines, and they start from a young age. We already know, for instance, that 27% of young disabled people aged 16 to 19 are not in any form of education, employment or training. By contrast, the same is true of only 9% of their non-disabled peers.

A Disability Rights Commission study found that 45% of disabled people said they had experienced problems at school as a consequence of their impairment. Further to that, 26% of disabled people have reported negative experiences in mainstream education, in part because of poor facilities and the negative attitudes of other people. In turn, it is hardly surprising that disabled adults are only half as likely to have formal qualifications as their non-disabled counterparts. All these issues arise prior to university. To redress these compound barriers, it becomes even more important that we make it as easy as possible for disabled students to make the transition to higher education.

Last year, the Muscular Dystrophy Campaign found that 40% of university inter-campus transport was inaccessible to disabled students. In addition, 30% of university social and leisure facilities were not accessible to disabled students. I find it surprising and saddening to hear that the Government plan to introduce changes to funding for disabled students that cut out all but the most severely disabled people. It strikes me as unfair for a number of reasons. There cannot be a sliding scale of equality: you are either equal, or you are not. Everyone should be treated equally and allowed access to the support and modifications that will enable them to flourish.

Cutting funding to disabled students with what the Government deem to be lesser support needs will mean that although some students are given support to access university on a level playing field, others will be denied access to equality of education.

[Mrs Ellman]

Does my hon. Friend share my concern that the Government have stated that they want to replace existing Government support to disabled students with support from local authorities? This is at a time when local authorities are under the hammer, particularly those in poorer areas such as Liverpool.

[Sarah Champion]

I completely agree with my hon. Friend. It seems that local authorities and the voluntary and charitable sector are meant to fill all the gaps created by this Government.

It is unfair and unreasonable to think that any person should be barred from furthering their education because of a disability. The Rotherham Disability Network has told me the same thing. Its chair said that the major impact of the funding cuts on disabled students in Rotherham is that the potential hardship caused by paying for modifications will mean that many families will have to decide whether they can afford to send their son or daughter to university at all. Many such students are from disadvantaged backgrounds, with the odds stacked against them in economic and disability terms. Unfortunately, the funding cuts will be make or break when it comes to deciding whether to go to university. Surely that is not fair.

Around 40,000 disabled people graduate each year, but levels of disabled students dropping out of university are high. I worry that that figure will become higher under these changes, resulting in a drop in the number of disabled graduates. Disabled students have enough barriers to face in getting to university in the first place; we should not be cutting the vital support they need to access university learning and services while they are there. That exemplifies why the amount of money given to students should be needs-based, rather than based on arbitrary caps associated with the Government.

Ultimately, there must be genuine equality between disabled and non-disabled students, and if funding to disabled students creates a high bill, it is a price we must pay for equality. More than that, it is a price we must pay for the economic viability of the country. I would much prefer a short-term financial intervention to enable disabled students to fulfil their potential and get a good job to their being stuck in a world of part-time, low-pay work for the rest of their life.

The Government must find some other way to fund this critical support. They certainly should not be penalising disabled students, so I urge them to reverse their decision.

15:07

[Andy McDonald (Middlesbrough) (Lab)]

It is a great pleasure to serve under your chairmanship, Mr Hood, and I thank the hon. Member for Cambridge (Dr Huppert) for securing the debate.

I start by saying to the Minister that it is reprehensible that we are here talking about a backwards step for disabled people’s access to education. I thought we were supposed to be in the business of making life better for people, not worse. It simply cannot be right for the Minister to abdicate his responsibility to universities and say, “You get on with it. It is your duty to provide access to education and observe the principles of the Equality Act.” Surely to goodness that responsibility rests with Government as well.

The National Union of Students has reported that 59% of disabled respondents to their “Pound in Your Pocket” survey are worried about not having enough money to meet the basic living expenses of university, while 55% are considering leaving their course. Putting another barrier in their way is certainly not going to help. Such financial challenges only add to the multitude of barriers already faced by disabled students. They are more likely to drop out than their non-disabled counterparts and less likely to be able to access postgraduate degrees. Disabled students also face reduced choice when deciding which university to attend. Many students take the opportunity to travel away from home, but for disabled students that might not be an option. Students with special care needs may require support from parents or assistants, and their choices are dictated by accessibility.

Receiving the disabled students allowance massively improves disabled students’ experience and success while in higher education. Research has shown that students receiving DSA are more likely to achieve the very highest degree classifications than those who do not. The decision to remove DSA funding for standard specification computers, software and associated instruments compromises disabled students’ ability to get ahead and make the very best of their time in university.

[Mr Sheerman]

Does my hon. Friend agree that the fundamental difference between us and the Minister is that he does not understand that the direct payment was the emancipation of disabled people, allowing them to see going to university as a right?

[Andy McDonald]

Absolutely. My hon. Friend makes a powerful point. That principle has been enshrined, and we should treasure it.

It is not good enough to suggest that everyone owns a laptop or that computers are now ubiquitous among students. They are not cheap, and it simply cannot be assumed that everyone from an area like mine has one. For those from a well-heeled background, where these things are easily provided, that is fair enough, but it is not the case for families from other backgrounds.

The changes to DSA also fail to recognise the needs of the up to 98% of disabled students who require specific software to help them with their studies. The Government have suggested that cheaper tablet and notebook devices might be suitable for disabled students, but such machines are simply not equipped with the power or memory to support specialised software alongside standard office and internet programs, as the hon. Member for Blackpool North and Cleveleys (Paul Maynard) so eloquently explained.

My second major concern is about moving responsibility for providing non-medical support from the Government to individual institutions. The reforms assume that disability is evenly distributed, but that is not the case. There are smaller institutions where disabled students make up a higher percentage of the total number. How will those institutions cope with the changes? Some higher education institutions might be deterred from actively recruiting disabled students, simply because of the cost if they attend. Indeed, Teesside university in my constituency has warned that it might cost up to half a million pounds to replace any funding elements that are withdrawn.

Universities currently have a duty to provide reasonable adjustments for their students, but they are largely undefined and open to interpretation. I am greatly concerned that if institutions are unable adequately to provide for disabled students, there will be limited means to raise the issue. Confusion and uncertainty will undoubtedly affect the level of applications from disabled people and the subsequent willingness of disabled people to seek the support they need to progress and attain qualifications.

Many disabled students in Middlesbrough would suffer as a result of the changes, and I recently met the NUS welfare officer at Teesside, who provided some key examples. A student in computing and digital forensics suffering from—I hope I pronounce this correctly—visual stress/Irlen syndrome required ClaroRead software and modified glasses to enable her to read without undue hindrance, but she would not have been able to purchase those essential tools without DSA. We can all cite many such examples, and they will be repeated all over the country, but I will bring my comments to a close. These individuals are not seeking to cheat the system or to get something for nothing; they simply want their right to succeed in education. The punitive changes to DSA will undoubtedly limit the ability of disabled students to fulfil their ambitions and their potential. It is simply incomprehensible that legislators in a wealthy, modern country are looking to withdraw support from those who require it simply to get an education.

15:09

[Lilian Greenwood (Nottingham South) (Lab)]

I congratulate the hon. Member for Cambridge (Dr Huppert) on securing this important debate, and it is good to see it so well supported. When the Universities Minister announced the Government’s proposed changes to DSA on 7 April, they came as a real shock to universities and students alike, and gave rise to a great many questions.

All of us here know the difference DSA can make to disabled students and to their ability to benefit from the opportunities offered by higher education. In that regard, a couple of students in my constituency have written to me. One says that they have just completed their BA in sociology, for which they have been awarded a first-class degree, and that they are going on to do a master’s degree next year. They add that

“quite honestly I could not have achieved this without support from disabled students allowance.”

Having a hearing and visual impairment, they feel that there are real challenges in studying for a degree and that DSA has been absolutely essential. In this student’s case, DSA provided funding for note-taking support in lectures; library browsing support; reader support, whereby a support worker could read aloud sections of written text; practical support with finding buildings on campus; assistance with paying for books, paper and printer ink; and assistive technology, including a laptop, a printer and magnification capacity. It is clear that all those things are necessary for someone to achieve such great results.

I had a further letter from a mathematics undergraduate at the university of Nottingham. They say they received a DSA-funded mentor, who not only helped them to undertake their work, but supported them with social situations—obviously, part of university is the opportunity to operate in a new environment. They say:

“Without my mentor my experience at university would have been very different and I fear I would have been overwhelmed with academic issues.”

They say they would not have had the opportunity to experience university in the same way as a non-disabled student might.

The Equality Challenge Unit showed us that disabled students who receive DSA do better than those who do not, and we should look at extending it, rather than reducing it. When the Minister made his statement to the House, he talked about modernising the system, the equality impact assessment and limiting the public funding available and making sure it was targeted at those most in need. That raises a number of questions, which he really must answer. How is the review being carried out and who will be properly consulted? When will the equality impact assessment be published and to what extent will its conclusions require changes to his proposals?

There is real concern about the funding for disabled student support and about potentially targeting it on those in most need. What happens to those who have minor or moderate needs, but for whom DSA is nevertheless important? As one of my hon. Friends said, there is also the impact on institutions, especially smaller ones and those with a disproportionate number of disabled students.

I am particularly concerned to raise one other issue. The university of Nottingham has told me that Student Finance England has jumped the gun, is assuming that DSA will be cut and has started implementing reforms—before we have even had a proper debate in the House. Will the Minister confirm that any changes will be properly consulted on and debated before they are implemented? Will he ensure that Student Finance England is made aware of the fact that its actions are unacceptable and have caused unnecessary panic and distress, as the university of Nottingham told me?

DSA is vital, and any revisions must be undertaken only with care and after proper consideration and debate. The Minister must listen and respond.

15:16

[Nic Dakin (Scunthorpe) (Lab)]

I congratulate the hon. Member for Cambridge (Dr Huppert) on securing the debate. It is clear from the comments made how strong feeling is on the issue—not only in the House, but outside.

I would like to quote my constituent, June Jacobs, who recently wrote to me:

“The allowance made a big difference to me and it saddens me to think that the next generation of students would not have access to funds that could make the difference between succeeding in their studies or not.”

With the word “succeeding”, she puts her finger on the issue before us. Succeeding is about aspiration and about enrolling on the course of our choice, remaining on it and achieving—it is about all that, and DSA has a track record of helping people to succeed.

From my experience as a principal of a sixth-form college, I know that the message DSA gave young people was about building aspiration and belief. It allowed them to believe in themselves and to believe that they would go forward. It also showed leadership by the Government on this crucial issue. That leadership helps to break down barriers and create access. As a result, DSA was, and is, transformative in people’s lives.

By going down the proposed route extremely hastily, the Government risk giving the wrong message. Indeed, as my hon. Friend the Member for Nottingham South (Lilian Greenwood) said, that message is already out there and causing damage, which will create more damage tomorrow. The proposals will constrain people’s aspirations and choices, which is really negative.

The Minister is a good Minister, and I hope he is listening, reflecting on the debate and trying to find ways, as my right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) said, to take the battle back to the Treasury. We will be with him in that battle, because he needs to win it. As things are, the pain will far outweigh the gain, and that, in political terms, is the test.

We risk making a very bad decision very hastily. This process is happening too quickly for us to have proper consultation and to involve all those who need to be involved if we are to get this right and ensure that, if we go down a different route, the implementation of any proposals will protect the future.

15:20

[Paul Blomfield (Sheffield Central) (Lab)]

I join the congratulations to the hon. Member for Cambridge (Dr Huppert) on initiating the debate, which is important to me. I am delighted to represent more students than any other Member of the House—36,000 of them. Both Sheffield’s universities are in my constituency and I have met students from both to talk about their concerns, and mine, about the DSA proposals.

In a letter to Members of 3 June, to brief us in anticipation of the NUS lobby on the Friday of that week, the Minister described the changes as “measures to modernise” DSA. I would have thought better of him than that, because it is the sort of Orwellian doublespeak that makes people cynical about politics. This is not about modernisation, as he knows. It is about balancing the Department’s books on the back of disabled students, just as the Treasury sought to do with other vulnerable groups, with the attack on the student opportunity allocation earlier this year. He fought his corner then, and I hope he will do so in the present case.

In the letter, the Minister identified what he described as unsustainable growth in spending on DSA, with an increase over this Parliament of £37 million. That is a tiny proportion of his budget and just 6% of the £620 million growth in grants and loans to students in private colleges, which is partly policy design and partly a failure by his Department to maintain adequate controls over that budget line. The wrong people are paying for the consequences of those mistakes. The priorities are wrong, and those with disabilities are being punished for the black hole in the Minister’s budget.

Disabled students’ No. 1 priority in choosing a university is the access and support that they will have; that is more important to them than the choice of courses. They are more likely to drop out than non-disabled students. We can all throw statistics around, but I want to share a story about a university of Sheffield student union officer, Kat Chapman. She is dyslexic and recently finished her degree, with a high 2:1. She is delighted to be embarking on a master’s degree at Cambridge. She is the model for the sort of person we want to progress in universities: a woman and a scientist. She clearly said to me that her delight at going to Cambridge

“is overshadowed by the fear of not receiving the same help that I have done through my undergraduate degree.”

The Minister has said that universities should meet the cost of supporting students such as Kat, but will making disabled students more expensive for universities improve access to higher education? Of course not. Universities will fulfil their equality obligations, which the Minister talked about earlier, but that will happen at a cost if there is no funding. The universities that are the most inclusive will face the greatest costs.

The Minister said in a communication of 25 June that

“it is not the case that students with ‘mild’ dyslexia”—

such as Kat—

“will no longer receive DSA funding.”

An assessment of Kat’s needs would determine who pays. I ask him for clarity: which needs will the Government help to meet, and which will it be left to universities to meet? Will he think again about this foolish short-term policy and take the case to the Treasury?

15:20

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

It is a pleasure to serve under your chairmanship, Mr Hood. I thank the hon. Member for Cambridge (Dr Huppert) for obtaining the debate.

Many people already know that I have mild dyslexia and dyspraxia. I know that without the support that came from my university I would never have qualified as a social worker, and that is why the proposals concern me. From 2016, a person in my position may be denied the opportunities that allowed me to succeed academically.

According to the Minister, the Government propose to ensure that the limited public funding available for DSA is targeted in the best way, to achieve value for money, while ensuring that those who are most in need get the help they require. However, I am not convinced and the Government have not provided enough evidence to show that support for those with moderate needs will be maintained. There is still a threat that they will be locked out of higher education. That is a further blow to disabled students who are already suffering as a result of the Government’s trebling of tuition fees. A report by the National Union of Students found that 55% of disabled students have considered leaving their courses, compared with 35% of non-disabled students. I cannot imagine how the changes will encourage students to remain on their courses, or future students to enter higher education.

Universities have a duty not to discriminate against students with disabilities under the Equality Act 2010, passed by the previous Labour Government. It is of course right to expect higher education institutions to carry out those duties as my university did. However, the Government have been unable to explain how institutions are supposed to meet the duty under the reformed scheme. Their share of responsibility will greatly increase, but we do not know where they will find the resources to carry out that responsibility. We do not even know the effect that the proposals will have on the total DSA spend. It is worrying that the Government have rushed ahead without either conducting a full analysis of the impact or holding a public consultation, to ask institutions whether they will be able to cope with plugging the gaps left by DSA.

Even more worryingly, by giving institutions more responsibility for delivering specialist support, the Government will create a situation in which the most inclusive universities will be hit hardest. That could, as the National Association of Disability Practitioners pointed out, have perverse consequences: those universities might not be able to afford to be so inclusive, or they might be forced to make cuts in other areas.

Disabled people already face disadvantages in higher education. They are less likely to enrol and to study full time, and more likely to drop out before finishing their course. If that is the situation now, we can expect it to get worse once the Government’s DSA cuts take effect. Disabled people thinking about entering higher education today will have no idea what support to expect, or what the effect on their finances will be.

I feel lucky to have been supported with my dyslexia and dyspraxia. My condition is relatively mild, but the help that I received made a difference and helped to get me where I am today. I am concerned that people with mild conditions will be written off under the Government’s proposals and will never get the opportunities that I have been lucky enough to have.

15:26

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Member for Cambridge (Dr Huppert) on obtaining the debate.

I want first to say clearly that I am concerned about the cuts and the dramatic effect that they will have on the people who need the DSA the most. The hon. Member for Scunthorpe (Nic Dakin) talked about belief, hope, opportunity and ambition, and all those things will be hurt by the slashing of the grants.

Early-day motion 48 notes the NUS research finding that

“55 per cent of disabled students have already seriously considered leaving their course compared to 35 per cent of non-disabled respondents”,

with 54 per cent citing financial difficulties. Clearly, there is an issue. The reason I, a Northern Ireland Member, am speaking in the debate, is that the change will affect students from Northern Ireland who go across to universities on the mainland. The hon. Member for Ceredigion (Mr Williams) talked about Wales and Scotland, and there will be an effect for people from Northern Ireland as well. The change will affect us all.

I know from some of my constituents that the DSA helps with buying special equipment required for studying, non-medical helpers such as note-takers or readers, extra travel costs that disabled students may have and others costs for things such as tapes and Braille paper. Non-medical help such as that provided by note-takers is critical to disabled students. Some require their help throughout the semester; others need their assistance whenever they must go into hospital, which for some is a fact of life. Surely, the House recognises the importance of such helpers, particularly those who help when a student is in hospital.

I am sure that hon. Members have already looked through the background notes for the debate, which clearly explain who needs help: they include people with autism, people with sight or hearing issues and people with learning difficulties, of whom there are almost 22,000, as well as about 3,400 people with mental health issues, nearly 3,600 people with multiple disabilities and 540 people with wheelchair mobility. Clearly, complex health and physical needs must be addressed. People’s concern about the proposal is therefore understandable.

According to the Equality Challenge Unit, 71% of disabled graduates gained employment in 2012, compared with 42% of disabled non-graduates. Already a high number of disabled students consider leaving university because of high costs, and surely the figures are testament to the importance of providing disabled students with DSA, which enables them to pursue some of the ambition that we in this Chamber want to encourage.

If the change to DSA is pursued, there will be direct implications for people whom I and other hon. Members represent. We have heard about the cutting of DSA for dyslexic students, and the Minister has referred to those with complex needs or exceptional circumstances receiving DSA. I should like to know, for the life of me, exactly what that means, because I do not see that coming down to the people whose grants will be taken away from them.

The one issue that has perhaps not been hinted at is the bill for DSA. In 2011-12, the bill was £124 million for 53,000 undergraduates. The latest figures from the Student Loans Company, however, show that spending on DSA had reduced by almost £5 million in 2012-13, despite the number of claimants rising by almost 2,000. More seems to be being delivered with less money, so will the Minister say how his figures work out, given the reduction of almost £5 million and the almost 2,000 extra students? Why are we considering further cuts given some of the cuts that are happening already? In 2013, of the whole United Kingdom, Northern Ireland was hit hardest by the benefit cuts, with £750 million taken out of the economy. The case for the DSA proposal is not proven and is not acceptable. I strongly object to what is taking place.

15:30

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

Mr Hood, it is very kind of you to call me to speak briefly, even though I failed to tell you that I wanted to speak. I am conscious of that.

As the MP for Huddersfield, I represent Huddersfield university, which was the university of the year this year. The university has an amazing student body—including Coco Toma, the communications officer, and others—that constantly talks to me about how the proposals will affect disabled students. The empowerment and emancipation of students provided by this direct gift from the Government is wonderful. People know about DSA; they anticipate it; and it changes lives. I have talked to disabled students who say that, if they had the new system that the Minister will introduce, they would not have thought about going to university.

I know that the Minister will be embarrassed, but he and I get on very well. I think that he will change his mind. If he does not, this will be a big political issue at the general election. I hope that an incoming Labour Government will make it clear that we will change the proposal, because it is wrong.

I have great respect for the hon. Member for Cambridge (Dr Huppert), but disabled students are particularly double-whammied because the tremendous increase in student debt hits them more than anyone else. Disabled students have not forgotten the pledge or that the Liberal Democrats led us up the garden path. We all thought that they would never be in a coalition.

[Dr Huppert]

Will the hon. Gentleman give way?

[Mr Sheerman]

No. The hon. Gentleman did not give way to me, so I will not give way to him. The fact of the matter is that some people in Cambridge tell me that, whatever he does, they will not forget the pledge. He might work hard for the disabled students allowance, but they will not forget the breaking of that pledge.

[Dr Huppert]

Will the hon. Gentleman give way?

[Mr Sheerman]

No, I will not give way. The hon. Gentleman will get his come-uppance at the next election, and so will any Government who introduce this dreadful scheme.

15:33

[Jason McCartney (Colne Valley) (Con)]

Thank you for squeezing me in, Mr Hood. It is a pleasure to serve under your chairmanship, and it is a pleasure to follow my near neighbour, the hon. Member for Huddersfield (Mr Sheerman). Like him, I have engaged closely with the students union of my local university, the award-winning Huddersfield university. I thank Josh, the president of the Huddersfield students union, and Daniel, the democracy and campaigns officer, for coming down to brief me. I voted against the rise in tuition fees in December 2010 because I was concerned that students from low-income backgrounds would be put off applying to university. I did not go to university.

[Dr Huppert]

Like my hon. Friend, I voted against the rise in tuition fees. I am the first Member of Parliament for Cambridge to vote against a fee rise. When there was a Labour MP, she voted for a fee rise having promised to oppose it.

[Jason McCartney]

That is worth putting on the record.

I am concerned about the proposed changes—they are just proposed at this stage—because Josh and Daniel explained to me the implications, the worries about the cost of modifying laptops, and the importance of scribes and note takers. They talked about their first hand experience of students they study with who have dyspraxia and dyslexia. That is why I am here representing them today. They have questions about the complexity of different learning difficulties and how they would be categorised. There is also the cost of modifications to accommodation. Huddersfield university is investing hundreds of thousands of pounds in new accommodation, and there would be concerns about that, too. They told me that more than 700 students at Huddersfield university currently receive DSA, so it is close to people’s hearts in my part of the world.

I look forward to hearing from the Front Benchers, particularly the Minister, whether we will look again at the proposed changes. I encourage the Minister to engage with local students unions, to involve them in the process and to work hard so that every student, no matter what their economic background or disability, has a fantastic opportunity to engage in our world-class universities, particularly my wonderful, award-winning Huddersfield university.

15:35

[Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)]

It is a great pleasure to serve under your chairmanship, Mr Hood. I add my congratulations to the hon. Member for Cambridge (Dr Huppert) on securing this debate.

I have a simple argument to put to the Minister: the proposals are flawed, they need to be dropped and they need to be dropped now. I agree with my hon. Friend the Member for Huddersfield (Mr Sheerman) that the Minister is a good Minister and a good man. He has been put in a difficult position, and I hope that in today’s excellent debate he sees a consensus that stretches across the House. We are here with him to help him win the argument and to put the proposals where they need to be, which is in the bin.

We have heard powerful arguments this afternoon about the success of DSA, how the proposed changes are slipshod and why it was wrong to develop these proposals not in the open but in secret. We have heard powerful arguments about why DSA is so successful. We do not give disabled students enough help to change their lives by going to university, and we have to hold on to that basic fact in this debate. I congratulate the National Union of Students on its work to expose how important DSA is to thousands of students. Some 60% of disabled students are terribly worried about the cost of living, which is a much higher proportion than for most students. More than half of disabled students have thought about dropping out of their course, which is a much higher proportion than for most students. That is why DSA is so important to students across the country.

Today’s debate has been particularly powerful. My hon. Friend the Member for South Shields (Mrs Lewell-Buck) told her own story, but we have also heard stories from my hon. Friends the Members for Birmingham, Erdington (Jack Dromey), for Middlesbrough (Andy McDonald), for Scunthorpe (Nic Dakin) and for Rotherham (Sarah Champion) and from my right hon. Friend the Member for Oxford East (Mr Smith) about people they represent who have serious worries. The National Union of Students has collected similar stories, such as the story of Lucia, who said that university “wasn’t easy.” She knows that

“without the validation and…support from DSA I wouldn’t have kept going… I certainly wouldn’t have been able to get my first class honours degree, and I would have been lucky to finish.”

There are stories such as Suzanna’s. She said:

“I get DSA for dyslexia. I expect I am one of those David Willetts would class as having ‘mild difficulties’. My study…advisor is a godsend.”

She now wants to finish neuroscience and cure Parkinson’s disease. She said:

“Without DSA I would probably still be a waitress. A bad waitress at that.”

There are stories like Charlotte’s. She said that when she was making her university choices the availability of DSA was key to her getting into university and changing her life. In the background briefing for this debate we have heard argument after argument for protecting, preserving and enhancing DSA.

The Campaign for Science and Engineering makes the interesting point that if we care about the supply line of science, technology, engineering and maths skills in our economy, we should care about the future of DSA:

“One of the most worrying developments for STEM is the removal of…‘higher specification and/or higher cost computers…because of the way in which a course is delivered’”.

CASE continues:

“DSA funding will… only be provided for ‘the most specialist non-medical help (NMH) support.’ The definition of… ‘specialist’ is not clear.”

Many hon. Members have made that point today. The proposal would damage the chances of people on STEM courses in particular, which is why the changes are such bad news. In this House we are always happy to hear the case for reform. When pressed by hon. Members at oral questions the other day, the Minister said that no student would be worse off. That is a very big promise. Let us be honest: most of us here would like to believe him, but when my right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) tabled a parliamentary question to the Minister on 26 June about the extent to which DSA would be supported in future, answer came there none. The question was dodged, and that is why so many of us in this House have such serious concerns.

The Minister will no doubt want to remind us that the bill for DSA has gone up. That is true, but in the last year for which figures are available it has gone down by £5 million, while the number of disabled students who are supported has gone up, so each of them is actually getting much less. That is why we are so worried about a kind of carte blanche shunt of responsibilities to universities.

We have heard very clearly today the warnings from experienced people in this House about what happens when responsibility is shunted over. The hon. Member for Blackpool North and Cleveleys (Paul Maynard) put the case powerfully. There is too much ambiguity in an Act as high level as the Equality Act, important though that is. We should be honest about what is going on. This is a cost shunt to universities—let us call it what it is—but it is a cost shunt without any safeguards to go with it, and that is why so many of us are worried. I think the Minister will acknowledge that that is one heck of a gamble with the futures of disabled students in our country. It is certainly not a gamble that we want to see.

My hon. Friend the Member for Stretford and Urmston (Kate Green) made an important point when she underlined how the risk of a postcode lottery in the way disabled students are supported will mean that people’s choices will be damaged. They will not be able to pursue the choices that they want. As my hon. Friend the Member for Sheffield Central (Paul Blomfield) pointed out, it will be the most inclusive universities that are most damaged by the proposal. The worst-case scenario, we are told, is grim indeed.

I was concerned, as I know the Minister was, when I read the briefing from people who are expert in supporting disabled students, which stated that the worst-case scenario could see 60% to 70% of DSA eliminated. That is an enormous bill. The Minister accepts there is a problem with supporting disabled students at university, which is why he is not proposing the abolition of DSA. The fact that DSA is to continue is an acceptance of the principle that extra central Government support is needed.

We are not being told what the real objectives of the reform will look like. By how much does the Minister seek to cut the bill? How big will the cost shunt be? They are not the sort of questions we should be debating here this afternoon. We should have been debating them long ago—in January, February or March—before the ministerial statement appeared. Opposition Members are worried, as I am sure the hon. Member for Cambridge is too, that organisations such as the National Deaf Children’s Society felt they were not given a real chance to put their points of view in meetings that were simply cut short. That is not a standard of consultation that we are prepared to see, because the issue is simply too important.

If there is a need for modernisation, let us hear it. The Minister is a good man and a good Minister. He should be up front with us about how much he is seeking to save. He should be debating with us what extra safeguards need to be put in place to protect the rights and opportunities for disabled students in the years to come. The need is urgent. Lord Addington has told the other place that guidance for April is being drawn up. All of us wanted to be part of any changes that needed to be introduced. That is what we got when the DWP proposed to change the DLA and introduce the personal independence payment. It is the approach that we saw when the DWP wanted to introduce universal credit. Those were big and important changes, and Opposition Front Benchers were invited to the Department to discuss them. We may have disagreed with the conclusions, but at least we had the chance to flag up a few warnings, make a few suggestions and ensure that the debate was had in public, not in secret.

I think the Minister is a good man who will want to think again about the proposals. The debate should not have been today; it should have been in the early part of the year before the proposals were drawn up. If modernisation is needed, let us hear the arguments. If there are savings to be had, let us hear the targets, but we will not stand by while disabled students are given a bunch of proposals and told to like it or lump it. Disabled students demand and deserve much better than that.

15:44

[The Minister for Universities and Science (Mr David Willetts)]

It is a pleasure to respond to this important debate, and I congratulate the hon. Member for Cambridge (Dr Huppert) on securing it.

I want to make it absolutely clear that we are not abolishing DSA. Some Members who intervened have assumed it would disappear. It is a substantial item of spending now running at about £125 million, but we envisage that there will continue to be significant DSA in future. Several Members, particularly the hon. Member for Sheffield Central (Paul Blomfield), did not like my statement that we were modernising it, but let me explain briefly what modernisation means and why we are engaging with it.

The system of DSA has not changed significantly since it was introduced in 1974. Since then, there have been widespread technological changes, some of which have improved disabled people’s ability to access education through advances in IT, but some things that were previously available by special arrangement are now widespread. For example, many people have laptops or other forms of access to IT. So there have been advances in technology, which have spread across the country.

Let me tackle head-on another significant change that has happened: the spread of equality duties under the Disability Discrimination Act 1995 and the Equality Act 2010. The right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) was emphatic on that point. I have enormous respect for him and his work, but it is reasonable for us to say what is the right balance of responsibility between institutions’ legal obligations under the Acts and individual payments to students via the DSA. There may well be types of provision that are better and more efficiently delivered on an institutional basis via the universities’ obligation than via individual student support.

Perhaps as a lay person I can give a simple practical example. If a university has a library where people with disabilities find it hard to access material, it is a legitimate question to ask whether the DSA should provide for their costs to access the library or whether the library should be organised in such a way that every time someone comes in—

15:47

Sitting suspended for a Division in the House.

16:02

On resuming—

[Mr Jim Hood (in the Chair)]

Before I call the Minister, I remind right hon. and hon. Members that 15 minutes extra—the time taken for the Division—will be added to this debate. The debate that was supposed to start at 4 pm will start 15 minutes later.

[Mr Willetts]

I am not sure that this extra time will be as good as that in the Belgium versus United States match, but I will do my best. I welcome hon. Members who have come for the next debate and apologise to them.

I was starting to wind up the debate, explaining why it is legitimate to carry out the review and why the term “modernisation” is legitimate. One argument in that regard was about technical change. I was also saying that there is a genuine issue about obligations under the Equality Act, whereby universities have a duty to make reasonable adjustments for students who are disabled. We have to get the balance right between the institutional obligation on the university and personal financial support for the individual student. I was giving an example of how a library should function, saying that the obligation could be discharged by a library properly training its staff to help people with a range of disabilities. That may be a more effective way of delivering support for disabled people than individual disabled students turning up at the library with a personal assistant to help them. It is legitimate to try to get the individual versus institution balance reviewed in the light of the equalities duties.

The right hon. Member for Sheffield, Brightside and Hillsborough did not like the fact that I referred to the funding available for universities, but several hon. Members, beginning with my hon. Friend the Member for Cambridge but not only him, specifically asked, “How will universities pay, given that you are expecting them to discharge these institutional obligations?” There are two genuine points to be made in response, although more could be made.

First, with regard to the equalities duties that the House has introduced under successive Governments, by and large we do not say, “We therefore need an extra stream of funding for the NHS”, any more than we say that there should be extra public support for Marks & Spencer. Hon. Members should remember that, legally, universities are independent institutions outside the public sector. The general view across the House, when we have imposed equality duties, has been that that is just part of the proper functioning of an institution.

Secondly, it is fortunate that our universities are in a healthy financial position. I will not stray from the point, as happened in the argument a few minutes ago between the hon. Member for Huddersfield (Mr Sheerman) and my hon. Friend the Member for Cambridge, but the sums going to universities for teaching—the combination of the grant income and the fee income that they receive—is rising substantially as a result of the controversial changes that we introduced, going from £7.9 billion total income in 2011-12 to £9.9 billion in 2015-16.

To be frank with hon. Members who voted against the £9,000 fee—I suspect that the majority of those in this Chamber did so—it is inconceivable that universities would have enjoyed a £2 billion increase in teaching income in the life of this Parliament under any other model of financing universities, especially one that depended on public expenditure through grant. There is a genuine increase in their financial resource. Several hon. Members expressed concern that our proposal comes at a bad time, when universities have not got any money, but in fact they have had an increase in their cash resource.

[Mr Byrne]

I am grateful to the Minister for giving way with characteristic generosity. Can he help hon. Members? He has made an eloquent argument for the need to rebalance responsibilities between central Government and independent universities, saying that we need to do so because it is a long time since we have considered the matter. By how much is he seeking to reduce the DSA budget over the next financial year and the one after? He must know, because he has a list of specific measures.

[Mr Willetts]

I was going to get to that point in a moment. We are still consulting—it is a genuine consultation—so I cannot give the House a specific figure, because that will depend on a host of things, including exactly how the proposals are implemented and wider effects. However, it is a budget that has grown rapidly. Incidentally, the right hon. Gentleman said that that growth had stopped. There is always a difference between the provisional figures and the final outcome figures. My personal expectation is that the final outcome figures for the latest year should be higher than those for the previous year. It is not fair to compare final outcome figures with provisional figures. We will see. The budget has increased from about £88 million when we came to office to about £125 million now, so it is legitimate to look at it. However, we do not have a specific allocated figure.

[Mr Sheerman]

Will the Minister give way?

[Mark Durkan (Foyle) (SDLP)]

Will the Minister give way?

[Mr Willetts]

I will give way briefly to the hon. Member for Huddersfield, but I have a lot of specific points to make, so after doing so I shall make progress.

[Mr Sheerman]

The Minister knows what I am going to say. He is looking through rose-tinted glasses at the future of finance in higher education, but it is not all as rosy as that. A vice-chancellor recently said to me, “The real worry that I have is that the whole HE system is based on a mountain of student debt.” That is our worry. It is not as rosy a picture as the Minister has painted.

[Mr Willetts]

That is a separate issue. The graduate repayment system is a fair, sustainable and viable way of financing our universities, and it would be a mistake to try to reverse that.

I turn to some of the specific issues that have been raised. Let me say clearly to right hon. and hon. Members that we will fund non-medical help that would not be a reasonable adjustment for higher education institutions to make. We will define the obligations of the institutions, and on top of that there will be support for non-medical help, which in certain situations will include support for students with specific learning difficulties, as well as other groups. Hon. Members mentioned IT, and we will make a contribution to the costs of higher-cost and higher-specification computers in certain circumstances if they are required purely because of the student’s disability. We will pay the extra costs that arise from those computers being required by students with a disability, rather than have a general payment for laptops when they are now widespread across society. We will also cover additional costs of specialist accommodation in exceptional circumstances.

[Mr Andrew Smith]

Have the Minister and the Government looked into the implications more widely, beyond higher education, of the Government making such a definition of what is a reasonable adjustment by universities? Is there not a real risk that others will cite that definition and say that anything that goes beyond it is not a reasonable adjustment for them, thereby denying disabled people in other areas too?

[Mr Willetts]

That will be the last intervention that I take, because time is tight.

We are consulting, and we will produce guidance that will help make the crucial distinction between what institutions can legitimately be expected to do and where individual funding is required.

We are talking about education, and I want to come back to that, because several Members raised the topic. It is a distinct responsibility. We are consulting, and we will continue to meet a whole range of groups representing disabled people. We have already discussed the policy changes with, for example, the National Union of Students, Universities UK and the Office for Fair Access, and there will be many further such meetings in the future.

Institutions will be expected to have reasonable adjustments in place by September 2015. We believe that the time scales provide sufficient time for us to work with institutions and stakeholders to ensure that changes are introduced effectively, but I understand that some institutions are concerned that they will be disproportionately affected due to their high numbers of disabled students. Several Members have made that point, which will be considered before guidance is issued to the sector in the autumn. The guidance will help institutions understand better the role that DSA will play, enabling them to consider the support they will need to provide. We will also provide regular updates for the HE sector over the coming months.

Student information and guidance, which will include information on DSA changes as well as on the wider student support package, will be available in September in the normal way. Once we conclude our consultation meetings, we will be in a position to issue draft guidance in early autumn on what DSA will cover. That guidance will benefit higher education institutions and assessment centres in particular. Stakeholders will have the chance to review it and ensure that it is sufficiently clear and understandable before it goes live. I undertake to lay the relevant regulations at that time, which will allow Members to see the regulations and the draft guidance in parallel. Before adopting either, the Government will continue to have due regard to the impact of the changes on the aims set out in the Equality Act 2010. We will publish our analysis on that at the same time.

A point was raised about existing students and DSA students beginning university in 2014-15. They will remain on the current arrangements in 2015-16. I have already announced that the maximum available DSA amounts will not be changing. We are not adopting a blunt approach to the provision of non-medical help. We realise that non-medical help will be the responsibility of higher education institutions, but we recognise that in certain areas, perhaps as a result of the impact or severity of a disability, DSA has an additional role to play once reasonable adjustment has been made. In the case of complex needs, we will assess the severity of the impact on the education of the student. It will not be a simple physical assessment of their disability; it will be an assessment of how the disability challenges they face affect their ability to benefit from higher education. That is the assessment that has to be made. We will focus on the educational impact and the severity of their educational needs. I would also like to—[Interruption.]

[Mr Jim Hood (in the Chair)]

Order. When the Chairman can hear conversations at the back of the room, someone is out of order. I urge Members to pay attention to the Minister’s contribution.

[Mr Willetts]

Thank you, Mr Hood. I was trying to go almost too fast, because there is so much material to cover. I was trying to clarify the issue of specific learning difficulties and dyslexia, which has arisen in the debate. My announcement used the term “complex needs”, and I wish to make it clear that DSA will support those for whom the impact on their higher education needs is most severe. That is the approach we propose to take.

We are in consultation on technology with groups such as the British Assistive Technology Association. I assure Members that the Government are committed to supporting disabled students in accessing higher education. Students are right to expect support from their higher education institution, and DSA has been available to complement that support for nearly 25 years. That is not changing. What is changing is the balance between the two types of support, and that balance should be struck in the light of the Equality Act 2010. I conclude by assuring Members that over the summer, the Government and officials will continue to develop thinking, engage on policy issues and consolidate our work. We will, of course, continue to consult and keep the House informed as our proposals develop.

Flooding (Somerset)

Wednesday 2nd July 2014 Westminster Hall

16:09

[Mr David Heath (Somerton and Frome) (LD)]

I am extremely pleased to have secured the debate, which will consider the aftermath of flooding in Somerset. I am delighted to be supported on this occasion by my hon. Friends the Members for Wells (Tessa Munt) and for Taunton Deane (Mr Browne) and the hon. Member for Bridgwater and West Somerset (Mr Liddell-Grainger). We have been acting effectively as a team on the issue, and long may that continue.

I cannot honestly say that I have not had the opportunity to speak at length about flooding in Somerset on previous occasions. By my count, this is the 16th occasion this year when I have spoken on the subject. It has been a recurrent theme over my 18 years in Parliament, and sometimes I feel that I have spoken about little else. Looking back in Hansard the other day, I found that in March 2009, in a debate that I had introduced on the subject, I said:

“I am convinced that if we had proper dredging of some of our rivers and proper clearing of debris and strengthening of banks on some of the smaller tributary streams, it would make a substantial difference to the way in which we deal with these matters.”—[Official Report, 12 March 2009; Vol. 489, c. 553.]

I was right on that occasion, as were many, many local people, who had been saying the same things year in, year out for a long time. I had the opportunity to say some of those same things to the Minister’s predecessor, the hon. Member for Newbury (Richard Benyon), when he came down to see me in Langport in April 2012.

No one can honestly say that the flooding in Somerset this winter caught them by surprise; we knew it was going to happen. The good news is that, despite the reports about the conditions underfoot at Glastonbury festival last weekend, Somerset is now predominately dry. The floods have gone. We need to keep repeating that, because there are still people who ring up businesses in my constituency—I am sure it happens in my colleagues’ constituencies, too—saying, “Is Somerset open for business? Are you still under water?” No, we are not under water. Come and have a jolly good holiday in Somerset. It is a much better place to go than places that are further away. [Interruption.] No, I do not mean the Minister’s constituency. Somerset is a thoroughly good place to have a holiday.

Before I proceed to a catch-up on where we are, I repeat, as I have on many occasions, my thanks to everyone who was concerned during the flooding crisis with dealing with the conditions on the ground. People worked tirelessly, whether they were officers of the Environment Agency, the police, the fire brigade, council officers or volunteers. There were so many that it would be invidious to mention people by name, but they know how much their work was appreciated. I also thank those who helped in other ways, such as providing cattle fodder from the far ends of the country or providing cash to the appeals organised by the Somerset Community Foundation and others. We are deeply appreciative of that, as we are of the attention we were afforded for a few brief weeks by the Government.

The Prime Minister, the Deputy Prime Minister, the Secretary of State for Environment, Food and Rural Affairs, the Minister and many other members of the Government came down to see for themselves what the issues were. Were we lucky that we happened to have a few weeks before the Thames valley flooding to make our point? Yes, I suspect we were, but nevertheless, we did, and we appreciate the attention we were given.

[Mr Jeremy Browne (Taunton Deane) (LD)]

Will my hon. Friend expand on the point he just touched on? We all feel a genuine sense of gratitude that leading members of the Government—the Prime Minister, the Deputy Prime Minister and others—took such a close interest in the situation in Somerset, but surely the task now is to ensure that that interest is not passing and that the legacy of the attention afforded to our county is that we see over a period of years, not months, exactly the changes that were promised during those visits. That will ensure that the risk of floods is alleviated in the future.

[Mr Heath]

My hon. Friend is absolutely right, and that was why I called for today’s debate, which is perhaps unseasonable. Now is the time not only when work must happen in Somerset, which it is, but when decisions must be taken that will affect the situation for years to come. That is what I want the Minister to respond to.

I will briefly touch on the background, because we cannot escape the fact that elements of the Somerset flooding were avoidable. We expect flooding on the levels; it is a normal state of affairs. This occasion, however, was unprecedented due not only to the extreme weather conditions, but to now widely acknowledged policy mistakes. I have drawn attention to two glaring errors many times over the years, but they now have a common subscription. First, the landscape is artificial and does not maintain itself. Every drop of water that needs to be pumped away from the fields and the communities in the area must be pumped uphill into rivers that are higher than the surrounding landscape. People forget that and talk nonsense about natural drainage and flood plains when such drainage will never happen. The land is effectively reclaimed. It is land from the great mere of Somerset. Unless the water is pumped, drainage will not happen.

Secondly, an environmental heresy was allowed to develop for far too long at senior levels in the Environment Agency. It was assumed that the environmental benefit of the area was in the watercourses rather than in the land in between, which meant that what are essentially canals were being artificially preserved at the expense of the quite invaluable flora and fauna. I hope that that is now a thing of the past.

What is on the list of things to be done and how have we been managing? There have obviously been immediate acts of recovery and restitution. I understand that farm funding is considerably undersubscribed, but the Minister might be able to provide an up-to-date assessment of whether the funding has reached the farmers who need it. I also wish to add one caveat: we have not to date seen huge damage to orchards, but it is possible that it will appear later on. If we need to come back to the Department, I hope the Minister will be sympathetic if orchards have lost tree stock.

Dredging is now happening. There has been a lot of local cynicism as to whether it has been done sufficiently quickly and properly, and whether lip service has been paid, but I am satisfied that genuine dredging is taking place along the identified stretch. After a slow beginning, it is starting to catch up, and I think six crews are now at work. What a pity it is that we do not have the equipment that was given away or sold for peanuts many years ago. Nevertheless, the relevant area has been reconstituted and we have the hard-standings that enable the dredging machines to do their work. Will the Minister update us as to when he expects the initial tranche of dredging to be completed?

Increasing the capacity of watercourses will not satisfy local people, however. We accept the argument that increasing capacity is the most effective use of early funds, but I am conscious of the fact that the upper reaches of the Parrett were also severely flooded. Around Langport, Muchelney and Martock, there are bottlenecks that need addressing. Are we able to increase capacity under the bridge at Great Bow wharf at Langport? There are also plans to widen and deepen the Sowy diversion stream to provide extra capacity, which is a sensible idea that I would like to see happen, but it needs to be properly planned. We need to consider the potential consequences for other communities and reassure them that they will not be adversely affected by the Sowy being used to a greater extent. That issue would be particularly apparent at Beer Wall, which is where my constituency adjoins that of Bridgwater and West Somerset, and Aller Drove, which saw unprecedented flooding. Aller does not normally flood, but this time it did. I think that there was a miscalculation and that someone made a mistake in lowering the level of the river wall. Those calculations have to be right. As we use the Sowy, we must be sure that adverse effects are not happening elsewhere.

[Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)]

My hon. Friend is making some good points about the Sowy. The Minister is aware that part of the Sowy development must include the barrage or the sluice—whatever we want to call it—below Bridgwater, which would complement what my hon. Friend is discussing. Will the Minister also consider ensuring that the scheme goes into the autumn statement? We need money for the Sowy and for the barrage, but it can come only from central Government. Does my hon. Friend think that that may be a way forward?

[Mr Heath]

I most certainly do agree, because that was going to be the principal point—

[Mr Liddell-Grainger]

I am so sorry.

[Mr Heath]

We are at one on the issue. This is the big ask. This is what we need from the Minister. I know that he will not answer today, because he is not in a position to do so, but this is the most important demand.

Purely local schemes to alleviate flooding are also needed. Thorney is a tiny village—a hamlet—that is now rather curiously described as two different places for the purposes of flooding, because it floods separately at two ends, so we now have Thorney north and south, or greater and lesser—I am not quite sure how to describe the two ends of the village. A bund of some kind—a way to stop the water coming in—would be effective, however. That is a relatively low-cost solution and one that is being considered. I want an assurance that it actually will be built to protect the people of Thorney.

Similarly, we need to look at Muchelney Ham, a small part of Muchelney that was subjected to flooding. We also need to examine the highways situation, where the county council will be taking the lead.

I think we all agree that it is extraordinary in this day and age to have a village such as Muchelney completely cut off for week after week. We must establish at least one way to get in and out. Feasibility studies are being carried out as to whether it should be the Drayton road or whether there is a better alternative, but something must be done to ensure that people can get in and out of the village.

[Mr Browne]

I am hugely sympathetic to the residents of Muchelney, but while my hon. Friend is on the topic of highways, will he also discuss what could be done to improve the resilience of the A361? It is a major trunk road that links Taunton, the county town of Somerset, to the main body of the county, including Street and Glastonbury, but its resilience is inadequate. There seem to be two tasks: keep the flood water down and try to ensure that the road is open for longer stretches of time during floods.

[Mr Heath]

I am grateful to my hon. Friend, because the next thing written on my piece of paper is “A361”. I do not like the idea of Taunton being cut off from civilisation and we need to do something about the A361, but the question is, what? I am not convinced that simply raising the level of the road along its entire length is the most sensible use of funds, but we need to do something in combination with the sluice, which I will come back to in a moment. We need to mobilise whatever funding is available—whether from Network Rail, which otherwise needs to do something about its track across the levels, or the roads agencies—and use it in the wisest way to ensure that the road is not closed again and that we all have easy access to the pub at Burrowbridge, which served as such a useful headquarters for the media during the flooding.

Are we going to see the replacement of the necessary pumping facilities? Some have already been done, but we brought in those massive pumps during the crisis and they were an extremely good thing. We need to ensure that they are available when we need them, and without having to ask, as we need a boat to be available when necessary. Such facilities need to be built.

That brings me to the two big ticket items. One is the Parrett sluice, which I agree entirely with, having looked into the matter. As the hon. Member for Bridgwater and West Somerset knows, I was initially sceptical as to whether the sluice would include improvement for my area—it clearly would for his—but I am now convinced that it would. Preventing the influx of water from the Bristol channel at high tide, thereby ensuring that we can drain away water from the upper reaches of the levels, is crucial. We need the Chancellor of the Exchequer to announce the funding in the autumn statement—no doubt about it, we need it there in black and white. When we have that, we will be satisfied that the Government are keeping their promises to the people of Somerset.

[Tessa Munt (Wells) (LD)]

While we are on the subject of sluices, will the Minister address the problem of Bleadon sluice, bearing in mind that we have all talked about how any approach has to be for the whole catchment area? My concern is with the Axe and Brue rivers; there is a need for dredging on the Brue, but my most important concern is the Axe, which drains out into the northern part of my patch and over towards Weston-super-Mare. Bleadon sluice was closed by the Environment Agency, which put a red notice on it in 2009. There has been a bundle going on—no one will take responsibility. I was told earlier this year that the sluice was going to be fixed at some point during the year, but we are a long way through it and nothing has happened. Will the Minister address that, since we are on the subject of sluices?

[Mr Heath]

My hon. Friend is absolutely right. We cannot divorce the issues of the Parrett and Tone from those of the Axe and Brue. That is why the next ask is equally important: setting up the Somerset rivers authority, to absorb the interests of the existing internal drainage boards and to create real capacity to manage our complex water systems appropriately and with the benefit of local knowledge. That will not happen unless we have a revenue stream to support it, which in turn will not happen unless the Department for Communities and Local Government realises that Somerset is an exception and does not fit its rules. The Department will have to give way to establish what is already the case in some parts of the east of England—a separate levy to fund the maintenance we know to be necessary. Again, that is an ask to which the answer must not be no, because otherwise we will not have done our job.

Will the Minister also update us about how the common agricultural policy reforms as implemented in England—the pillar two payments, in particular—will be used to encourage water retention, the sort of sustainable use of land that will reduce the amount of water entering the lower reaches of the levels at the right time? That is a key component, whether it involves reforestation or simple changes in land use, to enable us to hold more water at higher levels, releasing it slowly when it can get away.

We need a balance between the environment and the community, including the agricultural community. The environment of the levels is precious. I will not have it said that the environmental benefits of the levels do not matter, because the levels are irreplaceable—if we allow them to drown, they die. Therefore, it is in our interests as environmentalists, as well as representatives of our community, to ensure that the balance is created. As I have said often, flooding 3-feet deep for three weeks is fine. That is what we expect in Somerset; it is the levels way. Flooding 10-feet deep for 10 weeks is unacceptable; that is when people are in difficulties, businesses and communities die, and vegetation dies as well.

I hope that the Minister will give as many answers as he can. We will excuse things not having been completed by next winter, provided that we have clear intent that they are under way. After all the promises that we have been given and all the efforts made, however, we will not excuse things simply being said only for nothing to happen. We will have flooding again this winter—that is a fact—but if it is as bad as it was last winter and we can turn around and say, “The Government have failed to do all those things that they said they were going to do,” then, frankly, the Government will have to answer not only to the people in this Chamber, but to an awful lot of people in Somerset, who will be very angry indeed.

16:35

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Dan Rogerson)]

It is a pleasure to serve under your chairmanship, Mr Hood, and to have the opportunity to respond to the debate.

I hope to satisfy my hon. Friend the Member for Somerton and Frome (Mr Heath) with my response, as far as I can on the day. As he said, he has raised the issues consistently, since long before my time with this portfolio. More recently, we have had a number of opportunities for debate inside and outside Parliament. He has been entirely consistent, as have my other hon. Friends present today, and they have worked together as a team, along with our right hon. Friend the Member for Yeovil (Mr Laws), who has also raised the issues with me.

I have only a short time to respond, so I will not set out everything to do with the extreme weather that we experienced, although it is important to mention that the effects in Somerset were replicated in other parts of the country. Yesterday I was debating with right hon. and hon. Members from the Humber estuary. My hon. Friends here today will be delighted to know that those Members were only requesting £880 million for the schemes identified in that area. We are not short of positive ideas to deal with flooding around the country.

The specific issues affecting Somerset are not so much to do with the large numbers of properties flooded—as my hon. Friend the Member for Somerton and Frome said, in other areas a much larger number flooded—as with the volume of the water and its duration, producing the longer term economic impacts on the communities affected. There was in excess of 65 million cubic metres of floodwater, covering an area of 65 sq km. Exceptionally, that floodwater stayed on the levels for more than 12 weeks.

The Environment Agency did an excellent job in carrying out the single largest pumping operation ever undertaken in Somerset. As my hon. Friend said, the emergency services, the volunteers and all the other groups from local communities and from across the country who offered assistance did a magnificent job in some very difficult conditions. In addition to the 40 permanent pumps, the Environment Agency mobilised a further 24 temporary units, increasing the ability to pump by more than 150%, although there is an interaction between the tidal nature of the catchments and the ability to get the water out into the sea, which my hon. Friend considered when talking about the sluice. I want to make it clear that there are no plans to reduce the number of Environment Agency front-line flood and coastal risk management posts. That issue has been raised in the past.

On my first visit to the Somerset levels with my hon. Friend during the episodes of winter flooding there, the clear ask from the community was for dredging of the rivers. I came back to the Department determined that we should re-examine the case for doing so. The Secretary of State for Environment, Food and Rural Affairs followed up with a visit and asked all the local organisations to meet and to put an action plan together, with support from officials in the Environment Agency and DEFRA. That happened in a remarkably speedy six weeks. I chaired the first meeting and returned later to hear about some of the progress. We now have the action plan, whose delivery is crucial for the future of the levels.

[Tessa Munt]

Will the Minister give way?

[Dan Rogerson]

I will give way briefly, but I do not have much time.

[Tessa Munt]

It is a brief point. Will the Minister make absolutely certain that DEFRA officials stay engaged with the process, because an internal drainage board cannot do things on its own? It is crucial that DEFRA officials carry on working with the boards.

[Dan Rogerson]

DEFRA officials and indeed Ministers will remain involved. The Secretary of State was in the area again recently to look at progress. He has been appointed flood envoy for Somerset and Wiltshire by the Prime Minister, as I have for Cornwall. We maintain an interest in the delivery of the plan which, as my hon. Friend says, is crucial. Money has been made available from the Department for Transport, DEFRA and the Department for Communities and Local Government. For example, an additional £12.3 million from the Department for Transport has been made available to the county council to help roads recovery.

I want to pick up on some of the issues in the action plan and the progress that has been made against that plan. An important element is resilience, which is perhaps slightly more intangible than dredging and hard defences but is important. The Somerset civil contingencies partnership is providing a dedicated programme of targeted support to help people, farms, businesses and neighbourhoods to recover, including by accessing the support and advice that we have made available. They are working hard on plans to increase resilience in the future. As my hon. Friend the Member for Somerton and Frome said, flooding will happen again, so we must ensure that communities have what they need at their disposal. That is particularly so for people who have moved to the area and may not have been through this before, unlike the old hands who have and know about resilience and how to support one another.

Implementation of the action plan has started with the dredging of the Rivers Parrett and Tone. It started when the banks were stable and safe enough to support the weight of the heavy equipment, when local access permission had been sought and preparations made for receiving the excavated silt. The dredging is progressing well and is on target to be completed by the autumn. The plan is to dredge 8 km of river; so far 1.7 km has been completed and the number of gangs has increased from two to six.

Work is in hand to find alternative ways of getting water to flow from the Parrett catchment area by increasing the capacity of the River Sowy and the King’s Sedgemoor drain so that water can be pumped more easily and be diverted to Dunball where extra pumps are working. The footings have been made permanent so we can call on them if necessary. That will lower the levels in the River Parrett sufficiently to enable the pumping stations to be operated, helping to lower water levels on the moors around Langport, and to a lesser extent around West Sedgemoor, Curry moor and North moor.

The Environment Agency is currently scoping this work and hopes to appoint a consultant by the end of this month who will work with communities and professional partners to agree aims and to include them in the development of the options. By the autumn, the agency expects to have assessed a range of options to see what is feasible. Partnership funding will be needed to build the scheme. Further key action is the construction of a barrier or sluice to deal with the impact of a rise in sea level and to protect Bridgwater from flooding, and to look at future development.

On Friday 6 June, the Environment Agency, with Sedgemoor district council, organised a technical meeting to discuss various options for the type of barrier that could be used. The meeting was attended by 60 people who received presentations from experts from across the country who have been involved in the design of other flood defence barriers. The long-term vision for Bridgwater was also discussed. A group will review these options and compile a report by September. That report will contribute to an informed decision on the preferred option.

The Environment Agency estimates that it will be three to five years before construction starts and that it will take two years to complete notwithstanding discussions on funding, to which my hon. Friend is keen to draw attention. If we have a plan by September, that will allow serious consideration of the funding options.

Under the action plan, a new Somerset rivers board is being set up. It will have greater control of and responsibility for work to maintain water and flood risk management in the area. This work is being co-ordinated by Somerset county council, working closely with district councils, the Environment Agency, Natural England and the internal drainage boards, which do such crucial work not just in the Parrett and Tone catchment areas but the Axe and Brue areas.

The Somerset rivers board was discussed at an interim leaders implementation group meeting on 20 June. It was a positive meeting that acknowledged the need for compromises and urgency. The options under review include organisational structures, legislative requirements and funding models, all issues that will need to be discussed by local and national Government to ensure a sustainable model in the future. Proposals being considered include an appropriate catchment-wide funding mechanism to generate additional funds. These proposals will be discussed at the next leaders group meeting on 7 July. When proposals have been agreed, next steps will include consultation and engagement on them. In addition, work is under way to consider raising the road to Muchelney and building a ring-bank flood protection scheme for Thorney. My hon. Friend was keen to make the case for that.

We have made provision through funding such as the farming recovery fund, and 167 applications were received from Somerset by the 27 June deadline. That represents 44% of all the claims. It was available to other areas of the country that experienced winter flooding from early December 2013 to April 2014. The total value of claims from Somerset is over £1.5 million of the money that was made available. Repair and renew grant is also available, and householders and businesses may claim up to £5,000 to establish flood resilience measures on their property. Of the 283 properties that were flooded in Somerset, 219 were in the area covered by Sedgemoor district council. Other councils have also taken that option.

In the few seconds remaining, I should say that I greatly appreciate the leadership that has been shown in communities. This has helped to bridge the gap between local and national agencies. We will continue to focus on delivering the action plan. There are challenges ahead, but if we work together we can overcome them so that that resilient community has a better time in future.

VAT on e-books

Wednesday 2nd July 2014 Westminster Hall

16:45

[Mr Tom Harris (Glasgow South) (Lab)]

Through you, Mr Hood, I thank Mr Speaker for giving me the opportunity to raise this matter. I raised the subject under a Labour Government in the last Parliament, before the 2010 election. Sadly, many of my concerns have not receded. I welcome the Minister to her place.

It is not necessary to go into a long exposition about the importance of books or reading. We can take for granted the Minister’s agreement that encouragement to read books is a good thing, and that any Government, whatever their political colour, want to promote the reading and enjoyment of books.

I declare an interest at the outset in that I am an avid reader and, in the past four years, have become an avid reader of e-books downloaded to my Kindle or my iPad—my personal iPad mini, which I bought myself, not my publicly-funded iPad. I say that for the record lest the tiresome usual suspects see an opportunity to berate me for misuse of public funds.

My experience seems to be fairly familiar to other e-book readers. Purchasing an e-reader prompts the reader to buy more books than he or she did before. An additional benefit of e-readers is that I can now purchase books and store them unread on my Kindle instead of buying physical books and leaving them unread and gathering dust on my shelf.

Amazon states that UK users of the Kindle buy up to four times as many books as they did before they bought their Kindle. For those of us feeling the dreadful physical onslaught of the years, e-readers make print more accessible with adjustable font size and colour, and so encourage reading.

E-books offer greater consumer choice. I was delighted to discover that books by my favourite science fiction writer—the late, great Bob Shaw—which were out of print, are available again online to download. The renewed availability of previously out-of-print books from a huge range of authors has provided a much-needed revenue stream for publishers and authors, as well as offering readers greater choice.

E-books are a British success story and have helped to drive the recovery of the UK publishing industry since the financial crisis of 2008. Consumers in the UK are already the biggest e-commerce spenders in the world, and have been fastest in the EU to embrace e-books, partly because of the huge choice of English language books, partly because of competition and choice in e-book readers, and in large part because of the price competitiveness of e-books. That has brought big new opportunities to readers, writers and publishers.

Rapid year-on-year growth saw e-book sales in 2013 account for 21% of the value of the UK’s total book market, up from 8% in 2011. The Publishers Association reported that 29%, or about £1.5 billion, of UK publishing revenues in 2013 was derived from digital products. Amazon.co.uk’s Kindle e-books already outsell print books.

That is all good news, but the Minister will be aware that a change is coming that will have damaging consequences for all concerned, except the Treasury. For everyone else—authors, readers, publishers and online retailers—the consequences of the changes to be introduced in January, just six months from now, will reverse much of the good that the introduction of e-books has achieved in recent years.

Unlike printed books, which rightly attract a zero rate of VAT, e-books have the full rate of VAT added to their price. That is simply wrong, and I have thought so for several years. It is clearly unfair to recategorise a book as an electronic service, which is the justification for adding VAT, simply because it is downloaded rather than picked off a shelf. A book is a book is a book. The full UK rate of VAT is charged on any e-book sold in the UK, but that does not affect readers who buy a book from the Kindle store, because the VAT rate is that applying in Luxembourg, where Amazon is based.

From 1 January 2015, however, VAT will apply wherever the purchaser lives. For example, Donna Tartt’s “The Goldfinch”—which I would highly recommend to the Minister, although a drawback of e-books is that it is much harder for people to lend others their copy—which I purchased from Amazon a couple of weeks ago for £3.49, included a nominal VAT rate of about 3%. If we add an additional 20% to that cost, which is what I would have had to pay had I waited until next year to buy it, that will undoubtedly have the effect of discouraging many readers—not all, but many—from buying it.

The decision to buy a book is price-sensitive. Ofcom research shows that the willingness to pay for a single book download declines steadily as the proposed price of a book download increases. The average price that respondents were willing to pay was £3.74. About 42% of people were willing to buy an e-book at £5. Once VAT at 20% was added, bringing the cost up to £6, the proportion of consumers willing to buy it fell dramatically to 28%.

According to the Publishers Association, digital sales across all publishing increased in 2013 by 305% and digital revenues are now £509 million—or 15%—out of an overall book market of £3.4 billion. In fiction, e-books account for a third of all sales—that is £200 million —and for 7% of non-fiction sales.

But the association adds:

“These figures are likely to continue to increase, but at a slower rate of growth than in the earlier years of e-reading take-up, as the market matures... A further check on the growth of ebooks will come from the fact that they currently attract VAT (in the UK at the full rate of 20%). This is compared with the application of the zero rate of VAT on physical books—a long-standing feature of the UK’s tax regime—and is a reflection of the belief that the tax should not act as a disincentive to reading and learning. However, this important feature of the fiscal regime is absent for digital publications on which the full rate of VAT of 20% is applied. Research suggests that consumers are discouraged from buying ebooks by the VAT rate.”

The association continues:

“The European Commission Directorate-General for Taxation is conducting a full study of the whole of the VAT regime, and has identified ebooks as a particular focus of attention.

“We currently await a Communication from the Commission outlining its findings and recommendations—however, publication of this seems to be suffering from repeated delays. We believe that the UK Government should urge the European Commission to publish its findings following its study; and that the Commission should resolve to allow Member States to investigate applying lower rates of VAT on e-publications (books and academic journals). The UK should itself then undertake a similarly detailed study to analyse the impact of reducing the VAT rate on e-publications, with a view to reducing to the zero rate.”

E-books are a hugely important part of the UK publishing industry, which is itself a hugely important part of our creative industries, and in a week when the Government are pledging to help and support our creative industries, this debate has come at an appropriate time.

The UK is the largest e-book market in Europe, but the Society of Authors is concerned that publishers’ practices and the Government’s policies are creating barriers to growth and hindering development of the publishing industry. It told me this week:

“The largest barrier to growth for most authors is the difficulty of obtaining a proper return for their professional work. Authors’ incomes continue to be squeezed: fewer books are published and sold; advances and royalties have fallen while more unpaid work is expected of authors in marketing and publicising their work, including appearances and use of social media.

“Print books attract a zero rate of VAT, but their electronic equivalents attract a rate of 20 per cent in the UK. Other EU countries, such as France and Luxembourg, have unilaterally reduced the rate of VAT on ebooks. This means the UK will now be at a competitive disadvantage, as ebooks sold in the UK will be more expensive than those sold elsewhere. The result is often to drive down prices leading to a smaller net sum going to authors. Most of the major players in the ebook market are based abroad.

“Given the rapid pace of development in the ebook market, there is an urgent need for removing VAT on ebooks to avoid the UK slipping behind European competitors.”

There are those in the industry who welcome the change from charging VAT in the country where the e-book is sold to charging the consumer where he lives. As someone who has spoken in the Commons against Amazon and others for not living up to their moral obligations to pay tax, it is a change that I understand. However, this is not about Amazon or Kobo or any of the other e-book sellers avoiding tax. VAT on e-books is not paid by the seller; it is paid by us, the consumers. If the change goes ahead in January, while the Treasury sticks to its position of insisting that an e-book is not a book at all but the equivalent of a video game and is therefore subject to 20% VAT, the industry—the whole industry, not just those specifically involved in producing and selling e-books—will suffer, and suffer significantly.

The Government argues that their legal advice

“indicates there is no scope to change the VAT treatment of the sale of digital book… products under EU law.”—[Official Report, 14 May 2014; Vol. 580, c. 682W.]

I simply cannot accept that, because Luxembourg and France have already challenged it. They cut their rates for e-books to 3% and 5.5% respectively in 2012. There is no reason why the UK cannot follow suit. I certainly do not believe that Ministers in this Government, of all Governments, are reluctant to pick a fight with the European Commission.

Other European Governments have taken on the EU on this issue. Germany, Poland and Italy are all calling for reductions in the rate of VAT on e-books. Will the UK add its voice to that call? Even assuming that the Government stand by their legal advice, which has been published and publicised, will they add at least their voice to the calls on the European Commission for change?

Incidentally, the German coalition Government’s executive board decided in April to cut VAT on audio books to 7% from 19%. The German Ministry of Culture is also pushing at the EU level for the same 7% VAT rate to apply to e-books, in line with the rate for print books in Germany, so the decision, if made, would make e-books and print books equal as far as VAT is concerned.

A German Government spokesman said:

“Due to rapidly advancing digitisation”—

I do not know what the German for “digitisation” is, by the way, but I would be quite interested to find out—

“we insist on a rapid implementation of the agreed points. We want to make sure that print and electronic media and audio media are treated equally for tax.”

Well, hooray for the Germans.

In the House, we are only too aware of the need to nurture the next generation. As parents, we understand the importance of encouraging our children to read. My own children often borrow my Kindle to take to bed, although they have not yet mastered the art of charging the damn thing after they have used it—that may be further down the line. So, for a new generation who view CDs as a quaint old-fashioned way to buy music; who watch TV shows when it suits them, not when it suits the broadcasters; who download their video games, rather than queuing outside the shop; and who have a far greater number of distractions than any previous generation to prevent them from sitting down with a book, but who will, when choosing to read a book anyway, be more likely to buy it electronically, are we really saying that increasing the cost of that product by up to 20% can really be reconciled with an ambition to encourage the young to read literature?

Do the Government still accept that we should promote reading and literacy and do all in our power to widen reading and literacy? I know, of course, that the genuine answer from the Minister will be yes, but should we not therefore widen our support for print books to their digital equivalent? Are the Government willing to engage with the European Commission to hasten the completion of its impact study assessment of options to reform EU VAT rules, including those affecting VAT on e-books? Should the Government not be standing up to Europe and following the examples of France, Germany and Luxembourg by insisting on a substantially lower rate of VAT on e-books? This is one area where I would like to see a race to the bottom. I want the Government parties and my own party competing in the next few months leading up to the general election to see who can offer the lowest rate of VAT on e-books, because consumers, readers and authors, not politicians, would emerge the winners.

Lastly, and importantly, one activity I use my taxpayer-funded iPad for is reading newspapers, and I am a subscriber to the digital edition of The Times. I am delighted that, as revenue from journalism is increasingly scarce, newspapers have found a route to survive in the 21st century through digital subscriptions, but their route to survival is similarly under threat. This country removed taxation from newsprint more than 300 years ago—removing what was seen, rightly, as a tax on free speech. Now, however, the Treasury is stealthily reimposing it by requiring the 20% VAT levy for the proportion of every newspaper subscription that is digital. It was not this Government who introduced that, but the previous Government. This Government have merely continued it, and it is wrong.

As a former local newspaper journalist, I want a successful future for our local, as well as our national, press. When quality journalism by properly trained and professional staff is competing with numerous free sources, as well as so-called citizen journalists—well meaning amateurs with dubious qualification to write about their chosen field of interest—imposing an unnecessary 20% charge on newspapers is a serious blow to freedom of expression. That argument was first deployed, successfully, 300 years ago. It is no less relevant today. The Minister and her colleagues have an opportunity to be on the side of fairness, literacy, opportunity and culture. The question is whether her Treasury colleagues will allow her to grasp that opportunity.

17:00

[The Economic Secretary to the Treasury (Andrea Leadsom)]

It is a pleasure to speak under your chairmanship, Mr Hood. I congratulate the hon. Member for Glasgow South (Mr Harris) on securing a debate on this very important subject. I am aware that he has asked a number of questions on the issue recently. As he will be aware from the answers that he has received, I am filling in for my hon. Friend the Exchequer Secretary to the Treasury in Westminster Hall, as he is in the main Chamber leading on the Finance Bill. In his absence, I will do my best to answer some of the hon. Gentleman’s questions.

Of course, no one needs to be an expert on tax to recognise the importance of books. The hon. Gentleman is absolutely right—publishing is an industry in which the United Kingdom can boast to have always been, and to remain, one of the world’s leaders, be it because of Charles Dickens, Jane Austen or Agatha Christie. I understand that Barbara Cartland is one of our most lucrative book exports, but I am not personally so familiar with her novels.

[Mr Harris]

I suppose that at this point we should acknowledge that one of the Minister’s colleagues, the hon. Member for Mid Bedfordshire (Nadine Dorries), is consistently in the top six on the Amazon bestsellers list for e-books.

[Andrea Leadsom]

I am sure that my hon. Friend will be delighted to have been name-checked. Her sales will no doubt rise dramatically as a result of that helpful intervention.

The Government also recognise the crucial role that reading can play in increasing literacy among our younger generations, which is important to their future success. I remember that my two sons were five and three when the first Harry Potter books by J. K. Rowling came out. We used to snuggle up together, and none of us wanted them to go to bed, because we just wanted to get on to the next bit. There is no doubt about the contribution of some of the great British children’s and adults’ literature. I include C. S. Lewis and some of the other great children’s authors among those who have helped to support and sustain literature and pleasure in reading among young people and adults. Our new national curriculum, which comes into force this September, is clear that all pupils must be encouraged to read widely, both for pleasure and for information. We absolutely recognise the important role that books have always played in this country and will continue to play.

On the issue of tax, I begin by reassuring the hon. Gentleman that the Government recognise the importance of the e-services market in the UK and that Ministers are taking a number of actions to support the digital economy. E-services are a growing part of our economy, and we expect them to generate significant tax revenues going forward.

On the specific issue of VAT, I should briefly explain that, as the hon. Gentleman pointed out himself, it is governed by EU law, and that reliefs from VAT are strictly limited under EU law. As hon. Members may know, when the UK joined the European Community in 1973, we successfully negotiated to keep our existing zero rate on items such as children’s clothing, most foods and physical books, newspapers and journals. Most other member states do not benefit from that derogation.

[Mr Harris]

I apologise for interrupting, but when the derogation was granted on our accession to the EU in 1973, there was no reference to physical books, because e-books did not exist at the time. There was a concession on books, and as that derogation stands, it could be extended to e-books, as e-books come under the definition of being a book.

[Andrea Leadsom]

Yes, I accept the hon. Gentleman’s point, and I will come on to it if he will bear with me.

EU VAT law allows member states to implement reduced rates of VAT of no less than 5% for certain goods and services, listed in annexe III of the VAT directive, at the discretion of member states. One of those reliefs relates to the supply of books on all physical means of support, newspapers and periodicals, other than material wholly or predominantly devoted to advertising. Although that may sound like it includes e-books, article 98(2) of the VAT directive specifically excludes electronically supplied services from the reduced rates in annexe III. That means that the UK charges the standard rate of VAT, 20%, on e-books and the zero rate of VAT on physical books.

As hon. Members will be aware, the UK’s e-books market is a growing one. Therefore, it is not clear that it is in need of a stimulus in the form of a reduced VAT rate. Between 2011 and 2012, e-book sales in the UK increased from £138 million to £261 million, so at a time when the Government are working to tackle the economy’s problems head-on and deliver a recovery that works for all, it is not clear that we should offer fiscal support for such a rapidly expanding industry.

[Fiona Mactaggart (Slough) (Lab)]

How many e-books are currently subject to UK rates of VAT and how many are subject to, for example, Luxembourg rates?

[Andrea Leadsom]

The hon. Lady will forgive me—I do not have those specific breakdowns to hand, but I will happily write to her on that point. I apologise for that.

[Mr Harris]

I am grateful to the Minister for giving way again. She has shown great patience, and I appreciate it. What she has just said, though, rather misses the point of my debate. No one is asking the Government to offer subsidies or favours to the e-book industry. What I am asking is that an impending charge that consumers in this country are not currently paying not be levied. She is right to say that the industry is doing well and growing. The problem is that people who buy books currently and pay 3% or 5% VAT will from 1 January pay 20%. We are not asking for any kind of subsidy from the Government; we are asking for the current situation to continue.

[Andrea Leadsom]

Again, I understand entirely the point of the hon. Gentleman’s debate. The issue is specifically that e-books are not counted as zero-rateable books from the point of view of the EU directive, so this is not an optional VAT charge. The EU directive requires us to treat e-books in that way, because they are treated as an electronic service. As the hon. Gentleman said at the start of his remarks, people can change the font; they can download e-books; they can switch from page to page without having to move pieces of paper, and so on. Therefore, they are deemed to be an electronic service and not the same as a physical book. The point that I am making is that our charging VAT on them is not optional.

Let me come on to the case of France and Luxembourg, about which the hon. Gentleman spoke, and in particular the difficult issue of books on Amazon. I am sure that, although he would support not paying VAT on e-books, he recognises that there has been an issue with big companies locating themselves in other places to take advantage of beneficial tax regimes that no doubt help their sales. As he pointed out, since 2011, France and Luxembourg have levied reduced rates of VAT—7% and 3% respectively—to bring them in line with their VAT rates on physical books. That is creating competitive distortions in relation to economic operators in other member states, and there has been pressure from the industry for the UK to reduce its VAT rate on e-books. The European Commission has begun European Court of Justice infraction proceedings against France and Luxembourg, and it has formally instructed them to apply their standard VAT rates to supplies of e-books. If the UK were to reduce the rate of VAT on e-books, it is extremely likely that we, too, would be infracted. I would be interested to know whether the hon. Gentleman thinks that we should seek to avoid infraction proceedings from the European Court of Justice or embrace them. We could be, unusually, on opposite sides of the argument on that point.

[Mr Harris]

I seem to remember being complimentary to the Minister when she spoke powerfully in favour of votes for prisoners in a debate on which we took the opposite points of view, and I believe that we are going to do the same again. I am more than relaxed about the UK being the target of court action by whichever European institution is relevant. I was relaxed about the idea when it came to votes for prisoners—we have to keep our position on that—and I see no difference, frankly, in this case. If the move would be good for the UK industry, we should stand up for that industry against interference by the EU.

[Andrea Leadsom]

I absolutely respect the hon. Gentleman’s position. Were we unilaterally to decide to change the VAT rate, we would, no doubt, be subject to ECJ infraction proceedings.

The other real issue is that a reduction in the rate of VAT on e-books would be likely to create border-line issues in the wider electronic services market, because problems of definition could lead to a widening of the relief through legal challenge and industry changes. That would put at risk serious amounts of revenue in the UK market, which is worth more than £2.5 billion.

I turn to the VAT changes that will be introduced in 2015. Currently, supplies of services, including electronically delivered services such as e-books, are taxed in the member states where the supplier is based at the VAT rate of that member state. Member states with lower VAT rates therefore have a competitive advantage, which encourages suppliers to locate there and sell to EU consumers, including the UK, at lower VAT rates. From 1 January, therefore, there will be a place of supply change, which will mean that e-books and other e-services will be taxed in the member state where the customer belongs at the VAT rate of that member state. That is designed to make competition fairer and to remove distortions.

Legal advice obtained by the Government indicates that there is no scope to change the VAT treatment of the sale of digital books and similar products under EU law. The Commission’s position is clear on the VAT rate of e-books: e-services attract a standard rate of VAT, because they are electronically supplied services. The UK’s rate is in line with EU law, and there is currently no intention to reduce the rate of VAT for e-books.

I am sorry to disappoint the hon. Gentleman by my reply, but I hope that he will be pleased to know that Ministers are focused on actions outside the VAT system to support the digital economy. In that area, we are making great efforts to encourage the digital economy. For example, in June 2013 the Government launched an information economy strategy, which includes positioning the UK strongly in the field of e-commerce by, among other things, improving digital skills across the population and creating the infrastructure to support innovation and growth.

Although I am sure that the hon. Gentleman is disappointed by my answer on VAT and e-books, I hope that he and other hon. Members are reassured that the Government support the sector and will continue to do so and that we are confident that the electronic services market will continue to grow and generate significant tax revenues.

[Mr Harris]

As there are a couple of minutes left, I wonder whether I could be cheeky and get in with another couple of points.

[Mr Jim Hood (in the Chair)]

Order. The hon. Gentleman was able to intervene, but the Minister has sat down and the hon. Gentleman cannot make another speech.

Question put and agreed to.

17:13

Sitting adjourned.