House of Commons

Monday 8th February 2016 Commons Chamber

Monday 8 February 2016

The House met at half-past Two o’clock

Prayers

Monday 8th February 2016 Commons Chamber

[Mr Speaker in the Chair]

Speaker’s Statement

Monday 8th February 2016 Commons Chamber

14:35

[Mr Speaker]

I wish to repeat what I said to the House on Friday.

It is with great sadness that I must report to the House the death of Harry Harpham, the hon. Member for Sheffield, Brightside and Hillsborough. Harry entered the House at the last general election, following careers as a miner, as a researcher for David Blunkett, now the right hon. Lord Blunkett, and as a representative of the National Union of Mineworkers at Clipstone colliery. Harry was also a councillor on Sheffield City Council for 15 years, holding important cabinet responsibilities in that time, and serving as deputy leader of the council. Harry was a diligent constituency Member of Parliament, who held the Executive to account on behalf of his constituents. Most recently, on Wednesday 20 January, he asked the Prime Minister what support the Government were providing to world-class companies such as Sheffield Forgemasters.

I must tell the House that Harry informed me a few weeks ago of his circumstances. Let it be recorded that he first fought bravely his illness, and then bore it with stoicism and fortitude, continuing to battle on behalf of his constituents to the very end. Harry will be sadly missed by us all, and our thoughts are with Harry’s wife, Gill, and the wider family at this very sad time.

Oral Answers to Questions

Monday 8th February 2016 Commons Chamber

The Secretary of State was asked—

[Mary Glindon (North Tyneside) (Lab)]

1. What assessment he has made of the potential effect of planned reductions in social rents and housing benefit support on the provision of supported housing.

[Peter Dowd (Bootle) (Lab)]

18. What assessment he has made of the potential effect of planned reductions in social rents and housing benefit support on the provision of supported housing.

[The Minister for Housing and Planning (Brandon Lewis)]

I associate myself and my colleagues on the Government Benches with your comments, Mr Speaker. Harry Harpham was a very distinguished long-serving councillor and we will all miss him in the years ahead.

This Government have always been clear that the most vulnerable will be protected and supported through our welfare reforms. Following our review of supported housing, due to report this spring, we will work with the sector to ensure appropriate protections are in place.

[Mary Glindon]

I, too, associate myself with the sad sentiments that have been expressed about our dear colleague.

The Minister says that the review will report in spring. It was due to report at the end of last year. Meanwhile, the Secretary of State is still pressing ahead with cuts before the review comes out. Can the Minister say why that is?

[Brandon Lewis]

As the hon. Lady may have heard in the recent Opposition day debate, we have always been very clear that the most vulnerable in our society will be protected. We will also ensure a fair settlement for taxpayers.

[Peter Dowd]

Will the Minister acknowledge that, although his announcement to delay the 1% rent cut affecting supported housing is welcome, it does not go far enough and the substantive proposals should be jettisoned to inject much-needed stability back into the sector?

[Brandon Lewis]

As I am sure the hon. Gentleman will appreciate, and as I said in the recent debate, we are working with the sector. The changes will come in in 2018, but we are very clear, and have always been very clear, that we will make sure that the most vulnerable in our society are protected.

[Peter Aldous (Waveney) (Con)]

11. Homeless hostels and foyers play a vital role in helping rough sleepers to get off the streets and into long-term homes. I would be grateful if my hon. Friend could confirm that housing associations will be given urgent clarity on whether the local housing allowance cap applies to those services. If it does not, there is a real worry that many will close and that, as a result, there will be an unnecessary rise in the numbers of young homeless people.

[Brandon Lewis]

My hon. Friend always fights hard for his constituents. Preventing youth homelessness is a priority for this Government. We are investing £15 million in the fair chance fund, an innovative payment-by-results scheme. That is helping some 2,000 vulnerable young homeless people to get into accommodation, education, training and employment. We will work closely with providers to find a long-term solution to the funding of supported accommodation.

[Dr Roberta Blackman-Woods (City of Durham) (Lab)]

I, too, associate myself and those on the Labour Benches with your comments, Mr Speaker. Harry Harpham will be sorely missed by the Labour party, his constituents, and, of course, his family and friends. Our thoughts are with them at this time.

Research from Changing Lives, a Newcastle-based specialist housing agency, estimates that it and other supported housing providers across the country will lose a huge sum of money from the Chancellor’s crude cuts to housing benefit. The discretionary fund on which the Government say they must rely is totally inadequate. What will the Minister do to ensure that that vital form of housing for many thousands of people with disabilities and other specialist needs remains and is properly funded in future?

[Brandon Lewis]

I say to the hon. Lady, as I have said before, that we will make sure that the most vulnerable in our society are protected. We are also boosting supply with £400 million-worth of funding announced in the spending review to deliver specialist affordable homes for the vulnerable, the elderly and those with disabilities. Of course, there is also our £5.3 billion investment in the better care fund, through which we are looking to integrate health and social care.

[Christopher Pincher (Tamworth) (Con)]

2. What progress his Department has made on the Help to Buy and Right to Buy schemes.

[The Secretary of State for Communities and Local Government (Greg Clark)]

I associate myself with your sentiments, Mr Speaker, about our former colleague, Harry Harpham.

This Government are committed to increasing home ownership. More than 130,000 households have purchased a home through Help to Buy since 2012. We have just launched London Help to Buy, and I can tell the House that in the first seven days, 15,000 people have registered to take advantage of it. Since April 2010, more than 53,000 homes have been sold to tenants under Right to Buy, and a voluntary Right to Buy scheme will give 1.3 million more families the opportunity to do so.

[Christopher Pincher]

Bovis Homes, a major employer in my constituency, commends Help to Buy as a tremendous initiative, but we all know that we need more small-scale developers in the supply chain to increase the supply of homes to which Help to Buy can apply. Does my right hon. Friend agree that large-scale developers franchising some of their plots to small and medium-sized developers is one way of getting those small-scale developers into the supply chain?

[Greg Clark]

I do agree with my hon. Friend. One of the effects of the financial crash was that many small builders left the industry, and we need to get them back and involved. My hon. Friend has a good idea. The direct commissioning scheme that we have announced, whereby we can carve up public sector land into small plots so that small builders can take advantage of it, will be a big step forward, too.

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

We should have an end to these excuses. There is a generation in the rented sector who have no hope of owning their own homes. Is it not about time that we had some bold, imaginative policies? How many new towns are there? How many new generations of building are going on? How many houses are being built in Ebbsfleet, for example, which is supposed to be a new town? Will the Secretary of State answer that?

[Greg Clark]

Over the last five years, home ownership, and particularly house building, has been revived from the crash that happened under Labour. The hon. Gentleman should welcome the planning reforms that we made, which have increased planning permissions by 50%. He should welcome the introduction of starter homes to give first-time buyers a foot on the housing ladder. He should welcome the extension of Help to Buy, which has helped so many people to achieve their dream of a home of their own.

[Antoinette Sandbach (Eddisbury) (Con)]

Right to Buy does not apply to rural exception sites. Does the Secretary of State therefore agree that affordable housing in rural areas is absolutely key?

[Greg Clark]

I do agree with my hon. Friend. In providing homes in all communities for all types of people we need to make sure that we have diversity of tenure, especially in rural areas. My hon. Friend is right.

[Andy Slaughter (Hammersmith) (Lab)]

The idea that any of these schemes are affordable is an Orwellian myth. In my constituency, people need an income of £70,000 to be able to get an affordable home, and that is going up to £90,000 before long. To whom is that affordable?

[Greg Clark]

I do not think the hon. Gentleman does a good service to his constituents. He should know that under the combination of Help to Buy and shared ownership, the deposit that a London first-time buyer can be required to pay on the average price paid of £385,000 is as low as £4,800. The hon. Gentleman would do his constituents a service by promoting these schemes to them.

[Robert Neill (Bromley and Chislehurst) (Con)]

I welcome my right hon. Friend’s comments about the importance of the small and medium-sized building sector. Does he agree that one of the most damaging things that could happen to that sector’s involvement in London would be the imposition of a 50% affordable housing target across sites, which would have no relation to the viability? As experienced under Ken Livingstone, this would actually drive developers away from bringing sites forward.

[Greg Clark]

I completely agree with my hon. Friend. It is not a matter of speculation but a matter of fact, because, as he says, the last Mayor tried that, and the amount of available housing in London fell. We want to provide homes for Londoners. The present Mayor has an exemplary record in providing affordable homes—indeed, homes of all types—ahead of the targets, and the £400 million that is being invested in the 20 housing zones across London is a tribute to his tenacity.

[Ben Howlett (Bath) (Con)]

I am pleased to say that hundreds of families in my constituency, and in the local authority area of North East Somerset, have benefited from the Help to Buy and Right to Buy schemes, but young families still cannot get on to the housing ladder because of the high cost of housing. Will the Secretary of State meet me, and other Members whose constituencies contain high-value areas, and will he undertake to roll out the two-for-one guarantee in those areas?

[Greg Clark]

I will certainly meet my hon. Friend and his colleagues. It is essential for homes to be built in every community, so that young people and rising generations throughout the country have a chance to continue to be part of the communities in which they were born and raised.

[Mr Speaker]

Mr Stephen Pound? Not here. Where is the fellow?

[Ms Karen Buck (Westminster North) (Lab)]

4. What plans he has to improve conditions for tenants in the private rented sector.

[Vicky Foxcroft (Lewisham, Deptford) (Lab)]

5. What plans he has to improve conditions for tenants in the private rented sector.

[The Minister for Housing and Planning (Brandon Lewis)]

I believe that all tenants should have a safe place in which to live. In the Housing and Planning Bill, the Government have introduced the strongest ever set of measures to protect tenants and ensure that landlords provide good-quality, safe accommodation.

[Ms Buck]

According to a freedom of information inquiry that I carried out last year, only 14,000 of a total of 51,316 complaints made to councils about poor housing were subjected to a local authority environmental health assessment, and, on average, councils prosecuted only one rogue landlord every year. Is it not irrefutable that local authorities lack the resources, certainly, and the will, in some cases, to take action against rogue landlords? What possible grounds can the Minister have for resisting a modest change that would allow tenants to take legal action against landlords who let homes that are not fit for human habitation?

[Brandon Lewis]

The hon. Lady is right, in that local authorities should be using the powers that they have. As I have said, there is already a requirement for properties to be fit and proper, and she may wish to welcome the extra £5 million that we have added to the £6.7 million that we have already invested to support it. However, if she looks at the changes in the operation of fines in the Housing and Planning Bill, she will see that the amount of resources for local government will be beyond anything that we have ever seen before, and certainly beyond anything that the Labour Government ever did.

[Vicky Foxcroft]

Much of what the Minister said is not what I am hearing from constituents. Many of those who come to see me speak of substandard homes which are damp and cold and have not been subjected to gas and electricity safety checks, and many are afraid of dealing with their landlords because they fear being evicted. What will the Minister do about that? Does he now regret not supporting Labour’s amendment to the Housing and Planning Bill, which would have ensured that landlords only let properties that were fit for human habitation?

[Brandon Lewis]

I hope that the hon. Lady will join me in insisting that her local council takes its duty seriously and deals with the situation. The Bill will enable councils to issue civil penalties amounting to up to £30,000 and remedy payment orders for up to 12 months. That will give them a resource that they have never had before, and one that I hope they will endorse and use. [Interruption.]

[Mr Speaker]

I must say that there are sounds of some very heavy breathing. I call Mr Mark Prisk.

[Mr Mark Prisk (Hertford and Stortford) (Con)]

While the hon. Member for Westminster North (Ms Buck) is right to draw attention to the difference in the enforcement of existing regulations, neighbouring councils with the same resources often enforce the regulations in radically different ways. May I encourage the Minister not only to promote the best practice in enforcement, but, most important, to challenge councils that are failing to use the powers that they have?

[Brandon Lewis]

My hon. Friend has a wealth of experience in this field, and, as always, he speaks with great common sense and logic. Local authorities should be using the powers that they have. By far the majority of landlords provide a good service, but authorities should be using those powers to crack down on the rogue landlords whom all of us, including good landlords, want to see driven out of the system.

[Mr Stewart Jackson (Peterborough) (Con)]

May I commend the Government for taking the toughest action on rogue landlords in a generation in the Housing and Planning Bill? On the provision of private sector rented housing, will the Minister give me an undertaking that he will continue to work, on a cross-party basis if necessary, to develop residential estate investment trusts, on which there has been a commitment from both parties over the years, and work with the Treasury to bring forward proposals for private sector housing, particularly in areas with affordability issues?

[Brandon Lewis]

My hon. Friend makes a good point, and we are working right across government on the institutional investments. I can tell the House that the estates regeneration panel that the Prime Minister has set up will be meeting for the first time tomorrow and will be looking at all these issues in that context as well.

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

Many of the 33% of my constituents who rent privately have been the victim of revenge evictions. Shelter has estimated that in a calendar year 4,000 people in my constituency were victims of revenge evictions and 200,000 people across the country suffered from rogue landlords. The Minister has been speaking about how much work the Government have been doing, but will he clarify what impact the law that was brought in last year has had on the number of revenge evictions across the country?

[Brandon Lewis]

It is clearly a matter for local authorities to use those powers to crack down on rogue landlords and to ensure that they are providing the right services. It is just a shame that the Opposition did not support those measures in the Housing and Planning Bill.

[Matt Warman (Boston and Skegness) (Con)]

In my constituency, some of the worst landlords have been prosecuted by Boston Borough Council, and the Department for Communities and Local Government has recently awarded it a £74,000 grant to keep up that good work. Does the Minister agree that when councils are proactive, there are resources available for them to enable them to be more proactive?

[Brandon Lewis]

My hon. Friend is right. He has given us an example of a good council looking to do the right thing by its local residents by ensuring that they are well protected and well served, using the extra funding that we have put in. In addition, local authorities will be able to impose the new £30,000 civil fines when the Housing and Planning Bill gets Royal Assent, and it is a shame that the Opposition did not support that measure. It will mean that councils will be able to do more in this regard than ever before.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

6. What recent discussions he has had with Ministers of the Scottish Government on the Aberdeen city region deal.

[The Parliamentary Under-Secretary of State for Communities and Local Government (James Wharton)]

On 28 January, the Government, along with the Scottish Government and the local leadership in Aberdeen were able to announce the Aberdeen city deal heads of terms. The deal includes an investment fund of up to £250 million. This shows the investment going in and the support being delivered for our economy in Aberdeen, just as it is across the country as a whole.

[Dr Whitford]

With the Treasury having received more than £300 billion from North sea oil revenue over the past 40 years, and given that the current low oil price is being aggravated by deliberate under-pricing, including by our “friends” in Saudi Arabia, does the Minister not think that the UK Government should at least match the £250 million given by the Scottish Government, instead of offering just £125 million to help the region through this difficult time?

[James Wharton]

Most people welcome the Aberdeen city deal, the significant investment that is going in and the joint working that it demonstrates between the British Government and the Scottish Government to make a real difference and to drive forward the economy in Aberdeen, which faces some of the challenges of which the hon. Lady speaks. It underlines the fact that we really are better together.

[Alison Thewliss (Glasgow Central) (SNP)]

I would first like to offer the condolences of the Scottish National party to the family and friends of Harry Harpham. He was passionate about housing, and he would no doubt have wanted to be here today to question the Government.

The Aberdeen city and shire deal submitted a bid for £2.9 billion of investment, but that ambition was not matched by the Tory Government, who stumped up only £125 million for the deal. Can the Minister understand why the people of Aberdeen city and shire feel disappointed and let down by this Tory Government?

[James Wharton]

Agreeing a city deal, with £125 million added to the other money that is going in, which is wanted by local people and delivered in co-operation with local partners, should be welcomed. It will drive forward growth, and it is something that a number of other areas would be very keen to secure if they could do so.

[Alison Thewliss]

This Government are not providing a 50:50 basis for this deal. In fact, the Scottish Government are contributing £379 million to it. Will the Minister and his Government respond to calls from the Cabinet Secretary for Infrastructure, Investment and Cities and stump up the additional £200 million that Aberdeen so clearly needs?

[James Wharton]

When I saw that this was an area of questioning with which we would be dealing today, I had hoped the questions would focus on the great positivity that has surrounded the announcement, which is characteristic of the working together that has got us to a place where the heads of terms on this deal have been announced. This deal will make a real difference and it is only possible because of the contribution the British Government have made, alongside the Scottish Government, working with local partners. It is a welcome deal—it is a welcome deal in Aberdeen and it should be welcomed by Scottish National party Members rather more than it appears to be at the moment.

[Martyn Day (Linlithgow and East Falkirk) (SNP)]

7. What progress has been made on the Edinburgh and South East of Scotland city deal.

[The Parliamentary Under-Secretary of State for Communities and Local Government (James Wharton)]

This question underlines the point I was making about how other areas would like city deals, too. We have to work together to deliver city deals and we have to ensure that they are properly thought through, but we will continue to have those discussions and continue to work together to deliver something that can make a real difference. I am sure the hon. Gentleman will continue to be a passionate advocate for it.

[Martyn Day]

This city region deal was submitted in September, with further information being submitted to both the UK and Scottish Governments on 18 December. Local government received a draft set of terms of reference from the UK Government, which was responded to in early January, but despite follow-up, it is still to hear anything further back. Can the Minister confirm whether a deal will be in place prior to the purdah period for the Scottish Parliament elections?

[James Wharton]

The Edinburgh and South East Scotland city deal is another important area of potential growth. The discussions are important, as this has to be done properly. The discussions have to be detailed, going through the opportunities as well as the costs. Given what has been achieved in Aberdeen, it is no surprise that the hon. Gentleman is keen to secure a city deal for his area, too. We will continue to have those discussions, and if the right deal can be reached, we will look to deliver on it.

[Deidre Brock (Edinburgh North and Leith) (SNP)]

The Government committed £500 million to the Greater Cambridge city deal—or 50%. Following the news that only 25% of Aberdeen and Shire’s deal was funded by Whitehall, may I ask what percentage of the Edinburgh and regions deal the Minister will be committing?

[James Wharton]

As I said, those discussions are ongoing and we will see what conclusion they reach. What is welcome is the recognition across the House that city deals can make a real difference and the recognition in those communities and economies of the value they can bring and of the growth they can generate. We will continue in those discussions. I hope we will reach a conclusion that will be welcomed by hon. Members from across the House, but I am confident that the city deals, as a whole, are making a real difference and will continue to do so.

[Wendy Morton (Aldridge-Brownhills) (Con)]

8. What support his Department is making available for the use of brownfield sites.

[Pauline Latham (Mid Derbyshire) (Con)]

9. What support his Department is making available for the use of brownfield sites.

[Andrew Stephenson (Pendle) (Con)]

15. What support his Department is making available for the use of brownfield sites.

[The Minister for Housing and Planning (Brandon Lewis)]

We are committed to fulfilling our manifesto commitment of supporting development on brownfield land. To that end, we are creating a £2 billion long-term housing development fund to unlock housing on brownfield land, and we are determined to make sure that we get 90% of that land with planning permissions by 2020.

[Wendy Morton]

I am grateful to the Minister for that answer. In my constituency, we place great importance on the amenity that the green belt provides to our communities. What support is his Department providing to metropolitan boroughs to unlock brownfield sites for modern commercial as well as housing development, in order to afford further protection to the encompassing green belt?

[Brandon Lewis]

My hon. Friend is right to say that we want to make sure we are protecting the green belt, and the national planning policy framework does just that. This £2 billion fund will make that brownfield land more attractive, as will planning permission in principle, once the Housing and Planning Bill goes through. This is about making sure we do everything we can to get those brownfield land areas developed for the benefit of our local communities.

[Pauline Latham]

Celanese is a very large brownfield site in Spondon in my constituency that is not included in Derby City Council’s core strategy, because it says that it will not be ready for development until at least 2028. The company on the site, however, says it will be ready by 2018. Does the Minister agree that local authorities should be doing more to utilise these sites through the funding that the Government have announced is available and increasing their efforts to make things ready for development?

[Brandon Lewis]

My hon. Friend, who is working passionately for her local community to make sure that brownfield land is appropriately and properly used, will appreciate that I cannot comment on the particular local plan that is at examination stage. It is true to say, however, that a local authority should be working with its local community to make sure that appropriate brownfield land, with a good understanding of its availability, is brought forward at the earliest opportunity and can take advantage of this new £2 billion fund as well.

[Andrew Stephenson]

Pendle has 46 hectares of brownfield land, 40 hectares of which is assessed as suitable for housing, yet just days ago Labour and Lib Dem councillors voted through an application to build 500 homes on a greenfield site in Barrowford in my constituency. I am a strong supporter of localism, but how can the Government make councils such as Pendle Borough Council step up to the challenge of brownfield development, rather than just taking the easy option and building on our green fields?

[Brandon Lewis]

My hon. Friend highlights a good case. I know that, with his support, the previous Conservative-led Administration in Pendle was passionate about delivering on brownfield land. We want to see 90% of that land given planning permission. The best route is for the local community to take note of what the authority does and to let it know exactly what it thinks at the ballot box next time round.

[Mr Clive Betts (Sheffield South East) (Lab)]

I join you, Mr Speaker, in paying tribute to my friend and colleague, Harry Harpham, who will probably be the last coalminer elected to the House. As you rightly said, despite the seriousness of his illness, he was still here three weeks ago arguing passionately for the steelworkers and steel industry in Sheffield. It was a fitting culmination to years of dedicated service to the people of Sheffield. That service included the delivery of the decent homes programme, from which thousands of our tenants have benefited.

There are many brownfield sites in the Don Valley in Sheffield on which more than 1,000 homes could be built. The problem is that the land is subject to flooding. Sheffield City Council has identified £40 million towards a £60 million flood prevention programme. Will the Minister ask his officials to liaise with officials from the Department for Environment, Food and Rural Affairs and city council officers to find a joined-up approach to ensuring that this land can be safeguarded and that those 1,000-plus homes can be built on the available brownfield land?

[Brandon Lewis]

Yes, the hon. Gentleman outlines a good example of where everybody could work together in the best interests of the community and to see more housing built, and I am happy to organise that meeting. I will make sure I have that conversation with him and the local authority.

[Rachael Maskell (York Central) (Lab/Co-op)]

York desperately needs family and social housing, yet the council plans to build predominantly high-value units on the 72 hectare “York Central” brownfield site, which will go no way to addressing our housing crisis. Will the Minister meet me to discuss the principle of York First and putting the interests of the city ahead of asset housing?

[Brandon Lewis]

As the hon. Lady will appreciate, it is absolutely right that local communities can make local decisions about what is right for them and that her local authority can look at its local housing need and make a decision about what is right for it, as it is looking to do in York.

[Tristram Hunt (Stoke-on-Trent Central) (Lab)]

In 2012, the Secretary of State told the House that the new planning policy framework offered “clear and unequivocal” protection of the green belt, yet the number of green-belt approvals has increased fivefold in the last five years under this Government. The new permission in principle powers in clause 102 of the Housing and Planning Bill will only further undermine the green belt. When will the Government put urban regeneration first, rather than ex-urban sprawl?

[Brandon Lewis]

Through the national planning policy framework and the guidance that has come out since, we have actually strengthened green-belt protection. With the new planning permission in principle, the new requirement for a brownfield register and the £2 billion fund, we are going further than any Government before in making sure that brownfield sites are developed first.

[Stephen Hammond (Wimbledon) (Con)]

Will the Minister agree that the plan of my hon. Friend the Member for Richmond Park (Zac Goldsmith) to drive the London Land Commission to force local authorities to bring forward unused land will secure the homes that Londoners need and protect the environment and give London the quality of environment it deserves?

[Brandon Lewis]

My hon. Friend outlines the sensible and productive approach that has been outlined by my hon. Friend the Member for Richmond Park (Zac Goldsmith), who I hope will be the next Mayor of London, to make sure we deliver more housing for London. As the joint chair of the London Land Commission, I look forward to working with him.

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

Does the Minister understand the plight of the residents of Haughton Green, an urban village in my constituency, who, under the Greater Manchester Combined Authority’s spatial framework, have seen every remaining piece of open green space in that area identified for future development? Is it not time we had a planning system that worked for the people of Haughton Green?

[Brandon Lewis]

The hon. Gentleman’s council is represented on that authority, so I would hope it has a voice. I am also co-chairing the Manchester Land Commission, and I will certainly raise that point with the Labour interim panel chair and Mayor.

[Mims Davies (Eastleigh) (Con)]

10. What steps his Department is taking to support communities in setting up neighbourhood plans.

[The Minister for Housing and Planning (Brandon Lewis)]

Our £22 million support programme for neighbourhood planning for 2015-18 provides neighbourhood planning groups with online resources, an advice service, grants and technical support in priority areas. Furthermore, the Housing and Planning Bill will speed up and simplify the neighbourhood planning process.

[Mims Davies]

I thank the Minister for his important answer. Having failed to deliver the first time, the Liberal Democrat-led Eastleigh borough council is now consulting on its new and somewhat controversial draft local plan document. Does the Minister agree that the best possible solution for my constituents is to have a suitable and properly supported local plan, and to back parishes such Botley on their community created neighbourhood plans, as there is currently none going to referendum in Eastleigh?

[Brandon Lewis]

My hon. Friend makes a very good point, and I am pleased to reassure her constituents that if they go forward with a neighbourhood plan, it will have weight in planning law, and if the local authority is failing to do its duty by its local residents in the community then the neighbourhood plan is the best way to proceed.

[Liz McInnes (Heywood and Middleton) (Lab)]

A number of neighbourhood plans have failed because of insufficient evidence, unrealistic expectations and a failure to meet European environmental requirements. What help is the Department giving those formulating these plans to ensure that they meet the standards set down by the independent examiners?

[Brandon Lewis]

As I outlined in my initial answer, we not only have online resources and advice services, but give grants of up to £8,000, with a further £6,000 in particularly difficult areas. Workshops are also going out around the country, and the National Association of Local Councils is talking through its parish council network about how the system works. I gently say to the hon. Lady that every single neighbourhood plan that has gone to referendum has passed with a huge majority.

[Mr Philip Hollobone (Kettering) (Con)]

Might it not be a good idea to highlight an exemplar neighbourhood plan in each shire area, which could be specifically rolled out across that county, to encourage more parish councils in particular to get involved?

[Brandon Lewis]

As is often the case, my hon. Friend raises a very good idea, and I will take it forward. I will be talking to the group that is going out and doing this kind of work and sharing best practice around the country. It is a good idea for local authorities to look at what others have done locally, and we will certainly do our best to take up his idea and to promote it further.

[Kelvin Hopkins (Luton North) (Lab)]

12. What recent assessment he has made of trends in the level of demand for social care services.

[The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)]

We have provided up to £3.5 billion of funding to meet the demographic pressures on social care. This is significantly more than the £2.9 billion that the Local Government Association estimated was needed.

[Kelvin Hopkins]

When will the Government accept that the problems of social care will be overcome only when there is a comprehensive and publicly provided system of social care for all, which is free at the point of need? I am talking about a national care service, exactly parallel to and integral with the national health service—a true public service free of privatisation.

[Mr Jones]

This Government are absolutely committed to the full integration of health and social care by 2020, and we will require all areas to have a clear plan for achieving that by 2017. The hon. Gentleman will also be interested to know that, by the end of the decade, the spending review does include more than £500 million for the disabled facilities grant, which is more than double the amount this year. That will fund around 85,000 home adaptations by that year, and is expected to prevent 8,500 people from needing to go into a care home by 2019-20.

[James Morris (Halesowen and Rowley Regis) (Con)]

17. Adult social care will be one of the biggest challenges that we face over the next several decades. Does the Minister agree that more needs to be done to integrate health and social care, particularly building on the success of the Better Care Fund, to encourage local authorities to work with local health providers to come up with innovative solutions for adult social care?

[Mr Jones]

I know that my hon. Friend is a real campaigner on this issue. As he identifies, the Better Care Fund is paying dividends. We are seeing significant joint working through the Better Care Fund, which, in many areas, is reducing delayed transfers of care from hospital. We are absolutely intent on spreading best practice around all areas of the country. Plans are also in place to improve areas that are the most challenged.

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

I am afraid that what we have just heard is nonsense. Government funding for social care falls far short of what is needed. Directors of adult social services tell us that £4.6 billion has already been cut from adult social care, and the gap is growing at £700 million a year. The social care precept will raise only £400 million a year, and the Better Care Fund, which the Minister mentioned, does not start until next year, at £105 million a year. Government Ministers must consider that they are risking the collapse of social care because their funding is too little and too late.

[The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)]

The funding coming into the Better Care Fund—£1.5 billion—is all new money for adult social care, and it is going directly to local authorities. The absolute key is the integration of health and social care, and as I have set out to the hon. Member for Luton North (Kelvin Hopkins) and my hon. Friend the Member for Halesowen and Rowley Regis (James Morris), the Government are determined to achieve that integration.

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

Does the Minister agree with the Conservative council leader who covers his constituency and who was recently quoted in the press as saying that inadequate Government funding has left his local council struggling to provide adult social care services?

[Mr Jones]

First, I welcome the hon. Lady to the Dispatch Box. I heard what she said about the Conservative leader of my local authority, Warwickshire County Council. I speak to the lady to whom she referred at all times. [Interruption.] Well, what I would say is that Warwickshire County Council set a sustainable budget last week, and was able to do that by protecting social care services.

[Karen Lumley (Redditch) (Con)]

13. What assessment he has made of the effect of the Syrian refugee resettlement programme on the resources required by local authorities.

[The Parliamentary Under-Secretary of State for Refugees (Richard Harrington)]

Resettlement costs for year one are funded by the Department for International Development through the official development assistance budget. At the spending review, we announced a further £129 million towards local authority costs in years two to five. This amount was calculated after consulting the Local Government Association and local authorities with experience in this field on the likely costs that they would incur in being part of our Syrian refugee resettlement programme.

[Karen Lumley]

I am working hard with my council leader, Bill Hartnett, to provide refuge for two Syrian families in Redditch. Does my hon. Friend agree with me that that is the right thing to do, and will he reassure local people that it will not be paid for by local council tax, as there is some concern in my town about that?

[Richard Harrington]

I thank my hon. Friend and the leader of Redditch Borough Council for the part they have played in the joint bid with Worcestershire County Council. As they are aware, we work closely with local authorities to ensure that capacity is identified as suitable for that area, and I again confirm to my hon. Friend that the funding available through the spending review will go a long way towards funding the resettlement of Syrian refugees.

[Keith Vaz (Leicester East) (Lab)]

I commend the Minister on being the first Home Office Minister in living memory to set a target for resettlement and meet that target. However, there are still another 19,000 Syrian refugees to be resettled before the next election, and the number of other asylum seekers has risen from 9,000 to 17,000. Where are we going to find that accommodation?

[Richard Harrington]

Mr Speaker, excuse me, but to be complimented by the Chairman of the Select Committee on Home Affairs puts one off one’s stride at the Dispatch Box. I remind the right hon. Member for Leicester East (Keith Vaz) that the refugee scheme for which I am responsible very much requires the good nature of local authorities. That, together with the asylum programme, is important to us, and I am pleased to say that the demand for places from refugees equals the supply.

[Mr Speaker]

I understand the Minister. It is humbling indeed to be praised by someone of the exalted status of the right hon. Member for Leicester East (Keith Vaz).

[Andrew Bridgen (North West Leicestershire) (Con)]

14. What estimate he has made of the average difference in council tax paid by residents of urban and rural areas.

[The Secretary of State for Communities and Local Government (Greg Clark)]

The average council tax has long been higher in rural areas than in urban areas. In response to the consultation on the local government financial settlement, several councils and hon. Members have pointed out the extra costs of providing services in rural areas—something that I am determined to address.

[Andrew Bridgen]

Figures from the rural fair share campaign show that those who live in urban areas receive 45% more funding than their rural counterparts, while at the same time those rural residents pay on average £81 more in council tax. Does my right hon. Friend agree that my constituents have every right to feel aggrieved about that inequality? What steps will the Government take to address that issue?

[Greg Clark]

I have been looking carefully at the responses to the consultation on local government finance, including that from Leicestershire, which seems to make a perfectly reasonable point that the essential requirement is that the underlying formula should reflect the different costs of providing services in different places. If my hon. Friend is patient and comes back a little later, I shall have more to say then.

[Fiona Mactaggart (Slough) (Lab)]

Is it not a fact that in practice, despite their rhetoric, Conservative councils are charging more than Labour councils? That is what the question from the hon. Member for North West Leicestershire (Andrew Bridgen) conceals.

[Greg Clark]

It is a long-established fact that Conservative councils offer lower council tax than Labour councils, which accounts for their success and their majority in local government.

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

Can my right hon. Friend say whether the gap between urban and rural authorities is widening? If it is widening in favour of urban authorities, will not the council tax payers in rural authorities, who are going to see their council tax rise considerably over the next three years, have to conclude that they are subsidising higher-spending urban authorities?

[Greg Clark]

My hon. Friend knows that we are moving to a world in which councils will be funded by council tax and business rates. It is essential that the formula underpinning that is fair to all types of authority. That has been very clear in representations that he and others have made.

[Mr Steve Reed (Croydon North) (Lab)]

The Tory election manifesto promised to keep council tax low, so will the Secretary of State explain to the House why he has just written to town halls up and down the country saying that he expects them to force council tax up by more than 20% over the next four years?

[Greg Clark]

I have written no such letter. I remind the hon. Gentleman that council tax doubled under the previous Government. On all the forecasts that we have made, it will be lower in real terms than it was at the beginning of the last Parliament.

[Mr Speaker]

Last but not forgotten, I call Paula Sherriff.

[Paula Sherriff (Dewsbury) (Lab)]

16. What steps he plans to take to support high streets.

[The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)]

We are committed to ensuring that high streets remain at the heart of their community. We have introduced a £1.4 billion package of support, which includes business rate relief, help for small business, measures to tackle over-zealous parking enforcement, and practical changes to simplify the planning system.

[Paula Sherriff]

May I associate myself with the comments regarding Harry Harpham? He was a dear friend, a good and decent man, and we will miss him very much indeed.

A week before the general election, the Chancellor told the Dewsbury Reporter that within the first 100 days of a Tory Government, the town would be added to a list of enterprise zones in which new businesses would be spared business rates for the next five years. Will the Minister confirm that nine months into a Tory Government, there is no enterprise zone in my constituency, and local businesses on our high street are still paying full rates? Will he offer an apology to local people who were promised one thing when the Chancellor wanted their votes, and got quite another once he was in office?

[Mr Jones]

We are committed to supporting high streets. High street vacancy rates are at their lowest since 2010. Investment in high street property is up by 30%, and where areas are doing the right things, they are seeing people return to their high street. That was seen through the Great British High Street competition. There are a number of winners from Yorkshire, and I am sure that people in Dewsbury will be able to take tips from around Yorkshire so that they can improve their high street.

[Mr Speaker]

I call Mr Geoffrey Robinson. Not here.

[Joan Ryan (Enfield North) (Lab)]

T2. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Communities and Local Government (Greg Clark)]

Since the beginning of January, the Cities and Local Government Devolution Bill has been enacted and given Royal Assent, the Housing and Planning Bill has passed its Third Reading, the voluntary housing association right to buy has been launched in five areas, and direct commissioning of housing has been launched.

I take this opportunity to pay tribute to the life and work of Mrs Hazel Pearson OBE, who died on Friday at the age of 92, having retired as a Middlesbrough councillor only last year at the age of 91. She was a formidable leader of Conservatives in Middlesbrough, achieved much for her town and was greatly respected by all parties and by her community over 47 years of service. She represented everything that was best in public service.

[Joan Ryan]

Enfield has the fourth highest population figure of all London boroughs. The last census said we had seen a population increase of more than 14% in one decade. That rapid population growth is well above the national average and is not reflected in an increased funding settlement. I am grateful to the Under-Secretary of State for Communities and Local Government, the hon. Member for Nuneaton (Mr Jones), whom I met last month to discuss these matters. However, in the light of that meeting, and of submissions that have been made, what further measures are the Government willing to take to ensure there is a more equitable funding mechanism for boroughs in this situation?

[Greg Clark]

I understand the point the right hon. Lady makes, which is very reasonable. It is important that the funding that local government receives reflects the very latest information available in terms of the population. I have reflected on the representations that have been made in the consultation, and I will have more to say about that later.

[Johnny Mercer (Plymouth, Moor View) (Con)]

T3. In my city of Plymouth, local campaigns seem to regularly mislead my constituents on the spare room subsidy, something that many people see as a fair way of bringing about parity between the social and private rental sectors. I commend the Government, therefore, for making funds available for specific cases where the spare room subsidy is not appropriate. However, will the Minister confirm that Plymouth City Council has chosen to return that discretionary housing payment to central Government every year, so no one should be struggling as a result of this policy?

[The Minister for Housing and Planning (Brandon Lewis)]

My hon. Friend highlights the interesting point that a local authority is sending this subsidy back and then claiming that it cannot look after people. That local authority should be answering to local people, doing the right thing and using the subsidy for the purpose the Government set out in the first place.

[John Healey (Wentworth and Dearne) (Lab)]

The Secretary of State will know that one of the many proud achievements of the last Labour Government was the rise in the number of families able to realise their dream of owning their own home—the number was up by 1 million over 13 years. Will the Minister tell us what has happened to the number of homeowners since Conservative Ministers took charge in 2010?

[Brandon Lewis]

I find it interesting that the right hon. Gentleman raises this question, bearing in mind the fact that, as a Minister, he said he thought a fall in home ownership was not a bad thing. I disagree with him on that, as I do on other things. I think home ownership is something people aspire to, and we should support it. I am proud that the number of first-time buyers has doubled since 2010. Our work through the Housing and Planning Bill will take that further, and we must go further to support those aspirations.

[John Healey]

Let me repeat: the number of homeowners under Labour was up by 1 million. Since 2010, it is down by 200,000. For young people, it is now in free fall, and they have little or no hope of ever being able to buy their own homes. Never mind the spin or short-term policies, the Minister has no long-term plan for housing. That is why I have commissioned the independent Redfern review to look at the decline in home ownership. We would welcome evidence from Ministers, but will the Minister at least agree to look at the review’s findings, so that five years of failure on home ownership do not turn into 10?

[Brandon Lewis]

Coming from somebody who oversaw the lowest level of house building since roughly 1923, that was interesting, particularly as the Redfern review is being led by Pete Redfern of Taylor Wimpey, who has called for an end to Help to Buy—the very product that is helping tens of thousands more people into home ownership. Perhaps the right hon. Gentleman is about to tell us that the Labour party will end Help to Buy, which is helping so many people. It is a shame that he and his party voted against the Housing and Planning Bill, which will deliver starter homes through increased Help to Buy. These measures will make sure that more homes are built for those who are working hard and who aspire to own their own homes—the very people let down by the crash under Labour.

[Stuart Andrew (Pudsey) (Con)]

T4. What advice does my hon. Friend have for groups such as the Aireborough neighbourhood forum in my constituency, which finds itself in a constant fight with its local authority in trying to make progress? In this instance, Leeds City Council appears to be ignoring Government advice on brownfield sites, without any consequences.

[Brandon Lewis]

Having met some of my hon. Friend’s constituents, I know they are very keen, and he has been supporting them strongly on their neighbourhood plans. Those should move forward, and we are putting in funding to support them. That gives them weight in law. This is a really good way for people to have control over local development opportunities if the local authority, in its local plan, is letting them down in the way my hon. Friend argues it is.

[Mr Speaker]

Dr Alan Whitehead—not here.

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

What does the Minister estimate the total percentage rise for residents of Birmingham will be once the Chancellor’s social care tax, the increased police precept and the 1.9% council tax are added together?

[Mr Marcus Jones]

The core spending power figures that we released just before Christmas and have just consulted on do not take into account authorities putting their council tax up to the maximum referendum principle. Council tax in Birmingham is a question for Birmingham City Council. However, my right hon. Friend the Secretary of State was absolutely right to say that we should not take any lectures from Labour Members on the council tax because while they were in power for 13 years council tax doubled.

[Karen Lumley (Redditch) (Con)]

T8. Will my hon. Friend confirm that if the people of Redditch want to be a full member of the west midlands combined authority, they will also be able to take part in directly electing a mayor?

[The Parliamentary Under-Secretary of State for Communities and Local Government (James Wharton)]

I thank my hon. Friend for that question. She is a passionate advocate for the people of Redditch. Whenever I see her, she does a very good and effective job of explaining why she has a desire to pursue this matter and ensure that her constituents will get a say if appropriate and at an appropriate time. I can confirm that were Redditch to become a full member of the combined authority, then yes, people would have a vote in the mayoral election, although of course it would be done only by local agreement. As this Government have pursued matters throughout devolution, we want to build consensus and work with local people to find deals and structures that meet their ambitions.

[Kirsty Blackman (Aberdeen North) (SNP)]

T6. Aberdeen has supported oil, with our residents having to put up with the bad and the good that comes with this. The UK Government have tried to tell Aberdeen that their £125 million of investment will inspire hundreds of millions of pounds of investment from currently hard-pressed Aberdeen businesses. What will the UK Government be doing to encourage businesses in Aberdeen that are suffering, along with the rest of us, to stump up cash?

[James Wharton]

I thank the hon. Lady for her important question, which ties in with the discussion we have already had about the Aberdeen city deal and the significant amount of money that is going in from the British Government in Westminster and the money that is going in in partnership with the Scottish Government, local authority leadership, and the local leadership of the business community in Aberdeen. We intend to ensure that the deal brings real growth and benefit to Aberdeen. We recognise the challenges that it faces because of the price of oil and other factors that affect its local economy, but we are determined, with local people who understand what is needed, to drive change and to do everything we can to support its economy.

[Bob Blackman (Harrow East) (Con)]

T9. Under Mayor Livingstone, the number of new housing starts in London plummeted as a direct result of developers walking away from unaffordable sites, thanks to the 50% affordable housing target. What does my hon. Friend think would happen if the new Mayor were to introduce a 50% affordable housing target?

[Brandon Lewis]

As my hon. Friend outlines, the evidence shows that those kinds of targets, if they are not appropriate for the local area, distort viability, meaning that developments do not go forward and we do not get the houses built that we need. Local areas have to look at what is right for them and make sure it is viable. My fervent hope is that we have a very sensible Mayor of London in my hon. Friend the Member for Richmond Park (Zac Goldsmith), who will take forward an increase in housing supply.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

T7. The Inverness city deal from Highland Council is based on the idea of a region for young people. The Highlands area has, over many decades, seen a drain of young people. Much work has been done to address this, including the opening of the Inverness campus, but more needs to be done to attract and retain young people. A plan such as the one put forward can help to rebalance the population demographic. Does the Minister agree that the aims of the plan and the statement of intent are worthy of support?

[James Wharton]

The hon. Gentleman is diligent in raising this issue, which we have discussed in the Chamber before. I think he recognises, as I do, the value that these sorts of deals can bring and the difference they can make. I recognise his comments and the importance that he attaches to this as a diligent local Member of Parliament, and I will certainly take it away and look at it. I cannot pre-announce deals at this Dispatch Box today. However, we continue in discussions and we are determined to deliver where the deal is the right one, and his effective advocacy is helpful in pursuing that ultimate objective.

[Helen Whately (Faversham and Mid Kent) (Con)]

T10. Only 94 of 1,600 asylum-seeking children and care leavers in Kent have been taken in by other areas under the voluntary dispersal scheme. With more refugee children coming, how will my hon. Friend’s Department get local authorities across the country to accept their share of the asylum-seeking children who are already here?

[The Parliamentary Under-Secretary of State for Refugees (Richard Harrington)]

We hope that dispersal arrangements remain voluntary and are working with the Home Office, the Department for Education, the Local Government Association and the Association of Directors of Children’s Services on a national dispersal scheme for unaccompanied asylum-seeking children. Provisions in the Immigration Bill will underpin dispersal arrangements and, if necessary, enforce them.

[Barry Gardiner (Brent North) (Lab)]

I know that the Minister for Housing and Planning well understands the extraordinarily high cost of private sector housing in London, but does he understand the impact that the changes to the local housing allowance are having on residents in my constituency? Will he ask his departmental officials to provide data on the impact of those changes?

[Brandon Lewis]

If the hon. Gentleman reads the answer I gave earlier, he will see that we have already outlined a one-year delay. We are also looking at the implications before the 2018 introduction and are working closely on it with the sector at the moment.

[Kelly Tolhurst (Rochester and Strood) (Con)]

Medway Council is currently working on its local plan. Could the Minister give an update on the work of the expert panel, which was set up in September to help streamline the local plan process?

[Brandon Lewis]

I am happy to do so. As my hon. Friend outlines, we are determined to make sure that local areas can have a clear-cut, simple system to deliver local plans that give control to the local community, because they should be locally led. I look forward to seeing the panel’s feedback in the weeks ahead.

[Jenny Chapman (Darlington) (Lab)]

In response to questions asked earlier by Conservative Members about funding allocations for rural areas, Ministers hinted that they think there is some unfairness in the system. May I encourage Ministers to look at the issue again, because I agree that there is a great deal of unfairness? The funding in my borough in Darlington is being decimated and the cuts are devastating for the local economy, whereas the spending power of a similarly sized town, Wokingham, will be increased over coming years. That is fundamentally unfair. Will Ministers look at the issue again?

[Greg Clark]

I will respond on the provisional financial settlement shortly. It is important for every type of authority that its needs and the costs of providing services are properly met, and that is the Government’s objective.

[Michael Fabricant (Lichfield) (Con)]

My right hon. Friend is keen, as am I, on building on brownfield sites. With the closure of coal-fired power stations, including the possible closure of one in my constituency, what are we doing to encourage building on brownfield sites that include contaminated land?

[Greg Clark]

I am grateful for my hon. Friend’s question. In the spending review the Chancellor established a fund to decontaminate brownfield sites so that they can be made available for house building in the way that my hon. Friend recommends.

[Daniel Zeichner (Cambridge) (Lab)]

The Local Government Association is predicting that the Government’s pay-to-stay proposals will lead to some 60,000 council tenants leaving their homes. At the same time, councils are saying that they do not know how much their tenants earn. Will the Minister for Housing and Planning explain to councils how and why they should be asking their tenants how much they earn?

[Brandon Lewis]

As we have said throughout the progress of the Housing and Planning Bill, on the Floor of the House and in Committee, we are looking at tapering to bring this in and we are working with the sector itself. It is absolutely right that we come up with a deal that is also fair for taxpayers, to make sure that as people earn more and can afford to pay towards their home they do so in a way that always makes it pay to work.

[Kit Malthouse (North West Hampshire) (Con)]

I assume that the Minister is aware that Basingstoke and Deane Borough Council’s local plan is due for adoption this spring. Could he reassure the council’s planning committee that it can now start to make decisions in line with that plan, safe in the knowledge that the planning inspector will not overturn those decisions, thus protecting the countryside from speculative development?

[Brandon Lewis]

That is good news. My hon. Friend outlines another local plan that is in its later stages. I can confirm that, as a local plan gets to those later stages, it picks up more weight, so the local authority should be making planning decisions in line with the local plan. That is the right thing to do for local communities.

[Diana Johnson (Kingston upon Hull North) (Lab)]

What assessment have Ministers made of councils that introduce a 2% precept increase for social care? For those councils with a very low council tax base, that will not result in the funding required to ensure that social care continues at the level it should in areas such as Hull.

[Greg Clark]

Part of the settlement that was made in the spending review was to include this new council tax precept in addition to the better care fund. On top of the resources that councils already invest, we will be able to invest more than the Local Government Association requested for social care in advance of the spending review.

[Several hon. Members rose—]

[Mr Speaker]

Order. I am sorry, but we must now move on.

Junior Doctors’ Contract Negotiations

Monday 8th February 2016 Commons Chamber

15:34

[Heidi Alexander (Lewisham East) (Lab)]

(Urgent Question): To ask the Secretary of State for Health if he will make a statement on the junior doctors’ contract negotiations.

[The Parliamentary Under-Secretary of State for Health (Ben Gummer)]

I would be delighted to update the House on the junior doctors’ proposed industrial action. The Government were elected on a mandate to provide for the NHS the resources it asked for and to make our NHS a truly seven-day service. The provision of consistent clinical standards on every day of the week demands better weekend support services, such as physiotherapy, pharmacy and diagnostic scans; better seven-day social care services, to facilitate weekend discharging; and better primary care access, to help to tackle avoidable weekend admissions.

Consistent seven-day services also demand reform of staff contracts, including those of junior doctors, to help hospitals to roster clinicians in a way that matches patient demand more evenly across every day of the week. In October 2014, the British Medical Association withdrew from talks on reforming the junior doctors’ contract and, despite the fact that the Government asked it to return, did not start talking again until the end of November last year in talks facilitated by the Advisory, Conciliation and Arbitration Service. Throughout December we made very good progress on a wide range of issues and reached agreement on the vast majority of the BMA’s concerns.

Regrettably, we did not come to an agreement on two substantive issues, including weekend pay rates. Following strike action last month, the Secretary of State appointed Sir David Dalton, one of our most respected NHS chief executives, to take negotiations forward on behalf of the NHS. Further progress has been made under Sir David’s leadership, particularly in areas relating to safety and training. However, despite agreeing at ACAS to negotiate on the issue of weekend pay rates, Sir David Dalton has advised us that the BMA has refused to discuss a negotiated solution on Saturday pay. In his letter to the Secretary of State last week, Sir David stated:

“Given that we have made such good progress over the last 3 weeks—and are very nearly there on all but the pay points—it is very disappointing that the BMA continues to refuse to negotiate on the issue of unsocial hours payment. I note that in the ACAS agreement of 30 November, both parties agreed to negotiate on the number of hours designated as plain time and I hope that the BMA will still agree to do that.”

The Government are clear that our door remains open for further discussion, and we continue to urge the BMA to return to the table. Regrettably, the BMA is instead proceeding with strike action over a 24-hour period from 8 am this Wednesday. Robust contingency planning has been taking place to try to minimise the risk of harm to the public, but I regret to inform the House that the latest estimates suggest that 2,884 operations have been cancelled.

I hope that hon. Members from both sides of the House will join me in urging the BMA to put patients first, call off its damaging strike and work with us to ensure we can offer patients consistent standards of care every day of the week.

[Heidi Alexander]

There is so much that could be said about this dispute that it is hard to know where to begin, so let me ask the Minister four simple questions.

First, the Health Secretary says that his door is open to further talks with the BMA. What does that mean? Specifically, can the Minister envisage a new contract where the definition of plain time working at weekends applies only to a Saturday morning?

Secondly, if a negotiated solution to a new junior doctor contract cannot be found, will the Minister today rule out imposing one? Does he not see how harmful imposition would be to patients, given its impact on staff morale, the risk of a protracted period of industrial action and the implications for future recruitment and retention?

Thirdly, can the Minister confirm that the pay protection offered to one in four junior doctors means that those doing the equivalent jobs in the future will be worse off? Should we not value the junior doctors of tomorrow as much as we value those of today?

Fourthly, and finally, throughout the dispute Ministers have repeatedly conflated the need to reform the junior doctor contract with their manifesto commitment to a seven-day NHS. Can the Minister name a single chief executive who has told him that the junior doctor contract is the barrier to providing high quality care 24/7? If junior doctors are the staff group who have to change their working patterns least to deliver this, which other groups of NHS staff will need to have the definition of unsocial hours changed in their contracts during this Parliament?

In the past year, the Health Secretary has implied that doctors do not work weekends, insinuated that juniors are somehow to blame for deaths among patients admitted on Saturdays and Sundays, and insulted professionals’ intelligence by telling them they have been misled by the BMA. If he was here, I would ask him whether he regrets the way he has handled this dispute, but he has not even got the nerve to turn up.

No one is saying the existing junior doctors’ contract is perfect, but if you speak to anyone in the NHS, they will tell you that this whole episode has been an exercise in using a sledgehammer to crack a nut. It is time now for the Government to do what is right for patients, for staff and for the NHS.

[Ben Gummer]

The hon. Lady wonders where to begin. I would say to her that where we begin is with the promise made to the electorate to deliver seven-day services in order to make care more consistent through the week and thereby bring down the rate of avoidable deaths. That has been the aim of this Government—pursued in the guise of the previous coalition and by the current Government—for some years. The junior doctors’ contract, about which negotiations have been going on for some years, has been framed partly in that respect during that time.

The hon. Lady asks a number of questions, and I will answer them directly. She asks whether the door is open and whether the Secretary of State is willing to see further talks. Of course it remains open. Throughout the entire process—from back in the summer, when the BMA made it a point of principle not to return to talks—we have asked the BMA to come back to the negotiating table time and again. I have done so, as has the Secretary of State, so the door remains open. I hope that, in the coming days up to the strike, such contacts will continue.

The hon. Lady asks whether there can be discussions about Saturdays. The Secretary of State has made it plain throughout the process that every aspect of the contract is open for discussion. What is not up for discussion is the ability of hospitals to roster clinicians on a consistent basis through the week. The one group of people who are refusing to negotiate about Saturdays or anything to do with the extension of plain time is the British Medical Association. Despite its assurance—in fact, its promise—at ACAS at the end of the November that it wished to discuss this issue, it has now refused to do precisely that with Sir David Dalton. We are therefore left at an impasse, where I am afraid that on the one item left to discuss, which is Saturdays, it is refusing point blank to open a discussion because of what it calls an issue of principle. For us, the principle is patient safety, and that is why we will not move.

The hon. Lady’s second question was about the introduction of a new contract. At some point, the Government will need to make a decision. Time and again, we have extended the point at which we will introduce the new contract, precisely so that we can give time for talks to proceed, even though the BMA, in a disjointed manner, refused to discuss it for several years until this point. At some point, we will have to make the changes necessary to get consistency of service over weekends. We cannot delay this any longer. No Health Secretary or Health Minister could stand in the face of the many academic studies that have shown there is an avoidable weekend effect and say that nothing should happen. Of course this should be done in concert with other contract changes—changing the availability of diagnostics, pharmacy and other services—and we have always said that it is part of the piece, but it has to be done at some point and that point is fast approaching.

The hon. Lady asks whether imposition will be harmful to patients. I ask her to consider whether avoiding changing rostering patterns to eliminate the weekend effect would not itself be harmful to patients to the number of several thousand a year.

The hon. Lady asks about pay protection. We have urged the BMA to put to its members the pay protection that we made clear right at the beginning of the process, but I am afraid that it wilfully misled its members about the pay offer that we put on the table. I ask her, therefore, to be careful in what she says. For this cohort of junior doctors, this is a very good deal. Those who are coming into the service can be assured that they will have a quality of contract that the current cohort has not benefited from: a reduction in the maximum number of consecutive nights from seven to four; a reduction in the maximum number of consecutive long day shifts from seven to five; a reduction in the maximum number of consecutive long late shifts from 12 to five; and a reduction in the maximum number of hours one can work in a week from 91 to 72. Those are considerable improvements in the contract that will protect the safety and working practices of future generations of junior doctors.

When the hon. Lady wrapped up her remarks, she asked whether we had any regrets about the way this process has proceeded. We do have regrets. We regret that the BMA wilfully misled its members at the beginning of the process, making them believe that there was going to be a cut to pay and an increase in hours, neither of which was true. We certainly regret the fact that the BMA refused to talk to us for months on end, when many of these issues could have been dealt with. We certainly regret the fact that the BMA has gone back on its promise to discuss plain time hours—a promise made at ACAS that it has now reneged upon. I am afraid that in dealing with the BMA, we have not been able to address the matter that is most important to doctors, which is protecting patient safety. That is why, in the end, we will have to come to a decision on this contract for the betterment of patients and the consistency of clinical standards through the week.

[Dr Sarah Wollaston (Totnes) (Con)]

Under the current contract, too many junior doctors are forced to work excessive hours and are overstretched during the hours they work. Will the Minister, having set out that the hours will be reduced, reassure the House about what measures will be put in place to make sure that managers do not let this slip and that we do not return to the days of overworked junior doctors?

[Ben Gummer]

My hon. Friend is right that new measures have been introduced in the proposed contract. A new guardian role, which was proposed by NHS Employers, will help to protect the hours of junior doctors in individual trusts. That has been a point of success in the negotiation between the BMA and NHS Employers. A new fines system, which is not currently in place, will penalise trusts and ensure that the moneys that are generated by the fines go towards enhancing the general wellbeing and training of doctors within those trusts.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

Obviously, I am disappointed that it is not the Secretary of State we are speaking to today. The Minister referred again to weekend deaths. I gently point out that if one studies the evidence from Freemantle, one sees that there is a lower level of deaths at weekends. Perhaps we might be a bit more precise and say that we are talking about people admitted at weekends who die within the next 30 days.

I welcome the commitment to increase diagnostics and social care, as I think will everyone in the NHS, but junior doctors already work seven days and seven nights a week, so I really do not see how they can be the barrier to the safety of patients.

I do think that, on looking back, the Secretary of State and the Minister may regret how this matter has been handled. Right from last summer, it has been so combative. In October, when we debated the junior doctors, the Secretary of State was still refusing to go to ACAS, so this cannot all be put on the BMA. Doctors are not stupid; they are capable of reading what has been offered. Many of the junior doctors who have written to me have talked about the fear of hours getting out of control. When I was a junior doctor, the hours were ridiculous and it was the automatic financial penalty on trusts that changed things. It is important that their concerns are listened to and that they are not patronised, as they were on the Marr show yesterday. That has aggravated things further, and the way in which this process has been dealt with from beginning to end has been really disappointing.

We are facing the second day of strike for the first time in 40 years—that is my entire career. What does the Minister feel will be brought to the table by the Department of Health in the next few days to try to get out of this and to try a different approach? We do not have junior doctors on the streets in Scotland. He has to ask himself why we have them on the streets here.

[Ben Gummer]

The hon. Lady speaks from experience, and rightly points to the fact that avoidable mortality that is attributable to weekends is different from mortality at weekends—the Secretary of State has been clear about that in his public statements. However that gap does exist, as the hon. Lady knows, and Professor Sir Bruce Keogh was clear in his statements that there is an avoidable rate of mortality. He stated:

“There is an avoidable ‘weekend effect’ which if addressed could save lives. This is something that we as clinicians should collectively seek to solve. It also strengthens the moral and professional case for concerted action.”

The way in which the hon. Lady characterised the discussions in September, October and November is not quite right. We implored the BMA to come and talk; I personally had those discussions with leaders of the BMA, and they refused to do so. It was only when they came and talked to us that we made substantive progress.

The hon. Lady is right to raise these issues, and we wanted to discuss such matters with the BMA. One issue was protection against excess hours, but we had no counterparty with whom to negotiate. Since we have had that counterparty, we have made good moments of progress, and the result is the guardian position, which she welcomed in another place. The guardian will be able to levy fines, and those fines will be remitted to the guardian. I hope—and indeed expect—that process to reduce the excess hours that we still see in a small minority of positions. We must get away from the perverse incentives for trusts and a small minority of doctors that mean that unsafe working hours are perpetuated.

Of course we all regret the course that this dispute has taken, but it would not have done so had the BMA taken a responsible position from the beginning. If people lie to their members and say that they will have their pay cut and their hours raised, of course doctors will be angry—all of us would be. The fact is that that was never true, but it has inflamed the situation. We could have had the kind of productive talks that we have had over the past three or four weeks back in August, September and October had we not had all the mess beforehand because of untruthful statements issued by the BMA.

[Helen Whately (Faversham and Mid Kent) (Con)]

The level of support among junior doctors for this pay dispute is at least in part because of longstanding dissatisfaction with the experience of being a junior doctor. Sir David Dalton recommended a review of those longstanding concerns in his recent letter. Do the Government intend to commission such a review?

[Ben Gummer]

The Government will be looking at Sir David Dalton’s recommendation and acting on it. He is right to point to the fact that the 1999 contract is imperfect—it was agreed back in 2008 that it had many failings, and that something needed to be done to fix it. That contract in its generality has helped to contribute to the lowering of morale in the junior doctor workforce, which Sir David Dalton has recognised, as has the Secretary of State. It is not just the way in which training placements are made and a whole series of other problems with the contract; it is also the fact that people have to work for long periods of consecutive nights and days, all of which is reduced in the latest proposed contract.

[Mr Dennis Skinner (Bolsover) (Lab)]

Is the Minister aware that it takes two sides to call a strike? It cannot happen just because one side of the argument wants a strike. The Secretary of State has been looking for a fight with the doctors ever since he got the job. Does he realise that when I came here 45 years ago, I was getting time and a half for all-day Saturday, and double time, like other miners, for Sunday? Every time the doctors are replaced by agency nurses it costs the Government and the taxpayer a small fortune. Get the matter settled, and be decent for a change.

[Ben Gummer]

The hon. Gentleman has long prized himself as a champion of working people, yet the current contract and the proposed contract by the BMA, which I presume the hon. Member for Central Ayrshire (Dr Whitford) supports, prefers junior doctors over porters, cleaners and junior nurses, and it gives them better rates of pay, and premium rates that could not be enjoyed by lesser paid workers under contracts negotiated by unions that the hon. Gentleman supports. Here we have it: the final morphing of the Labour party into a party that prefers professionals over porters. That, I am afraid, is the party that he is now a member of.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

I very much support the Government’s stance on junior doctors, while acknowledging that most doctors—junior and senior—work well beyond their contracted hours. Does the Minister agree that it is not junior doctors but their seniors, and seniors’ terms and conditions, who really set the tempo in our national health service?

[Ben Gummer]

My hon. Friend also speaks from experience. We have said right from the beginning that reform of consultants’ and junior doctors’ contracts will be critical in delivering seven-day services. On consultants’ contracts, it is important to make sure that consultants are providing clinical cover over weekends, not just for the benefit of patients but for juniors, who are often covering rotas without clinical cover from consultants with and to whom they might wish to confer and refer.

[Mr Ben Bradshaw (Exeter) (Lab)]

Is it not at the very least odd that the Secretary of State yet again chooses to stay away and not come before the House to answer questions on this very important subject? As a former Health Minister, I know how difficult the BMA can be, but this would seem to indicate to me that it is the Secretary of State who has become the main obstacle to a sensible solution to this crisis.

[Ben Gummer]

The right hon. Gentleman will know that, numerically, the previous Labour Government had far more scraps with the BMA than the coalition Government and this Government have achieved so far. He will know that it is a mark of all Health Secretaries to have disputes of one kind or another with the BMA. The Secretary of State will be here tomorrow, since the right hon. Gentleman asks, to answer oral Health questions.

[Several hon. Members rose—]

[Mr Speaker]

I am sure that nobody who toddled into the Chamber after the urgent question started would expect to be called. That would be quite out of keeping with our parliamentary traditions. I think I need say no more.

[Crispin Blunt (Reigate) (Con)]

I wonder whether the Minister can help me. The messaging I have heard from the BMA is that the dispute is nothing to do with pay. We have heard the issue described as a “nut” by the shadow Secretary of State, yet it has led to a national strike for the first time in 40 years and we face industrial action again. What is going on here?

[Ben Gummer]

That is a question I am increasingly asking of those in the BMA’s leadership. They have agreed with Sir David Dalton that the remaining issue is about pay. Having said for several months that it was not about pay, they have now, in the end, come clean and said that it is about pay. That is what we are dealing with: pay rates for plain time and for Saturdays, where they wish for preferred rates over nurses and other “Agenda for Change” staff.

[Dr Roberta Blackman-Woods (City of Durham) (Lab)]

Junior doctors in my constituency are only very reluctantly taking action on Wednesday. They are supported by many of my constituents, who think that it is simply a disgrace that junior doctors are being forced to take industrial action because the Government are simply failing to address the legitimate concerns raised by the BMA. I heard the Minister say that his door is open, but what he is actually going to do to settle the dispute, and does he think it helps to denigrate the BMA in the Chamber this afternoon?

[Ben Gummer]

The hon. Lady says the junior doctors in her constituency had legitimate concerns. They did. Every single one has now been answered in the negotiations between Sir David Dalton and his predecessors apart from one, and that is the one the BMA refuses to open negotiations on, despite having promised to do so in November last year. Yes, our door remains open, but the BMA has first to agree to talk to us, which it is again refusing to do.

[Alex Chalk (Cheltenham) (Con)]

Junior doctors in Cheltenham are some of the most dedicated and hard-working people anywhere in our local community. It is therefore a concern to me that some have cited information from the BMA suggesting that the Government are proposing a pay cut. Will the Minister make the position crystal clear? Is that right?

[Ben Gummer]

No, it is not.

[Norman Lamb (North Norfolk) (LD)]

Does the Minister ever wonder whether he has chosen the wrong target? He bases his entire argument on safety—and rightly so—yet chairs and chief executives of hospitals constantly tell me that they have no difficulty staffing their hospitals with junior doctors over weekends. At the same time, however, our GP out-of-hours services are under incredible strain and cover is threadbare in many parts of the country. That, surely, is where the real safety concerns lie.

[Ben Gummer]

The right hon. Gentleman will know that we are looking at the contracts for GPs, consultants and junior doctors: they are of a piece. We cannot see one clinical group in isolation, when they work together. He should know, therefore, that in concluding discussions with junior doctors, consultants and GPs, we need to ensure that we give hospitals and primary care settings the ability to roster staff consistently through seven days of the week.

[Maria Caulfield (Lewes) (Con)]

I have met junior doctor colleagues over the last few weeks and months, and I know that many of them are cautious about the new contract and that strike action is the absolute last resort for them that they would rather not take. I met one of my constituents from Polegate this morning whose operation is going to be cancelled this week, thanks to the strike action. I welcome the Minister’s comment that the door is still open even at this late hour to call off the strike. Would he find it helpful if the shadow Secretary of State also condemned the strike and asked the doctors to call it off, so that patients do not become the real losers in this dispute?

[Ben Gummer]

My hon. Friend points to an interesting fact—that despite these many months of discussions, we have never had a clear line from the shadow Secretary of State or from the Opposition generally on whether they condemn or support the industrial action. It would be helpful if they made that clear because we would know at least whose side they are on. Are they on the side of patients, where we are trying to eliminate the weekend effect, or are they on the side of the BMA’s leadership?

[Angela Rayner (Ashton-under-Lyne) (Lab)]

I find the Minister’s language and tone in regard to the BMA and the junior doctors unfortunate. He speaks as though junior doctors do not care and do not want to help their patients, and I find that regrettable. In my time as a Unison official, when I used to represent public sector workers in health care, the BMA was hardly known for its militancy within that organisation, and the Minister needs to reflect on that. Does he really think that this whole problem is, as my hon. Friend the Member for Bolsover (Mr Skinner) denied earlier, all the blame of the BMA and doctors? Doctors care about their patients; that is why they are in this position. Does the Minister not accept any responsibility for the impact?

[Ben Gummer]

I entirely agree with the hon. Lady about the passion and dedication of junior doctors—and never once has the Secretary of State or I questioned that. What we have questioned are the tactics of the BMA’s leadership. I happen to agree with her, too, about her previous employer Unison. I have constructive relationships with that union. I disagree with it, and it with me—often—but we agree on many things and have a straightforward relationship. I am afraid that it is difficult to do business with the BMA, however, when it promises to talk about one thing and then refuses to do so a few weeks later, when it refuses to come to the negotiating table for months, and when it misleads its members in a way that I do not think Unison has ever done.

[Maggie Throup (Erewash) (Con)]

The residents in my constituency tell me two things: first, how much they value the work of doctors, both junior doctors and consultants; and, secondly, how disappointed they are that this House is not united in saying that the strike is not justified on safety grounds. Is the Minister as disappointed as my residents?

[Ben Gummer]

Yes, and I would add the 2,800 people who have had their operations cancelled. I wonder what answer they would get from the Opposition about whether they support or condemn those cancellations. As soon as we get an answer to that very simple question, it will be easier for us to know the official position of Her Majesty’s Opposition.

[Julie Cooper (Burnley) (Lab)]

Yesterday, the Secretary of State for Health accused the BMA of misleading junior doctors. Today, the Minister comes to the House and accuses the BMA of lying. Is he really asking us to believe that some of the most intelligent people in the country—junior doctors—cannot see for themselves what the Government are proposing? Does he not feel that the continued abuse directed at the junior doctors’ representatives is hindering any possibility of a settlement to this dispute and that that is damaging to patients?

[Ben Gummer]

The hon. Lady is also an intelligent woman, so let me ask her this. If a trusted body, such as the BMA, tells its members that they will have a pay cut of 30% and an increase in hours, but that statement is incorrect, does it constitute a lie? That is the question I would put back to her.

[Stuart Andrew (Pudsey) (Con)]

A number of Members met representatives of the BMA in the House of Commons. We were disappointed that, despite continued questioning, they refused to go to the negotiating table, but thankfully they eventually did so, and made some progress. My constituents want a safe, seven-days-a week NHS. Is it not time to get back around the table, so that we can provide the service that NHS patients want?

[Ben Gummer]

It is, and that is why we need to move ahead in fairly short order. Ultimately, if staff contracts are not reformed across the service, those who will suffer most will be patients, and what will be most affected is the consistency of care that they receive at weekends.

[Margaret Greenwood (Wirral West) (Lab)]

The shadow Health Secretary asked the Minister if he could list the hospitals in which there were currently not enough junior doctors working at weekends. He could not answer that question, so I will give the Minister another chance. Will he name them for us now?

[Ben Gummer]

Evidence given to the Review Body on Doctors and Dentists Remuneration made clear that rostering was made more difficult by the current plain-time terms in the contract. That is why it has been on the table for several years and has been the subject of parts of our discussions with the BMA, when we have been able to have them. It is also why one of the leading chief executives in the country, Sir David Dalton, who led the latest round of talks, has pressed the BMA to come and talk about Saturdays specifically and plain time in general. The BMA has refused to speak about either.

[Richard Drax (South Dorset) (Con)]

Whatever the arguments in this case, I can think of no one more honourable, decent and honest to run the negotiations than my right hon. Friend the Secretary of State. It is reported that graduating medical students applying to be foundation year 1 and 2 junior hospital doctors are seeking work in Northern Ireland, Scotland and Wales to avoid the new contract. Is that true, and if it is, what can be done to stop this drain of our best medical students?

[Ben Gummer]

We do not see any particular evidence of the movement of juniors at present, but what we would most like to see for juniors is the introduction of the new contract, so that they can recognise that it will be better for their working practices than the current one. It is in everyone’s interests—not just those of juniors, but those of patients—to ensure that juniors work safe hours. That is why the new contract involves reductions in the number of consecutive nights and long days, and it is why we want to reduce, and eventually eliminate, the excessively long hours in the week.

[Christian Matheson (City of Chester) (Lab)]

I am sure that Ministers have a very clear idea of how their proposals will affect working practices, so may I ask this Minister on how many occasions last year a junior doctor worked 91 or more hours in a week?

[Ben Gummer]

We believe that last year about 500 junior doctors were operating on a band 3 payment, which equates to payments for hours of work that exceed what is specified in the working time regulations. That is a relatively small number within the NHS, but it is still significant, and for the doctors concerned, working those excessive hours is unsafe.

[Mark Spencer (Sherwood) (Con)]

Will the Minister join me in thanking the junior doctors who ignored the call to strike last time, and does he agree that the lack of condemnation from the Opposition demonstrates that they are putting their support for industrial action before my constituents and their healthcare needs?

[Ben Gummer]

I entirely agree. Rather like an arsonist who pours petrol on a fire and then runs to offer help to put it out, the Opposition have done very little to help to get the contract into the place where it needs to be, and to stop the industrial action. I am afraid that the patients whose operations will be cancelled this week will suffer partly because of the Opposition’s failure to take a firm stand.

[Fiona Mactaggart (Slough) (Lab)]

As the Minister will know, Wexham hospital in Slough has enormously improved the care that it gives to its patients. It has done that with the same staff, but with a leadership which says to the people who work there that it has confidence in them and shares their values. The Minister is saying that he is the only person who cares about patient safety, and that doctors do not. What does that do for morale and for doctors’ ability to improve the quality of care for patients?

[Ben Gummer]

I am not sure how to answer the right hon. Lady’s question, given that she has wilfully misconstrued what I said. I have never once suggested that only the Government care about patient safety. Almost every doctor out there cares for nothing other than patient safety and patient care. However, according to the 10 clinical standards of the Academy of Medical Royal Colleges, if there are to be consistent levels of care over the weekends, part of that will be achieved through reform of staff contracts. One of those is the junior doctors’ contract, which is why we must press ahead with it.

[Wendy Morton (Aldridge-Brownhills) (Con)]

I commend my hon. Friend for all the work he is doing to deliver a truly seven-day-a-week health service for the benefit of not only my constituents but those of every other Member. I am a little surprised by the hon. Member for Lewisham East (Heidi Alexander) saying that no one thinks the existing contract is perfect. Does the Minister agree that we should all be working together in the interests of our constituents to bring this situation to a successful conclusion, rather than trying to score party political points with it?

[Ben Gummer]

I agree with my hon. Friend. I am afraid that this is a mark of the way in which the Labour party has changed. I suspect that a Labour party of a different era—one that was more responsible in how it dealt with industrial disputes—would have understood on whose side it should be acting at this point.

[Nic Dakin (Scunthorpe) (Lab)]

This is a Conservative Government, but to have a strike of this kind on any Government’s watch is a disgrace and a failure. I quite like the Minister actually, but he has only ever laid the blame for this elsewhere. Surely, the Government should be evaluating their own performance and saying, “We can do better than this and we should ensure that this does not happen,” even at the eleventh hour.

[Ben Gummer]

The hon. Gentleman tempts me with kindness, and I repay the compliment. However, having been involved in this process for some months now, I have found it incredibly frustrating. Up to the end of November, every time we asked the BMA to come and talk to us, it refused, despite personal entreaties. And when it did talk to us, we often found that we had nailed down an agreement only to find it slipping out of our fingers the next day in front of the media. This has been a hugely frustrating and difficult process for everyone concerned—not only for us but for the junior doctors, who have been left confounded and confused by the whole thing.

[Dr Tania Mathias (Twickenham) (Con)]

Does the Minister agree that most, if not all, junior doctors exceed their contracted hours and that a 72-hour limit is therefore essential? Will he also acknowledge that, even after the negotiations are complete, many junior doctors will continue to exceed their contracted hours?

[Ben Gummer]

Some junior doctors exceed their contractual hours. The average across the service is 48 hours, but some are working as many as 91, which is the current permitted limit outside the working time directive. We wish to stop that altogether and bring it down to an absolute maximum of 72 hours a week, which would equate to a 48-hour average over the agreed period, which is currently six months. The key is to get the number of hours down, because working excessive hours is unsafe for patients and for doctors.

[Barry Gardiner (Brent North) (Lab)]

The Minister has been keen to establish what he sees as the preferential terms and conditions that junior doctors enjoy, yet Sir David Dalton has said in an interview with the Health Service Journal:

“My assessment is that the staff group that will have to contribute the least above that which they are providing at the moment would be our doctors in training. Our messaging on this has got muddled”.

Does the Minister agree?

[Ben Gummer]

Sir David Dalton has also made it clear that we have to reform all contracts. One can place the balance where one wishes, but it is important that we reform the juniors’ and the consultants’ contracts together, so that they can fit within the service of a piece. It is wrong, for instance, to have a junior on duty taking decisions at the weekend and not be covered by consultants supervising and helping with those decisions. We need to ensure that there is consistency of rostering through the week and at the weekend involving both juniors and seniors.

[Robert Jenrick (Newark) (Con)]

I represent many junior doctors. I have met them and I have tried to represent their views to the Government, but I have always taken the view that my primary responsibility is to the patients of the NHS. One of those patients, a constituent of mine, emailed me this week to say that a consequence of the strike would be the

“cancellation of my wife’s biopsy, planned for this week, without which her already shortened life will be shorter”.

Will the Minister, the shadow Minister and the whole House join me in condemning this strike? It will achieve nothing. It is a distraction from the negotiations, which need to continue, and it will put the lives of my constituent and others across the country at risk.

[Ben Gummer]

I cannot possibly add to the comment made by my hon. Friend, and I just hope the shadow Secretary of State takes note.

[Liz McInnes (Heywood and Middleton) (Lab)]

Strike action is always a last resort, and I can say categorically, as an ex-NHS worker, that no NHS worker wants to go on strike. We have here a complete failure of negotiation. The Secretary of State’s door may be open, but the inflammatory and insulting comments he made in the media this weekend do not exactly invite people to cross that threshold and talk to him. Given that he has manifestly failed as a negotiator, is it not about time he stood aside and let a trained negotiator deal with the BMA and come to an agreement, before it is too late?

[Ben Gummer]

I am not sure the hon. Lady has been listening to the statements made in this House and elsewhere.

[Liz McInnes]

I have been listening—

[Ben Gummer]

I am not sure the hon. Lady has been listening because otherwise she would have heard that the negotiations have already been taken on by leading negotiators from NHS Employers and, latterly, by Sir David Dalton, one of the leading chief executives in the country. Significant progress has been made, contrary to what she has just suggested. Negotiations have worked. We have managed to nail down—[Interruption.] The hon. Lady shakes her head, but the fact is that Sir David Dalton has managed to secure agreement on every single point of contention other than pay rates for plain time, unsocial hours and Saturdays. This dispute on Saturday and the kind of results we are going to see across the country on Wednesday will, in essence, be about pay rates on a Saturday, with the BMA wanting preferential rates over nurses, porters, cleaners and other workers in the NHS.

[Ben Howlett (Bath) (Con)]

May I join colleagues in thanking the Minister and the Secretary of State for all their work in negotiating a contract, which is obviously a tough discussion to have? Although many of my constituents may have sympathised last year with the BMA’s case, patients and their families, including my father after a recent heart valve replacement, will be concerned that the BMA is not getting around the negotiating table and thus placing a lot of undue stress on the most vulnerable. Does the Minister agree that the BMA should seriously consider those patients as it protracts its negotiations?

[Ben Gummer]

If the BMA was truly representing its members, it would be thinking about patient welfare during the strikes. Just now, we heard my colleagues describe with great eloquence the kinds of effects on individuals that a strike will cause. These strikes will get us no nearer to a solution; the only way to come to a solution is by negotiation.

[Matt Warman (Boston and Skegness) (Con)]

It is testament to the progress being made in the course of these negotiations that the BMA has cancelled some strikes and has downgraded the one we are expecting on Wednesday, but does the Minister agree that one crucial thing that would make the greater difference would be condemnation from the Opposition?

[Ben Gummer]

It would make a significant difference. Now that the Leader of Her Majesty’s Opposition is sitting on the Front Bench, he might like to take note of the fact that if we have a united political response condemning strikes that affect patients and their safety, it helps to bring negotiations to a more profitable end.

[Diana Johnson (Kingston upon Hull North) (Lab)]

Hull royal infirmary is under a black alert, which means that local people have been told not to attend the hospital unless it is a matter of life and death. Will the Minister tell me how the insults the Secretary of State has been throwing around over the weekend, and those that he himself has made today about hard-working and dedicated junior doctors, will help people in Hull, who need a functioning NHS? How will those insults improve the morale of those doctors?

[Ben Gummer]

The hon. Lady does dangerous work if she tries to conflate the comments that I and others have made about the leadership of the BMA with the motivations of junior doctors, none of whom I have impugned. I recognise that junior doctors work incredibly hard, care passionately about their patients and have a vocational drive to do the best for the people they care for, but that is different from an organisation that refuses to talk, refuses to negotiate, lies to its members and is very slippery in the statements it puts out to the press.

[Mr Philip Hollobone (Kettering) (Con)]

Kettering general hospital is always under huge pressure, and the junior doctors there do a fantastic job. May I tell the Minister that my constituents will be extremely disturbed to hear him tell the House today that the BMA said at the ACAS talks that it would negotiate about Saturday pay but is now refusing to do so? The consequence will be a strike on Wednesday, and my constituents are appalled that 2,884 operations have already been cancelled, with that number possibly set to go even higher.

[Ben Gummer]

My hon. Friend is right about that. He mentions one of a number of agreements that we have come to with the BMA in the course of these discussions that have subsequently been reneged upon by that organisation. That is why this whole process has been so torturous for everyone involved.

Syria Crisis: UK Response

Monday 8th February 2016 Commons Chamber

16:19

[The Secretary of State for International Development (Justine Greening)]

With permission, Mr Speaker, I shall make a statement updating the House on the recent Syria conference, which the UK co-hosted with Kuwait, Norway, Germany and the United Nations last Thursday.

For nearly five years, the Syrian people have suffered unimaginable horrors at the hands of the Assad regime and, more recently, Daesh. Inside Syria, 13.5 million people are in desperate need, while a further 4.6 million people have become refugees. As we have seen over the past 72 hours alone, the impact on the people of the region is terrible and profound. When I was in Lebanon and Jordan last month, I spoke to refugees, some of whom were spending their fifth winter under a tent, and their stories were similar. When they left their homes, they thought they would be back in weeks or perhaps months at the most, but for an overwhelming number it has turned out to be years, and there is no end in sight.

Not only is Syria the world’s biggest and most urgent humanitarian crisis, but its far-reaching consequences are being felt across Europe and touching our lives here in Britain. More than 1 million refugees and migrants risked their lives crossing the Mediterranean last year. Of these, half were fleeing the bloodbath in Syria.

Since the fighting began, Britain has been at the forefront of the humanitarian response to the Syria conflict. Aid from the UK is already helping to provide food for people inside Syria every month, as well as clean water and sanitation for hundreds of thousands of refugees across the region. Our work on the Syria crisis gives people in the region hope for a better future, and is also firmly in Britain’s national interest. Without British aid, hundreds of thousands more refugees might feel they had no alternative but to risk their lives seeking to get to Europe.

Despite all that, more was needed. The UN Syria appeals for the whole of last year ended up only 54% funded. Other countries needed to follow the UK’s lead and step up to the plate. That is why the UK announced we would co-host an international conference in London on behalf of Syria and the region, building on three successful conferences held in Kuwait in previous years. Last Thursday, we brought together more than 60 countries and organisations, including 33 Heads of State and Governments. The stage was set for the international community to deliver real and lasting change for the people affected by the crisis, but in the end it was going to come down to choices.

Could we pledge the record-breaking billions needed, going much further than previous conferences, and commit to going beyond people’s basic needs and delivering viable, long-term solutions on jobs and education for Syria’s refugees and the countries supporting them? At the London conference, the world made the right choices to do all of those things. Countries, donors and businesses stepped up and raised new funds for the crisis amounting to more than $11 billion. This included $5.8 billion for 2016 and another $5.4 billion for 2017-20. It was the largest amount ever committed in a single day in response to a humanitarian crisis, and it means that more has been raised in the first five weeks of this year for the Syria crisis than was raised in the whole of 2015.

The UK, once again, played its part. We announced that we would double our commitment, increasing our total pledge to Syria and the region to more than £2.3 billion. Going beyond people’s basic needs, the world said at the London conference that there must be no lost generation of Syrian children and pledged to deliver education to children inside Syria and to at least 1 million refugee and host-community children in the region outside Syria who were out of school. This is an essential investment not only in those children, but in Syria’s future. It also gives those countries that are generously hosting refugees temporarily the investment in their education systems that will benefit them in the longer term.

The London conference also made a critical choice on supporting jobs for refugees and economic growth in the countries hosting them. We hope that historic commitments with Turkey, Lebanon and Jordan will create at least 1 million jobs in countries neighbouring Syria, so that refugees have a livelihood close to home. That will also help to create jobs for local people and leave a legacy of economic growth. By making those choices, we are investing in what is, overwhelmingly, the first choice of Syrian refugees: to stay in the region, closer to their home country and their families who are so often still in it. If we can give Syrians hope for a better future where they are, they are less likely to feel that they have no choice other than to make perilous journeys to Europe.

I wish to thank all those civil servants from my own Department, the Cabinet Office, the Foreign Office and the Department for Business, Innovation and Skills for working so tirelessly as a team to help us deliver such a successful and vital conference. It is not often that civil servants get the thanks that they deserve, so on this occasion I decided to put my thanks on record.

The world has offered an alternative vision of hope to all those affected by this crisis, but, in the end, only peace will give the Syrian people back their future. The establishment of the International Syria Support Group at the end of 2015 was an important step on the path to finding a political settlement to the conflict. The Syrian opposition has come together to form the Higher Negotiations Committee to engage in negotiations with the regime on political transition, and the UN launched proximity talks between the Syrian parties in January.

The UN special envoy to Syria took the decision to pause these talks following an increase in airstrikes and violence by the Assad regime, backed by Russia. The UK has called on all sides to take steps to create the conditions for peace negotiations to continue. In particular, Russia must use its influence over the regime to put a stop to indiscriminate attacks and the unacceptable violations of international law. Across Syria, Assad and other parties to the conflict are wilfully impeding humanitarian access on a day-by-day basis. It is brutal, unacceptable and illegal to use starvation as a weapon of war.

In London, world leaders demanded an end to those abuses, including the illegal use of siege and obstruction of humanitarian aid. Our London conference raised the matter of resourcing for life-saving humanitarian support, which must be allowed to reach those who are in need as a result of the Syria conflict, irrespective of where they are.

I also want to take this opportunity to provide an update on the campaign against Daesh in Iraq and Syria. Since my right hon. Friend the Foreign Secretary last updated the House on the campaign against Daesh in Syria and Iraq, the global coalition, working with partner forces, has put further pressure on Daesh. Iraqi forces, with coalition support, have retaken large portions of Ramadi. In Syria, the coalition has supported the capture of the Tishrin Dam and surrounding villages as well as areas south of al-Hawl.

The UK is playing its part. As of 5 February, RAF Typhoon, Tornado and Reaper aircraft have flown more than 2,000 combat missions and carried out more than 585 successful strikes across Iraq and Syria. We are also leading efforts to sanction those trading with, or supporting, Daesh. My right hon. Friend the Prime Minister gained agreement at the European Council in December on asset freezes and other restrictive measures.

Since day one of this crisis, the UK has led the way in funding and shaping the international response. We have evolved our response as this incredibly complex crisis itself has evolved. There will be no end to the suffering until a political solution is found. The Syria conference, co-hosted by the UK and held here in London, was a pivotal moment to respond to help those people and countries affected. We seized the chance to offer the Syrian people and their children hope for a better future. The UK will now be at the heart of making that ambition a reality and keeping the international community’s promise to the Syrian people. That is the right thing to do for those suffering and, fundamentally, for Britain, and I commend this statement to the House.

[Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)]

The Syrian crisis is the most pressing humanitarian challenge facing us at this time, and the Government are to be commended on co-hosting an important conference that has raised more than $10 billion for Syrian refugees. They are also to be commended on doubling our own commitment to more than £2.3 billion. The emphasis on education and jobs is entirely correct: we cannot allow a whole generation of Syrian children to be lost.

The Secretary of State will be aware, however, of the report by Concern Worldwide that reveals that a third of the funds pledged to Syria in 2015 had not been confirmed by December of that year. Can she say whether all the money pledged in 2015 has now been confirmed, and does she appreciate the hopes of the entire House that she will get other countries not just to match our generosity but to hand the money over? The wholly commendable efforts on Syrian refugees in the region belie the Government’s wilful myopia on the plight of more than half a million Syrian refugees here in Europe. It is true that the majority of Syrian refugees are in the region, and the situation continues to worsen. We all saw the television pictures at the weekend of tens of thousands of terrified Syrians waiting at the border with Turkey in response to Assad’s bombardment of Aleppo, but will the Secretary of State explain how much longer this country and the EU can expect Turkey to keep its border with Syrian open while at the same time we want to prevent refugees from transiting to western Europe?

The funds raised by the conference are vital, but it is vital, too, that this country shows willingness to take its fair share of refugees, including Syrian refugees. The UK has agreed to take, over five years, fewer refugees than Germany has taken in a month. The Opposition appreciate that this country has not signed up to Schengen, but does the Secretary of State acknowledge that the fact that we are not signatories to Schengen does not remove the moral responsibility that falls on us as part of the European family of nations, and does she accept that many people are surprised and disappointed that the Government have rejected the Save the Children campaign to take in just 3,000 child refugees?

The Secretary of State may well wish that these children had stayed in the region, but the direction in which the children chose to flee does not make them any less vulnerable. These children may not be in the part of the world she might prefer them to be in, but they are still lone children at risk of abuse, sex-trafficking and worse. She cannot behave as if there are two classes of Syrian child refugee: one set who stay in the region, whom she is prepared to help, but another class who have travelled to Europe on whom she turns her back.

The Secretary of State will have heard reports of the German Chancellor’s speech in Turkey today. Does she agree with Angela Merkel that the ultimate solution to the migrant crisis is safe and legal pathways for refugees? On the political process, I am glad to say that the Opposition support calls on all sides in the Syrian civil war to take steps to move towards sustainable peace negotiations. In particular, Russia must use its influence on the Assad regime. We entirely agree that it is unacceptable and illegal to use siege, starvation and the blockage of humanitarian aid as a weapon of war. We welcome the steps taken to freeze Daesh assets and other restrictive measures, for which my right hon. Friend the Leader of the Opposition has called for some time.

All Syrian refugees want to return home. Immigrants and refugees, whether they go home or not, never lose that hope in their heart that they will return to the country in which they were born. But whether the Secretary of State would prefer it or not, there are half a million Syrian refugees here in western Europe. Together with my right hon. Friend the Leader of the Opposition, I visited the camp in Calais and met very many Syrian refugees there, many of whom, it seemed to us, had a legal right to come to this country, and all of whom were living in appalling conditions.

When the caravan of these international events has moved on, there will still be thousands of Syrians and other refugees, including an increasing proportion of women and children, living in appalling conditions in Europe, frightened, terrorised and at the mercy of people traffickers. We may all wish that they had not listened to the people traffickers, but this Government should be doing more not just for Syrian refugees in the region, but for the very many Syrian refugees here in western Europe.

[Justine Greening]

The hon. Lady raises the important point that it is vital that countries that came and made promises at last week’s conference live up to them. Too often at similar meetings in the past, countries have spoken warm words or set out promises that they have not lived up to. The UK will play its role by delivering on our promises, as we have in the past and will in the future, and by putting in place the necessary transparency to enable us to ensure that other countries live up to the promises they made.

It is wrong of the hon. Lady to say that we have not played our role close to home. Our strategy from the word go has been to tackle the root causes of the crisis that we have seen reaching our own shores, which is to make it viable for refugees to stay close to home in their home region as that is, overwhelmingly, the first choice of most refugees. It has been a failure to deliver on such promises and to provide the necessary resourcing that has led them over time to give up on that.

We are playing our role close to home here in Europe. It is the UK that has been working with UNHCR and the Red Cross, making sure that newly arrived refugees are effectively registered—although the hon. Lady will understand the challenges that poses on occasion—and making sure that they have the shelter, clothing, blankets and sustenance that they need, having finally made that often fatal journey. So we are playing our role.

The hon. Lady will know that we are resettling 20,000 refugees from the region directly. That is not only a safer route for people to get to the UK if that is where they need to be resettled, but it enables us to focus on the most vulnerable people affected by the crisis who need to be resettled—people who could never otherwise make the kind of journey we have seen other refugees making across Europe. In more recent days we have set out the work that we will be doing particularly to help children affected by the crisis. I am very proud of the work that the UK has done to put children at the centre of our response to the Syrian crisis. It was at our initiative that the No Lost Generation initiative was set up. It was through our help that UNICEF has been able to put safe zones in refugees camps to help link up children who have become separated from their family. It is the UK that has been ensuring the availability of the psychosocial support that children so often need, having been involved in such crises and undergone the experiences that they have, and we will continue to do that.

More broadly, the hon. Lady’s condemnation of Russia is correct. We can debate whether and how the UK’s support for people affected by this crisis is working, but we should all be able to agree that the routine flagrant, deliberate breaches of international humanitarian law that we see daily in relation to this crisis are unacceptable. A country such as Russia should be playing its role by pressing the Assad regime, which it is spending so much time and resource supporting, to allow the aid that is there in places such as Damascus to get down the road to the people who desperately need it. I believe that in time, as we look back on the crisis in the years to come, that breach of international humanitarian law will be one of the most telling aspects of it. People will ask themselves how it could have been allowed to go on.

[Pauline Latham (Mid Derbyshire) (Con)]

May I commend my right hon. Friend for her calm and factual statement on the situation of the Syrian refugees, which contrasted with the rather emotive statement by the shadow Secretary of State, who is trying to whip up emotion about these things? Does my right hon. Friend agree that, actually, we do need peace in the region, we do need to talk to Russia about what it is doing, and somebody needs to tackle Assad? We should also be looking at keeping as many people as possible in the area where they have been brought up, where their culture is correct and where they understand the lifestyle, rather than encouraging them, as the Labour party might choose to do, to come to this country, when we are putting so much money—taxpayers’ money—into helping these people to settle there.

[Justine Greening]

These are two related issues. One, as I have said, is that we are, of course, playing our role close to home—here in Europe—in helping refugees who have finally arrived on our shores. However, my hon. Friend is right to recognise that, overwhelmingly, refugees basically want to stay close to home. I met a lady on my last trip to Jordan whose family were still in Homs, and she had intermittent contact with them. For her, the prospect of even considering leaving Jordan was totally not what she was looking at; what she desperately needed was to be able to work legally to support herself while she tried to get on with the life she suddenly found herself living.

As I said, at the beginning of this crisis, none of the refugees thought that they were leaving Syria for anything more than a few weeks or months, and we should all think about how we would cope with such situations. It is incumbent on the international community, though, to make sure that we now go beyond providing just day-to-day support, so that people are not just alive but able to have some kind of life. That is in their interests, but it is also in the interests of the host communities, which are so generously accommodating them.

[Patrick Grady (Glasgow North) (SNP)]

I thank the Secretary of State for her statement and for giving us early sight of it. The Scottish National party, too, welcomes the pledges and commitments made at the conference. We recognise the achievement of securing the biggest ever pledges made in one day and particularly the commitments on child education and jobs. However, I echo the concerns about the difference between making and fulfilling a pledge, and it would be helpful to hear what discussion there was at the conference about processes for monitoring and implementing the pledges, bearing in mind the gap between last year’s pledges and the actual assessed need.

There is a feeling in some quarters that civil society—especially local and national Syrian civil society organisations—was under-represented. However, it is those organisations that are often the front-line responders to the crisis and that have the access inside Syria that international counterparts do not. It would be useful to hear what role the Secretary of State sees civil society on the ground having in decision making and implementation as aid is disbursed.

While recognising the role the Government have played, I echo the concerns about the response to the refugee crisis in Europe. Analysis from Oxfam suggests that, rather than 20,000 refugees over four years, the UK’s fair share would be 24,000 this year alone. How will the commitments the UK made at the conference support those displaced by the conflict, especially those already in Europe?

Finally, the only viable long-term solution, as we have heard, must be a negotiated peace. What discussions is the Secretary of State continuing to have with her Cabinet colleagues about the impact of UK airstrikes, and does she believe that the UK’s involvement has helped or hindered its role as a peacemaker; and how can the Government be confident that their bombing is not adding to human misery, and that, while seeking to improve the humanitarian response on the one hand, they are not adding to the crisis on the other?

[Mr Speaker]

The hon. Gentleman might win a prize, although it may not be one that he craves, for probably the longest sentence in the Parliament.

[Justine Greening]

Mr Speaker, I shall try to answer briefly the points that the hon. Gentleman raised, which were all important.

As I said, we will do our level best to make sure that the commitments made last Thursday are honoured. The hon. Gentleman is right to highlight the important role of civil society. In fact, we had a day dedicated to that last Wednesday. Seventeen Syrian civil society organisations were represented at that event, and 27 non-governmental organisations overall. The role they have been playing, and can continue to play, is in delivery on the ground. Many of these people put their lives on the line every single day of the week to get into communities who desperately need their help. We have to continue to assess needs, and the information that we get from civil society is often vital in making sure that we target our aid where it can have the biggest impact,.

Looking ahead, perhaps optimistically, but nevertheless importantly, when we finally get to a position where we can see Syria getting back on its feet and rebuilt, civil society will have a crucial role not only in understanding the needs and priorities of local people but in forming networks that can help on the ground to deliver on them. As I said, I believe that we are playing our role, not only, overwhelmingly of course, in the region, but closer to home here in the EU. A pound spent here in Europe does not go anywhere near as far in supporting refugees as a pound that can be delivered closer to home in the region to provide food, water and shelter, or get a child into school who is currently out of school. It is incredibly important that we do not lose sight of the need to tackle the root causes that underlie the refugee flows into Europe over recent months.

The hon. Gentleman will not be surprised to hear that I could not disagree with him more on UK airstrikes. One of the key challenges in ever reaching any kind of peaceful settlement in Syria is the presence of the barbaric Daesh, who, day by day, routinely commit acts of unspeakable brutality—particularly on women, but on people more generally—in the territories they control. These people are not simply going to get up and go home. That is why we need to take military action against them to force them out of those territories. This is already happening in Iraq. They are leaving a wasteland behind them, but at least it is a wasteland that we can start to rebuild in, and we are going to do the same in Syria.

[Mark Field (Cities of London and Westminster) (Con)]

I wholeheartedly support what the Government are doing. A critical part of our strategy is to ensure that the two small nations nearby, Jordan and Lebanon, are able to cope. It must be incredibly difficult, given the huge number of refugees compared with their overall populations. Will the Secretary of State give some detail on the work we are doing to encourage those two nations, particularly in economic terms, through customs unions and the idea of economic co-operation—perhaps not just with the UK but within the EU as a whole—to try to ensure that they do their best in this regard? We must recognise that many hundreds of thousands of these Syrian refugees are likely to be in Jordan and Lebanon for many years to come.

[Justine Greening]

I am pleased that my right hon. Friend has mentioned this historic step forward in getting agreement to start creating jobs for refugees. For many years, they had been unable to work legally, and that forced many into working illegally to try to support themselves. They might have left Syria with some assets, but over the weeks, months and years those assets were depleted, and reaching the end of them led many to decide that they had no alternative but to try find a life somewhere else. This therefore matters. In essence, countries such as Jordan and Lebanon decided to allow work permits so that greater numbers of Syrian refugees can work legally. These were big decisions for them to take, but they were right to do so as they cope, and indeed often struggle to cope, with the refugees who are temporarily, but in large numbers, within their countries.

What are we doing? On the Jordanian and Lebanese side, particularly with Jordan, we are setting up economic zones with advantageous tax rates to encourage investment. Some of this will be, in effect, the Syrian economy in exile. I have met business leaders who are re-establishing their Syrian companies, but in Jordan. That is not just good for Syrians who can get back into work; it is also providing work for local people who are unemployed. This is complemented by the investment coming from the World Bank and the European Investment Bank; and crucially, as my right hon. Friend mentioned, by reform at the European Union level and making our own trade barriers that much more flexible so that countries such as Jordan can more easily sell their goods into the huge market that is the European market.

We should be really proud of the work achieved with both Jordan and Lebanon at the conference. It was home-grown UK ideas that were put on the table and they got international support. Most importantly, they gave us the chance to work directly with the Governments of Jordan and Lebanon to help with the long-term provision of jobs and growth that will be there long after their generous hosting of refugees temporarily.

[Mr Speaker]

The lucidity and comprehensiveness of the Secretary of State’s replies cannot be disputed, but I would gently point out that we have got through two Back-Bench questions in seven minutes, so we shall now strive for improvement in productivity.

[Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)]

I strongly welcome the results of the London conference and the leadership shown by the Secretary of State and others in Government. That is immensely important. She said that Britain is also helping refugees in Europe, but the honest truth is that the help being provided to them is tiny. There are refugees in Greece and the Balkans, and close to home in Dunkirk and Calais, who are in worse humanitarian conditions than those in the region and who are being denied support by Governments, the United Nations and aid agencies because they are in Europe. Children are suffering from scabies, bronchitis and cold. How much of the London conference funding will go towards helping refugees in Europe? If the answer is none, what is the Secretary of State doing to hold a similar pledging conference to help the refugees in Europe?

[Justine Greening]

The conference was, indeed, about making sure that we are responding, in the region, to Syrian refugees and host communities affected by the crisis. The right hon. Lady asks about the response in Europe. We are talking about European countries that have the resources to respond to and help refugees who are currently in their own countries, but, as I have said, the UK has played its role in helping refugees who have arrived.

[John Redwood (Wokingham) (Con)]

I strongly support the Government’s approach of giving maximum help to refugees near their homeland, as well as the Government’s participation in crucial initiatives for political progress and peace. What impact is the intensification of Russian-supported Assad military intervention having on British Government policy?

[Justine Greening]

The main impact, in the short term, has been the breakdown of any progress in peace talks. In the end, it is a peace settlement that will give people hope for the future and result in their wanting to go back and rebuild their country.

[Mr Ben Bradshaw (Exeter) (Lab)]

I welcome the Secretary of State’s comments on the positive role already being played by the RAF in the coalition campaign to drive Daesh back from territory in Syria, following the recent vote in this House. Does she agree that the catastrophe, including the humanitarian and refugee catastrophe, will continue as long Daesh controls large areas of eastern Syria and as long as President Assad, supported by Putin, slaughters his own people?

[Justine Greening]

Yes, I agree entirely. As I said in response to the hon. Member for Glasgow North (Patrick Grady), it is critical that we maintain Syria’s integrity as a country, and that absolutely means regaining the territory that has been lost to Daesh. There can be no peace settlement in Syria until we have that territory back under control and it can form part of the peace talks.

[Wendy Morton (Aldridge-Brownhills) (Con)]

I am grateful to the Secretary of State for coming to the House today. She has always been accommodating in updating us on the work of the Department for International Development in the region. Will she confirm that DFID will continue to focus its work and aid on the camps and the region, because ultimately this is about tackling the root cause of the problem, and a political solution is the only long-term solution?

[Justine Greening]

I strongly agree with my hon. Friend. The talks need to get back under way. Of course, UN Security Council resolution 2254, which was adopted at the end of last year, set out a road map for that to happen. It highlighted two key areas. The first was the need for a ceasefire, and the second was the need for free, unfettered access for humanitarian supplies to get through to people, but the lack of progress on them, combined with the intensification of attacks by Assad forces, supported by the Russians, is hindering the peace talks and undermining the process.

[Ann Clwyd (Cynon Valley) (Lab)]

Words cannot convey the impotence and the anger that we, as politicians, feel at the lack of progress in the peace process. I understand the contribution made by the Government, but we are seeing an awful humanitarian crisis develop today at the border with Turkey. Mrs Angela Merkel has made quite clear what she feels about it. She says that the Russians are primarily responsible for the bombing and are the reason that people are fleeing in their droves from Syria. Has the Foreign Office called in the Russian ambassador today? Has the Prime Minister called in the Russian ambassador? He should be called in every day until the Russians stop barrel bombing the civilians in Syria.

[Justine Greening]

The right hon. Lady will be pleased to hear that the Foreign Secretary is part of the International Syria Support Group, which will meet in Munich this Thursday, hopefully with the Russians there. That is precisely the sort of message that we will be delivering to the Russians; they have a critical part to play in enabling the peace talks to move forward. At the moment, their actions are taking us further away from a peaceful settlement, because they are bombing the very moderate opposition around which it should be possible to form a transition Government.

[Heidi Allen (South Cambridgeshire) (Con)]

The Secretary of State has every right to be exceptionally proud of what was achieved at the conference, but I fear that we need to do more locally in Europe. She will know, I am sure, that I and my hon. Friends the Members for Bury St Edmunds (Jo Churchill) and for Eastbourne (Caroline Ansell) were in Lesbos last weekend, and I can tell her that the Greeks are not coping. Britain needs to lead in Europe, as we have done on the global stage. There are refugees, including children, in Europe who need our help, and Greece is on its knees. Will the Secretary of State meet us to hear our first-hand emotional and factual account of what we saw?

[Justine Greening]

I am very happy to meet my hon. Friend, and I have read reports of her visit. I reassure her that we are playing as much of a role as we can in working with Greece. The UK has worked with the UNHCR, which has registered many of the refugees who have arrived in Greece. In the end, we have to accept that Greece has sovereign control, and it will want to organise how it deals with refugees. Yes, it needs resourcing. The European community is discussing how it can effectively do that, and the UK has been part of that. In the meantime, our focus has rightly been on dealing with the root causes of why those people lost any hope that there was a future for them in the region where they lived and had grown up. That surely has to be the main focus.

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

The Prime Minister accepted when the House voted to extend the military campaign against ISIS from Iraq to Syria in December that that would extend not only our involvement but our responsibility. May I ask the Secretary of State more about the political peace process that she has touched on? It would be easy to lose faith in it, given the events of recent days, but does she agree that although the aid efforts she talks about are commendable, the only long-term solution for the people of Syria is not aid but a country in which they can live? Is there anything more that she can say about how to get the political process back on track?

[Justine Greening]

The right hon. Gentleman knows that a key next step will be taken this Thursday, when the International Syria Support Group meets. That will build towards the resumption of peace talks, which are having what the UN special envoy Staffan de Mistura described as a “pause” until 25 February. There are two elements to this. One, of course, is the peace talks and the political dialogue that is under way. The second, as I said in response to an earlier question, is the military action that is needed to eradicate Daesh from the part of the country that it holds. Making progress on both of those is critical. The final step, the rebuilding of Syria, will be a chance to put into practice much of the planning that is there already but unable to be got on with.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

Tragically, whole generations of children have grown up in refugee camps, such as those in Tindouf in Algeria, with all that that means in terms of education and radicalisation. What can be done to prevent something similar from happening near Syria?

[Justine Greening]

The sort of step forward that we saw last Thursday—the commitment that no child will be lost to the Syrian crisis, and that all children will be back in school—is absolutely critical. If we want them ever to feel that they are in a position to rebuild their own country, they will need at least to be able to read and write, and to have had some sort of education. Too many children have already lost too many days in school, but after last Thursday we have a much better chance of getting them back into the classroom and back learning. That is precisely what we are hoping to do over the next few weeks and months.

[Keith Vaz (Leicester East) (Lab)]

May I join other Members in commending the Secretary of State for the success of the donor conference but remind her that, as with the Yemen donor conference six years ago, it is not the pledges but the paying of the money that matters? In that case, only 10% has been paid so far. The key local country is Turkey, to which the EU has pledged €3 billion to deal with this crisis. Has that money been paid at least in part, and can she reassure the House that recent developments are not affecting the processing of the 19,000 Syrian refugees whom the Prime Minister has pledged will come to this county before the next election?

[Justine Greening]

The €3 billion deal was very much reached as part of the Syria conference last Thursday. Like the right hon. Gentleman, I will be very keen to make sure that all the commitments made last Thursday are delivered. That is vital if we are to achieve the results we have set ourselves, including the ambition to make sure that no Syrian refugee child is out of school by the end of the forthcoming academic year. More broadly, he should be reassured that the UK will continue to play a role in ensuring not only that we do a lot in our response to this crisis—we have already done so: we are the second biggest bilateral donor to date—but that we continue to shape the response.

[Bob Stewart (Beckenham) (Con)]

Once people cease to be internally displaced persons and cross an international border, in their minds and in reality they become refugees or economic migrants and it is very difficult—much more difficult—for them to go back to their own country. It would be great if the international community, which has so far failed to stop the war, came to an agreement to set up safe areas close to or on the borders of other countries. We would be able to reach into those safe areas and look after people there so that when the time comes—and politics works—they can go home to their own country.

[Justine Greening]

Following last Thursday’s conference, the hope is that we can better help countries on the border with Syria that are safe for refugees to flee to and that are better able to cope with the refugees who are now there. We all hope that, in time, refugees will be able to go back to their countries. The reality, however, is that the typical time somebody spends as a refugee is now 17 years. That is why the work on getting children into school and on jobs is so important.

[Tom Brake (Carshalton and Wallington) (LD)]

What concrete action did the conference agree to take in Aleppo, following the toxic intervention of the Russians and the likelihood that Assad will impose a blockade? Was the subject of either aid convoys or air drops discussed?

[Justine Greening]

The general point that the right hon. Gentleman raises about access and making sure, alongside generating the resources that UN agencies and NGOs need, that we have the ability to get those resources to people in need was a central part of the conference. That is why I set out in my statement how important it was for the international community to reiterate its support for free and unfettered humanitarian access. We should condemn all those who are daily preventing key supplies from reaching people who are often at death’s door and in need of such supplies.

[Jason McCartney (Colne Valley) (Con)]

The easiest thing in politics is to say, “Do more”, but may I say how proud I am of the Secretary of State, the Prime Minister and the UK for our response to this humanitarian crisis? I agree with my right hon. Friend the Member for Wokingham (John Redwood), the right hon. Member for Cynon Valley (Ann Clwyd) and many other Members that we must now tackle the issue of indiscriminate bombing by Russian air forces. What can be done to get the UN special envoy back around the table with the Russians and to stop the bombing, which is making the crisis so much worse?

[Justine Greening]

The UK Parliament is playing its own role in highlighting this issue, which has led to the current pause in the peace talks. In Munich on Thursday, it is vital that the Russians take a long, hard look at their role in being able to make or break the peace talks. At the moment, the actions they are taking are preventing progress—it is as simple as that—on two fronts: one is the ceasefire, and the other is their failure to persuade the Assad regime to allow supplies into key areas under its control. Of the many requests that UN agencies have made to the Assad regime to allow access to such areas, just 10% have been agreed, which is a total disgrace. I hope the Russians will raise that with the Assad regime, which they are doing so much to support.

[Peter Kyle (Hove) (Lab)]

I commend the Secretary of State for the resources that have been allocated to educating children and young people from Syria while they are displaced, which I understand are being channelled almost exclusively through UNICEF. Will she confirm that British aid agencies, which have a lot of experience in this area, are being included in the discussions and that the door to DFID is open so that their expertise can be used and harnessed?

[Justine Greening]

The No Lost Generation initiative was set up with UNICEF, which has done an amazing job in allowing us to scale up this work. Of course, it is now essentially owned by the Governments in Lebanon and Jordan. I have had the privilege to work alongside their Education Ministers to put together the plans that are enabling us to scale up this work to ensure that all children in those countries can get into school. The best suggestion I can make is that those NGOs get in touch with DFID to understand what role they can play in the plans that the Governments of Jordan and Lebanon have to get children back into school.

[Henry Smith (Crawley) (Con)]

I commend my right hon. Friend and the Government not only for convening the Syria donor conference but for the significant in-region humanitarian support we are providing. In recent times, Saudi Arabia and the United Arab Emirates have contemplated military action in Syria. Will she say what those countries and similar countries in the region are doing with regard to humanitarian aid?

[Justine Greening]

One big step forward at the conference was the stepping up of the region to provide the resourcing for humanitarian supplies to get through to people. Of course, the last three donor conferences were in the region, in Kuwait. We chose to host the conference this year, but it had substantial and significant support from the region. That is one reason we were able to reach such a record-breaking pledge.

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

I echo the concerns of my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper) about the squalid conditions of some of the refugee camps not just in Syria and the region but in Europe. What assessment has the Department made of the health risks, particularly the public health risks, arising from those squalid conditions? What more can be done to alleviate the conditions in which refugees are living?

[Justine Greening]

As I said earlier, we have provided key support to refugees arriving in Europe. Most recently, we announced a £10 million fund that will enable us to provide very practical support to refugees who are having to cope with the difficult conditions the hon. Gentleman describes.

[Mr Philip Hollobone (Kettering) (Con)]

I commend my right hon. Friend for ensuring that Britain is the second largest western donor of aid to the region. What are the Turks meant to deliver in return for the €3 billion that the EU is giving them, especially with regard to the latest wave of refugees from the crisis in Aleppo?

[Justine Greening]

My hon. Friend will be aware that there is already a substantial number of refugees in Turkey— 2 million in total. The plan is really about helping Turkey to continue to provide the food, water, shelter, education and, more latterly, jobs programmes that enable refugees to cope with the circumstances they find themselves in.

[Diana Johnson (Kingston upon Hull North) (Lab)]

If Syria is to have a stable and peaceful future, women and girls will have a part to play in it. Will the Secretary of State say why there was no mention of the role of women in the Syrian stabilisation paper that was published last week?

[Justine Greening]

I fully agree with the hon. Lady that women have a key role to play not only in the rebuilding of Syria in time, but in the peace talks that need to happen in advance. She will know that, alongside all the work we have done to help children affected by this crisis, we have focused on women as well. We know that in humanitarian emergencies, women and girls—adolescent girls, in particular—are often the most vulnerable people, so we have worked very hard to make sure that the risks they face are managed. I would be happy to write to her about some of our plans to make sure that women stay at the centre of our thoughts in the international response to the Syria crisis.

[Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)]

The Secretary of State appropriately highlights the work that is done with people immediately on their arrival into Europe, but the key question remains about what happens after that. What do the Government think should happen with the 1 million people who arrived in 2015, and who should do it?

[Justine Greening]

The UK is obviously not part of the Schengen area, but it has played its own role in helping Syrian refugees who need to be resettled out of the region—the Prime Minister has pledged to resettle Syrians over the course of this Parliament, and I pay tribute to the work of the Under-Secretary of State for Refugees, who has overseen that process to date. We met our first timeline of resettling 1,000 Syrian refugees prior to Christmas, and I think we should be proud of that.

[Hywel Williams (Arfon) (PC)]

Today, up to 70,000 refugees from Aleppo are caught between the al-Assad regime’s advancing forces and Russian airstrikes, and are unable to cross to Turkey. What is being done to offer immediate help to those poor people?

[Justine Greening]

That flow of people is happening because action by the Syrian regime is driving them out of their homes, and we have seen that persistently over the past few years. We have talked directly with our partners on the ground to ensure that humanitarian support is getting through to those Syrian refugees, and more broadly we understand that the Turkish authorities are putting in place the necessary measures to ensure that people are able to cross the border.

Local Government Finance

Monday 8th February 2016 Commons Chamber

17:11

[The Secretary of State for Communities and Local Government (Greg Clark)]

With permission, Mr Speaker, I am pleased to report to the House my response to the consultation on the provisional local government financial settlement for the next financial year. I have considered all 278 responses to the consultation, and my Ministers and I have met local government leaders of all types of authority and from all parts of the country, as well as many colleagues in this House. I have listened carefully to each of them. Colleagues who have worked with me before know that I always take the views of Members of this House seriously, and I always respond when I can to practical and sensible suggestions. I am grateful to everyone who has taken the trouble to make such suggestions.

The provisional settlement contained a number of important innovations. First, although the statutory settlement is for 2016-17, I set out indicative figures to allow councils to apply for a four-year budget extending to the end of the Parliament. Such a change permits councils to plan with greater certainty. That offer was widely appreciated in the consultation, which is not surprising as local government has been requesting it for years. I want to give councils time to consider this offer and to formulate ways to translate that greater certainty into efficiency savings. I will therefore give them until Friday 14 October to respond to the offer, although many have done so positively already.

Secondly, in the provisional settlement I responded to the clear call from all tiers of local government, and many colleagues across the House, to recognise the important priority—and growing costs—of caring for our elderly population. In advance of the spending review, the Local Government Association and the Association of Directors of Adult Social Services wrote to me requesting that an additional £2.9 billion a year be made available by 2019-20. Through a dedicated social care precept of 2% a year—equivalent to £23 per year on an average band D home— and a better care fund of £1.5 billion a year by 2019-20, we will seek to address those pressures on care. The provisional settlement made up to £3.5 billion available by 2019-20.

Thirdly, recognising that council services in rural areas face extra costs, I proposed in the provisional settlement that the rural services delivery grant be increased from £15.5 million this year to £20 million in 2016-17—the year of this settlement—and provisionally to £65 million in 2019-20. Councils and colleagues who represent rural areas welcomed that, but some asked that the gap in central Government funding between rural and urban councils should not widen, especially in the year for which this statutory settlement is intended.

Fourthly, this year’s provisional settlement marked the turning point from our over-centralised past. At the start of the 2010 Parliament, almost 80% of local councils’ expenditure was financed by central Government grant. By next year, revenue support grant will account for only 16% of spending power, and by 2019-20 only 5%. Ultimately, revenue support grant will disappear altogether as we move to 100% business rates retention. Local finance through council tax and business rates, rather than central Government grant, has been a big objective of councils for decades. However, many authorities and many hon. Members, especially those from counties such as Dorset, Leicestershire, Hampshire, Worcestershire, Lancashire, and several London boroughs including Kingston and Havering, have argued for transitional help during the first two years when central Government grant declines most sharply. They have argued that other local resources would not have had the time by then to build up fully.

Much in the provisional settlement was welcomed, but specific points were raised about the sharpness of changes in Government grant in the early years of this Parliament and there were concerns about the cost of service delivery in rural areas. Another very important point was made: many colleagues and councils felt that too much time has passed since the last substantial revision of the formula that assesses a council’s needs and the cost it can expect in meeting those needs. These responses to the consultation seemed to me to be reasonable and ought to be accommodated if at all possible.

Everyone will appreciate that the need to reduce the budget deficit means that meeting the recommendations is extraordinarily difficult, but I am pleased to be able to meet all of the most significant of them. I can confirm that every council will have, for the financial year ahead, at least the resources allocated by the provisional settlement. I have agreed to the responses to the consultation, which recommended an ease in the pace of reductions during the most difficult first two years of the settlement for councils that experience the sharpest reductions in revenue support grant. I will make additional resources available in the form of a transitional grant, as proposed in the response to the consultation by colleagues in local government. The grant will be worth £150 million a year, paid over the first two years.

On the needs formula itself, it is nearly 10 years since the current formula was looked at thoroughly. There is good reason to believe that the demographic pressures affecting particular areas, such as the growth in the elderly population, have affected different areas in different ways, as has the cost of providing services. I can announce that we will conduct a thorough review of what the needs assessment formula should be in a world in which all local government spending is funded by local resources, not central grant. We will use it to determine the transition to 100% business rates retention.

Pending that review, and having listened to colleagues representing rural parts of the country, including Cornwall, Lincolnshire, Devon, Cumbria and Northumberland—

[Mr James Gray (North Wiltshire) (Con)]

And Wiltshire.

[Greg Clark]

And indeed Wiltshire. I suspect I may have the opportunity to respond to colleagues. In fact, distinguished local authority leaders are with us today.

I propose to increase more than fivefold the rural services delivery grant from £15.5 million this year to £80.5 million in 2016-17. With an extra £32.7 million available to rural councils through the transitional grant I have described, this £93.2 million of increased funding compared with the provisional settlement is available to rural areas. Very significantly, this proposal ensures there is no deterioration in Government funding for rural areas compared with urban areas for the year of this statutory settlement.

At the request of rural councils, I have also helped the most economical authorities by allowing them to charge a de minimis £5 a year more in council tax without triggering a referendum. I will also consult on allowing well-performing planning departments the possibility to increase their fees in line with inflation at the most, provided that the revenue reduces the cross-subsidy the planning function currently gets from other council tax payers.

A final point from the consultation: although the figures for future years are indicative, a small number of councils were concerned that, as their revenue support grant declined, they would have to make a contribution to other councils in 2017-18 or 2018-19. I can confirm that no council will have to make such payments.

These are important times for local government. The devolution of power and resources from Whitehall is gathering momentum, yet I am aware that there is serious work for councils to do to continue to provide excellent services for residents at the lowest cost possible over the years ahead. I acknowledge the important role of Members in representing to me the recommendation of councils that deliver the services on which all our constituents depend. I am grateful for all their contributions.

My response to the consultation has been positive in respect of very sensible recommendations and as fair as possible, while holding firm to our commitment to free our constituents from the dangers inherent in the national deficit. I commend the statement to the House.

17:20

[Jon Trickett (Hemsworth) (Lab)]

I thank the Secretary of State for his courtesy in providing me with an advance copy of his statement. We welcome some of the announcements made this afternoon. It is clearly a good thing that more money is being provided to rural communities that are particularly hard hit, but will he explain exactly where the additional funding is coming from? It sounded like a sum of just over £200 million, but that obviously represents a massive shortfall in relation to the billions required to meet all the spending pressures. Nevertheless, where is this additional funding coming from? Has he had to cut other areas of local government expenditure to deliver the additional money? Above all, will he confirm that all this is purely transitional? It reminds me of someone speeding along the road into a disaster who then says he will take his foot off the accelerator without changing the destination. Local government is facing a disaster.

The Secretary of State’s provisional announcement the other week seems to have added some unusual recruits to Labour’s Anti Austerity Alliance. I wonder whether the right hon. Gentleman knows the identity of the anonymous Tory MP who told “ConservativeHome”, which is essential reading—[Interruption.] It certainly is true. This anonymous MP said:

“Councillors have done the right thing, and done it well, in saving vast amounts of money in the last few years. But now all the fat is gone, all the meat is gone and government wants to gnaw on the bone. I’m not having my local swimming pools and libraries closed down”—

and I say hear, hear to that! Is the Secretary of State really gnawing on the bone of local government, as many people feel—in his party and elsewhere? Does he acknowledge that, according to the Tory-controlled Local Government Association, even if every council in England increased council tax by the maximum allowed by the Government for the next four years and even if every penny of that increase went only on supporting the elderly, that would still leave a funding gap of over £1 billion on social care alone?

Only last March, the then Minister responsible for social care promised that the Government would end the infamous 15-minute flying visits. Is that still the Secretary of State’s policy, and if so, how will it be funded, given the £1 billion shortfall? When does the right hon. Gentleman envisage the Government achieving this target?

On how the Government distribute funding between councils, how does the right hon. Gentleman explain the manifest injustice that the most deprived areas have been cut the most? As things stand, the 10 most deprived areas in England will be 18 times worse off than the 10 least deprived areas. How will he explain to hard-pressed families that their services will be cut at the same time as he is engineering council tax increases—up to about 20%, we estimate, by the end of this Parliament?

It is clear from the Secretary of State’s statement that he has studied carefully the representations made by the Rural Services Network, as well as by some anonymous Tory MPs. Perhaps some of them were not anonymous. The Rural Services Network is also Conservative-led, and it said that his provisional statement would

“make life for hundreds of thousands of people across all areas of rural England totally insufferable.”

That is what the Tory rural network said. Can the right hon. Gentleman guarantee that the relatively small increase in the rural services delivery grant announced today will mean that no county councils will have to cut home helps or children’s homes or public transport? Is he really recommending to rural districts that they increase council tax by a precept of at least 2% or by £5—not by whichever is the lower, but by whichever is the higher? Does he acknowledge that more than £20 billion has been cut from local government since 2010? Is not the truth that during the Government’s first term, the impact of these cuts was felt primarily in the more urban northern and London boroughs, and is now spreading far and wide throughout the English countryside?

I represent 20 rural villages. There is no doubt that the provisional settlement was devastating for rural England—how could the Secretary of State make such an announcement? —and that the settlement he has announced today is far from adequate. Will he confirm, as it is transitional, that he intends all the cuts that he announced at the time of the provisional settlement to be imposed on rural areas in due course, during the present Parliament? When will he give the House details of any equalisation measures that he intends to introduce in relation to business rates?

Does the Secretary of State accept that all these cuts are, in essence, a political choice rather than an economic necessity? Should the Government not learn lessons from other members of the European Union that are raising hundreds of millions of pounds more than we are in tax from Google and other multinationals—money that could be used to support public services? Is it not time that the Chancellor showed some guts and stood up to the multinationals, rather than attacking the purses, and the services, of the poorest?

[Greg Clark]

I am delighted to hear about the hon. Gentleman’s reading material and to learn that it is through “ConservativeHome” that he seeks to educate himself these days. That makes a change from the red book that is the preferred choice of the shadow Chancellor. I encourage him to continue. He will know from looking at that very good website that there is constant praise for the efficiency of Conservative councils, which have a record of economy and good service for their residents.

As for increases in council tax, the hon. Gentleman will know all about that, because the Labour Government doubled council tax. According to projections from the Office for Budget Responsibility, at the end of this Parliament, it will be lower in real terms than it was at the beginning of the last Parliament, so we will take no lessons from the hon. Gentleman about council tax.

I detected a half-hearted welcome for the transitional funding, which is just as well, because some Labour council leaders called for precisely that, and I think they might have been disappointed if the hon. Gentleman had not supported them. He asked where the money would come from. I can confirm that it will not come from the local government financial settlement. We have been able to find resources outside the settlement, and, thanks to the generosity of the Chancellor, we are able to add them to it. I can also confirm that the social care precept was requested by local councils, which recognised, in a cross-party consensus, that as the population grows more elderly, there are more elderly people to be looked after in each council area. That is not a reflection on the efficiency or otherwise of councils; it is a demographic fact of life. It is right for us to provide for our elderly people in their retirement.

The hon. Gentleman mentions anonymous people and important figures in Conservative local government. My experience of my colleagues in every part of the House is that they are not anonymous, and they are not shrinking. They know that they can come and talk to me any time and that I will listen and respond when they make a good case. As for our leaders in local government, including the head of the Local Government Association, I could not help noticing the presence in the Chamber today of the gentleman concerned, and he seemed to have a happy smile on his face. I do not know whether that says anything to the hon. Gentleman.

[Several hon. Members rose—]

[Mr Speaker]

Order. I remind the House that Members who came into the Chamber after the statement began cannot expect to be called. Our convention on that matter is very clear and people need to abide by it.

[Robert Neill (Bromley and Chislehurst) (Con)]

The Secretary of State is to be congratulated on having negotiated a difficult minefield with considerable skill. I particularly thank him for his thoughtful approach and for the time that he gave to me, my fellow MPs and my council leader from Bromley when we came to see him. I welcome the fact that he has picked up on the importance of transitional relief in so far as it affects the London boroughs, given the risk that outer London’s particular circumstances can sometimes be lost in the equation. Can he give me details of the timeframe for the operation of the transitional relief? Can he also tell me more about the review of the needs element, which many of us welcome? I regret that we were unable to do that in coalition, but there were many other pressing matters at that time. It is important that the comparatively low unit costs incurred by historically efficient local authorities should be picked up when setting the baseline for retained business rates.

[Greg Clark]

I am grateful to my hon. Friend. I recall spending a very pleasant evening with the Cabinet of his council in Bromley and having a more recent meeting there. It is right to think of the demographic pressures in the outer London boroughs. Those boroughs, and many other places across the country, have made the case that the population has aged and more people tend to retire to those places than to others. They also contend that the formula, which has not changed for 10 years, has not kept up with that. I can confirm that the transitional funding will be available immediately, from the next financial year, so that my hon. Friend’s council and others will be able to apply those extra funds straight away.

[Alison Thewliss (Glasgow Central) (SNP)]

I thank the Secretary of State for giving me slightly advance notice of his statement. It comes against a background of cuts to local government in England; I understand that the figures are 27% over the past years and 8% for the years ahead. I am glad that he has at least given local councils a bit of time to think about this, and I hope that they will get back to him with their views on the settlement. I note what has been said about the pressures on rural service delivery, but the breakdown of the core spending power appears to show that areas that are already very wealthy are going to get more. He also mentioned that the percentage of council expenditure financed by central Government grant was going down from 80% to 5%, but I wonder how much of that is just cuts rather than changes to the expenditure.

There does not seem to be enough time for councils to respond to the proposals. The Secretary of State has talked about giving them two years to respond, but that does not acknowledge the difficulties that some councils will have in raising funds from business rates and council tax. Some will be starting from a relatively low base in that regard, and I am not convinced that two years will be enough transition time for them. Also, the statement does not seem to mention any recognition of needs. It talks about demographic pressures, but age is not the only such pressure that communities face. There needs to be greater acknowledgement of that fact in these plans. Other demographic pressures exist, and areas of multiple deprivation will require additional support and transitional relief. I would like to see greater recognition of that in the proposals.

[Greg Clark]

I am grateful to the hon. Lady for her contribution. She will know from her colleagues in Scotland that setting the local government financial framework is a delicate matter. It involves a lot of decisions that affect people in different ways, and I hope she will acknowledge that I have done this in a fair way. She talks about the transitional relief lasting for two years. This will happen because the shape of the settlement will see resources increasing towards the end of the period, as the social care precept and the Better Care Fund take effect. However, colleagues across the House felt that the first two years would be the most severe time, and I therefore felt it right to focus the transitional relief on that period. The hon. Lady mentioned an assessment of needs, and I completely agree with her. The review to which I have committed will look at all the needs, and it will consider not only the demographic pressures but the cost of delivering services, because that is a fair way to proceed.

[John Redwood (Wokingham) (Con)]

Will the Secretary of State give me any more detail on how the welcome transitional relief will abate the severe cuts in his original plans for both Wokingham and West Berkshire?

[Greg Clark]

I will indeed. I was grateful to my right hon. Friend for his meeting with me and the representations he made. Again, both of his local authorities felt that the early years were the most pressing, so I can confirm that there will be transitional funding for West Berkshire of £1.4 million and for Wokingham of £2.1 million in the year ahead. I think that will be welcomed by his authority, following my having carefully studied its representations to me.

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

May I again tell the Secretary of State about the ongoing cuts in my borough because of the lack of funding? Would he be willing to meet the Tory leader of the council to discuss what is happening on the ground and the adverse impact on my constituents and others in the borough of the continuing cuts? Will he come to the borough to see for himself what is happening and to see that I am in no way exaggerating the position?

[Greg Clark]

I regularly meet that local leader. The west midlands is a very important area where we are negotiating a very important devolution deal at the moment. The hon. Gentleman will know that his local authority has benefited from the settlement, so that over the four years its spending power will increase by 1.5%, which I know will be welcomed locally.

[Sir Nicholas Soames (Mid Sussex) (Con)]

I thank my right hon. Friend for the careful and diligent way in which he has approached this matter. Does he agree that what seems to be so difficult for local government, particularly in rural areas, is that some counties and authorities, such as my local Mid Sussex District Council, run their affairs in an exemplary and very orderly fashion, but the more efficient and effective they are, the less money they get? That seems to be a completely idiotic way of proceeding.

[Greg Clark]

Indeed it is, which is exactly why we are making the transition to business rate retention, where it is not the representations that councils make to central Government for grants, but their ability to attract businesses and to grow those businesses that will be the determinant of the resources they have available. Councils and Conservatives have long wanted that, and I am confident that both my right hon. Friend’s county council in West Sussex and his excellent district council, the membership of which I know very well, will respond with great alacrity to the opportunities available to them.

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

The crisis in social care in Liverpool will not be resolved by either the new precepts suggested or the Minister’s statement today, as it is the result of the 58% cumulative cut in funds by central Government on the poorest area in the country. Will he take another look at this very critical situation?

[Greg Clark]

The introduction of the precept and of the Better Care Fund will be very important for Liverpool; by the end of the period it will deliver about £30 million a year to spend, quite appropriately, on the care of elderly people in Liverpool. I would have thought the hon. Lady would welcome that. Conservative county council leaders proposed that there should be a social care precept, but it would benefit her city as much as it does them.

[Jo Churchill (Bury St Edmunds) (Con)]

I thank the Secretary of State for the meeting he held with me and other Suffolk Members to discuss local funding. I know he has worked hard on our behalf, and I cautiously welcome his announcements today, particularly those on additional funding to ease the pace of reduction during those first two years. However, will he inform the House as to when final figures will be given to councils?

[Greg Clark]

I will indeed. I was grateful for the meeting I had with my hon. Friend, and I am looking forward to the discussions of further devolution to Suffolk for the East Anglian powerhouse or motor—we will coin an apt description for that very high-performing part of the country. The funds will be available right from the beginning of the next financial year and, in the usual way, they will be confirmed to councils following this statement.

[Derek Twigg (Halton) (Lab)]

I can see the Parliamentary Private Secretaries working hard to get the figures to the Secretary of State.

To put the announcement in context, Halton has had a cut of more than 50%—£52 million—since 2010, while 68% of properties there are in bands A or B. The precept will not raise anywhere near enough to fund the shortfall in social care. Will the Secretary of State reconsider this and meet me urgently to talk about the problems in Halton?

[Greg Clark]

I am always happy to meet the hon. Gentleman. He will know that the funding allocation took into account the different resources of different areas—and Halton was a beneficiary of that—but I am happy to meet him to take him through the figures so that he can better understand.

[Sir Edward Garnier (Harborough) (Con)]

Like others, I thank my right hon. Friend for the meetings he has had, particularly with my right hon. and hon. Friends from Leicestershire. As he will know, our county historically has been one of the worst funded from central Government, and we are hopeful that the new deal will benefit not only central Government but Leicestershire. Will he tell the House when we are likely to get the numbers, which the county council can deal with, and what they will be?

[Greg Clark]

I certainly will. I am grateful to my right hon. and learned Friend for his advice on this matter. I think Leicestershire will make a particularly strong case for a review of the match between needs and resources. Rather than keeping him hanging on, I can tell him that the transitional funding for Leicestershire will be £3.3 million.

[Mr Kevan Jones (North Durham) (Lab)]

For the benefit of the PPSs, my local authority is County Durham. It is a bit off, Mr Speaker, that the Secretary of State has all the figures, but they have not been released to councils, which means we have no way of scrutinising his answers.

I wish to raise the point also raised by my hon. Friend the Member for Halton (Derek Twigg) about the Better Care Fund. I agree with the Secretary of State that this issue affects all councils, but County Durham has a low council tax base, as most of its properties are in bands A or B. He just said this will be taken care of in the formula. Will he meet me and north-east MPs whose councils are disadvantaged by not being able to raise the cash that larger authorities, such as Westminster, can?

[Mr Speaker]

Usually the complaint is that others are told first. In this case, I fear some people are complaining that the House is being told first. I cannot see what is wrong with that. It seems a highly desirable state of affairs. I might have misunderstood, but I think I have understood.

[Greg Clark]

I am grateful, Mr Speaker.

I had conversations with the hon. Gentleman’s local authority, and it made some very positive comments and suggestions for the settlement, but I am always pleased to meet him to discuss the important devolution taking place in the north-east of England, of which we are very proud.

[Jesse Norman (Hereford and South Herefordshire) (Con)]

I warmly congratulate the Secretary of State on his announcement. As he will be aware from our representations, Herefordshire was looking at a 34% reduction in the rural services grant next year, against a uniform reduction of 25%. Any support will be much appreciated. Is there not a danger that low-economic-activity areas—I am afraid that my own county has historically been such an area—might be penalised by the transition to council tax being supplemented by rural rates, unless there is a transitional fund to stimulate economic growth alongside it?

[Greg Clark]

My hon. Friend makes a good point. I think that Herefordshire has great potential in terms of attracting and growing businesses. For example, he has been a doughty campaigner for a university in Hereford. He is right that the transition to a world in which local resources fund councils has to take account of the needs of each area and its potential to raise revenue. That is why I announced the review today. Several colleagues from across the Chamber have contributed to, and have great expertise in, this matter, and I hope, in the spirit of this statement, that they will contribute personally to that review.

[Ann Coffey (Stockport) (Lab)]

I, too, am concerned about the future stability of funding for local services. While council tax provides a solid base of revenue, moving to more reliance on business rates means more unpredictability in the level of revenue available to local councils. What consideration has the Secretary of State given to future mitigation of the impact on local services of a fall in revenue from business rates—for example from a downturn in the economy, which is beyond the control of any local council?

[Greg Clark]

The great advantages of the devolution deals that we are striking, including with Greater Manchester—[Interruption.] The hon. Lady raises her eyes, but the elected leaders of Greater Manchester have proposed a means of taking on the 100% retention of business rates and making sure that they can manage the ups and downs of that across the years. This is a proposal that they have made, so that, in attracting more businesses to Greater Manchester, the whole of that great city will benefit.

[Sir Alan Haselhurst (Saffron Walden) (Con)]

Can my right hon. Friend assure me that his final settlement reflects the accurate level of reserves that are truly available to Essex County Council?

[Greg Clark]

I have made no assumption of reserves. In advance of the spending review, several commentators suggested that we should take account of councils’ known reserves. I resisted those calls, and it seems that it is reasonable for councils to have reserves, just as, as a nation, we are looking to create a surplus as a buffer against the ups and downs of the economy in the years ahead, which is something that the Labour party failed to do. The great advantage of a four-year settlement is that it gives that certainty to councils, so that part of the reserves that they keep against the uncertainty of year-to-year settlements is available to them, but I have made no assumptions that they will use them.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

At my surgery on Friday, I met a woman who cared, on her own, for her severely disabled daughter 24 hours a day, seven days a week. She is not able even to get a decent night’s sleep. She used to receive six nights of respite care a month, but now she has been told that she will get nothing. That is the reality of the Conservative party’s treatment of local government since 2010. In Tameside, there are no more back-office functions to merge and no more staff to be made redundant. There is nothing left to cut, except the services for the people who need them most, and for them the outlook is bleak. No amount of devolution to Greater Manchester, as good as that is, can compensate for a lack of basic provision.

[Greg Clark]

May I suggest to the hon. Gentleman that he goes next door and has a cup of tea with the leader of Trafford council, which runs its services extremely efficiently? I dare say that it would be sensible of Tameside to take up any advice that the council leader is able to give.

[Mr Laurence Robertson (Tewkesbury) (Con)]

May I thank the Minister for revisiting this issue? Does he accept that what all Members who represent rural areas want to see is fairness in the funding system? Although Gloucestershire may seem to be a leafy, wealthy county, there are areas of deprivation. We have flooding problems and a higher percentage of older people who, regardless of where they live, still need social care. May I ask him to ensure that the final settlement reflects the problems in rural areas as well as in other areas?

[Greg Clark]

I completely agree with my hon. Friend. I was grateful to my colleagues from Gloucestershire for the representations that they made. He will be pleased to hear that the pressure on them will ease for the first two years—it will be to the tune of about £2.5 million next year—which, knowing the pressures on the council for exactly the reasons that he said, will be welcomed locally.

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

At £0.75 billion, no council has ever suffered the same level of cuts in local government history as Birmingham. No city has ever been treated so unfairly. Does the Secretary of State begin to understand the dismay that there will be over today’s announcements, which will put at risk school crossing patrols, deepen the growing crisis of health and social care in the city and threaten dozens of community groups supporting the most vulnerable in Birmingham? There will be utter dismay in Britain’s second city.

[Greg Clark]

The figures that I have published today include an extra £800,000 from the new homes bonus for Birmingham that was not included in the provisional settlement. I should have thought that that was a cause of some pleasure in Birmingham, rather than the opposite.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

Really well done to the Secretary of State on the statement, the uplift in the rural services delivery grant and the review that he has announced. However, what assumptions has he made about the uplift in parish and town council precepts, given the assertion he made a few moments ago about the proportion of local government spend that would be consumed by the revenue support grant by the end of the decade? He will know that those precepts have gone up as the RSG has gone down, as in many places the council tax has been frozen.

[Greg Clark]

My hon. Friend makes an important point. There have been representations in the past to include parish and town councils in the referendum principles. We have not done that, but we keep it under review so that there is economy in those councils, which is important, because their residents are also council tax payers who pay council tax to his county council.

[Diana Johnson (Kingston upon Hull North) (Lab)]

Hull is the 10th most deprived area in the country, and over the next year it faces spending cuts on average nearly 50% greater than those faced by county councils, so will the Secretary of State explain to my constituents why county councils are getting additional moneys, but not areas such as Hull?

[Greg Clark]

County councils and other authorities in the first two years experienced sharper reductions in the revenue support grant, and representations across local government, including Labour authorities, suggested that we should ease the transition. I would say to the hon. Lady’s constituents in Hull that much attention has been paid to that important city through the growth deal that we established, which invested substantially in the area. The prospect of further devolution offers more important opportunities for that city.

[Rishi Sunak (Richmond (Yorks)) (Con)]

I thank my right hon. Friend for meeting colleagues and me, and for listening to rural communities. I warmly welcome the statement. An ageing population is a key driver of cost, so will my right hon. Friend ensure that future funding formulae, instead of using out-of-date figures, will keep up with the changing demographics in areas such as North Yorkshire?

[Greg Clark]

Indeed. That is one of the points that my hon. Friend and other colleagues have made, which is why I have responded by saying that we should look again at that funding formula. It was also a point made by Carl Les who, as my hon. Friend knows, is the excellent leader of North Yorkshire County Council, and I am pleased that we have been able to meet his request.

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

Did the Secretary of State consider including the Chancellor’s social care tax in the calculation of overall council tax income for the core funding settlement, which would make the changes fairer and mitigate the late introduction of the better care fund for low council-tax base authorities such as Birmingham?

[Greg Clark]

The social care precept is recognised across all parties and different types of authorities, even those, including district councils, that do not receive it. Their residents are residents of counties and of metropolitan boroughs, and it is important that funding is there. The combination of the precept and the better care fund provides up to £3.5 billion. I repeat what I have said: the representations that I received before the spending review from the Local Government Association and directors of social services was that they needed £2.9 billion. We have provided £3.5 billion.

[Simon Hoare (North Dorset) (Con)]

May I thank my right hon. Friend for his patience and courtesy, and ministerial colleagues and indeed officials at the Department for Communities and Local Government for theirs in their dealings with colleagues from Dorset, including the leader of the county council and me? It is appreciated, and I welcome wholeheartedly today’s announcement from my right hon. Friend. If it was parliamentary, I am sure that rural local government would plant a big, wet kiss on the cheek of the Secretary of State—but I am not entirely sure that that is parliamentary.

Will my right hon. Friend give further details of the transitional funding for Dorset that he has announced? The devil is in the detail, as always, so will he set out further information on the timing of the welcome review of the assessment of needs? The sooner we can get that sorted out, the better for rural local government.

[Mr Speaker]

Before the Secretary of State provides a comprehensive and, I am sure, scintillating reply to his hon. Friend, I take this opportunity to say what a delight it is to see our new Serjeant at Arms in the chair.

[Greg Clark]

May I add my welcome to the new Serjeant at Arms?

Given what my hon. Friend the Member for North Dorset (Simon Hoare) said, I am grateful that he is sitting far away from the Dispatch Box. I am grateful, however, for his good wishes. Dorset is a well-run county council, and it has important costs as a result of being a beautiful rural county. The extra funding that it will receive from April this year will be £4.10 million which I know, having spoken to the leader of the council, will make a big difference in managing the transition that was a great concern for the authority.

[Fiona Mactaggart (Slough) (Lab)]

Slough is the smallest unitary authority in the country. In response to questions, the Secretary of State announced that fellow Berkshire unitary authorities, West Berkshire and Wokingham, will receive £1.4 million transitional funding. Slough faces particular pressures, as it is on the border of London and has a changing, high-needs population. What are we going to get?

[Greg Clark]

It sounds as though the right hon. Lady wants to participate in the review of needs and of the cost of delivering those needs, so I am surprised that she has not welcomed the announcement that I have just made.

[Mrs Anne-Marie Trevelyan (Berwick-upon-Tweed) (Con)]

I welcome the additional funding that my right hon. Friend has announced to ease the pace of reductions during two the most difficult years, which in Northumberland seemed to be a really frightening challenge. Will he confirm that the revised settlement means that the position in Northumberland, which continues to have one of the highest populations of elderly people, will be secure?

[Greg Clark]

The benefit for Northumberland is twofold. First, there is additional funding from the rural services delivery grant and the transitional grant that I mentioned, both of which are important and will be welcomed by people in Northumberland. Secondly, the review of the cost of delivering services in rural areas and the increased demands there is something for which my hon. Friend’s constituents and councillors called, so it is right that we should get on with that straightaway.

[Peter Kyle (Hove) (Lab)]

The recent report by ResPublica said that 37,000 elderly people who were dependent on statutory funding for residential care were at risk of losing their places and becoming homeless because of the rise in the minimum wage and cuts to local council funding. Areas such as mine which, for the benefit of the Parliamentary Private Secretary to the Secretary of State is Hove in Sussex, will do reasonably out of the precept because of the high tax base, but other areas with a low tax base, such as the north-east, will suffer very badly, and they have the highest rates of dependency on statutory funding for adult social care. Will the Secretary of State look again at the funding formula and make sure that areas that most need funding get it?

[Greg Clark]

I have just said to the House that I intend to look again at the funding formula to make sure that areas with the highest costs and pressure are funded accordingly.

[Richard Benyon (Newbury) (Con)]

The well-run West Berkshire Council faces a cut in the RSG of 44%, so I am grateful that my right hon. Friend and his ministerial team have listened to the many entreaties from my right hon. Friend the Member for Wokingham (John Redwood) and me.

Will the Secretary of State do two things? First, will he say whether it is possible to envisage a speeding-up of work on the retention of business rates, because that would resolve many problems for local authorities such as West Berkshire? Secondly, would he have a word with his colleagues in the Department of Health and tell them to pull their finger out, as they have agreed a deal to return funding under the Care Act 2014? They promised to do that, and it would make a massive difference to settling this year’s budget.

[Greg Clark]

My hon. Friend is right: he has a well-run council, and representations from him, our colleague and the council led me to make the changes that I have made. On the early retention of business rates, I am glad that he has given me the opportunity to say to all Members that, through the devolution deals, we are keen to get on with the devolution of business rates. I encourage all areas to introduce proposals on that. The Chancellor has made a commitment that that should be in place by 2019-20, but that is “by” rather than “in”, and I should have thought that West Berkshire and its neighbours were well placed to put together a good case for that.

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

I always had the Secretary of State down as a fairly bright chap, but this would be a fair settlement only if it were predicated on every area having an equal council tax base and equal levels of need. Representing as I do a cross-borough constituency—for the PPSs, that is Tameside and Stockport—I know that those two local authorities are very different in their ability to raise income. Tameside, for example, this year has a £16 million deficit in adult social care. The levy on council tax—the 2% precept—will raise £1.4 million only. How does the Secretary of State plan to fill that gap?

[Greg Clark]

I have given some advice to the hon. Gentleman’s neighbour, the hon. Member for Stalybridge and Hyde (Jonathan Reynolds), on this issue. If the hon. Gentleman would like me to arrange for him to meet Sean Anstee, the leader of Trafford council, I think he would find it a very constructive conversation. In a world of devolution, Trafford may be able to provide some advice and assistance to the hon. Gentleman’s borough council on running an efficient set of services.

[David Tredinnick (Bosworth) (Con)]

I welcome the £3.3 million transitional relief for Leicestershire which, as my right hon. Friend knows, has been at the bottom of the funding pile. The transitional relief will be widely welcomed in my constituency. Will my right hon. Friend say a word about the discussions he has had on the funding of adult social care, which very much affects our county?

[Greg Clark]

I will indeed. The provisional settlement, as I said in my statement, made a particular response to the acknowledged pressures on adult social care across the country. All tiers of local government cited this as the important priority. The decision to establish the social care precept and the addition to the better care fund were an extremely important step in recognising what has been building up for many years as particular pressures on authorities, and Leicestershire, well run though it is, feels those pressures particularly acutely.

[Heather Wheeler (South Derbyshire) (Con)]

I congratulate my right hon. Friend on listening, with all his Ministers, to the pleas from Derbyshire and South Derbyshire in particular. We are very grateful for the amelioration of the arrangements, but will my right hon. Friend go a little further and think about the changes to the new homes bonus and to business rates, so that although fast-growing districts will get more money in the future, they are not penalised in the short term ?

[Greg Clark]

Indeed. The consultation on the new homes bonus is open until March and it is important that my hon. Friend and her councillors contribute to that. That will be the opportunity to consider those views. As I have made clear today, the important step of 100% business rate retention by local government needs to be accompanied by a fundamental look at the methodology, and I hope my hon. Friend will bring her considerable expertise to bear on this matter.

[Dame Angela Watkinson (Hornchurch and Upminster) (Con)]

I thank the Secretary of State for his announcement about transitional relief, which I very much hope the London borough of Havering will benefit from, not just because of its ageing population but because of the increasing demand for children’s services. My right hon. Friend will already know, I am sure, that the 12 inner-London boroughs have more reserves collectively than the 20 outer-London boroughs. Will he reflect further on whether that might be taken into consideration?

[Greg Clark]

I am grateful for my hon. Friend’s suggestion. Havering is a well-run council and it will benefit from the transitional relief. I think it will want to make a good case for the review of the demographic and other pressures it is facing. My hon. Friend invites me to do what I said I would not do—require councils to dispose of their reserves. If I did that, I would incur the displeasure of some of the colleagues who spoke earlier. I have not done that. It is a matter for local government, but a four-year settlement gives every council the ability to plan ahead and make sure it has the right level of reserves for the circumstances it faces.

[Graham Stuart (Beverley and Holderness) (Con)]

I join colleagues in thanking the Secretary of State for the manner in which he carried out the consultation. Further to the remarks of the Scottish National party representative, the hon. Member for Glasgow Central (Alison Thewliss), who suggested that rural areas were richer than urban areas, the opposite is true: average earnings are higher in urban than in rural areas, and council tax is much higher. If we allow percentage rises to continue on a much higher base for much poorer people, there is a danger that we will reinforce the inequities in our system. So in a world of business rate retention and council tax, what can the Secretary of State do to ensure that our poorer, older, harder-to-service citizens are not unfairly impacted by ever greater council tax, while the lower council tax areas—often richer people—pay less and continue to be subsidised by us?

[Greg Clark]

My hon. Friend makes an excellent point. I pay tribute to him for conducting a well-reasoned and forensic argument that has been persuasive, and I am grateful for the manner in which he has done that. He is right. It is a false assumption that because an area is rural, it is wealthy and prosperous. Some of the most challenging circumstances are in the most rural areas. That is why, after more than a decade, it is long overdue that we should look at the costs of delivering services in rural areas. We should look at the pressures that they face and set the retention of business rates accordingly, so that they can be recognised in a way that they have not been over recent years.

[Dr Sarah Wollaston (Totnes) (Con)]

I warmly welcome the Secretary of State’s statement today and thank him for listening to the concerns of rural areas. He will know, however, that the demographic pressures in places such as Devon are severe, and that the precept, welcome as it is, will quite meet the cost of the rise in the national living wage. During his review, will he set out whether he will listen to other proposals to create a sustainable long-term settlement for social care, which has been described as unfinished business in the “Five Year Forward View”?

[Greg Clark]

I certainly will. I am grateful for my hon. Friend’s words. One knows that more people choose to retire to places such as Devon than to other parts of the country, and it is important that that is recognised in the funds that are available. As everyone knows, my hon. Friend chairs a very important Committee of this House, and one of the essential tasks of this Government over the years ahead will be to make sure that health and social care come together. They are two sides of the same coin. The same people are being looked after, whether by councils or by the NHS. One of the things I am determined to do is to make sure that we have a much better connection between the NHS and social care, and I would be grateful for her advice and that of her Committee in how we do that.

[Mr Philip Hollobone (Kettering) (Con)]

I declare my interest as a member of Kettering Borough Council. The different councils in Northamptonshire will be affected by the settlement in different ways. Perhaps Northamptonshire County Council, which charges the lowest county council tax in the whole country, will be the most vulnerable. The long-term answer to ensuring proper local service delivery in the county might be a restructuring of local government. Will my right hon. Friend confirm that he is open to innovative solutions that could involve a restructuring to ensure that local public services are delivered more efficiently under a different organisation?

[Greg Clark]

It is in the interests of us all that councils are effective and efficient. I have always said that I do not believe in a top-down reorganisation of local government. When that has been attempted in the past, it has not ended well, if I may put it that way. But of course the commitment I have to devolution carries with it the idea that if local people want to do things differently, they should be able to do that, so if there are proposals from Northamptonshire that enjoy the support of local people, they should come forward and have those discussions.

[John Howell (Henley) (Con)]

I congratulate my right hon. Friend on his pragmatic approach to these issues. He rightly points out that demographic pressures affect different areas in different ways. When does he expect the needs review to be completed, and what role will the figures obtained from that play in any closer integration of social care with the NHS?

[Greg Clark]

I am grateful to my hon. Friend, who was of considerable assistance to me when we consulted on the national planning policy framework, and we were able to make sensible responses to that consultation too. I am keen to get the review under way as soon as possible so that it can inform not only business rates retention but other decisions the Government have to take from time to time about rural areas and the different needs of different areas. The sooner it is done, the better, and I will set out in the coming weeks the process involved, so that colleagues across the House can contribute.

[Richard Drax (South Dorset) (Con)]

May I thank my right hon. Friend for the courteous way in which he has dealt with me and Dorset colleagues—it really has been exemplary—and for the £4 million or more for Dorset County Council? Will he confirm—I did not quite hear this, and local leaders are watching the debate—whether the tariff adjustment will stay or go? In 2019-20, Weymouth and Portland Borough Council, for example, will end up paying the Government £500,000 but taking only £123,000 in council tax. I do not think that is fair, and I very much hope that the review will take such things into account.

[Greg Clark]

Indeed. I am grateful to my hon. Friend for his kind words. Not only Dorset County Council but the districts he represents will find the transitional relief and the rural grant important. I have said that we will remove what has been called the negative grant entirely for 2017, 2018 and 2019. By the time we get to the end year of the settlement, 100% business rate retention will come in anyway, so the figures will be influenced by that. My hon. Friend can therefore look forward with confidence to the review, to which his council and, I dare say, he himself will want to contribute.

[Mark Pawsey (Rugby) (Con)]

The funding of adult social care has been one of the biggest pressures on our local authorities given that we have an increasingly ageing population. I therefore thank the Secretary of State for listening to the concerns of council leaders such as Councillor Izzi Seccombe, of Warwickshire County Council, who has spoken regularly on this matter. I also thank him for making sure that more money is available through the better care fund to attend to the needs of these particularly important residents.

[Greg Clark]

I am grateful to my hon. Friend. He is absolutely right: Izzi Seccombe does an excellent job not only in leading Warwickshire County Council but in her national responsibilities in the Local Government Association. She has been very persuasive in making the case for extra funding, recognising the costs of social care. She is one of the most influential and respected council leaders in the country, and my hon. Friend is lucky to have her.

[Andrew Bridgen (North West Leicestershire) (Con)]

I thank the Secretary of State for his earlier answers to my right hon. and learned Friend the Member for Harborough (Sir Edward Garnier) and my hon. Friend the Member for Bosworth (David Tredinnick), and indeed for accommodating a meeting with all the Leicestershire and Rutland MPs, at which we had a very frank exchange of views about local funding. Will he go a little further and explain what opportunities exist for North West Leicestershire and Leicestershire under the increases to the rural services delivery grant?

[Greg Clark]

I am grateful to my hon. Friend for coming back after questions earlier to consider these matters. There are opportunities for Leicestershire; it and North West Leicestershire will gain in transitional funding. One thing we will need to do in the review is look at areas such as North West Leicestershire to see whether their resources and needs are adequately recognised not only in business rates retention but in calculations for things such as the rural services delivery grant.

[Chris White (Warwick and Leamington) (Con)]

Both local authorities operating in my constituency have expressed serious concerns about the draft settlement. What assurances can the Secretary of State give regarding his consideration of those concerns?

[Greg Clark]

As I said earlier, we have listened carefully. The leaders of my hon. Friend’s authorities have made representations, which we have listened to very seriously. I think they will be pleased with the response we have made through the settlement.

[Mark Spencer (Sherwood) (Con)]

The Secretary of State will be aware of the challenge faced by Nottinghamshire, which has been particularly compounded by the issues faced by former coalfield communities. Will he outline the improvements to the funding Nottinghamshire may receive? Will he also meet me to discuss plans for an enterprise zone at Thoresby colliery to enable the county council to find its own way in generating business rates in the future?

[Greg Clark]

My hon. Friend makes an excellent point. Attracting businesses to locate in an area is a sure-fire way of making sure that the resources available to councils continue to grow. I am grateful to him for his question, and I can confirm that Nottinghamshire will receive transitional grant funding of around £2 million next year, which I think will be welcomed across the county.

[Bob Stewart (Beckenham) (Con)]

It was not me who had a cosy little chat with “ConservativeHome” this morning—if, indeed, it was a Conservative MP who did so. However, the idea of some councils having to gnaw on the bone is absolutely accurate, and I refer, of course, to my own council of Bromley, which has been gnawing on the bone, because of its efficiency and competence in providing services. Therefore, I am grateful to the wonderful Secretary of State for visiting Bromley and for agreeing to transitional arrangements for it. Could I ask what they are, sir?

[Greg Clark]

It is always a pleasure to come to Bromley, and I hope I will be able to do so again with my hon. Friend in the future. We will make sure that Bromley benefits from around £2 million in transitional grants for each of the next two years. I know from looking at the representations that have been made by London boroughs that that will be a big help in helping them to manage the more difficult first two years of the settlement.

[Matt Warman (Boston and Skegness) (Con)]

May I thank the Secretary of State for listening to the vocal representations from across Lincolnshire, including from my neighbour, my hon. Friend the Member for Louth and Horncastle (Victoria Atkins)? At those meetings, he heard that it is not just rurality but sparsity of population that is important. Will he confirm that the new, revised settlement takes those conditions into account and tell us what it means for Lincolnshire?

[Greg Clark]

I will indeed. Lincolnshire is in a particularly ambitious phase of its history, and it is looking to negotiate a substantial devolution deal. As a rural and sparsely populated county, as he said, it faces particular pressures, so the additional funding it will receive is in the order of £5 million during the year ahead, and that will be widely welcomed across the county.

[Peter Heaton-Jones (North Devon) (Con)]

As it apparently falls to me to do the finale, I say well done and thank you to my right hon. Friend the Secretary of State. I and many colleagues from across the south-west and from rural constituencies lobbied pretty hard, and we thank him very much for listening. We await the final figures. He might well be able to provide the figure for North Devon shortly—if I speak slowly enough. [Interruption.] Marvellous. However, does he agree that it is important that we never again find ourselves in a position where rural areas face discrepancies and unfairness compared with urban areas?

[Greg Clark]

I am very grateful to my hon. Friend. He may be last, but Devon is certainly not least—it is a very important part of the country. His patience is rewarded: the funding that Devon will receive from the Government next year is £8.4 million, which will make a big difference to his area. North Devon will receive around £250,000 for its district council services. The opportunity to take a long, hard look at the resources that areas have, the costs they incur and the demands they have on their services is long overdue. I know that my hon. Friend’s county and his district will play a full part in that review, and I dare say he will too.

Social Security

Monday 8th February 2016 Commons Chamber

18:18

[The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)]

I beg to move,

That the draft Social Security Benefits Up-rating Order 2016, which was laid before this House on 25 January, be approved.

[Madam Deputy Speaker (Natascha Engel)]

With this we shall take the following motion:

That the draft State Pension (Amendment) Regulations 2016, which were laid before this House on 18 January, be approved.

[Mr Vara]

The order and regulations before us have been laid previously in the House. It is my understanding that there is general agreement on both sides of the House on their contents. I do not, therefore, propose to detain the House any longer than is necessary.

18:19

[Angela Rayner (Ashton-under-Lyne) (Lab)]

This is the first time I have debated with the Minister at the Dispatch Box, so I welcome him to his place and thank him for his—very brief—explanation of the draft proposals.

I want to use this opportunity to debate, clarify and scrutinise aspects of these important measures. As the Minister has outlined previously, the coalition Government legislated in the Pensions Act 2014 to introduce a new single-tier state pension for persons reaching state pension age on or after 6 April 2016.

A central principle of this legislation has been to maintain the earnings link, which was restored in the Pensions Act 2007, passed by a Labour Government. The coalition Government committed to increasing the basic state pension through the triple guarantee of earnings, prices or 2.5%, whichever is highest, from April 2011. The triple lock is a policy approach that Labour Members support—a position that was confirmed in our manifesto at last year’s general election.

Today, we are considering statutory instruments to implement and update key features of that settlement. For existing pensioners on the current state pension age scheme, the proposed 2.9% increase, which matches earnings as the highest rise of the three measures for this year, is a step in the right direction. A full basic state pension will therefore rise to £119.30 a week—an increase of £3.35.

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

I welcome my hon. Friend to her Front-Bench position. The triple lock is all fine and well if one is in receipt of the state pension, but she will know that there is a group of women who have been deprived of their state pension, the WASPI—Women Against State Pension Inequality—women who were born in the 1950s. Does she agree that a triple lock on nothing is still nothing and that we need from this Government fair transitional arrangements for those women?

[Angela Rayner]

I thank my hon. Friend; I hope to touch on that later. I commend him and my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) for their campaigning on this issue for those women who feel that they have been let down by this Government.

The increased starting rate of £155.65 for the new flat-rate pension, to be introduced in April this year, is also broadly welcomed by Labour Members, although it is of course an increase of only 5p on the previous minimum guarantee of £155.60. Less welcome are the lack of communication, escalated timescales, poor management and utter confusion caused by what the former Pensions Minister, Steve Webb, said was meant to be “a simplified system”. Several aspects of the new legislation will have significant implications for current and future pensioners.

Under the new single-tier state pension, the Government intend that individuals qualifying for the new state pension will receive it on the basis of their own contributory record. The qualifying period to receive the full flat-rate pension goes up from the former 30 years of national insurance contributions to 35 years. There is therefore some concern about reports over the weekend suggesting that up to 4 million people retiring under the new scheme from April could receive an incorrect amount because their incomes are being calculated using data riddled with errors.

The Government are quick to jump on individuals or families who make errors in relation to tax credit or benefit claims, so it is, equally, incumbent on them to ensure that their own calculations are correct. The Minister has been prepared to set debt collectors on families who have received extra tax credit income because of the Department’s errors, so there will be understandable fear of the consequences where pensioners are overpaid due to any errors. Of course, if they are underpaid, the injustice will be obvious. It would therefore be helpful if the Minister gave us his assessment of the scale of these problems and said whether he believes that the press reports over the weekend are accurate. If the Government are encountering such problems, how does he plan to deal with them? What reassurances can he give to the millions of taxpayers potentially affected that they will get the correct amount that they were promised and are entitled to?

On a matter of equal importance, unlike the current state pension, under the new single-tier state pension an individual will no longer derive entitlement based on the national insurance record of their former spouse or civil partner. Though some transitional protection has been provided, the details are not at all clear. I am sure that Members in all parts of the House have constituents in rather desperate circumstances, trying to knit through the fog. A constituent recently contacted me. Her husband is terminally ill and on his deathbed, and he has expressed fears about what would happen to her under these transitional arrangements when he dies. They have no children, and his wife had stayed at home for many years while her husband provided for them both. She called the pensions helpline, but it was unable to offer any clarity or reassurance.

I have asked this question before, but I have yet to receive a satisfactory answer: can the Minister confirm that, in an extreme scenario, a woman with no entitlement in her own right who is widowed could end up with no state pension at all, as compared with the expected £119.95 she would have received under the current system? What are the Government doing to ensure that pensioners do not unfairly lose out and that people are given the correct information, so that they know the position they will be in? When asked how the Department was planning to communicate with those affected, the Minister for Welfare Reform, who of course sits in the other place and so is not here today, said, “You can’t foresee who is going to become widowed in future.” I think it is fair to say that that was not exactly a helpful reply. So perhaps the Minister who is with us today could provide some clarity on what action the Government are taking to communicate these changes, particularly to those with gaps in their record who are likely to be directly impacted.

[Andrew Gwynne]

My hon. Friend is making an important point about the need to communicate any changes to social security and particularly to the state pension rules. She will know that one of the complaints of the WASPI women is that they have not been adequately notified or given proper transitional arrangements. Does she think that the Government ought to be doing a lot more to communicate the changes to the new state pension arrangements because some people will not benefit from this scheme?

[Angela Rayner]

My hon. Friend is absolutely right: the Government do need to get their act together on communicating these changes. The general population out there expect nothing less than honesty and the frank information that the Government should be providing for them, so that they can make informed decisions about their future.

Will the Minister give a more specific estimate of who will be covered by transitional protection and how many people will lose out from these changes in future years? Once again, the Government’s track record on communicating pension changes falls well short of the standard that the public would hope and expect. When I met members of the National Pensioners Convention last week, they pointed out that many pensioners are now waking up to the fact that only a minority of those who reach the state pension age under the new system will receive the full flat rate of £155.65 proposed today, as confirmed by recent analysis published by the Minister’s Department. It estimates that only 37% of people reaching state pension age in 2016-17 will receive the full amount of the new state pension directly from the state. Millions of people will receive a significantly lower state pension in future, and some of them will be more than £500 a year worse off. The gloss from spinning the top-line full flat rate without the detail is rapidly starting to fade. Indeed, the Minister for Pensions herself has now admitted that the new state pension has been “oversold”.

It is clear that the Government should be doing far more to inform those affected, especially those who are nearing retirement and therefore have the least notice or time to consider the impact. In its interim report on the new state pension published in January, the Work and Pensions Committee reported:

“We heard evidence of a widespread lack of awareness among individuals about what they will receive and when. We were concerned to be told that the statements intended to rectify this were confusing and lacked necessary information.”

Age UK, among others, has called on the Government to do far more to contact people who are likely to be affected. It says:

“There are DWP materials highlighting credits and ways to increase the State Pension, but people need to know they may be affected. We believe the DWP should contact people with gaps in their record individually to highlight the changes and explain options.”

What are the Government doing to properly communicate the impact of the changes?

[Andrew Gwynne]

My hon. Friend is being generous in giving way. We also need to have confidence that the information being communicated by the DWP is correct. She will remember from last week’s Westminster Hall debate that, as recently as last week—I have not checked whether this has been changed yet—the DWP was still communicating that the state pension age for women is 60.

[Angela Rayner]

I thank my hon. Friend for making that point, which is central to what the WASPI campaigners have been arguing for some time and with which I have sympathy. The Government are failing to give adequate information and it is not readily available when people require it.

The DWP has produced analysis showing that the majority of people will be better off over the next 15 years, but what about after that? A close look at the figures reveals that, for those aged under 43 now—like me and many others in the House—the probability is that they will receive thousands of pounds less in state pension by the time they retire.

We do not hear much about the impact of the new state pension on the retirement income of future generations, and it is becoming increasingly clear why the Government are keen to keep quiet about it. Analysis that the shadow Secretary of State for Work and Pensions, my hon. Friend the Member for Pontypridd (Owen Smith), has commissioned from the Library shows that those in their 40s now are likely to be £13,000 worse off over their retirement. Men in their 30s now are likely to be nearly £17,000 worse off, while women will lose more than £18,000. For the generation in their 20s now, the loss is likely to be more than £19,000 for men and £20,500 for women. Future generations will clearly be worse off.

By 2060, when today’s 20-year-olds are nearing retirement, the Government will be spending £28 billion a year less on state pension provision. That is a huge cut, and one that has not been given proper acknowledgement by the Government or, consequently, been properly scrutinised and debated in the House or more widely.

[Kevin Foster (Torbay) (Con)]

It is interesting to hear the hon. Lady’s comments. She mentions the reduced state pension for those who are currently in their 20s, but how much of that reduction is based on the fact that the Pensions Act 2007 increased the retirement age for those who are my age and younger to 68?

[Angela Rayner]

I remind the hon. Gentleman of the coalition Government’s provisions. We had a proposal that worked for pensioners—we had a long-term plan—but the coalition Government speeded it up without any regard for the people affected by it, so I will not take any lessons from Conservative Members.

As I was saying, the £28 billion a year less that will be spent on state pension provision is a huge cut that has not been given proper acknowledgement by the Government. I hope we will debate it further in the House. Will the Minister confirm that the Government’s so-called long-term economic plan involves cutting £28 billion from pensions? What assurances can he give to today’s younger generations—who face higher housing costs, the largest fall in real wages and greater insecurity in the workplace—that they will have sufficient income in retirement?

Labour will continue to ask the Government to be far more transparent about the long-term winners and losers from the new state pension. Withholding that information may be politically advantageous in the short term, but in the long term it serves only to undermine public trust in saving for retirement, which Members on both sides of the House agree is the right course for all our population and is in the national interest.

Members on both sides of the House showed enormous interest in a related debate in Westminster Hall last week, which was triggered by more than 140,000 signatures on the petition by WASPI. There was standing room only, not, I suspect, because it was my first outing on the Front Bench, but because of the significance and importance of the issue to many Members and 2.5 million of our female constituents. Indeed, the Minister might wish to note that they include more than 4,000 women in his own constituency. I therefore hope that he will expand on the Government’s consideration of transitional protections for those women, too many of whom were not given proper notification of the acceleration in their state pension age.

The Government have failed to respond to a number of proposals, including specific solutions for the 1951 to ’53 cohort of women, who will not have access to the new state pension that we are agreeing today; for those born between 6 October 1953 and 5 April 1955, who face a delay of more than a year; and for the women born later in 1953, who have had a double whammy of changes in 1995 and 2011. What assessment have the Government carried out of those options?

Alternatively, it was suggested during the passage of the Pensions Act 2011 that maintaining the qualifying age for pension credit according to the 1995 timetable would protect some of the most vulnerable people. Have the Government reconsidered the issue since then?

Turning to another element of the regulations, I note the proposal to freeze the saving credit element of pension credit, as announced in the autumn statement. For the 438,000 pension credit recipients who receive only the saving credit element of the pension credit, their losses will not be offset by the rise in guaranteed credit. Their pension credit reward will, therefore, be reduced.

Unfortunately, the Government have so far refused to come clean about the impact on some of Britain’s poorest pensioners. According to analysis by the Institute for Fiscal Studies, 1.2 million recipients of pension credit will lose an average of £112 a year from the next financial year. That figure will be significantly higher for many people, including those in the poorest fifth of pensioner households. Will the Minister confirm that some of Britain’s poorest pensioners will be worse off as a result of the measure, and will he commit to publishing a more detailed impact assessment than that produced to date? Will he tell us exactly how many people will be worse off and by how much?

Knowledge is power, and people need to be empowered by knowledge when it comes to their retirement. I hope the Minister can provide some answers today, because that is the least that this and future generations of pensioners deserve.

18:38

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

May I start by welcoming the hon. Member for Ashton-under-Lyne (Angela Rayner) to the Front Bench? I was surprised that the Minister chose to move the regulations formally and that there is so little interest in debating them, not because there are deep-seated, fundamental disagreements about them, but because, given the significant changes that are about to take effect with the introduction and implementation of a brand new pension system in just a few weeks’ time, I would have thought there would be an appetite in the House to debate the issues and, indeed, to raise awareness among the public, who are still very much in the dark about the changes and their significance to their lives.

I will confine my remarks to a few of the key issues, some of which have already been touched on. I will start by addressing the State Pension (Amending) Regulations 2016. Although the new state pension will be set at £155.65 a week, very few people will actually get that amount. Indeed, even though the single-tier pension will be higher than the basic state pension, the net amount that some people will receive may be less than they would have got under the old system, because of the loss of means-tested benefits. Only 22% of women and 50% of men who reach state pension age in 2016-17 will get the new state pension in full. According to the National Pensioners Convention, almost six out of 10 new women pensioners and nearly half of new male pensioners—around 1 million people—will get less than the full amount.

[Andrew Gwynne]

The hon. Lady is making an important point, which is rather pertinent to some of my earlier interventions. Is it not incumbent on the Government and on Ministers to communicate those changes properly? Do we not run the risk of repeating some of the mistakes that have impacted on the WASPI women, because those people will be bitterly disappointed when they realise that they are not entitled to what they expected?

[Dr Whiteford]

The hon. Gentleman makes an important point. It is worth saying that successive Governments have failed to communicate adequately with pensioners about a system that is, undoubtedly, very complex. The hon. Gentleman alluded to the WASPI women, and they are the best example of the problem at the moment. They have seen the goalposts shifted several times. Many of them are still not entirely sure what they are going to get and when, and they have had contradictory information, even in very recent times, from the Government.

I come back to the new state pension. We are calling it a single-tier pension and making much of that flat rate, but, in reality, there will be many different rates depending on an individual’s personal circumstances. In other words, it is not going to be so simple. Inevitably, the introduction of the new system means that two systems will operate concurrently for several decades. The danger is that the state pension could be seen as a two-tier system, because some existing pensioners would be better off if they were included in the new state pension. I am fairly confident that all MPs will be inundated with approaches from constituents after April once those people work out that they have been short-changed in comparison with their friends, relatives and spouses who are on the new state pension.

We all understand that there will, inevitably, be a cliff-edge with the introduction of a new system, and that it is impossible to predict accurately whether someone will lose or gain from the new pension without a crystal ball to tell us how long they will live in retirement. Given all the inevitable anomalies, which will cause a huge sense of injustice, it is incumbent on the Government to introduce some flexibility in the system by letting people take a bit more responsibility for whether they are in the old or new system, so that at least it is their choice to take that gamble with their own life expectancy.

We need to acknowledge that, over time, the new system will be less generous for most people. Those born from 1970 onwards will mostly be worse off under the new arrangements. Those who have contributed to the system for longer—for example, those who moved into work at an early age and worked continuously—will also lose out significantly. On the other hand, there will be benefits for the self-employed and for those who, under universal credit, start to receive credits to the state pension for the first time. There will be winners and losers, but there will be more losers over time.

The new state pension is being introduced on a cost-neutral basis, but the reforms are eventually expected to reduce expenditure compared with cost projections for the existing system. We must also note that the different indexation arrangements for the two systems have the potential to lead to accusations that the Government are building inequality into the system. After April 2016, the new state pension will be uprated annually at least in line with earnings, as per the triple lock, and we all support that. However, my understanding is that an existing pensioner will have a triple lock on only the first £119.30 of their basic state pension, with a consumer prices index link on any state second pension above that level. If CPI inflation is lower than earnings growth, as it is now, the value of the state second pension will fall in real terms. That gap is likely to widen.

Around 7 million pensioners get some kind of state second pension payment, and the average payment is around £28 a week. Applying the same indexation arrangements to old and new state pensions to the same level would cost a modest sum relative to pension spending, but it would mean that both the basic and state second pension were linked to the triple lock. That would help the Government to avoid some of the disparities that are likely to develop in the coming years, and it would help to create a system that is more likely to be perceived to be fair.

I want to express disappointment about the fact that the Government are not uprating savings credit. Instead, it will fall in April from £14.82 to £13.07 for a single person, and from £17.43 to £14.75 for a couple, and it will no longer be available to new pensioners. The Government announced in November last year that savings credit would be further reduced for current recipients, but that reduction is not included in the order. I would be interested to hear whether Ministers have decided not to reduce the amount of savings credit, or when they intend to introduce regulations for that measure.

Savings credit supports pensioners on low incomes who have managed to save a small amount towards their retirement. The vast majority—around 80%—of those who receive it are women, many of whom will have spent their working lives in very low-paid jobs. They have had limited opportunity to save, but they have done so nevertheless. It seems to me that reducing savings credit, and abolishing it for new pensioners, sends exactly the wrong signal to people in low-paid jobs who feel as though they should be trying to save but who have little incentive to do so.

Before I conclude, I want to devote some attention to the part of the statutory instruments relating to the uprating—or rather, the non-uprating—of state pensions paid to those living overseas; this is the issue of so-called frozen pensions. Such state pensions are paid to people who have spent their working lives in the UK paying contributions towards the state pension, but who, for whatever reason, spend their retirement domiciled in countries that do not have a reciprocal arrangement with the UK for the uprating of state pensions. Those UK pensioners find that every year, while UK-domiciled pensioners and those living in other parts of the EU or countries with reciprocal arrangements receive an uprating, their pension remains frozen in cash terms at the amount it was when they retired. The value of their pension therefore falls every year in real terms, causing real hardship to those affected.

According to the explanatory memorandum attached to the order, more than 500,000 people are in that position. Most—more than 90%—live in Commonwealth countries such Australia, Canada, New Zealand and South Africa, and also in India, Pakistan, parts of the Caribbean and Africa. In other words, they live in countries that have deep cultural and familial ties to the UK. Some have dual citizenship and others are UK citizens who have retired overseas to be close to family, but they all paid their contributions in good faith. The International Consortium of British Pensioners points out that a pensioner aged 90 who has lived in, say, Canada or Australia throughout their retirement will get a basic state pension of just £43.60 a week. If they had stayed in the UK, they would be receiving £115.95, which is due to go up as per this uprating. I just do not think that that is right. We are doing very badly by those people.

Those who are affected by frozen pensions had no choice about whether to pay national insurance contributions —doing so was mandatory. We must remember that many of them lived and worked in a rapidly changing and globalising world in the post-war era, when few would have paid much attention to the small-print of their state pension arrangements. It seems to me wholly unfair that a pensioner who retires to the USA will get their full uprated pension, whereas a pensioner in Canada will continue to receive their pension at its original level. Clearly, there would be a cost attached to uprating, but the Government must offset that against the costs that would have been incurred if those individuals had chosen to remain in the UK. The Government estimate that every pensioner who lives abroad saves the public purse on average around £3,800 each year in health and social care costs alone.

It is hard to measure the deterrent effect of frozen pensions. Pensioners who would like to retire close to their children and grandchildren in other parts of the Commonwealth are prevented from doing so by the knowledge that a key component of their retirement income would not keep pace with the cost of living. A partial uprating such as that advocated by the all-party parliamentary group on frozen British pensions would cost around £30 million and represent a tiny 0.03% of pension spending, but it would signal that those pensioners were not forgotten.

We all want fair and sustainable pensions that provide enough support for our elderly population to enjoy a dignified and comfortable old age, but the arrangements must be fair, and must be seen to be fair, if we are to maintain confidence in the system for future generations. I hope that the Minister will consider and respond fully to the points that I have raised.

18:49

[Mr Vara]

May I take this opportunity to welcome the hon. Member for Ashton-under-Lyne (Angela Rayner) to her new position? I look forward to discussing and debating various issues with her over the coming months. I thank her and the hon. Member for Banff and Buchan (Dr Whiteford) for their contributions. In the short time that we have, I will try to address as many of their questions as possible. I also thank the hon. Member for Denton and Reddish (Andrew Gwynne) for his one or two interventions. I am grateful to the hon. Member for Ashton-under-Lyne for welcoming the triple lock and to her party for its support for that initiative.

The issue of communication has come up repeatedly. I just want to say that there is an awareness campaign, which is particularly targeted at those aged 55 and above. They will receive a letter—their addresses will be obtained from payroll and benefits data—providing details of their own state pension. The first phase of our communications campaign aims to build awareness among those in that age group, who will be the first to reach pension age after April 2016, and we are encouraging them to get a personalised statement. Between September 2014 and October 2015, we issued nearly 500,000 personal statements. We have factsheets, infographics, videos, calculators, YouTube videos, toolkits for stakeholders and weekly stakeholder bulletins. We will continue to do whatever is necessary and whatever we can to ensure that people are made aware of what is coming. I urge all colleagues on both sides of the House to do their bit, as Members of Parliament with access to media and to local communities, to make sure that people are aware of this very important change.

It is our intention, and it will be the case, that the new state pension will be a lot simpler and clearer for people than the previous situation, when there were opt-outs in relation to the state earnings-related pension scheme and additional pensions, as well as private pensions, occupational pensions and so on. The hon. Member for Ashton-under-Lyne said that not everyone will qualify for the new rate of £155.65, and she is absolutely right, because the new state pension is based on people’s national insurance contributions. In recent years, some people have not paid full national insurance contributions to the state because they have opted out or contracted out. Some of those people contracted out into a second, additional pension, and that has to be factored in. Alternatively, the national insurance contributions that they had contracted out of were used for an occupational pension or a private pension. If the two pensions are added together, the total will in many cases be more than £155.65.

I hope that the hon. Lady and her colleagues appreciate that if we have a system in which people’s pensions are based on national insurance contributions, they cannot, if they have not paid such contributions, be expected to get the full payment due notwithstanding the fact that some of their national insurance contributions have gone to another pension. I hope she will reflect on that point.

[Angela Rayner]

I gave the Minister a specific example of someone who had not contracted out because of a second pension. Will he address that point and the fact that some people have not been given adequate notice of the changes? I appreciate the point he makes about contracted-out contributions, but some people have not been given such information. I am asking for people to be given that information so that they can make alternative provision.

[Mr Vara]

The hon. Lady will appreciate that I cannot give advice on individual cases at the Dispatch Box. As for communication, I have read out a whole list of measures we are putting in place to make sure that people are communicated with. If we were not doing our job properly, we would not have issued nearly 500,000 personal statements between September 2014 and October 2015. We continue to make sure that people are aware of the change. As I have said, she has a role to play, as do others. I am sorry that she expresses such disappointment, given that in the forthcoming year the Government will spend an additional £2.1 billion more than we are spending at present. There is also the pension credit standard minimum guarantee, which will ensure that the minimum threshold must be met. The state is there to assist people.

The hon. Member for Banff and Buchan mentioned frozen pensions. It has been the policy of successive Governments for the past 70 or so years not to uprate pensions for everyone. The issue is complex, but she will be aware that uprates are made in some countries where there is a legal obligation to do so. It should be remembered, however, that the pensions people get in some countries are based on a means test: if we gave everyone from Britain who is now resident in another country an uprate, our contribution to that uprated pension would be taken into account by their new home country and they would therefore be given less by the new home country.

[Neil Gray (Airdrie and Shotts) (SNP)]

indicated dissent.

[Mr Vara]

The hon. Gentleman is shaking his head, but I assure him that some countries make pension payments on the basis of means.

This Government take the rights of pensioners very seriously, and we are doing all we can to protect them. From April, the rate of the basic state pension for a single person will go up by the biggest real terms increase since 2001. We will continue to protect the poorest pensioners. The means-tested threshold below which pensioner income need not fall—the pension credit standard minimum guarantee—will also have the biggest real terms increase since its introduction. The full basic state pension will be more than £1,100 per year higher in 2016-17 than at the start of the last Parliament. Our triple lock, our protections for the poorest pensioners and our new state pension reforms mean that we can provide pensioners with the dignity and security that they deserve in retirement. I commend the order and the regulations to the House.

Question put and agreed to.

Social Security

Resolved,

That the draft State Pension (Amendment) Regulations 2016, which were laid before this House on 18 January, be approved.—(Mr Vara.)

Backbench Business

Monday 8th February 2016 Commons Chamber

Great Western Railway Routes

Monday 8th February 2016 Commons Chamber

18:56

[Kevin Foster (Torbay) (Con)]

I beg to move,

That this House believes that the routes of the Great Western railway are not just a transport system, but the heart of the regions they serve; and calls on the Government to ensure that plans for further electrification and improved resilience of the Great Western railway routes are progressed urgently.

I thank hon. Members from both sides of the House who supported the application for this debate at the Backbench Business Committee. I also thank my colleagues on the Committee for agreeing to allocate the debate to this slot in the Chamber, rather than Westminster Hall, where it would have ended up. We have three hours for this debate, and it is encouraging that we are starting almost bang on time, given that we are discussing trains and railways.

It must be said that this is an apt day for such a debate, as Storm Imogen has hit Devon and Cornwall. One hon. Member, who I hope will join us later, texted me earlier to say he was hoping to get to Westminster but that there was a tree on the line at Bodmin, which sums up the issue of resilience.

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

Is my hon. Friend aware that three trees have come down on the line?

[Kevin Foster]

I thank my hon. Friend for sharing with the House his superb knowledge of the vegetation on the Great Western main line in Devon and Cornwall. His point absolutely rams home the message that a tree falling over, a cow breaking out of a field, or a small amount of earth moving at a critical point can close huge parts of the network. That is why it is so important to hold this debate about resilience. In addition, the cross-country services have been cancelled at Dawlish again today. I must say that that is not due to the line but to a fault with the trains, but that again brings home to us the vulnerability of some key routes and networks on which many people depend.

I hope that this debate will not be about being negative and having a moan. We could all spend the next few hours whingeing and sharing our stories about various poor train journeys. One that sticks in my mind was when I and my hon. Friend the Member for Taunton Deane (Rebecca Pow) got on a train that had what was charmingly described as a “toilet spill”, which was particularly interesting. Being negative will not achieve anything: it may make us feel a bit better to get a dreadful journey off our chests, but it will not actually make a difference.

[Mr James Gray (North Wiltshire) (Con)]

I am sorry to bring a disagreeable note into what has, so far, been an extremely agreeable debate. Of course we all love to moan and groan about our rail journeys, but I have travelled with First Great Western twice a week for 20 years and I find it extraordinarily good. We have criticisms of some things—the catering, the toilets and one or two other matters need to be sorted out—but overall, the punctuality and the service are extremely good.

[Kevin Foster]

My hon. Friend is right that there are many positive stories to be told. Let us be blunt that a key one is the amazing legacy of innovative engineering we have been left by the Victorians. The Royal Albert bridge was built using innovative techniques and was a feat of engineering at the time. It created the link between Plymouth and Cornwall that exists to this day and carries trains far heavier than it was ever designed for. Box tunnel is now one of the most well-used tunnels. It was so innovative when it was built that there had to be a station at both ends, because some Victorian travellers were rather frightened of going through a tunnel, so there was the option of getting off the train, taking a horse and carriage ride around it and getting back on a train at the other end.

[Mr Gray]

rose—

[Johnny Mercer (Plymouth, Moor View) (Con)]

I think my hon. Friend was there.

[Kevin Foster]

That is very ungentlemanly of my hon. Friend the Member for Plymouth, Moor View (Johnny Mercer). I give way to my hon. Friend the Member for North Wiltshire (Mr Gray) again.

[Mr Gray]

My hon. Friend is being very generous. Box tunnel is, of course, in my constituency. He will know that the only time one can see from one end of the tunnel to the other is once a year on Brunel’s birthday. [Interruption.] The Minister says that it is not true, but we believe it is true—I have seen it myself. More importantly, we think that we are close to reopening an important station at Corsham, which is at one end of Box tunnel. I hope my hon. Friend will agree that opening such stations along the route is extremely important.

[Kevin Foster]

Absolutely. I do not want to get involved in a cross-Wiltshire debate about tunnel openings and people’s birthdays, but it is important to think about the communities along the route. One reason why the theme of resilience is so important is that having a station is great, but if a train does not run at certain times, people do not have the service they want.

Let us be candid: this is the positive story of a network that stretches from London to Swansea, that runs through Cheltenham and Bristol, and that goes down to Penzance. It revolutionised a whole region that had been fairly isolated until the trains went through.

Over the past few years, we have seen huge growth in rail travel across our region, with many branch lines, particularly in Cornwall, seeing passenger levels that have not been seen for decades. All that is being delivered with the well-known limitations of the network in the area: the relatively old rolling stock, some of which has seen better days, and issues with the network in terms of resilience, signalling and other things that I will come to in a minute.

The point of this debate is not to share jokes or reminisce about poor train journeys, but to say that there could be an even more positive story in the future that would boost productivity and deliver more jobs and investment.

[Scott Mann (North Cornwall) (Con)]

My hon. Friend’s constituency is very similar to mine in that it is very tourism-based. Does he agree that the more trains and branch lines we have in such areas, the better it will be for the tourism economy of the south-west?

[Kevin Foster]

Absolutely. As I am sure my hon. Friend is aware, the early figures for the Borders railway that is being built in Scotland show higher than expected levels of usage. In St Ives, good park-and-ride services are crucial to the tourism industry. Having good trains makes for good tourism.

[Mrs Sheryll Murray (South East Cornwall) (Con)]

Will my hon. Friend give way?

[Kevin Foster]

I will give way once more, but then I must make some progress so that I do not hog the time.

[Mrs Murray]

Does my hon. Friend agree that we should expand the existing park-and-ride services? In my constituency, there could be another park-and-ride station to the east of Bodmin Parkway to allow people from areas that do not have access to a railway station to commute and travel to places such as the city of Plymouth?

[Kevin Foster]

My hon. Friend is absolutely right that park and ride can play a huge part in giving rural communities in particular access to rail services via parkway-style stations. Looking at north-west Devon and north Cornwall, it might be an interesting project in years to come to provide parkway stations near the A30 as it comes into Devon, using the spur that heads towards Okehampton. That could provide a service to the area without competing with the Great Western main line in south Devon.

We must ask what investment can deliver. It is estimated that even a relatively modest improvement of 15 minutes in journey times between the south-west peninsula and London would deliver £300 million in increased productivity. However, this debate is not just about economics; it is about communities along the line and their needs for travel and growth.

I will not look to play our region off against another. Just as investment in Crossrail and new rail capacity in other parts of the UK will deliver for those communities over the next 10 to 15 years, delivering on the issues we are discussing can deliver for ours. It is worth bearing in mind the fact that investment in the Great Western railway supports other key projects across the UK. For example, the expansion of Heathrow as the UK’s hub will be supported by the western rail access. I hope the Minister sees the urgency of that.

[Fiona Mactaggart (Slough) (Lab)]

Does the hon. Gentleman share my profound disappointment over the delays in the western rail access to Heathrow, which the Hendy review announced would be put back a further two years? This access will bring the biggest inward investment to the UK, as well as helping travellers from all over the west of England—

[Huw Irranca-Davies (Ogmore) (Lab)]

And Wales.

[Fiona Mactaggart]

Indeed, and Wales. It will help those travellers to get to Heathrow—our premier hub airport. Will the hon. Gentleman press the Minister to ensure that, as a result of this debate, someone in her Department puts their foot on the accelerator of western rail access to Heathrow?

[Kevin Foster]

I thank the right hon. Lady for her passionate and well-argued intervention. She is absolutely right that the western rail access to Heathrow makes eminent sense for south Wales, my region and the Slough area. It will support not only the economies of our areas but the national economy, by making it easier to expand and develop our key hub airport. I hope that one thing the Minister will look at is the timeline for the western rail access. Given the widespread support across the House for that access, I hope that the timeframe will be greatly shortened so that people can get the shovels in the ground on this project, which makes eminent sense.

I am conscious that I could give a long list of improvements that are needed. I am sure that several contributors are about to highlight those they see as vital for their areas. For me, there are two key issues that affect the whole network—resilience and electrification. The Dawlish collapse brought into stark view how vulnerable parts of the main line are. That is not the only issue, but it has given us the opportunity to debate all these other issues. As my hon. Friend the Member for South West Devon (Mr Streeter) said in his foreword to the “On Track” report by the Peninsula Rail Task Force:

“It took a crisis to get here, but this is our chance”.

It is worth looking at the impact that that crisis had. My hon. Friend the Member for North Cornwall (Scott Mann) reminded us of the impact that the railway has on tourism. Some 7% of Torbay’s tourist visitors come by train. After the pictures of the hanging tracks in the media, there was a 20% drop in tourism bookings because of the image it created. That shows that this is not just a transport issue.

[Huw Irranca-Davies]

I want to support the point the hon. Gentleman is making. The incident he is talking about was the most extreme example of damage to a piece of major rail infrastructure. It is no fault of Great Western Railway, but I travelled up from south Wales by bus for part of my journey today because of flooding on part of the line. Okay, that is an extreme event, but we are having more and more. There is also regular flooding around the Severn tunnel. Does the hon. Gentleman agree that we need to be absolutely sure that we have a resilient railway structure, as well as having electrification?

[Kevin Foster]

I agree completely. My constituency is not scheduled to benefit from the electrification project, but it is affected by flooding on the Somerset levels. It is vital that we make sure our railway is future-proofed. A few years back, I took a bus in the constituency of the right hon. Member for Exeter (Mr Bradshaw) when there was flooding on the railway line across Cowley bridge that looked like something out of the Bible. It is vital that we tackle the range of resilience issues, not just the very famous issue on the coast. I know that Network Rail is looking at the cliffs near Teignmouth. I am sure that my hon. Friend the Member for Newton Abbot (Anne Marie Morris) will talk a bit more about that in her contribution. That aspect needs to be looked at too, not just the sea wall. Much of the signalling throughout Devon and Cornwall was installed in the 1960s. It is listed for consideration in control period 6, which is between 2019 and 2024, and it is vital that that goes ahead because we must improve journey times and ensure a modern infrastructure.

The issue of resilience has been brought into focus by the imminent publication of the final report from the Peninsula Rail Task Force, which will set out its 20-year plan for railways in Devon, Cornwall and Somerset. Resilience will be at the heart of that, and it is vital to have the funding needed to complete such a commitment. There have been encouraging noises on that issue over the past week or two, and I hope that we might hear a couple more words from the Minister when she responds to the debate. It is clear just how vital it is that we secure that line.

Electrifying the Great Western route into south Wales is probably the single biggest project on that line since the Severn tunnel, and it will electrify the line in communities along that route—I suspect that colleagues may wish to speak a little more about that. It is pleasing that in the south-west it is no longer the case that the only way to get close to a bit of electrified track is to buy a train set! As a member of the Public Accounts Committee I have sat through a discussion on progress so far—not least the estimated cost of that electrification, which has now reached £2.8 billion—and I imagine that the Minister might not be relishing the thought of committing to more such projects. However, it is right that those issues are highlighted, as investment must not just be about creating a corridor for electric trains to speed through to south Wales; it must be the starting point for an integrated network of electrification across the areas served by Great Western Railway.

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

I congratulate the hon. Gentleman on securing this debate. One major reason for the escalating cost is compensation payments to train operators—the so-called schedule 4 payments. Does he share my concern that the UK Government will not publish the level of schedule 4 compensation payments made, because we talking about many hundreds of millions of pounds of public money? There must be transparency about those rising costs.

[Kevin Foster]

I thank the hon. Gentleman for his interesting intervention, and I am sure that the Minister will wish to respond to his detailed point. In the Public Accounts Committee discussion, one of the main issues was the signalling that was installed in the 1960s. When the piling was done, the cables were not mapped. Hopefully, as with the re-signalling in Devon and Cornwall, knowing exactly where the signalling cables are might make those lines more suitable for future electrification.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

I congratulate my hon. Friend on securing this important debate. He is talking about electrification in south Wales, but does he agree that it is also important to electrify at least part of the route from Paddington to Penzance? Does he welcome the proposal to bring forward AT300 Hitachi trains, which are bimodal? Given the speeding-up of the service that that would introduce, does he share my concern that we could be tempted to delete some stops along that route? That would be a pity—perhaps he will come on to this point—since it would mean that some of our constituencies would simply become transit corridors. Does he agree that Westbury station, which is a vital north-south-east-west hub, must not be deleted from any forthcoming plans in the new franchise?

[Kevin Foster]

Having changed trains at Westbury, I share my hon. Friend’s concern about maintaining the ability to interlink with the rest of the region. As we have said, this must be about viewing the railway not as a transport network in aspic that we stand around like trainspotters, discussing exactly how long it will take and what number train will travel down that line; this is about where people want to get to, linking economies and ensuring that people can use the service. I share my hon. Friend’s concerns, and I am sure that colleagues in south Devon and neighbouring constituencies would be concerned if we sped journeys up by driving past passengers. This is about improving the network for everyone, not just making it quicker to get from one end of the network to the other with nothing in between.

I am conscious that time is moving on and that I am stretching your patience, Madam Deputy Speaker, so I will try to press on because other colleagues wish to speak. The introduction of bimodal trains due in 2018, as my hon. Friend the Member for South West Wiltshire (Dr Murrison) mentioned, will make a real difference and open up many opportunities for our region, not least because it will allow the potential for partial electrification on sites that would most enhance the journey time. In the past, for obvious reasons—not least the potential impact of mixing high-voltage cables and sea water at Dawlish—a purely electric train might not have been considered west of Exeter, but bimodal trains will give us real options for future development. Again, that is why the reports are so important.

I could reel off a long list of issues that affect train lines, including prospects for new stations in my patch for the first time in decades. However, there are five issues that I believe it is most important for the Minister to consider as we look ahead to the work in control period 6. The first is whether funding for the two reports that will form part of the work of the Peninsula Rail Task Force will definitely be provided. I know that Network Rail is, in its own words, ready to start work on that immediately once that funding is confirmed. Secondly, is there a clear commitment to the re-signalling work for Devon and Cornwall that is scheduled to take place in control period 6? Thirdly, will the project to secure our main line at Dawlish be committed to, including any work needed to secure the cliffs? Fourthly, will work to secure the line against flooding on the Somerset levels and other key points be progressed? Finally, will the electrification project to south Wales be completed with a view to being part of an electrified network for the Great Western region, rather than just an electric cable running through the middle of our constituencies?

Those are clear questions, but I believe the benefits are also clear. We must ensure that in the 21st century, the vision for the Great Western line is as great as it was when Victorian engineers rode the route on horseback, imagining what could be in the future. They could not have imagined the type of trains that they would have, or the uses to which people would put the railway, but they could see that in building a railway they would build a region. I believe that we can do the same now and show similar vision, and I commend the motion to the House.

19:16

[Mr Ben Bradshaw (Exeter) (Lab)]

I apologise to you, Madam Deputy Speaker, and to the hon. Member for Torbay (Kevin Foster) for arriving a few seconds after he rose to his feet. The previous business finished rather earlier than a lot of us expected or had been forewarned about, but I congratulate him on being the driving force behind this timely debate.

At the end of the week, when I get into carriage A at Paddington with my bike in the bike space just in front of it—carriage A is the quiet carriage—I sit down, and I usually have the best two hours of my week. Every time I am on that journey, I give thanks to Isambard Kingdom Brunel and the brilliance of the line that he created back in the Victorian age, from which we are still benefiting. It still think it incredible, given that very little has happened since, that on a good day someone can get from London to Exeter—quite a long way, as I am sure hon. Members who know their geography realise—in under two hours, and that is very much thanks to Brunel.

I completely agree with the hon. Member for North Wiltshire (Mr Gray), because for all its frailties, Great Western is my favourite railway line. I travel across the UK quite a lot, and it is certainly better than the new franchise owners on the east coast main line, and the pokey little carriages on Virgin and the west coast main line. Great Western is comfortable and bright. The loos do not work, and when they do they flush straight on to the tracks. That is completely intolerable and unacceptable in the modern age and must change as a matter of urgency. The ventilation is idiosyncratic, and one can often find a carriage that is far too hot or far too cold, but the staff are always delightful and friendly, and the service is excellent.

I have one plea to all railway companies, which is that they should do much more to publicise a passenger’s right to a full refund if they are delayed by more than an hour. I really think that they are getting away with too much, and far too many people do not realise that they are entitled to a refund. I was an hour and a half late coming back at the weekend because of some of the problems that the hon. Member for Torbay referred to, and, in terms of good customer service, such compensation should be announced on the trains as a matter of course.

[Dr Sarah Wollaston (Totnes) (Con)]

In highlighting the beauty of the line to Exeter, may I encourage the right hon. Gentleman to stay on the train and see how even more beautiful the line gets once it passes along the coast? It is not just about the beauty of the line, which I hope everyone will experience, but the economic importance of the line via Dawlish to the economies of south Devon. Will he join me in saying that whatever we do we must protect the line through Dawlish and protect the economies of south Devon?

[Mr Bradshaw]

I know the line through Dawlish very well. I spent childhood holidays in Salcombe. In fact, my parents used to get a train all the way to Kingsbridge in the good old days before Beeching took his axe to our rural rail network. It is beautiful, but vulnerable. I will come on to say something about it in a second.

Having said all those positive things, we still have rolling stock that was introduced, I think, in the early 1970s. As I have said, travel speeds have not actually increased very much for decades, if not for a century. I mentioned the loos and the heating, and the hon. Member for Torbay mentioned electrification. It is puzzling that Spain and Italy have full comprehensive networks of high-speed electric trains, but in this country we still do not have a network of high-speed trains. We are getting one slowly, but in the south-west we are set to be probably the only major region with big cities left in western Europe that does not have either high-speed trains or electrification. There is absolutely no reason why we should not already have electrification down to Exeter. There have been technical challenges, but having been on electric trains in the Alps that go up steep gradients I have never quite understood what the barrier is to electrification where there are gradients. As the hon. Member for Torbay says, we will very soon have the technology to overcome that.

[Kevin Foster]

I thank the right hon. Gentleman, who, given the speech he is making today, I will call my right hon. Friend even if that is not strictly correct. Does he agree that the question arises of how long it takes us to deliver infrastructure projects in the UK? We touched on this in relation to western rail access to Heathrow and electrification. We just take too long to make decisions and to deliver on them.

[Mr Bradshaw]

I entirely agree. The Labour Government set up an independent infrastructure body—I cannot remember its name—and the hon. Gentleman’s Government have gone on to do something similar. We need to be much more radical in how we manage big infrastructure improvements. Network Rail is currently pleading, in today’s Financial Times, with the Government not to privatise it, but instead to hand over such decisions to an independent rail commission. That is a very sensible and sound idea, and I hope the Government will listen to it. The fragmentation and privatisation of Network Rail would be an absolute disaster. It is worth reading the piece in today’s Financial Times.

[Oliver Colvile]

If we want business to use railways, we also need to ensure a good level of broadband so that people can actually work on them.

[Mr Bradshaw]

I forgot to mention that broadband is terrible in standard class. It never works. I just use 3G, or 4G, if I have it, on the train. I raised this issue with First Great Western a number of times, but it still has not been resolved. I am told that it is fine in first class, but who travels first class? MPs certainly do not; not in my experience, anyway. I never have and since the new expenses system came in we are quite rightly not allowed to.

As hon. Members will remember, two years ago last week we had the catastrophic severing of the line at Dawlish. As the hon. Member for Torbay said, it had a huge impact on the region’s wider economy. Flooding then cut the line on the Somerset levels and this weekend there was flooding between Taunton and Castle Cary. My train was diverted from Exeter because of flooding. There are a lot of resilience problems throughout the network. As we all know, with the growing threat from climate change there will be increasing occurrences of extreme weather events. There has been meaningful and substantial investment in the railways, including in the south-west—although not as much as in other parts of the UK. Following the Hatfield disaster, hon. Members will remember that under the Labour Government there was a major programme of work to make signalling and track safer. That work is ongoing. Improvements at Reading have already made a significant positive difference to the reliability of the service. There used to be regular delays, in particular when coming into Reading on the return journey.

There have been improvements, but we in the far south-west, as opposed to the Bristol-south Wales corridor, where major electrification is planned, still feel the poor relation when it comes to investment. There were a lot of generous—I will use that term rather than grandiose, because we took them at their word—promises made by the Prime Minister, the Chancellor and the Transport Secretary after Dawlish and particularly in the run-up to the general election. I lost count of the number of times the Chancellor and the Prime Minister appeared in Devon and Cornwall wearing a hard hat and a fluorescent jacket and promising us more than £7 billion of rail and other infrastructure investment. They will be held to those promises. A whole swathe of Conservative MPs were elected in Devon and Cornwall on those promises. [Hon. Members: “Hear, hear.”] They are laughing, smiling and “hear-hearing” now, but if those promises are not delivered the smiles will be on the other side of their faces come the next general election. It is up to them to get their Government to deliver.

I feel sorry for my Conservative colleagues. We are friends—we have regional solidarity—and I feel sorry for them. In the past two weeks, we have had an absolute public relations fiasco over a tiny sum of money. The Peninsula Rail Task Force in the south-west is a group that got together after Dawlish. It is run by a Conservative councillor. All the councils have taken part and most of them are Conservative. It came up with a fantastic document, on which the hon. Member for Torbay based most of his speech, about what needs to happen in the south-west. Its very small initial ask is for £250,000 for the necessary feasibility studies into electrification and resilience, which the hon. Gentleman mentioned. We were promised that this would happen. There was going to be a press release. It was going to be announced last week on the second anniversary of Dawlish. I hope the Minister will use the opportunity this evening, when she responds to the debate—it is not a very good time to put out such a fantastic news story that our media in the south-west would absolutely love—to come up with this small amount of money. It is £250,000 for two feasibility studies. Nothing has been said about when the work will happen.

[Johnny Mercer]

Will the right hon. Gentleman concede that Network Rail committed to paying for the studies? The Government have not given money to a project and then taken it away. The money has fallen through as a result of what Network Rail has done. We have asked the Government to step up and deliver in its place.

[Mr Bradshaw]

The hon. Gentleman is absolutely right that the Government have never come up with the money. I am suggesting that they should. Network Rail is not able to come up with the money because of the massive cost overruns and delays on the whole of the rest of its infrastructure investment projects; not just the huge cost and time overrun on the Great Western line into south Wales but on its overall investment all over the country. Incidentally, the Government knew about that before the general election when they were making all those great and grandiose promises about what they were going to deliver to us in the south-west. Those are the conversations the hon. Gentleman needs to have with his Front Bench colleagues. I will leave that to him and wish him the very best of luck.

It is completely obvious to me why the money has not been made available. Network Rail has not got it because it has massively overspent and overrun on all its other projects. I hope that when the Minister responds we can hear a little bit more detail on exactly what we can expect in the far south-west and when. If she cannot tell us about the feasibility study money this evening, perhaps she can tell us: when we might be able to hear about it; when we might have some hope about the prospect of electrification beyond Bristol into our part of the region along the lines that have been suggested; and when we might have some idea about the timetable for an additional alternative line to Dawlish.

I completely agree with the point made by the hon. Member for Totnes (Dr Wollaston). We do not want to lose the line at Dawlish. It is beautiful and the people of Dawlish do not want to lose it. However, the fact is that if we talk to any engineer or climate change scientist about the long-term viability of the route, they do not just talk about storms and sea level rises but the fragility of the cliff. The biggest problem with the block last year was that the cliff kept falling down. It is a multiple problem and the line is between the sea and quite a soft cliff. As hon. Members will know, there was a plan back in 1939 to build a sensible, slightly inland alternative from Powderham Castle to Newton Abbot. That did not go ahead because the second world war broke out. There are other options. I can understand that people in north Devon and north Cornwall like the idea of the Okehampton line being reopened. Let us have a look at that and have some idea about what is going to happen and when. As the Prime Minister himself said, we cannot afford to have the south-west cut off like that again. Our economy cannot afford it. I was on the right side of that block, so it did not affect me, but the Plymouth, Cornwall, South Devon and Torbay economies were seriously affected by it.

[James Heappey (Wells) (Con)]

May I add to the right hon. Gentleman’s shopping list? The Minister might like to reassure us about where the south-west and south Wales sit in the Government’s wider priorities. It would appear that we have neither resilience in our network, nor had significant investment in the speeds of our journeys since the ’70s—certainly beyond Bristol, there is no evidence of that coming soon. Other regions, therefore, will zoom ahead with much faster high-speed rail within a decade or two. It would be useful if the right hon. Gentleman added to his list this question about where we stand in the Government’s priorities.

[Mr Bradshaw]

I entirely agree, and we look forward to hearing the Minister respond at the end of this debate. I intend to finish with what I hope will be an attractive suggestion to all those Conservative Members who were swept to power—

[The Parliamentary Under-Secretary of State for Transport (Claire Perry)]

I simply hope that at some point the right hon. Gentleman will welcome the fact that there will be a new station opening in his constituency next year.

[Mr Bradshaw]

Yes, and we have already had a new station opened just outside my constituency—and the investment programme for it was put in place by the Labour Government, so I am very grateful that the Minister did not cut it. [Interruption.] Of course I am grateful for that.

[Claire Perry]

rose—

[Mr Bradshaw]

I am sorry, but I am not giving way again.

[Several hon. Members rose—]

[Madam Deputy Speaker (Natascha Engel)]

Order. The right hon. Member is not giving way.

[Mr Bradshaw]

I have said I am grateful for that station and that I am grateful for the investment programme that the Labour Government initiated. I say to the Minister simply that she has cut that investment programme over the last six years at a time when every sensible economist in the world thinks we should be investing in our infrastructure for the long term. We have record low long-term interest rates in this country and a faltering economy, so now is the time when we should be investing in infrastructure, and particularly in rail. I repeat that I am very grateful that the Minister did not cut the money for that station and that we are going to get another station—but, incidentally, the Labour Government initiated the plans for that, too.

I am going to end with the following suggestion to the Conservative MPs in Devon and Cornwall who were swept to victory last May on great and grandiose promises of a rail revolution and renaissance in the south-west. I got into a great deal of trouble with my Whips in the last Parliament for refusing to vote for the money for High Speed 2 up to the north. To give credit where it is due, one Conservative Member, the hon. Member for South West Devon (Mr Streeter)—sadly, he is not in his place tonight—did the same. We withheld our support for that money. The Government now have a majority of only 12—

[Mrs Sheryll Murray]

Will the right hon. Gentleman give way?

[Mr Bradshaw]

No, I will not. I am finishing and the hon. Lady can speak in the debate.

More than 12 Conservative Members with constituencies in Devon and Cornwall could stop the Government putting that money through if they do not get what this Government promised over the next five years. I challenge them to do that—to stick up for their constituents, stick up for the south-west and stop taking no for an answer.

19:32

[Anne Marie Morris (Newton Abbot) (Con)]

I think that all Conservative Members will be sticking up not just for their own constituents but for the country as a whole. What we want to see is growth and productivity improved. We have to repair the damage done by the previous Labour Government that resulted in our having to make the cuts that we are now making. It is undoubtedly this Government, and the previous coalition Government, who have focused on the need to do something about the whole infrastructure mess.

I congratulate my hon. Friend the Member for Torbay (Kevin Foster), my constituency neighbour, for securing tonight’s debate. It is undoubtedly true that the Great Western route is critical. It is fair to say—here the right hon. Member for Exeter (Mr Bradshaw) and I might agree —that we need to give some priority to the infrastructure in the south-west. Where we would disagree is that I believe that we have already seen action taken and seen more than just warm words. Frankly, as the Member representing Dawlish among other places, I have seen it in spades. We all want to see this commitment. I believe it is fair, but we need it on the record.

[Mrs Sheryll Murray]

The very fact that the trains running between Penzance and Paddington were first introduced in 1976 just goes to show the lack of investment initiated by the Labour Government about which the right hon. Member for Exeter (Mr Bradshaw) talks. They did nothing for the south-west when they were in government for 12 years.

[Anne Marie Morris]

My hon. Friend makes a very fair point. It is this Government, and the former coalition Government, who have begun to look at the south-west and to recognise that we have a motorway, the M5, which ends at Exeter, and that the road infrastructure therefore needs sorting. They recognised, too, that broadband needed sorting, which is not something that the Labour Government did much about. They have also recognised that, frankly, our railway needs resolution.

The gross value added of the south-west is 72% of the national average, and if we could just deal with infrastructure issues, we would open up the opportunity and really deliver on the potential by raising the productivity of our area as a whole.

Given that so many colleagues have mentioned Dawlish, let me say a few words about it. This was an extraordinary event. It is, I suppose, a truism that after some of the most disastrous events, we sometimes see some of the best things emerge. It is undoubtedly true that what happened in Dawlish on that fateful day shined a light on the challenge. Rather than running away from it, the Government said, “This is something that matters; we are going to spend the money.”

I remember that storm in February 2014. The Government put in £35 million at the time, and I recall constituents telling me, “This can’t be fixed,” while the engineers were saying, “It can’t be done,” yet Network Rail and the Government told me, “It can; it will be; and it will be soon.” In the end, I think it took about six weeks. It was absolutely phenomenal. Having fixed it, they continued to spend another £6 million sorting out some further individual problems.

Clearly, there is more to be done, but if we look at what happened, we find that we had 300 engineers—that wonderful orange army—who worked solidly pretty much round the clock for two months, sorting out our railway. They were ingenious. Despite what the engineers said, they came up with the idea of using 19 sea containers to provide a temporary sea wall. That was quite an innovative idea. The only challenge they had, once it was put in place, was how they were going to remove it. That turned out to be more of a challenge than putting it in place. Yet 6,000 tonnes of concrete and 150 tonnes of steel later, along with the 25,000 tonnes of the cliff being removed, we are now in a good, resilient position for the railway at Dawlish. We have repaired 600 metres of wall and Dawlish station, including the platform, and we have 700 metres of new track.

Still more work is ongoing. The point made about signalling is absolutely right. More signalling repair and restoration is going on, along with more repairs to the sea wall, whose footpath has been repaired. Riviera terrace, which disappeared overnight, has now been rebuilt. As for Dawlish Warren along the coast, the point has been made that there are some natural climate change erosion problems, but work is already going on to deal with them through beach recharge and trying to realign how the natural coastal flow works.

The point of this debate—other than being able to say, “Well done, Government, you sorted out Dawlish; thank you very much”—is to flag up to everyone the need to do more. There is a bigger picture.

As my hon. Friend the Member for Torbay mentioned, the Peninsula Rail Task Force has been one of the key drivers. It was established to look at a 20-year plan, and I think that it has the support of everybody in the area. It is a great credit to the area and it shows how strongly we all feel about getting this right. If we can get this right, if that taskforce is allowed to complete its job and if we get that 20-year plan and the Government to commit to investment in the south-west, we could have a GVA uplift of £520 million by improving journey times.

It is fascinating that the potential for this area is so clear. Passenger numbers are many times that of any other area. I think they have gone up by 126% over the decade compared to a national increase of 61%. The tourism potential is already well demonstrated. In 2014, over £1 billion was spent by visitors to the south-west. Believe it or not, in 2013, Saudi and Russian visitors spent more in the south-west than in London.

If those who enjoy travelling using the “Lonely Planet” guides have a look, they will find that the south-west is situated in the league tables as the third best place to visit—ahead of Italy and Denmark. So the potential is there, and there is a win-win—not only for the south-west, but for the Government, because we will get productivity up, which is what the Chancellor wants to see above everything.

The Government have already committed £400 million, and we have had 11 individual reports since the Dawlish events, looking at resilience and reliability, faster journey times and sufficient capacity, and five more reports are coming. No one could honestly say that that did not represent a serious commitment to understanding the problem and then getting it right.

A number of crucial issues need to be addressed. I think every Member agrees that the Dawlish coastal route must be a priority, because unless it is running as a “forever, forever” resilient line, shoring up the whole peninsular network, everything else will begin to become secondary.

I take issue with the challenge from the right hon. Member for Exeter, who, like King Canute, seemed to fear that at some point we would all be washed away. I suggest that we should take account of British scientists, who have been incredibly resilient over the years—as, indeed, were those intrepid passengers who, when the line broke down all that time ago, simply got out of one carriage, climbed over the rocks, and got into another carriage to continue their journey. We are a resilient nation, and that line will survive. It too will be resilient, and it is there for the long term. I am sure that the Government will ensure that that can happen. Nothing is impossible; all that is needed is a little imagination and some intelligence.

The coastal route is crucial, but it is in all our interests to look at the whole area, and the east of Exeter project for resilience is equally important. Bridgwater and Taunton are also crucial, as are Yeovil and Castle Cary. They must be on the must-do list.

[Neil Parish (Tiverton and Honiton) (Con)]

I agree with my hon. Friend that what was done in Dawlish was absolutely right and that we must keep that railway going. However, we must also consider the line from Bristol to Taunton. We need new stations at Wellington and Cullompton, and we need some metro trains as well. My hon. Friend the Member for Taunton Deane (Rebecca Pow) cannot be here today because of ill health, but I know that she would agree. We need to increase resilience. We need to bring more trains down existing tracks; we need more stations; and we need to use our tracks much more effectively.

[Anne Marie Morris]

My hon. Friend is absolutely right. At present, we have just one spine going along the south of the peninsula. We need another spine going along the north and opening up the Okehampton line. We also need a network rather like a spider’s web. If we are to take full advantage of what is happening to the economy and if productivity is to increase, we need the smaller stations to which my hon. Friend refers. As was pointed out earlier, stations such as Dawlish should not become secondary branch stations. If that happened it would be a disaster, because our economy is set to grow. We need those two spine routes, but we also need the connectivity—the spider’s web—that will enable all our communities to be successful. For rural communities, travel is mission critical.

Shortening journey times is crucial. I welcome the bimodal rolling stock that we shall have in 2018, but, meanwhile, it would be helpful if the Minister told us a little about any cast-offs that might increase the current number. I agree with what has been said about electrification. I think that bimodal rolling stock is the solution, but, as others have said, we need a plan. We need to know that the Government are committed to dealing with more than just one piece of the south-west. The south-west does not stop at Bristol, although—dare I say?—some people seem to think that it does. We also need to consider the calling patterns, and we must give some thought to capacity and quality. The issue of the additional routes is crucial. I have already mentioned the Okehampton route and the concept of a spider’s web.

Let me now mention some keynote events in the far south-west. A geotechnical study, which is due to begin in April 2016, will look specifically at the Dawlish issue, the Teignmouth cliffs, the sea wall, and whether or not there is a need for a barrage out at sea. I am pleased that the study has gone full steam ahead and has not been subject to any cuts. I hope that the Government will undertake to take its findings seriously and to give us a chance to work and lobby hard to find the right solution. I hope that they will commit themselves to spending the money that we need to sort out our resilience once and for all.

Another key event is the 20-year plan report from the Peninsula Rail Task Force. As has already been said, the plan needs to be properly funded, but we hope that there will be some pre-planning in control period 5. Although control period 6 will not begin until 2016, I think that, once we have the report, the Government should say, “Now that the plan is in place, this is what we can do,” so that we are ready to go. We need the Government to invest during the planning phase. I would love CP6 to happen sooner, but it is realistic to assume that, by the time the planning has been completed, it will be 2018. But a commitment to investing in that planning and to the resolution of the problem would be brilliant.

If we invest in the south-west, our gross value added will increase, our productivity will increase—the Chancellor will be very pleased—security will be improved, and we will unlock the marine potential of the area, which is already worth £410 million in GVA. We will also be able to build on the nuclear potential. Currently, the UK nuclear market, much of which is in our part of the world, is worth £50 billion. We will also be able to take advantage of the aerospace advanced engineering, which is already worth £16 billion in our part of the world, and of new data analytics, which are based primarily in Exeter. The super-computer there gives us a potential income of £97 million in the area.

I will end my speech now, because the Minister has heard enough about me, the lady from Dawlish—[Hon. Members: “No, no! More!”] Let me finally ask you for your commitment to the south-west: a commitment to find the funds that we need, to give us the security that we need and to help us deliver the productivity that the Chancellor wants, that we want and that the country needs.

19:46

[Huw Irranca-Davies (Ogmore) (Lab)]

It is a pleasure to follow the hon. Member for Newton Abbot (Anne Marie Morris), whose stirring speech I thoroughly enjoyed. Let me also commend the hon. Member for Torbay (Kevin Foster) for securing the debate, which I think will prove very useful.

The Great Western Railway is important to me, because, along with my Welsh colleagues, I use it regularly. I have used it for the last 15 years, and, if I am fortunate—I am assuming nothing—I may be using it shortly to travel back in that direction for the final time as I head down to the Welsh Assembly. It all depends on the electorate. However, as others have said, the railway is critically important not just to politicians who travel back and forth to work and to represent their constituents, but to the economies of the areas involved. As we heard from the hon. Member for Newton Abbott, the GWR will provide great GVA if we get it right.

I must thank the GWR for getting me here almost on time. I apologise to the hon. Member for Torbay for being a couple of minutes late; that is because part of my journey was on a coach. Fair play: the company ensured that the coaches were running, and managed to deal with the traumatic weather. I thank it for sorting that out for me, and for all the other passengers. However, it raises the issue—regardless of electrification—of run-of-the-mill resilience. Too many parts of our existing railway stock have a fluctuating ability to deliver the timetable that we need. All too often there is a shutdown, and even if it lasts for only two or three hours, trains back up in the wrong places, and the timetable has to catch up with where the rolling stock is. No doubt, following today’s debate, GWR, Arriva Trains Wales and the branch lines will be shuttling stock to try to catch up after the delays.

[Kevin Foster]

I am enjoying the hon. Gentleman’s speech, but does he agree that we must ensure that the rolling stock that we have is correctly specified? Cross-country journeys connect parts of south Devon and, sometimes, south Wales on the route to Birmingham, and some trains have not been not specified to go along a piece of track that a wave might go over.

[Huw Irranca-Davies]

That is a very good point. I hope that what has been said today will be noted not just by the Minister, but by train operating companies and infrastructure companies. I hope that they will act on the suggestions that have been made by Members, so that their services can work better for commuters and other passengers.

Several Members on both sides of the House have drawn attention to the importance of the spine of the network to all the branches that flow from it. It is not just to do with high-speed links or electrification. I travel here from Maesteg, where I live with my family—it is north of Bridgend, up the Llynfi valley—and I am fortunate that we still have a branch line there. Thank goodness that, at the height of the Beeching cuts, there was local opposition and strong-minded leadership in the Labour authority, and people fought and said that they would be damned if that line would close. They managed to keep it open, and nowadays it is a tremendous success. That route from Maesteg down to Bridgend, and all the way up to Chepstow and beyond, is a very popular route and we need to go further. We talk about travel-to-work areas. The people in my constituency travel down from Maesteg and from all the valleys I represent to work in Swansea, Bridgend and Cardiff, and they need good reliable and affordable transport in order to do that. We are fortunate that we have that in the Llynfi valley and we need to keep it that way.

We are also fortunate that we were able to open a new station on the Great Western mainline spine. It is rare to see that happen nowadays. The station at Llanharan, between Cardiff and Swansea, was closed in the ’60s under Beeching, but after a fight lasting more than 40 years, we were able, along with local Assembly Member Janice Gregory and local councillors Geraint Hopkins, Roger Turner and Barry Stephens, to reopen it. It has had great benefits, with more than 2,000 homes being built in the area and possibly another 2,000 on the way. The station has been an economic boon to the area. People want to come and live there because it is not just a place along the Great Western spine route; it now has a station. The point has been well made that we must ensure that we do not bypass communities when we deliver the electrification and the mainline spine; we also need to connect the spine to the communities.

[Jonathan Edwards]

The hon. Gentleman seems to have neglected to mention the role played by Ieuan Wyn Jones, the Transport Minister in the Welsh Government at the time, and a member of my party.

[Huw Irranca-Davies]

Ieuan Wyn Jones played a good hand in that campaign, and so did Andrew Davies, the Economic Minister at the time. His officials were telling him that the economic case for the station did not quite stack up, but he told them that it would when they saw the 2,000 new homes and the new schools that would come in as a result. My goodness, he was right. When I travel through the new station now, I see scores of people using it at every hour of the day as they commute to Cardiff for shopping or visiting relatives or to go to work. It has been a tremendous success, and we need to think more about these projects alongside the electrification.

Another critical aspect of using the spine along the Great Western railway is to ensure that it also connects to the south Wales metro. I use that name deliberately; I am not talking about the Cardiff Bay metro. This needs to be a genuine south Wales metro. In my area, linked to the Great Western line, we have the Llynfi line that was protected all those years ago, but we also have three valleys that have no connections to rail links at all. They need to be linked in to the First Great Western line when it is electrified and delivering faster services. That link might take the form of light rail, or perhaps good coaches and buses operating to the right timetable to enable them to make the connections at the right times of the day.

That kind of thinking has to happen, and representatives of Bridgend County Borough Council, under the leadership of Mel Nott, are now sitting down with the Welsh Government to work out how to join those communities that have no rail links to the Great Western spine, so that people in those communities can get to work and go to meet their friends and so that elderly people there can socialise with friends who live further away without having to get an expensive taxi.

[Byron Davies (Gower) (Con)]

You are making some important points. Would you accept that the electrification of the line down to Swansea by the Conservative Government is going to result in greatly increased social mobility for the people of the valleys?

[Huw Irranca-Davies]

I agree entirely with the hon. Gentleman, but I hope that he will support my point that this project must be delivered on time as originally pledged and, hopefully, on budget as well. The hon. Member for Newton Abbot said earlier that too many people think that the south-west ends at Bristol. Well, too many people up here think that south Wales ends at Cardiff. Cardiff is a brilliant city—please go there and visit. Newport had the NATO conference and Cardiff has the greatest stadium in the land, with the only covered surface. Wales also has the best national opera company. Cardiff was third in the top 10 short break destinations in the whole of Europe recently. However, south Wales does not stop at Cardiff. Just beyond that line, there is Bridgend, and just beyond Bridgend is Swansea. Beyond that is west Wales.

So I fully agree with the hon. Member for Gower (Byron Davies), but I want to say to the Minister today, “Don’t short-change us through these delays.” We have been talking about the economic benefits and we were told that the electrification project would be delivered to Swansea—not to Bristol, not to Cardiff, not to Bridgend, but to Swansea—and we want it to go to Swansea. Let us look at the developments that are happening in Swansea at the moment. There is the SA1 project and the new university campus out at Briton Ferry. These are tremendous jewels in Swansea’s economic crown, and they need to be joined up. South Wales does not stop at Cardiff—brilliant city though that is. It goes way beyond that, and we need this project to be delivered.

I agree with the hon. Member for Gower’s primary point that we need to get the electrification completed, but I hope that he would agree with me that we need to get it done promptly and on time, without the delays that we have been talking about. We have now been told that it is to be put back into control period 6. For those who do not know what that means, control period 6 is between 2019 and 2024, which would mean that the project would not be completed at the same time as the rest, around 2018. So in effect, Christmas will come late for the hon. Gentleman’s constituents and for mine. We are going to have to wait for our Christmas presents, and that is not good enough. His constituents are not second-class citizens of this nation and neither are mine. Let us have this project on time, at the same time as everybody else. I know that he agrees with me on this.

[Jonathan Edwards]

The hon. Gentleman is making a very important point. Does he agree that it would be far better if these large infrastructure development projects started in Swansea as opposed to starting in London? If they started in Swansea, you can guarantee they would arrive in London on time and in budget.

[Huw Irranca-Davies]

I would certainly be reasonably happy with that. I would probably start them from Bridgend and work outwards in both directions, but starting from Swansea would be a good second option.

I was talking about connectivity with the Great Western rail line, and the necessity of delivering the Heathrow link has been mentioned in this regard. Come what may in terms of capacity expansion at Heathrow, that link needs to be made. The journey from South Wales to Heathrow is preposterous at the moment, and that link needs to be delivered. Again, it would provide a major economic boon. It is not only business people who say this—although they do, repeatedly; it is also commuters. It is also myself. I fly from Cardiff and from Bristol, and I also fly from Heathrow. These preposterous patterns of travel need to be remedied, and that needs to be done quickly. These plans have been sat on for years and years.

The hon. Member for Gower has said that the electrification plans are good, but they must be delivered on time. The Welsh Government have made it clear, as have other parties in Wales, that we are holding this Government to their original commitment of delivering it on time and on budget. I would ask the Minister to ensure that, when this is done, full discussions are held with the communities along the routes about the related infrastructure developments that would really benefit those communities. I will give the House an infamous example, from my own constituency. The lovely town of Pencoed still has a traditional level crossing, and it is one of the busiest in the land. It is right in the centre, next to the cenotaph and the shops. When we march there on Remembrance Sunday every year, we have to time our marches to take account of what can be a 15-minute wait while the level crossing is closed. Of course, that happens every day of the week, not just on Remembrance Sunday.

If we have this major investment that will require not only electrical infrastructure but raising the height of bridges and making major structural changes in different communities, I would love to meet the Minister, with Mel Nott from the local authority and the town council, to discuss how we can all work together to get rid of the level crossing and upgrade the bridge which is only half a mile or less up the road, so that we can get two lanes of traffic over it. That would allow us to solve the problem the level crossing causes, as well as drive electrification all the way down the line. Perhaps the Minister would invite me to meet her, along with a small delegation, because we think we can bring something to the table—the town council can, as can the county borough—and we can make this work for those communities as we drive electrification through.

My final point on electrification goes back to one made by the hon. Member for Gower, who represents constituents at the end of the main spine of the line. In case Ministers are confused, I should say that it does not finish there; it goes way beyond that, up into west Wales. For the purpose of this project, however, Swansea is regarded as where the Government originally said they would deliver electrification to. We are not talking about hybrid electrification—half diesel, half electric—variations or something that is late, but about electrification on time.

Regardless of that, at the moment we have been told that because of the delay we have no clear costings—to my knowledge, they have not been done—no clear start date, and thus no certainty. My worry is that this will drift, so I want some more clarity from the Minister today. I would love her to say that this is going to start between 2019 and 2024 and to give a date for delivering the full costings, so that we have a little more certainty that even though this is drifting, it is not drifting into the back of beyond. This is a great project. I wish all south-west Members, including the hon. Member for North Devon (Peter Heaton-Jones)—we stare at each other across the Severn estuary or the Bristol channel from our glorious coastlines—well in their aspirations for their areas. But my area needs electrification on time and on budget, so that we can link up all the other things we have been talking about in a cohesive infrastructure for south Wales and on to west Wales.

[Several hon. Members rose—]

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. Before I call the next speaker, may I say that there is something strange going on this evening? Each of the previous three people who have spoken in this Chamber has used the word “you” in reference to other people. It is not just one person—everyone is doing it. I have been reluctant to intervene and I try to not to, but after three times I must point out to the Chamber that when the word “you” is used, it means the Chair. If you are asking the Minister to do something, you ask “the Minister”. I call Oliver Colvile.

20:02

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

Thank, you for calling me in this debate, Madam Deputy Speaker, and I will try very hard to do that. I hope that if I do make a mistake, you might forgive me. I congratulate my hon. Friend the Member for Torbay (Kevin Foster) on securing this debate. Obviously, he has something more important than I have, because I have tried for five years to get a debate on the future of the railway down to the south-west and have always failed; he obviously has something more alluring and has therefore delivered. Also, let me say that I hope I will not get accused of being a fat controller at the end of my speech. [Hon. Members: “No!”]

Last week, we had the unwelcome second anniversary of the Dawlish line being swept into the sea, as my hon. Friend the Member for Newton Abbot (Anne Marie Morris) has pointed out. That was a huge wake-up call to the Government and to all of us in the south-west region. Interestingly, we have all worked together to make one common cause: to make sure that the Government understand the importance of this issue. If there is one thing we have been successful in doing, it is in ensuring that we have spoken with one voice, as have done this evening. We need only look at what happened today, when trains on the line out of Cornwall were once again delayed, because of the appalling weather and the three trees that fell on to the line at Bodmin, to see how fragile our railway line is. As chair of the all-party group on south west rail, I am fighting, alongside my fellow Devon and Cornwall MPs, for better train and other transport links to the region. I have campaigned for that over the past 15 years, initially as a Conservative candidate and more recently as the Member of Parliament for Plymouth, Sutton and Devonport.

[Neil Parish]

This is very much about the resilience of infrastructure into the west country, because we have not only the Great Western line but the Waterloo to Exeter line, where we could make big improvements by, for example, using loops around Honiton. We could also open Seaton Junction and bring back the trams to meet the service. This is also about carrying on from Exeter down into Cornwall with a second line, because although it is absolutely right to keep the Totnes and Newton Abbot line, we need that second line so that we have resilience. We seem to be having more and more bad weather, so the first line will get blocked and we have to have a second route into Cornwall.

[Oliver Colvile]

My hon. Friend is 100% right about the need to have that second line. My personal preference is for it to go through Haldon Hill, as that would be ideal, but I understand that it may be too expensive. We therefore need to make sure that we have one that has the potential to go through Okehampton and Tavistock, purely because we have to make sure there is increased capacity and we can put freight on the line, too.

As my hon. Friend the Member for Newton Abbot said, two years ago the line at Dawlish was washed away, and for the following six weeks there were no trains west of Dawlish to the biggest conurbation west of Bristol—Plymouth. Having lost our airport and our trains, the only way anyone from Plymouth could get to London and the midlands was by using the partially dualled A303 and the M4 and M5—we are talking about the only single dual carriageway at the moment. I very much welcome the Government’s commitment to dualling the whole of the A303. I, like my hon. Friend the Member for Tiverton and Honiton (Neil Parish), would like to see it go through the Blackdown hills as well, but I may be being too greedy in that.

In the aftermath of the Dawlish disaster, the Prime Minister visited the Laira depot in my constituency, and I was very reassured to hear today, when I met people from Great Western Railway, that the company is going to be seeking to make full use of Laira and it is not going to be closing. The Prime Minister’s persistence ensured that the orange army worked tirelessly to fix the line before Easter 2014, which of course was the start of the tourist season. This time last year, the Prime Minister met my hon. Friend the Member for South West Devon (Mr Streeter), the chairman of the local enterprise partnership and the leader of Plymouth City Council, and he warmly supported the setting up of the Peninsula Rail Task Force to undertake research into what needs to happen to deliver a resilient railway line. Although I understand that much progress has been made, I was slightly dismayed to learn two weeks ago that Network Rail did not have the money to deliver on the research into journey times and electrification. I very much hope that the Minister will be able to help me on that this evening and make sure that that work happens.

Last Monday, nearly all my fellow Devon and Cornwall MPs met the Chancellor and set out our concerns. We were all elected on a promise to try to make sure that we could deliver a decent railway line to and from the west country, and to improve other transport links. I am very grateful that he met us at such short notice and that he understands what our peninsula’s needs are. On Tuesday, we met the Under-Secretary of State for Transport, my hon. Friend the Member for Devizes (Claire Perry)—we hope she is soon to be our right hon. Friend—who is both responsible for rail and a south-west MP. She told us she would do everything she could to find the £300,000 for this work, and I am delighted that it seems she is going to be able to find that for us.

Let me remind the Minister what we in Plymouth and the far west want. She may be bored with hearing this, but I have been saying it for the past five and a half years and I am going to say it one more time. We want more three-hour train journeys from London to Plymouth and vice versa; and we want trains getting into Plymouth from London before 9 am, so that business people can do a full day’s work in Plymouth. We are the largest urban conurbation west of Bristol—bigger even than that in Wales—and it is important that we be an economic motor to deliver the growth that my hon. Friend the Member for Newton Abbot talked about.

Never again must Plymouth and the far west be cut off from the rest of the UK. I was delighted when the Transport Secretary came to Plymouth before the general election and announced we would get the new high-speed Hitachi AT300 trains in 2018. It was very positive news. I am concerned, though, that it could be subject to further delays, given that the electrification to Newbury is delayed and over-budget. If I have got that wrong, perhaps the Minister will correct me.

We need more three-hour train journeys between Plymouth and London and more trains arriving before 9 am; we need to straighten the tracks and improve the signalling between Totnes and Cornwall; and we need an additional line to the one at Dawlish so that never again can the far west be cut off. Plymouth can only play a significant part in growing our economy if we have a decent transport system—and skills base. I am acutely aware, as is my hon. Friend the Member for Plymouth, Moor View (Johnny Mercer), of the low-skills and low-wage base in our city.

In 2020, an important event will take place in Plymouth, when we commemorate the Mayflower’s leaving the city in 1620 to found the American colonies. To make that a success, people need to be able to get to Plymouth to see where that great ship sailed from.

Just in case the Opposition think they have got off lightly—as I slightly hold the Minister’s feet to the fire—I remind Labour that it does not have a particularly good record on delivering in the peninsula. It announced in its manifesto that it would cancel the dualling of the A358, which would move the bottleneck from Stonehenge down to South Chard. I am delighted that we are continuing with the dualling.

Without the south-west, the Government would not have an overall majority. We have done our bit to ensure a Conservative Government, whom I am delighted to support, so will they please help us deliver for them?

20:12

[Peter Heaton-Jones (North Devon) (Con)]

I congratulate my hon. Friend the Member for Torbay (Kevin Foster) on securing this important debate.

The hon. Member for Ogmore (Huw Irranca-Davies) said he might be departing for pastures new. As he kindly namechecked me, may I say what a pleasure it has been to serve under his chairmanship of the Environmental Audit Committee? It has been my first experience of a Select Committee, and it has been extremely fruitful. We will miss you—I mean, we will miss the hon. Gentleman. I apologise. Ooh, I think I’ve got away with it.

Like many Members on both sides of the House, I am a regular user of the Great Western main line. I travelled up this morning. As others have said, the journey was considerably delayed, but I pay tribute to the GWR train staff, who always kept us well informed and advised. On such days, they operate in extremely difficult conditions. It can only be a challenge to deal with a lot of stroppy passengers who want to know why they are an hour late, but they performed in an exemplary fashion this morning and kept us all advised. Although we got into Paddington an hour late, that was fine.

As mentioned, faster broadband would be gratefully received. The train is a valuable opportunity to work—I had an unexpected extra hour this morning—but although the broadband works after a fashion, it is, like the curate’s egg, slightly patchy. Like the right hon. Member for Exeter (Mr Bradshaw), I choose to travel in the quiet carriage, but never has anything been so misnamed. It is certainly not always quiet. The train is a vital place of work for people on their journey from the south-west to London and elsewhere.

[Mr Bradshaw]

This has been suggested to me once or twice before. In my experience, if one politely asks somebody making a noise in the quiet carriage to desist or move, they do so. It is a great example of British self-policing. I recommend that the hon. Gentleman try it, if he has not already done so.

[Peter Heaton-Jones]

I am a shrinking violent and would never presume to do such a thing, but I take the right hon. Gentleman’s point.

The vital nature of this main rail link for the south-west—our major rail artery—has to be stressed again and again, but it is extraordinarily important for another reason. As others have said, not only is it a fragile link, but it complements what is, by any definition, a fragile series of road links to the south-west. On the M5 or the A303, you pays your money and you takes your choice. There are times when both are unhelpful to the travelling public. For that reason and many others, it is vital that the south-west line is resilient, as many Members on both sides of the House have said.

[Alex Chalk (Cheltenham) (Con)]

As well as resilience, do we not need to get the network running smarter? For example, a great train robbery takes place every day when my constituents are robbed of 15 minutes of their lives because the train from London leaves the main line and parks in Gloucester, where the driver gets out from one end of the train and walks to the other, before the train rejoins the main line and continues to Cheltenham.

[Peter Heaton-Jones]

My hon. Friend makes a good point. I am not aware of the particular jiggery-pokery he mentions, but it sounds like an extraordinary bit of choreography.

I have mentioned the difficulty with transport links as a whole. That is why the resilience of the south-west main line is vital. I also want to talk about the spider’s web, as others have called it. We need to ensure a good and widespread rail service across the south-west. It needs not just a spine, but ribs coming off it—to stretch the analogy to breaking point.

I am bound also to mention the vital rail link in north Devon connecting Exeter with Barnstaple. Over the years, it has survived the Beeching cuts and many other problems, including flooding and underuse, and now it has turned a corner. The number of passengers using it is growing almost exponentially. It used to be used primarily in the summer months. Indeed, at some points, it is still signposted with signs of the brown tourist variety, which rather gives the impression of its being a quaint Puffing Billy line, which it is not. It is a vital artery, and if we can improve it, we will improve the economic vitality of north Devon.

The fantastic work of the Tarka Rail Association in promoting and operating the line has helped to drive its increased use, so I was delighted when, just three weeks ago, I arranged for the chairman and me to meet my hon. Friend the rail Minister. We had an extremely productive hour-long meeting at which we discussed the importance of the north Devon main line, as we are hoping to rechristen it. I hope that my hon. Friend will refer to that in her comments. Having these ribs off the spine are absolutely vital if we are to ensure that we have a rail service that is truly of use to the maximum number of people in the south-west. It is of particular importance to north Devon because of tourism.

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

I am grateful to my hon. Friend for giving way. I feel like an intruder in this debate, as I do not represent a south-west constituency. However, I was at Exeter university and I regularly visit north Devon. I absolutely concur with his point about the Barnstable line. A key thing that is needed is enhanced rolling stock. Very often what is in use is a single carriage train, which is woefully inadequate. I hope that when the Great Western franchise comes up in a few years’ time, proper consideration will be given to procuring better rolling stock for that line.

[Peter Heaton-Jones]

My hon. Friend makes a good point. I am delighted to welcome him to beautiful north Devon. The rolling stock is an essential matter, as it has been left to decay to the point that it is only just fit for purpose. I have held a significant number of meetings with the operators, GWR, Network Rail and the Tarka Rail Association and we have discussed at length the importance of acquiring significant new rolling stock. I am delighted to say that we now appear to have reached a position where there will be a “cascade” of rolling stock. I would rather not use the phrase “cast-off” that was previously used, because I want to strike a more positive note. We will have a cascade of—almost—21st century rolling stock coming towards us for that line.

[Huw Irranca-Davies]

May I take this opportunity to stress the importance of access for wheelchair users? My friend Simon Green from the Bridgend Coalition for Disabled People stresses that, very often, in railway carriages there is space for only one wheelchair, so two people travelling together have to be split up. It would be great if we looked at the possibility of different variations in the new rolling stock.

[Peter Heaton-Jones]

The hon. Gentleman makes a good point. I have travelled on the north Devon line between Barnstable and Exeter, and, quite often, there is no room at all for a single wheelchair user, which is why we need to get this new rolling stock cascaded to us as soon as possible.

Let me turn away from the specifics of the north Devon line to the Great Western main line, which is a vital artery for the south-west. We have talked a lot about the resilience of the line. We absolutely rely on that single rail line to provide us with a transport artery to the south-west. When incidents occur, such as the one in Dawlish, the effects are devastating. Even though people who come to north Devon often jump off the line well before Dawlish—like me, they usually get off at Tiverton Parkway—the fact is that when we have the sort of incident that happened at Dawlish, the whole of the south-west and all the constituencies represented by Members here are affected. We need to ensure that we have the resilience of that line sewn up for the future, which means addressing the difficulties at Dawlish. The right hon. Member for Exeter made the point that the cliffs on one side of the line are just as much a problem as the coast, on the other side of the line. I have seen for myself that that is a problem. We also need to consider this second line—the Okehampton route—that will start to open up a vital northern corridor. I have an interest in such a route, as I represent north Devon.

The flooding issue is also of significance. As I came up on the train this morning, I saw how close the line was to the Somerset levels. Then there is the electrification issue. I absolutely agree with Members from all parts of the House that we need to speed up the process of electrification of the line. I am delighted that it is planned to go through to south Wales, but we need to ensure that we get it down to the south-west.

I add a note of concern here: if we get no significant movement on this until control period 6—in other words starting in 2019—we will be pushed back to the end of the queue. I hope that the Minister can give us some positive news in this regard. In particular, I hope that she can provide us with some reassurance on these two feasibility studies into the resilience and the electrification of the line, which have been mentioned a few times already. Without going into all the do’s and don’ts of who said what, of where the money was coming from, and of whether it was cut from point A or from point B, the fact is that we need a relatively small amount of money to undertake those two vital reports, and they really need to be done. I hope that, when the Minister gets to her feet at the end of the debate, she will have some positive news for us. One cannot stress too much how important it is to have those two studies done.

Let me briefly mention the Peninsula Rail Task Force and the excellent work it has done. Its 20-year plan certainly bears reading and taking seriously, because it has a vision for the rail line that we in the south-west deserve.

As has been mentioned, the Prime Minister and the Chancellor came down to the south-west on a number of occasions. They came to my constituency—to Saunton in the case of the Chancellor—and announcements and promises were made and ambitions mentioned. They talked about investment for the south-west rail line. I feel sure that, when the rail Minister gets to her feet, she will be able to reassure us that those promises will be delivered. It is vital for all of us in north Devon and the wider south-west that we have a resilient, fast and efficient rail service.

20:27

[Fiona Mactaggart (Slough) (Lab)]

I am sorry that I had to miss parts of the debate, but I was rehearsing with the Parliament choir. I was trying very hard to be in two places at once and, as usual, failed.

I really welcome this debate. I know, because I have heard reports about the speeches that have already been made, that the focus of the debate has not included the commuter service provided on the Great Western railway. I urge the Minister to respond to the issues relating to the passengers who commute on those routes. If we look at passengers in excess of capacity on a typical autumn week day by operator, we will see that Great Western Railway exceeds all other companies, not because of the long-distance services that we have heard about, but because of the chronically overcrowded commuting services provided on the railway. On an average day, there are something like 1,000 people in excess of capacity in the three most overcrowded trains on the rail line, and 30% of the 10 most overcrowded trains are on the Great Western main line. There is a serious problem. Too often, I have been in one of those trains, with my nose pressed into the armpit of someone whose name I do not know. I find that offensive. We have standards for carrying animals on lorries, but we do not have standards for carrying humans on trains. The Great Western commuter rail service is, on many occasions, quite disgusting for passengers, and we have to do more than adapt a few carriages that were used to feed people—we have given that up—by putting in a few more seats. We need to do more to provide sufficient stock for the commuter service to serve the people who depend on it.

The Thames valley is the most productive region of our country. It makes more profit per worker than any other part of Britain. We need to make sure that those people can get about. My constituency—I often say this in the House, and I am sure Members are bored of hearing it—has more European headquarters of multinational companies than Scotland, Wales and Northern Ireland put together, because Slough is really easy to get to. It is really easy to get from Slough to Heathrow, to London, to the west country, or up the A40 to Birmingham, or along the M3 and around the M25. It is a well-connected town, which is why we are successful in drawing investment into Britain. I am not competing with other towns in England, Wales, Scotland and Northern Ireland particularly; Slough tends to compete with cities in Europe.

When I talk to companies about the issues that impact on their profitability, they say that they want to be confident that Heathrow has a secure future and they want to reach it more easily. The best way to do so is by rail. I persuaded the previous head of the Berkshire local enterprise partnership to do some research, over 10 years ago, on what companies in the Thames valley spent on taxis to Heathrow. The figure was £10 million a year. If that money was spent not on taxis going to Heathrow on the excessively congested M4 but on a train service to Heathrow, those companies would have a more reliable journey that did not depend on what was happening around junction 5, 6 or 7. They would not face overcrowding on the M4. We are going to get smart motorways, but with hard-shoulder running, if there is an accident, it takes longer to get round it. At the moment, they have serious problems using that route properly.

I have a feeling about how the Department for Transport works. It can do only one thing at a time. It looks down a little tunnel, saying, “This is my project.” Its project at the moment on my bit of the railway is creating a train park for the Heathrow express, which I would rather not have. The Minister has been helpful on some of these issues, but the failure to put a foot on the accelerator of western rail access to Heathrow is truly foolish, given the impact not just on this bit of railway but on the national economy. If the project had as much energy behind it as other rail projects it would attract significant inward investment. We are failing to attract that investment and are failing to create the jobs that would inevitably follow better connectivity for Heathrow because no one is pushing this forward.

I was concerned that we would not get the project done by 2018, which was the first chimera of western rail access to Heathrow, but then it was pushed back to 2020. Now it looks as though it might be done by 2023 or 2024. I suspect that the project will probably not be completed until we have the additional runway, but we need it before then.

I urge the Minister to set someone—one of her nice tunnel-vision civil servants—to focus their tunnel vision on Western rail access to Heathrow. I promise that companies in this country are desperate for it and they will back it. Perhaps she needs a bit of private investment. I had a meeting some years ago with officials in her Department and one of them said, “We’re spending blah million”—I cannot remember how many—“per month on the airport.” I looked around at the company representatives who had come with me, whose companies were spending that much per month on their own development.

The time has come to ensure Western rail access to Heathrow. It does not need complicated consultations because most of it is on the existing rail line and the rest of it is in a tunnel, so there is nothing to delay the project. This Minister, whom I admire, would forever be in my glory books if she would make sure that somebody put the accelerator under this project. At present, her Department is failing and letting down the Thames valley and the whole of the south-eastern economy as a consequence.

[Several hon. Members rose—]

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. There is no need for a time limit in this debate as we have plenty of time, but when we have plenty of time, speeches and interventions tend to expand, so it would be helpful now if Members would take around 12 or 13 minutes, which is a long, long time.

20:36

[Johnny Mercer (Plymouth, Moor View) (Con)]

You will be delighted, Madam Deputy Speaker, to know that my speech will be very brief indeed.

I thank my hon. Friend the Member for Torbay (Kevin Foster) for securing this debate. I shall not repeat what has already been said. I am going to disappoint my father again—I am no railway engineer. He dragged me round, trying to introduce me to the lost art of trainspotting when I was a young man, but it never caught on.

I want to talk about why the rail connection is important to my city, Plymouth, and why we as a Government need to get it right, to deliver for that part of the world. I echo the comments of my hon. Friend the Member for North Wiltshire (Mr Gray). For much of the time we have a remarkable service, though there are some serious challenges to be faced. We must rise to the challenge of severe weather, without denigrating everything we have already achieved. That would do us a disservice.

Almost two years ago exactly, the Dawlish rail disaster happened. The railway fell into the sea, cutting off my city, as has been mentioned. The idea that the Government have done nothing since then is one of the myths in the literature from the Opposition that is piling up in my office. In the past two years, £70 million has been invested to keep that railway open and to increase resilience generally in the south-west. That is not an insignificant sum. We have that resilience at Dawlish. Admittedly, it sometimes faces challenging weather, but the weather may be a little beyond our control.

I urge the Government not to heed the divisive words of those who seek to further their own personal agenda in this rail debate. Many of us in the south-west feel that we have had investment to a point, but we now need to go to the next level. Let me explain why that is important. As I said, I am no rail engineer, but I am an extremely mediocre politician. That gives me the opportunity to knock on people’s doors in Plymouth and hear what is important to them. People often ask me why, despite our history in Plymouth and our astonishing Janner spirit that has seen us conquer the seas and make the largest contribution to this country’s defence in matériel and men, and despite reviving ourselves spectacularly after a devastating blitz during the second world war, we still have in our city some of the most deprived communities in the United Kingdom. The reasons are many, and clearly far too varied for this debate, but the answers are part of it. We must address the life chances we give people in Plymouth. If we were to cross a particular bridge in Plymouth tonight, we would see the average life expectancy drop by seven and a half years—that is seven and a half years in my city.

We must aggressively fight our way out of the state dependency that has dominated our city since the heady days of the 1980s, when 35,000 Plymothians worked at the dockyard. As the economy and society have changed, we as a city have changed with them; the central economy based around the dockyard has given way to a bright, positive and emboldened city that has become a hub for small businesses and start-ups, driving an astonishing 48% drop in unemployment in the last Parliament.

We have two world-class universities, but they are further from an airport than any in the UK. Marjon University is ranked first in this country for social mobility, which is really important in Plymouth. We as a Government must do everything we can to assist its onward development in that respect.

[Kevin Foster]

My hon. Friend is making some powerful points, which also relate to my constituency, where we, too, are trying to diversify. Does he agree that that is what makes the debate so important, particularly given the comments by the right hon. Member for Slough (Fiona Mactaggart) about the need for western access to Heathrow, which acts as the south-west’s key air link?

[Johnny Mercer]

My hon. Friend is absolutely right. At its heart, this is about developing opportunities and bringing skilled employment to places outside London—to communities that have been deprived for so long.

Plymothians have adapted to the challenge of modern Britain in a way that only they can—with a positivity and a spirit that make some of us proud to call Plymouth our home. However, we as a Government must now play our part in that revival and tackle the single totemic issue that will fuel this onward journey towards a better, more prosperous and more healthy Plymouth. The biggest, most rewarding and highest-pay-off issue the Government could get right in the next five years is this railway. The jobs, the opportunities for our young people and the skilled manufacturing opportunities will come only if we have a transport link that is resilient, fast and befitting of a 21st century Britain. I say again that this is the totemic issue for this Parliament for us in the south-west.

At the last election, Plymothians showed their true colours and, for the first time, elected three Conservative Members of Parliament. Plymothians have aspirations, and they want life chances, and we need to do everything we can as a Government to enable them to achieve those and to provide them with the ladder, so that we can bring my city forward and enable it to achieve the potential it so clearly has. The rail link is the single thing that will do that to the greatest effect.

20:43

[Scott Mann (North Cornwall) (Con)]

It is a pleasure to follow my hon. and gallant Friend the Member for Plymouth, Moor View (Johnny Mercer). I thank my hon. Friend the Member for Torbay (Kevin Foster) for bringing this debate about.

I would like to talk for a few moments about my experience with the Great Western railway and about how beneficial the railway has been. I was not previously a huge user of the railways, having not travelled from north Cornwall to London that much. However, I use them regularly now, because I have to travel up to London and back twice a week. For me, the best part of the week, as the right hon. Member for Exeter (Mr Bradshaw) mentioned earlier, is getting back on the train at Paddington. I use the sleeper train, and I would urge him to use it as well; there is nothing better than leaving London at midnight and waking up in God’s country, in the south-west, at six o’clock before going back to work on Friday morning. It is an excellent service.

I represent a constituency that is barren in terms of its railways. North Cornwall has no branch railway links. The south-west saw huge reductions under Beeching’s cuts, and North Cornwall lost stations in Bude, Launceston, Padstow and Bodmin, which served the original Great Western railway. I pay tribute to the Peninsula Rail Task Force, which has worked tirelessly in the south-west to attempt to deliver a plan for the south-west. In recent days, we have seen that plan and presented it to the Chancellor and to the Transport Secretary. I hope that later we will hear some positive announcements regarding the funding for that plan.

We have also seen in recent days how groups of MPs can join together and work for a region. Today we had the example of the securing of the local government funding settlement and the increase for rural areas, which has been hugely beneficial to residents in Cornwall, and I am grateful for that. We have a rather seamless tide of blue in the south-west, and it would be beneficial for us all to work together to try to get the best we can for our region. The Great Western Railway franchise, or First Great Western as it used to be called, has had a significant presence in Cornwall. In the past, other operators such as Virgin, CrossCountry and Wessex have come and gone, but trains operated by FirstGroup have served the Cornish people for many years. I thank my hon. Friend the Minister for her continued support for the train network in the south-west and for recently agreeing to meet us.

We noticed how resilient Cornwall and Devon can be when we saw the events in Dawlish in 2014. Those events cannot be ignored. Dawlish is a fantastic place to pass on the train—it is one of the best advertisements for the south-west. For any Members who have not ridden through Dawlish on the train, if you look over to the left-hand side, you can see a huge amount of sea and swell. That is exactly what the south-west is about—it is coastal, it is rugged—

[Johnny Mercer]

Like you.

[Scott Mann]

Thank you—likewise!

Millions of people from across the world saw the scenes of the railway hanging into the sea at Dawlish. At that time, we were reliant on the one arterial road that comes into Devon and Cornwall, and that was difficult. We saw the orange army out working—they did a huge job for us, and I am very grateful—but I feel that we should explore other opportunities and other branch lines that might well help us out. An Okehampton link on the line from Exeter to Plymouth would be viable, and it would bring benefits to tourism not just in North Cornwall but in the area represented by my hon. Friend the Member for North Devon (Peter Heaton-Jones) and in other parts of the region. I am sure that Great Western Railway would welcome the opportunity to serve more stations and facilitate the return of trains to North Devon. That would help thousands of people right across North Cornwall and North Devon, many of whom have to travel huge distances to access trains.

I might be the only speaker in the Chamber this evening who does not have a branch line running through their constituency, and I would very much like one, so I am going to make another case—for a Bodmin central branch line. There are only two standard-gauge railway stations in North Cornwall, both of which are served by the Bodmin and Wenford steam railway, which runs to Boscarne and is fantastic. However, Bodmin Parkway is located about five miles outside the town centre, which means that it is not easily accessible if there are roadworks or problems on the roads. I would therefore like a proper dedicated mainline link to be implemented between Bodmin Parkway and Bodmin General. The steam trains do a great job in the summer, but we need a 365-day-a-year link. I would welcome Great Western Railway considering putting in a link to connect Bodmin town up to Bodmin Parkway.

[Kevin Foster]

Does my hon. Friend agree that what he is saying about where train services could be developed shows the latent demand in the south-west region, particularly on the peninsula, for the creation of additional services not just on the Great Western Railway route but through the further extension to Okehampton of the old Southern route that still exists between Exeter and Waterloo?

[Scott Mann]

I do agree. The more branch services we get, the better. Our public transport system in Cornwall and Devon is not great, and we struggle to provide sufficient bus services. As my hon. Friend the Member for Plymouth, Moor View said, if we make these investments, that will drive jobs and drive the economy in our areas.

I thank the Minister for the investment that has already gone into the south-west, including in the points systems in Penzance, the new bimodal Hitachi trains, which will be ready for use by 2018—that is a fantastic investment and we are grateful for it—and the sleeper trains. I talked earlier about being rocked to sleep on the sleeper trains, which are a fantastic service. A gentle relaxation and a rocking to sleep is a lovely feeling, and it takes six and a half hours to get from Paddington to Bodmin Parkway, so I look forward to those sleeper trains coming online.

The bimodal trains will reach Cornwall faster, so we could do with them. It is also imperative that we look at electrification and line speed improvements. I know that is not going to happen overnight, but I would like the Minister to consider it. The sleeper train is an integral part of south-west connectivity. With the region being three to six hours away from London, night sleeping is important because it means you can have a restful night’s sleep and then get to work first thing on a Friday morning.

I thank the hon. Members for Ogmore (Huw Irranca-Davies) and for Slough (Fiona Mactaggart), who is no longer in her place, for raising the Heathrow proposals. For me, Heathrow is not a London issue; it is a countrywide issue. Linking up areas such as the south-west means faster journey times to Heathrow and it connects us to onward travel. I am grateful to the hon. Members for pointing that out. In 20 years’ time, we could be living in a region that has direct flights from Newquay to Heathrow, and direct trains from the region to Heathrow. People from Cornwall could then fly to Heathrow in an hour, and people in east Cornwall and Devon could hop on an electric GWR service and alight at Heathrow in under three hours.

[Johnny Mercer]

I am very much enjoying my hon. Friend’s stories of rocking the sleeper to sleep, or whatever it is. Does he agree that in order to upskill our part of the world and change the character of the south-west economy, it is fundamental that we attract bigger manufacturing companies to give our young people the skilled opportunities and skilled manufacturing jobs that will keep them in the south-west?

[Scott Mann]

My hon. Friend is absolutely right. Train connections have raised the wage base in other areas, and over the years the south-west has suffered from a low wage, high house price economy. Many of our young people struggle to get houses and to get on in life. If those rail services come online, businesses will invest in the south-west, which will give our young people every opportunity, which is great.

[Huw Irranca-Davies]

The hon. Gentleman is making a fine speech. I urge him to look, when he has time, at the development of the south Wales metro concept, because it covers urban and rural areas, and valleys as well as major conurbations. It is a great idea, because it relies not only on rail, but on other modes of transport that work on time and are affordable. It has a way to go, but a south-west metro concept comes to mind.

[Scott Mann]

I will, of course, have a look at those reports. The hon. Gentleman spoke eloquently about his valleys and the branch lines within his valleys, so I look forward to reading those reports.

In conclusion, the Great Western railway is a valuable asset to the south-west and it could be improved. Without it, the region would crumble, which is why we must make it better, faster and more resilient. Today, many of my colleagues will have been affected by the severe weather in the south-west. In fact, we have heard that four fallen trees have affected the railway service in Bodmin and around the south-west. It is quite fitting that those trains have been delayed on the same day as this debate. I am confident that the GWR franchise will continue to serve our region well, linking it to the capital, and that the Peninsula Rail Task Force and the south-west MPs will all work together for our corner of Britain and make it a better place to live, work and play.

20:54

[James Heappey (Wells) (Con)]

I congratulate my hon. Friend the Member for Torbay (Kevin Foster) on securing this important debate. It is important for two reasons. First, rail infrastructure in the south-west was a central part of the Chancellor’s long-term economic plan for our region. As such, it is important that we hold the Government to account in the delivery of that plan. Secondly, the south-west as a region is, unfortunately, defined by its poor infrastructure. We have a poor road network beyond the M5, we have relatively poor broadband, and access to the national airport is difficult. We have some fantastic and growing regional airports, but still nothing on the scale of those in other regions. Our rail network is only one line deep, and that line, not too long ago, was washed into the sea. That shows just how vulnerable we are. Moreover—although the right hon. Member for Exeter (Mr Bradshaw) made the point that broadband could be better integrated into the rail service, I will exclude broadband from what I say next—our roads, our rail and our airports are poorly integrated. Not only are they individually bad, but collectively they do not create a particularly well joined-up network. That adds to our woes as a region.

My remarks come under two headings: the inter-regional and the intra-regional. On the first, my hon. Friend the Member for Torbay was noble in resisting the temptation to compete with other regions, but I believe that the important thing is how the south-west fares against other regions, and therefore where the region should be in the Government’s priorities. It takes one hour and 42 minutes—give or take—to go from London to Bristol Temple Meads. That is 118 miles. On the west coast main line, we can go from London to Crewe in an hour and 34 minutes. That is 183 miles. On the east coast main line, we can go from London to York in an hour and 50 minutes. That is 215 miles. Already, our region is at a huge disadvantage relative to other regions, because of the speed of access into the south-west. The new Hitachi bimodal trains will reduce the journey to Bristol to around an hour and 25 minutes, which is very welcome indeed, but our line will still be slower, mile for mile, than the lines serving the midlands, the north-west, the north and the north-east.

I make three points about that. First, I have just given for comparison the journey to Bristol, which is in the northernmost part of our peninsula where the lines are fastest, so it is, in theory, the quickest to access from London. Secondly, in other regions, huge further improvements are expected to the rail infrastructure that will accelerate journey times into those regions. While we catch up with the bimodal trains that will get us to Bristol in an hour and 25 minutes, the other regions will sprint ahead, so we will remain in the second division. Thirdly, the effect of limited electrification will be marginal. Electrification only to Bristol, or only part way down the west country line, will mean that passengers reach the end of the electric line relatively quickly, but thereafter their journey will be relatively slow. Proceeding beyond Bristol will be rather like jumping off a cliff back into the slow world of diesel trains. I fear that that will accelerate investment into the Thames valley and the M4 corridor, but not necessarily beyond Bristol and into the south-west peninsula at large.

What do we ask, from an inter-regional perspective? Clearly, our connection to London—and London Heathrow, which has been mentioned a few times—is vital. It would be churlish not to say that it is the most important connection, so it is absolutely right that it is the key aim of the Government’s rail plans for the south-west of England. It is not the only inter-regional connection that matters to the south-west, however. Our visitor economy will benefit enormously from improvements to the cross-country network, because so many of our visitors—they are very welcome indeed—come down from the midlands, the north-west and the north-east to find some sun in the west country.

Clearly, the Government have only so much cash, so what matters is the way they sequence how the cash is spent. This is rather like the debate about broadband. We talk endlessly about whether our responsibility is to deliver superfast broadband to as many people as possible or to deliver broadband just to those left without it altogether. The debate about rail in the south-west of England is very similar: do we sprint ahead with the development of high-speed rail into the north of England, when the south-west still has bimodal trains, because we can only get electrics so far down the line and thereafter have to revert to a technology not employed elsewhere? From the nodding of the hon. Member for Ogmore (Huw Irranca-Davies), I suspect that very much the same applies in Wales, once people go beyond Cardiff. This is an opportunity for the Government to state very clearly—I shall come back to this point later—where the south-west sits in their priorities. Those priorities are very clearly demonstrated by the way in which the Government sequence the spending of cash on rail infrastructure.

On intra-regional train networks, the Peninsula Rail Task Force has rightly received praise this evening, but there is a danger with PRTF. Its genesis lay in the difficulties we had in accessing Devon and Cornwall after the floods a few years ago, so much of the plan it has come up with addresses those difficulties. There are some benefits for Somerset in that, because the lines affected by flooding need to be made more resilient, but Somerset is an integral part of the Peninsula Rail Task Force, not just a territory to enable quicker travel down into Devon and Cornwall.

I want to plant it in the Minister’s mind that the PRTF has responsibility not only to get greater resilience in Devon and Cornwall and to look at commuter capacity in and around Plymouth and in Devon, but to recognise that within Somerset—certainly north of Taunton—the requirement is to generate commuter capacity to Bristol and Bath. When I speak to people in that part of our county, which includes my constituency, about faster rail connections, they may or may not mention London first, but many of them will certainly talk about their inability to commute by train to work in Bristol or Bath. We need to make sure that that is addressed.

I have met the Peninsula Rail Task Force, which assures me that that point is part of its thinking, but one cannot help but notice that there is no specific mention of it in its interim document. I hope that from our meetings so far, from this debate this evening and, I hope, from the Minister feeling suitably animated by this matter, more explicit mention may be made in the future, because this is hugely important to the economic development of our part of the county.

There are a number of challenges when it comes to increasing commuter capacity from Somerset up to Bristol and Bath. The arrival of rolling stock from the Thames Valley will be very welcome. However, plenty of our stations have platforms that are not quite long enough for them, and we need to address that; plenty of them do not have the car parking capacity to meet the growth in demand that I hope will come, so we need to address that; and many of them have no disabled access whatsoever, and we need to address that.

We also need to look at timetabling services better. In my last job in the military, when I was working in the Ministry of Defence, I saw how South West Trains has services coming in from Hampshire and Surrey that stop relatively frequently until Woking or Surbiton and then go straight into London Waterloo, while others stop hardly at all and then stop all the way up from Woking or Surbiton. Given that people are now willing to travel a bit further to work and that the Bristol and Bath economies are growing very fast, I wonder whether there is an opportunity to have services that stop at Taunton, Bridgwater, Highbridge and Burnham in my constituency and perhaps Worle on the outskirts of Weston-super-Mare, but then accelerate through into Bristol to deliver a journey time that encourages people to live a bit further out in Somerset.

That is hugely important for creating jobs that people in Somerset can access through this new public transport link. It is also important because one of our great problems in the south-west is that houses are very expensive—those within the Bristol and Bath commuter belt are cripplingly expensive—but accelerating commuter traffic from Somerset up into Bristol and Bath would allow people in Bristol and Bath to access cheaper housing in Somerset. That is a win-win, given the Government’s priorities in those areas.

Highbridge and Burnham is an interesting case, if I may be slightly parochial for a few minutes. It is the only station in my constituency—a constituency of about 750 square miles. It is on the no-man’s-land bit of line between Taunton and Bristol, which may or may not be electrified. Improving that station presents a real opportunity, given the frustrations that so many people in my part of Somerset have in accessing Bristol. More parking could be delivered. There is no disabled access whatsoever on the Taunton-bound platform when coming across from the car park, other than by going out on the road and over a bridge with no traffic lights or anything. There are huge opportunities for improvement, but because the station is in a quiet backwater of Somerset, it is too easily forgotten. The opportunity that sits there just waiting to be harnessed, which would require a relatively small amount of money, is too often overlooked. [Interruption.] I have placed it on the record now, Mr Deputy Speaker, so I will move on.

To conclude, the Government have committed a welcome amount of investment to the south-west. We now need to deliver on what has been committed. The Government made some exciting promises on rail in the south-west in their long-term economic plan. We now need to deliver. Although we recognise that the public purse is stretched, the Government need to come good on the things they said in the west country during the election campaign and make it clear that the south-west is a priority for them. We believe that the Government’s majority was made in the south-west.

The right hon. Member for Exeter (Mr Bradshaw) has left his seat, so I can say without fear of reply that the south-west benefits enormously from being represented almost entirely—bar one—by Conservative MPs. We speak as one voice on all sorts of issues, from school funding to local government funding, which we talked about here the other night, and rail, which we are talking about tonight. That one voice gives the south-west an opportunity in this place that it has not had before. We need to harness that by making sure that the Government deliver on their promises and on the things that we are so keen to see happen in our constituencies.

Our region has poor infrastructure. The road improvements that the Government have promised are very welcome. The broadband improvements that the Government have promised are very welcome. The rail improvements that the Government have promised are absolutely vital. I hope that the Minister will agree that it should be a priority to deliver them in the south-west, and that if money does not allow for things to be done at the same time, the south-west will get priority over other regions so that we can catch up with everybody else.

21:07

[Andy McDonald (Middlesbrough) (Lab)]

I congratulate the hon. Member for Torbay (Kevin Foster) on securing this debate on an important subject. There has been many an excellent contribution. I agree with the hon. Member for Newton Abbot (Anne Marie Morris) that the Great Western railway is more than just a transport system; it is vital to the areas that it serves, which is why it is so important that the Government deliver on their promises on electrification and improved resilience as a matter of urgency.

As was identified by my hon. Friend the Member for the Crown principality of Ogmore (Huw Irranca-Davies), the recent flooding in much of the country has further highlighted the importance of ensuring that our railways are resilient in extreme weather conditions, which we are witnessing with increased frequency. Commuters on the Great Western railway know that only too well. The breach of the Dawlish sea wall in 2014 forced the closure of the line for two months, creating significant disruption. We saw the rails hanging in the air like a rope bridge. I, too, applaud the heroic efforts of the engineers and workers of Network Rail who brought the repair to a speedy conclusion.

A report published in the Journal of Transport Geography on the likely future impact of weather on trains travelling to and from the south-west predicted that up to a third of rail services could be disrupted over the next 100 years. That report, which was described by Network Rail as “key” to long-term developments, underlines the importance of improving resilience in the region.

The Labour party agreed with the Prime Minister when he said that the Government “needed to find answers” because the Dawlish disaster of 2014 “must not happen again”, but his rhetoric has yet to be matched by action. Despite it being said that “money is no object”, the Peninsula Rail Task Force—we have heard a lot about that this evening—has been examining how to improve the south-west’s rail network following the storm damage, but is currently unable to complete its final report because funding is unavailable.

In a letter to the Secretary of State, Tim Jones, chairman of the Devon and Cornwall Business Council, said that the south-west would be at a “severe disadvantage” should no funding be found to complete those studies. If we are to accept what the Prime Minister told the House when he said that “money was no object”, and if we are to believe that the Government are serious about making our railways resilient to extreme weather conditions, they must ensure that funding is available to complete the report. It is of paramount importance that resilience is improved, and the Government should give their backing to the report so that the task force can get on with delivering a railway that is to be relied on come rain or shine.

A number of suggestions have been made for an additional route to Dawlish, including by my right hon. Friend the Member for Exeter (Mr Bradshaw), and by Labour South West, including Tudor Evans, the leader of Plymouth City Council. However, the Prime Minister appeared to prejudge any fair assessment of the options when he backed a new Okehampton railway route as the “most resilient” alternative to the vulnerable Dawlish route, saying that the UK is a “wealthy country” that should be making long-term investments in rail, and that the Okehampton line was worth a “long, hard look”. Will the Minister guarantee that all options for an additional route in the south-west will be assessed on a fair basis? Will she also reassure the House that the funding that the Prime Minister promised will be made available, and that no decision has yet been taken on the route that an avoiding line might take?

So far the Government’s track record on delivering the Great Western main line is poor. Electrification will be delivered late and cost substantially more than initially estimated. Labour committed to electrification of the Great Western main line in 2009, but the estimated cost of that has escalated dramatically since Network Rail made its first assessment in 2011.

[Mrs Sheryll Murray]

The hon. Gentleman has criticised this Government’s track record. Will he enlighten the House about the previous Labour Government’s track record on investing in the Great Western railway line?

[Andy McDonald]

I will happily do so. Let me remind the hon. Lady of the pieces that we had to pick up when coming into government after the disaster of Railtrack and the deaths that were caused as a result of the privatisation of the railways. We do not want to hear any more about that—the investment was significant.

[Mrs Murray]

rose—

[Andy McDonald]

I have given way. Mark Carne, Network Rail’s chief executive, told Members of Parliament in October that the estimate for the project had been £874 million in January 2013, and £1.5 billion in September 2014. He said that because of “inadequate planning”, the cost of electrification could now reach £2.8 billion.

The upgrades that were expected to have been completed by 2018 are significantly behind schedule. Under the original plan, the Reading to Didcot route should already have been completed, and routes to Oxford and Bristol were on schedule to be completed this year. Didcot is now expected to be two years late, in 2017, and Newbury and Oxford three years late, in 2018 and 2019 respectively. Bristol Temple Meads will not have electric trains until 2020, and the east-west rail link from Oxford to Bletchley is delayed until the early 2020s.

Some of those improvements have been delayed by up to four years, significantly affecting commuters who rely on the Great Western line, as well as on the towns and cities that the line serves. Progress on the Great Western electrification has been hampered by this Government putting electrification on hold after the 2010 election, and not fully confirming the project until July 2012, meaning that essential planning work was delayed. The Office of Rail Regulation has said that because a number of major enhancements were added to control period 5 at a relatively late date, several important projects were started in 2014 without being fully assessed. At the start of control period 5, £7 billion of the £12 billion of enhancement spending had not been signed off by the regulator. Calvin Lloyd, Network Rail’s head of long-term planning and funding said:

“There are cost pressures across the whole portfolio of enhancement projects, which should not be a surprise to anyone given that we did not have the level of confidence we might have wished at the start.”

It is the taxpayer, commuters and those who rely on Great Western who will suffer the consequences of poor cost estimation and poor planning. If the Great Western tracks are not electrified according to schedule, the Department will be liable to pay compensation to the private consortium that is delivering the new generation of electric intercity express programme trains. The Department for Transport is considering converting electric IEP trains so they can run on diesel, at an unclear cost to the taxpayer. They may not be able to reach speeds of 125 mph, raising fears that some journeys could actually slow down, compared with today, if electrification is delayed.

The Government’s plans for replacing uncomfortable and inaccessible Pacer trains on branch lines in the south-west are dependent on the success of the electrification programme. If the Great Western electrification project is significantly delayed, passengers in the south-west could endure vehicles for years that the Government have, quite rightly, said are unacceptable in the north of England.

Poor planning and the premature announcement of projects have left commuters uncertain of the future of the Great Western, yet the Government were repeatedly warned that rising costs could lead to some projects being delayed or cancelled. Labour first raised problems with the Great Western main line electrification programme in May 2014, just weeks into the start of the investment period, and challenged the Government to explain which electrification projects will be delayed or cancelled as a consequence of rising costs. Those concerns were echoed by the Transport Committee, which warned in January 2015:

“We are concerned that key rail enhancement projects—such as electrification in the North and North West of England—have been announced by Ministers without Network Rail having a clear estimate of what the projects will cost, leading to uncertainty about whether the projects will be delivered on time, or at all.”

Worse still, commuters were kept in the dark by the Government throughout this period. The chief executive of Network Rail confirmed:

“In mid-March 2015, Network Rail informed the Department for Transport that decisions may need to be made in the coming months about the deferral of certain schemes.”

However, Ministers in the Department are still refusing to say whether they were informed before the election of the plans to defer major schemes. It is now clear that the agreed work could never have been delivered within the agreed budget and timeframe. Yet Network Rail, the Department for Transport and the regulator, the Office of Rail and Road, signed up to the plans anyway, resulting in a great deal of unnecessary uncertainty and confusion. It is passengers and the public who pay the price for such failures, and serious questions must be asked of the Government about how such a shambles was allowed to occur on their watch.

It will be a great relief to passengers reliant on the Great Western that track upgrades will arrive late rather than never. We on the Labour Benches encourage the Government properly to examine their adequacy and the adequacy of Network Rail in budgeting, planning and delivering such programmes in future. It is those issues that should be focused on, so it is an issue of concern that Nicola Shaw, who is heading the Department’s review of the future of Network Rail, has said that privatisation of Network Rail is an option that is on the table. The Government should be asking how better to deliver major projects such as rail electrification in the future, not looking to devote time to managing yet further privatisation and fragmentation of our national rail infrastructure.

[Mr Bradshaw]

Is my hon. Friend aware that, according to the Financial Times, Great Western also raised objections to the possibility of privatising Network Rail, saying it would fragment the system and remove the advantage Network Rail has currently in being able to buy in bulk—and therefore cheaply—on behalf of the taxpayer?

[Andy McDonald]

My right hon. Friend is absolutely right. It is a matter of huge concern that the critical mass of Network Rail is now under threat from this review. It makes no sense whatever to break up a national network. We all remember the days of the private enterprise adventure into our country’s rail infrastructure—and the consequences that flowed therefrom. I would therefore encourage Members strenuously to resist the proposals for the privatisation of Network Rail.

21:20

[The Parliamentary Under-Secretary of State for Transport (Claire Perry)]

I thank my hon. Friend the Member for Torbay (Kevin Foster) for securing this excellent, coherent, thoughtful and wide-ranging debate. He has heard many reports, as have I, of the damage created by Storm Imogen during the day. I am just thankful that everyone is here in one piece. So far, there has been no report of injuries. I am sure we will all be thinking about what our constituents have had to deal with during the course of the day.

Let me deal with a couple of points before answering some of the outstanding questions put to me. A broad set of issues have been raised by Members and I am tempted to respond to many of them.

The right hon. Member for Exeter (Mr Bradshaw) is one of the few Labour Members, I am pleased to say, representing the south-west, but he is an assiduous campaigner on behalf of his rail users—[Interruption.] He is probably the only Labour Member representing the south-west. I am pleased to hear that he enjoys his journeys, accompanied by his bicycle, but I am disappointed that he tends to produce a tirade of misinformation and never likes to have the facts put to him.

I was interested to hear that he rebelled against his party Whip on HS2. I wondered whether he rebelled against—or at least had stern words with—shadow Ministers on issues such as the pitiful performance of the Labour Government on electrification. I know that the right hon. Gentleman was one of a revolving door of Ministers whom I had to face, but let me ask him once again—he could not answer one of my hon. Friends earlier—that at a time when we had a go-go economy and a light-touch regulatory system that was pouring money into the Treasury’s coffers, how many miles did the Labour Government electrify in 13 years? It was fewer than 10 miles.

Do you know why, Mr Deputy Speaker? In Labour’s view, the railway was not something that really mattered. The view of the Labour Government was that they could jack up the fares with the flex and have inflation-busting fares year after year. They did not invest a penny in electrification in the south-west. Here is the thing, though: they could have replaced the Pacers. Do we all remember the Pacers? Do we remember all the heat and fury from Labour about the dreaded Pacers that were carrying thousands of people around the north? Could they have replaced the Pacers in 2003-04? Yes, they could. Did they? Did they heck. Let me tell you why, Mr Deputy Speaker—it is because they do not give a stuff about transport investment. It is not important in Labour’s view, and their track record is disgraceful. Frankly, I will take no lessons whatever from the Labour party on the railways.

I hope that the right hon. Member for Exeter will also have stern words with his party about its plans to abandon the upgrade of the A358, as set out in his party’s manifesto, and about its lack of a word in support of the dualling of the A303, which is vital to the economy of the south-west. If he did not complain about that, which is a road so close to his constituency, I hope he would complain about his party being monetary fantasists who had no plan at all to generate a strong economy, without which we cannot invest in transport infrastructure and in vital public services. I think the whole House can agree that we will take no lessons whatever from—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I am going to help a little bit. I am not quite sure how the A303 fits in with a rail debate on the Great Western line. I know that the Minister wants to deal with the railways. Her reputation as the rail Minister is what I want to see tonight.

[Claire Perry]

Far be it for me to criticise you, Mr Deputy Speaker—[Interruption.]

[Mr Deputy Speaker]

We both know that that is not an option.

[Claire Perry]

But the roads and rail investment is vital to this region.

[Mr Deputy Speaker]

It looks like I need to be even more helpful. If the Minister looks at the title of the debate, she should realise what it is about, and Members have tried to stick to that subject. I know the Minister has a lot to cover, and I want her to concentrate on what Members have said and on the railways. I know that that is what she wants to do, too.

[Claire Perry]

I will follow your excellent advice, Mr Deputy Speaker.

My hon. Friend the Member for Newton Abbot (Anne Marie Morris) made possibly one of the most impassioned speeches we have heard in the House, drawing attention to the value of this investment and what it does for the region. As for the hon. Member for Ogmore (Huw Irranca-Davies), who made a powerful speech about the extension of the line to Swansea, I am very sad that he will—potentially—leave us in May. I hope that it has nothing to do with anyone whom he nominated for the Labour party leadership; it would be awful to think that he was disappearing on that basis. He will be much missed by many Members on both sides of the House. I have asked my hon. Friend the Member for Vale of Glamorgan (Alun Cairns), the Under-Secretary of State for Wales, if he will meet the hon. Gentleman, as a matter of urgency, to discuss the important infrastructure issues that he raised.

My hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) was, I believe, the only Member who mentioned the vital role of freight on the railways, and he was very clear about his priorities for the constituency. I am delighted that the Laira depot, which I have visited, is being retained, because of the important jobs that it brings, although I was disappointed that he did not mention hedgehogs once. I had hoped to hear a plea for a hedgehog crossing.

My hon. Friend the Member for North Devon (Peter Heaton-Jones)—whom I have enjoyed meeting many times, along with Mr Mike Day—raised the possible opportunities on the Tarka line, which are fantastic. My door is open, and I am happy to give further consideration to his proposals.

The right hon. Member for Slough (Fiona Mactaggart), who is no longer in the Chamber—I think that she had to leave early—is another passionate campaigner for rail. Her constituency will, of course benefit from the Government’s record investment in the railway, and particularly in Crossrail. I take her point about the Heathrow spur. However, she accused my Department of having tunnel vision. Far from it: we are multi-tasking on a daily basis. We are delivering the electrification of the midland main line, the Great Western main line electrification—about which I shall say more shortly—the multi-billion-pound Thameslink programme, and Crossrail. We are delivering £38 billion of investment on the country’s railways. That is the biggest investment programme since Victorian times. However, one of the lessons that we have painfully learnt is that if we are committing money, it must be spent wisely. The hon. Lady was right to raise the Heathrow issue, and it will be delivered, but it is a question of appropriate sequencing.

My hon. and gallant Friend the Member for Plymouth, Moor View (Johnny Mercer)—who is not a trainspotter, I gather—made a powerful point about the regional need for transport investment to drive entrepreneurial growth. He made the important point, which was received rather churlishly by Labour Members, that private sector economic growth drives the best improvement in life chances, particularly in a disadvantaged constituency. I was disappointed by Labour Members’ reaction to that.

[Huw Irranca-Davies]

In fact, the private sector has an important role to play in development and growth. However, as the Minister will know, the company that has achieved the highest satisfaction, the highest investment and the lowest bills is a not-for-profit water company called Dwr Cymru, which returns its surpluses to shareholders. Does she agree that the Wales consultation—it was launched on my birthday, 22 January—on a not-for-dividend model for the Wales and Borders franchise is a worthwhile exercise, given that it is considering a different way of delivering more value to rail users?

[Claire Perry]

When the hon. Gentleman becomes First Minister—which is, I am sure, his aspiration—he will have every opportunity to look at models for that franchise for the Welsh railways, because it is a devolved matter. However, I hope that he will be grateful, as I am, for the Government’s commitment of £125 million, over and above the Barnett consequentials, to ensure that electrification of the Welsh valleys is delivered. How the work is sequenced will, of course be within the purview of the Welsh Government.

As always, my hon. and, allegedly, rugged Friend the Member for North Cornwall (Scott Mann) spoke passionately about the potential of his constituency. He also made the important point that branch lines that create local connectivity are vital to the railway. I hope that the Peninsula Rail Task Force, about which I shall say more later—I know that there is bated breath in the Chamber—will capture some of the investment. My hon. Friend also made an important point about the sleeper service, which the Government have supported with a multi-million-pound investment. I am glad that it is rocking him to sleep every Thursday night, but it is also a vital way of building the tourism and business pathway down to the south-west, and I am very pleased that that work has been done.

My hon. Friend the Member for Wells (James Heappey) pointed out the importance of transport links, including road links. I am sorry that I was ruled out of order by mentioning road links earlier, so I will not mention them again, Mr Deputy Speaker. My hon. Friend made a point about regional investment, and I want to assure him that this is not a zero-sum game. It is not a question of pitching the north against the south-west or the south-east. In this Government’s view, transport investment across the local, regional and national economies drives up economic growth, and economic growth delivers greater tax revenues and greater skills. That is a boat that floats the entire country higher, so if we can generate economic growth from transport investment, we will all benefit from that.

My hon. Friend made the fascinating point about regional transport around an area and talked about commuting into Bristol, where house prices can be very high. I hail from that area and I know it very well. In this regard, we would be looking to organisations such as the Peninsula Rail Task Force to help us to understand where every pound of spending can deliver maximum economic growth.

My hon. Friend the Member for Taunton Deane (Rebecca Pow) cannot be here tonight as she is recovering from surgery, but she too has campaigned on the vital issue of regional connectivity and is working hard on proposals to put forward to the new station investment fund, to which this Government have committed another £20 million in the latest spending review. I hope that I have now mentioned everyone who has contributed to the debate.

What is going on with this line? This debate is about the future of the Great Western railway. Some people have called it “God’s wonderful railway;” others have called it the “great way round.” It is a railway that I know very well. I grew up in Bristol and I remember when the InterCity 125s came to the city. It was as though we were no longer cut off; we were finally connected. However, as many Members have pointed out, those self-same trains are still running today. Some of them have been re-patched; they have been rebranded and refreshed. They still work, and they are a tribute to their engineering, design and maintenance, but they are now old trains. In the past 20 years, passenger numbers have doubled on that line. Indeed, since privatisation, passenger journeys are at a record high, with numbers having doubled across the country.

Too many trains are overcrowded and too many paths are full. Successive Governments of all political colours—I hold my hands up here—have not taken the necessary tough decisions on railway investment. Too many difficult decisions have been ducked and, as I have said, Labour’s record on this is really nothing to shout about. However, despite the appalling economic chaos that we inherited, this Government have picked up the pieces and said, “We will invest more than £38 billion on our railways.” Moreover—if I may crave your indulgence for a moment, Mr Deputy Speaker—we will put our road investment budget on a sustainable basis, so that all our transport systems can be protected.

This is truly the most ambitious rail upgrade since Victorian times, and it is being directed at the south-west because that region is a priority for this Government. Good transport reduces the cost of doing business. It helps local companies to reach new markets and to grow, and it helps local people to travel to new opportunities. It helps students to travel to our wonderful universities. However, poor transport acts as a drag on growth and on social aspiration, and this Government understand the importance of rail investment in the south-west.

Powerful cases have been made tonight about the need to transform the Great Western main line. Over the next four years, the 40-year-old InterCity 125s will be replaced by reliable cutting-edge intercity express trains. I have seen them, and they are great. Along with the electrification of the fleet running on the suburban lines around London, they will deliver a 40% increase in the number of seats coming into Paddington. That is an incredible number, and it will start to deal with the overcrowding problems that we have heard about tonight. Also, journey times will be cut by up to 15 minutes, which will help to achieve some of the ambitions that have been described today. Fifty stations and 170 bridges will be improved, along with 200 miles of track and 17 tunnels, including the Box tunnel, which I have been through on a people-mover. All this work is going on.

The hon. Member for Ogden—[Hon. Members: “Ogmore.”] The hon. Member for Ogbourne—

[Melanie Onn (Great Grimsby) (Lab)]

Do you know Wales very well?

[Claire Perry]

I know Bristol much better than Wales. The hon. Member for Ogmore (Huw Irranca-Davies) made an important point about electrification. I want to tell him that the commitment to electrify the line to Cardiff is absolutely baked into the new Hendy plans, and he must consider that as preliminary work towards Swansea—[Interruption.] It is difficult to get through the Severn tunnel, as he knows, but the work is going on and the gantries are in place. We have made the commitment that the electrification will continue on to Swansea the next capital period. [Interruption.] He says, “What about the new trains?” Of course the hybrid trains that we have purchased will be able to run on those tracks, so his constituents will see the journey time and capacity improvements, and those brand-new, state-of-the-art trains. I hope that he will at least be happy with that—

[Huw Irranca-Davies]

rose—

[Claire Perry]

I can tell that the hon. Gentleman is not and that he is going to ask for another piece of infrastructure.

[Huw Irranca-Davies]

I winced only because I could feel the whole population west of Cardiff wincing at the same time as we were told that that was an interim measure to get us there. I do understand the point the Minister was making, however. Will the right hon. Lady—

[Claire Perry]

Hon. Lady.

[Huw Irranca-Davies]

She would be right hon. in my eyes if she could give the date when we will see the completion to Swansea.

[Claire Perry]

I am sorry, but I do not have that completion date. As the plans proceed and the work accelerates on the electrification to Cardiff, I will be happy to make sure that the hon. Gentleman is one of the first people to know, in whatever the capacity. I was invited earlier to choose glory, but my job is to serve—that is it.

Let us talk a little about the direct investment, as well as this Great Western line, because some people, including the hon. Gentleman, might legitimately say, “That is fine, but it just goes to Bristol and the south-west is much more than just Bristol.” Indeed, it is much more than just Cardiff, if we are talking about south Wales. What is actually happening for the south-western peninsula? Hon. Members were right to say that the south-west has sat and watched other regions pull ahead and wondered why that was happening. The south-west has vital extractive industries and some brilliant talent, but we are, in effect, cut off. Whether it was what happened at Dawlish or other transport network issues that had to prove that, the events at Dawlish were a wake-up call for so many of us. The work done on restoring that line showed that where there was a will and funding, there was a way to deliver. That is why in this Parliament the Government are investing more than £400 million directly in the rail system for this region. We are providing the class AT300 trains—the bimodal trains—which go through my constituency, too. I put my hands up: this is a great thing for my constituents, too. Those trains will provide fast, reliable journey times down to the south-west.

We have opened a new station at Newcourt, with others to come at Marsh Barton and at Edginswell, in the constituency of my hon. Friend the Member for Torbay in the next 18 months. We are re-signalling the main line from Totnes to Penzance, which is vital. The right hon. Member for Exeter mentioned Reading station, where this Government are making a £700 million investment in untangling freight and passenger lines, so cutting a key source of delay on that line. We have overhauled the Night Riviera sleeper trains, and I am told that the new launch will be before the vital tourist season this year. We are expanding the Long Rock train maintenance site at Penzance to maintain those trains, and of course we spent £35 million at Dawlish at the time of the works, and money has continued to go into that project since, because it is not enough just to stabilise the track for now.

As we have heard over and again tonight, the challenge will be in future-proofing these lines, which are in some of the most exposed parts of the railway network. That is why £3.5 million has been spent by Network Rail on the geological analysis—on the cliff resilience analysis—to make sure that what is proposed for Dawlish works for the future. An additional £31 million is also being spent at 10 sites across the south-west, including the works at Cowley bridge, and the installation of rainfall and other monitoring. We are trying to make sure that the flooding problems we saw in 2014 do not happen again.

We have a plan for the south-west and we are determined to improve the resilience for the south-west. We also have a plan for Wales, and although the hon. Member for Ogmore may not be entirely happy with it, this Government are delivering for Wales, too. I was pleased to hear an almost universal series of comments about Great Western Railway today, which is delivering its highest ever score for overall passenger satisfaction. As has been said time and again today, it has really delivered at a time of tough service disruption. It is delivering 3% year-on-year increases in customer scores and it is determined to do more.

There is a No.1 question today. People have said, “Okay Minister, you have told us that this matters and clearly there is a long-term plan, but what about the resilience study?” I am delighted to assure the House that we have indeed negotiated a package that will make sure that those relatively small but important studies do go ahead, to form part of the plan that we are expecting to get from the great Peninsula Rail Task Force. I wanted to keep everyone in suspense until the last possible moment. Therefore, the GRIP 2 study—governance for railway investment projects—into line speed improvements between London and Devon and Cornwall can go ahead to establish what more can be done to bring about track and signalling improvements. That is an important but not the only part of the study. I am really excited that the Peninsula Rail Task Force will report in June with a vision for the next 20 years. That work will include the resilience questions at Dawlish and the journey time improvements we need. That is no easy task, so we should all thank the relevant parties, led ably by the chair of Devon County Council, for putting that work together.

[Mr Bradshaw]

I think what the Minister just said is welcome, but she used the expression, “We have negotiated a package.” How much are the Government putting on the table compared with the local authorities, which have already put quite a lot on the table?

[Claire Perry]

We have not been asked to put in a penny. Great Western Railway has funded the study, as part of our negotiations with it. No Government money was ever being put into these studies. We stood by to make sure the studies happened—

[Andy McDonald]

Stood by!

[Claire Perry]

No, we were prepared to backstop any shortfall, but Great Western Railway agreed to fund this small part of the overall plan. We are talking about £200,000 to £300,000, as opposed to the £3.5 million Network Rail has already spent. I hope the right hon. Member for Exeter, just for once, is going to crack a smile and welcome something. Go on! Just welcome something the Government have done. No? I think we will move on.

The Government are committed to the region, and these studies will go ahead. This is a vital region of the country for transport investment and economic growth, and I am delighted, as both a south-west MP and the rail Minister, to confirm that those studies will go ahead.

21:42

[Kevin Foster (Torbay) (Con)]

This has been a fascinating couple of hours. We have managed to keep the debate on track and, as I told the Backbench Business Committee we would, to build up a head of steam behind these issues, and hon. Members will be pleased that the debate did not hit the buffers, as some suggested it might.

Leaving aside the puns, I think this has been a good debate. It was encouraging to hear that the studies would go ahead, as a key part of identifying exactly what needs to be done on our railway to secure it for the future. It is right that we heard the commitment that Dawlish and the Great Western main line would continue to be at the heart of the community in the peninsula. I know that the line into south Wales and Swansea is at the heart of that area and its economy, too, and I hope that people will support the motion without the need for a Division. It reinforces the importance of the network. This is not just about a transport system to get people from A to B; it is about the heart of a region that could deliver so much more with the investment that we hope will come.

Question put and agreed to.

Resolved,

That this House believes that the routes of the Great Western railway are not just a transport system, but the heart of the regions they serve; and calls on the Government to ensure that plans for further electrification and improved resilience of the Great Western railway routes are progressed urgently.

Business without Debate

Monday 8th February 2016 Commons Chamber

business of the House (9 February)

Monday 8th February 2016 Commons Chamber

Ordered,

That at the sitting on Tuesday 9 February, paragraph (2) of Standing Order No. 31 (Questions on amendments) shall apply to the Motion in the name of Mr Nigel Dodds and to the Motion in the name of Tim Farron as if the day were an Opposition Day; proceedings on each Motion may continue, though opposed, for three hours and shall then lapse if not previously disposed of; proceedings on each Motion may continue, though opposed, after the moment of interruption; and Standing Order No. 41A (Deferred divisions) shall not apply.—(Jackie Doyle-Price.)

Business of the House (10 February)

Monday 8th February 2016 Commons Chamber

Ordered,

That at the sitting on Wednesday 10 February, Standing Order No. 16 (Proceedings under an Act or on European Union documents) shall not apply to proceedings on the Motion in the name of Secretary Theresa May relating to Police Grant Report or to proceedings on the Motion in the name of Secretary Greg Clark relating to Local Government Finance;

the Speaker shall put the Questions necessary to dispose of proceedings on—

(1) the Motion in the name of Secretary Theresa May relating to Police Grant Report not later than three hours after the commencement of proceedings on that Motion, and

(2) the Motion in the name of Secretary Greg Clark relating to Local Government Finance not later than three hours after the commencement of proceedings on that Motion or six hours after the commencement of proceedings relating to Police Grant Report, whichever is the later;

proceedings on those Motions may continue, though opposed, after the moment of interruption; and Standing Order No. 41A (Deferred divisions) shall not apply.—(Jackie Doyle-Price.)

International development

Monday 8th February 2016 Commons Chamber

Ordered,

That Fabian Hamilton be discharged from the International Development Committee and Stephen Doughty be added.—(Bill Wiggin, on behalf of the Committee of Selection.)

Flood Insurance for Businesses

Monday 8th February 2016 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Jackie Doyle-Price.)

21:43

[Craig Whittaker (Calder Valley) (Con)]

The floods that hit the north of England over the Christmas period brought untold misery and suffering to a record number of people. In the Calder Valley, 2,700 homes and 1,635 businesses were flooded. In addition, four schools were affected, two of which are likely to remain closed for the foreseeable future, several bridges were destroyed and the total repair bill for damaged infrastructure currently stands at £32 million.

The Government’s response so far has been most welcome. A £12 million package for households and businesses was made available within days of the flooding to help with the initial incidental costs. Since then, we have seen £5.5 million for the rebuilding of Elland bridge and, most recently, funding to repair and improve flood defences in the village of Mytholmroyd, which was particularly badly affected.

As welcome as the Government response has been to date, there is still far more to do. The communities in my constituency will need a great deal of support over the coming months and years as they get back on their feet.

The Environment Agency is due to complete the long-awaited flood prevention modelling work for the length of the Calder Valley in October. Although improved flood defences and upland management schemes cannot guarantee full protection in the future, there is an urgent need to move ahead with such projects. In addition to flood prevention work and the cost of repairing the damaged infrastructure, there is also the need to work with businesses to ensure that they are able to recover. An essential part of that is ensuring that small businesses are able to access flood insurance.

In response to a recent written question on this issue, the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Penrith and The Border (Rory Stewart) said:

“While we recognise the difficult challenges that some small businesses could face in accessing commercial flood insurance in areas of high flood risk, we are not currently aware of evidence that there is a systemic problem. Therefore, we have committed to work with the Association of British Insurers (ABI) and other interested parties to monitor the insurance market for small businesses. We are keen to work across government, and with a range of business interests, to better understand the nature and extent of any problem that might exist”.

[Alex Cunningham (Stockton North) (Lab)]

I am grateful to my former Education Committee comrade for securing this debate and for giving way. This afternoon, I met Alan Smith, the leader of Allerdale council, to hear of the problems in his area and his worries for small and large businesses. Of concern is the fact that excesses of several tens of thousands of pounds are needed in order to secure insurance. What specific role should the Government have in developing some form of Flood Re type scheme for businesses, perhaps with some of that underwriting money that we have for domestic issues?

[Craig Whittaker]

I will come on to what I want the Government to do a little later, but I will also explain what is currently taking place. The hon. Gentleman is absolutely right that the excesses for small and medium-sized businesses are phenomenally unaffordable, as are some of the premiums on offer.

In addition to the written question that I mentioned earlier, the Prime Minister recently stated that he was looking very carefully at this issue and that, although some small businesses are highlighting concerns, the insurance companies, via the Association of British Insurers, state that they would not turn down any small business for flood insurance.

[Jim Shannon (Strangford) (DUP)]

Flooding has become worryingly regular across the whole of the United Kingdom of Great Britain and Northern Ireland. Mother Nature cannot be ignored. Does the hon. Gentleman agree that we should consider setting up a formal structure of permanent support for businesses that are affected by flooding, outside of the insurance industry?

[Craig Whittaker]

I am not sure that that is the sole responsibility of the Government. I think that there needs to be a joint approach between the insurance industry and Government, but, again, I will come on to that during my speech.

Although the ABI said that it would not turn down any small business for flood insurance, I can tell Members that, having spoken to hundreds of businesses in the Calder Valley over the past few weeks, it has become apparent that many small businesses are experiencing difficulties in accessing flood insurance and that this uncertainty, coupled with the crippling costs that now face some businesses as a consequence of the floods, is jeopardising their future. Although I note the Minister’s response that the Government are not aware of any evidence of a systemic problem, I question the basis on which that conclusion has been reached.

Last July, the Department for Environment, Food and Rural Affairs published the report “Affordability and Availability of Flood Insurance: Findings from Research with Businesses”. A cursory look at the report might lead one to conclude that there is not a problem after all. The research found that uptake of insurance across businesses is high. The survey showed that the vast majority of small businesses arrange commercial insurance cover for their premises and that there is no significant difference between small businesses that are located in high flood-risk areas and those that are not.

However, a more detailed consideration of the report, particularly the basis on which the evidence has been collected, provides a different picture. The headline figures from the report come from a secondary source, a small business survey run by the Department for Business, Innovation and Skills. The DEFRA report acknowledges that the BIS survey data contain only small numbers of businesses located in high flood-risk areas. As such, one may legitimately question how valuable such data are when considering the issue of insurance for businesses in high-risk areas. The main focus of the DEFRA report was a series of in-depth interviews with businesses, and it is that component that forms the main evidence base. Only 25 businesses were interviewed, the majority of which were not in high flood-risk areas. The overwhelming majority were very small businesses, employing fewer than 10 people, and only one manufacturing business was included in the sample. My point is that the evidence base of the DEFRA report is not particularly credible and, as a consequence, the report is of limited value. If they are to appreciate the extent of this issue the Government and the Association of British Insurers need to speak to businesses in areas of high risk.

[John Mc Nally (Falkirk) (SNP)]

As the recently appointed chair of the all-party parliamentary group on flood prevention, I can tell the hon. Gentleman that we had discussions with the hon. Member for York Central (Rachael Maskell) on this on, I think, 26 January. It became apparent in the debate, which was interrupted several times so that we could vote in the Chamber, that there was a great divide on whether there was evidence to show that businesses had been affected. Does he agree that the APPG should visit the sites so that we can witness the problem and speak to the businesses that have been affected by flooding?

[Craig Whittaker]

Of course, we would always welcome the APPG in the Calder Valley. In fact, we welcome anyone who would like to come and have a look. Indeed, if it helps us to make progress in this area and others affected by flooding, the whole group is very welcome, and I will help to arrange for businesses to talk to it too.

To appreciate the true extent of the problem, the Government and the ABI need to speak to businesses in areas of high risk, including those located in communities that have experienced a high frequency of flooding in recent times such as the Calder Valley. Calderdale Council says that between 40% and 50% of businesses cannot access flood insurance in five of my six communities, while our local insurance broker in the upper Calder Valley tells me that 20% of his clients cannot access flood insurance—ironically, including himself. True to the spirit of people in the Calder Valley, he has a desk and a mobile phone set up in the middle of all the building works in what was his office, working to ensure that his clients are sorted out. After the floods he, along with other brokers from around the UK in high flood-risk areas, were invited to London to highlight cases to the ABI. The journey turned out to be an absolute farce, as the ABI refused to look at those cases, saying that it was not allowed to do so because of data protection. The ABI says that there is no evidence of businesses not being able to access flood insurance, and cites DEFRA’s own report, which I have highlighted, to say that there is no evidence.

[Rachael Maskell (York Central) (Lab/Co-op)]

Today, I received a briefing from the ABI saying that it was not going to look at the issue of small businesses having a Flood Re scheme, and that small businesses could shop around for insurance. I know from my constituency of York Central that that simply does not happen, and is not possible. Businesses in my constituency are putting forward their own resources instead of claiming from their insurance company. Is it not crucial that the Government move forward with a Flood Re scheme for small businesses to make sure that they are protected in future?

[Craig Whittaker]

I am not quite sure that that is entirely the Government’s responsibility. The ABI has a huge responsibility for this too. As I shall highlight with the things that have been done in the Calder Valley—doubtless they have been done in York Central too—it is the responsibility of business, but it is also everyone’s responsibility to make sure that we have viable businesses, otherwise we do not have communities going forward.

[Stuart Blair Donaldson (West Aberdeenshire and Kincardine) (SNP)]

I apologise to the hon. Member for Calder Valley (Craig Whittaker) and to you, Mr Deputy Speaker, for arriving late. The hon. Gentleman has made an important point about the ABI. Does he agree that another way to help businesses and communities affected by flooding is for the Government to apply to the EU solidarity fund to ensure that more support is available for those businesses and communities?

[Craig Whittaker]

As the hon. Gentleman knows, the Government have given a commitment to look at that funding to see how they can help. I dare say the Minister will give us an update on that.

Of the many businesses across the Calder Valley which are experiencing these difficulties, I will cite just three of the many examples coming in daily to illustrate some of the concerns that I have become aware of. I will not name the companies as we do not want their customers to lose faith any more than they have already. The first is a leading high-end British furniture manufacturer located in Mytholmroyd which is experiencing difficulties similar to those faced by other businesses. It is a very successful manufacturer of sofas, employing some 100 local people. On Boxing day, it was flooded for the second time in just four years. After the last flood it could get insurance only for stock, not for machinery or anything else relating to flooding. It is facing a loss of around £500,000. The business will survive and continue, but of significant concern is the insurance position going forward. Its insurance cover was due for renewal only last week and it has been told that it will not be able to access flood cover again, even for stock.

At the other end of the Calder Valley, located in Brighouse, is a nationally acclaimed climbing centre which opened in 2011 and now has over 30,000 members. Together with its sister business, a bar and a restaurant, it employees 30 local people and occupies a strategic site that is central to the regeneration of the wider area. As the business is located between the river and the canal, it has been unable to access any flood insurance since it was set up. The business incurred losses when it was flooded in 2012 and now, following the latest floods, it faces a very substantial bill and a battle to stay in business. Once again, the business is in limbo.

Last but by no means least, I will mention a large manufacturing firm which has been flooded on four separate occasions over the past decade. The business has been able to access flood insurance in the past, but has been told in no uncertain terms by its insurers that it will not receive flood cover in the future. Its inquiries of other insurers have been unsuccessful on account of the ridiculous terms and conditions that have been quoted. The difficulties in accessing insurance, and the losses incurred by being flooded so regularly, now mean that it is likely that this business will close, with the loss of 40 jobs.

[Holly Lynch (Halifax) (Lab)]

Does the hon. Gentleman agree that bigger and smaller businesses alike may be significant employers for neighbouring constituencies, and the thought of flooding just once is so serious that they may think of moving out of the Calder Valley? The loss of those jobs, and the loss of the business rates those businesses pay and the support that they provide to communities, is serious. Business insurance is a big part of ensuring that we are an attractive place in which to keep trading.

[Craig Whittaker]

The hon. Lady is right. As she knows, the Calder Valley is made up of high-sided valleys, so there are few places for those businesses to relocate locally. If they move out of the Calder Valley, we will lose the job skill sets and the local communities will wither and die. I shall return to that.

Although I am encouraged by the words of the Prime Minister and his assurances that he is looking very closely at this issue, my experience leads me to believe that there are potentially hundreds of businesses in my constituency which are unable to access flood insurance. The examples I mentioned are the tip of the iceberg and serve only to illustrate the difficulties that some businesses are experiencing because of the lack of adequate cover. If this situation is replicated nationally in communities susceptible to flooding, which I imagine is the case, this means that thousands of businesses across the UK are experiencing these difficulties.

Every community that is susceptible to flooding has its unique challenges and this is certainly the case in the Calder Valley. Towns in my constituency such as Todmorden, Walsden, Hebden Bridge and Mytholmroyd, Elland and Brighouse are located next to the River Calder at the bottom of steep-sided valleys. They are proud communities and their small businesses and independent traders are the lifeblood and the beating heart of our area. The topography of those areas is very challenging and the transport links are limited. This means that there is limited land for development, as I said to the hon. Member for Halifax (Holly Lynch), so locating to another premises in the area is not a viable option for many businesses. This underlines the serious economic challenge that communities such as the Calder Valley face. If these businesses close down or move away from the area, we are in grave danger of losing the vast employable skills and expertise built up over generations, and our local communities are in grave danger of withering on the vine and dying. The importance of this issue, then, cannot be overstated.

With Flood Re, which is for domestic properties, the Government have shown that it is possible to work with the insurance industry to create a scheme that can fill the gaps in the existing market. They are currently talking with the Association of British Insurers about business insurance. The ABI feels that it is the Government’s responsibility to fix this issue, while the Government, I am sure, feel it is for the market to fix it. However, I suspect the solution is somewhere in the middle—

22:00

Motion lapsed (Standing Order No. 9(3)).

Motion made, and Question proposed, That this House do now adjourn.—(Jackie Doyle-Price.)

[Craig Whittaker]

I suspect the solution is somewhere in the middle, with a joint partnership between both.

[Melanie Onn (Great Grimsby) (Lab)]

Does the hon. Gentleman agree that a strategy to provide upfront support for businesses, protecting their properties from flooding in the first place, would bring down insurance premiums, save the Government money on repair funding and save businesses lost revenue in the long run?

[Craig Whittaker]

The record shows, particularly in the Calder valley, which was flooded in 2012, that the Government invested quite a lot of money in flood prevention schemes, allowing people to invest in their homes. One problem we have, of course, is that although people live beside the rivers, they do not particularly prepare for these things. The evidence does not really show that putting flood prevention in reduces the risk with insurance companies. That is one of the serious issues that needs addressing.

Meanwhile, while the big boys talk some more, the businesses in Hebden Bridge are looking at a scheme called Watermark, which will give customers the choice of paying the normal price or the Watermark price for goods. On top of that, businesses will have the choice to pay into a generic pot as well—almost a savings plan. Although they accept that the pot will not cover all the damage done if and when the floods hit again, it will give them access to a pot that will allow some of their uninsured works to be done. That is something the ABI and some of its members perhaps need to start looking at, thinking out of their box and perhaps accessing some of their moral and social justice conscience.

To be fair, some insurers I have seen have done excellent work with their clients; in fact, they have behaved incredibly well. They include companies such as Aviva, which has pledged that the claims of their current small and medium-sized enterprise customers will continue to get cover and that those with excesses of more than £350 will not see those excesses rise when they next renew. Unfortunately, that is only for existing customers.

The British Insurance Brokers Association is in the process of creating a scheme for SMEs that will specifically include businesses at risk of flooding. BIBA’s expectation is that it will enhance the current situation by enabling up to 2,000 BIBA brokers across the UK to place those more difficult risks through the scheme, offering cover to the vast majority of businesses that have struggled in the past. My understanding is that BIBA is in advanced negotiations and that it aims to launch the scheme this year. However, I have spoken with BIBA, and the scheme uses only products that are already on the market. It also seems to be quite a complex system of protection for the carrier and protection for the property that is to be insured, with a further policy to reduce high excesses. How will the scheme assist businesses with the excessive terms and conditions that act as a barrier to insurance already? Will it help to reduce some of the unreasonable levels of excess that make cover unaffordable in many cases?

May I request that, in communities such as the Calder valley, the Government work alongside small businesses to identify the gaps in the market and to understand what prevents some businesses from receiving adequate flood cover? Relying on the DEFRA report is just not good enough; the evidence is not there, and we need to go out there and get it.

It remains to be seen whether BIBA’s new scheme is the innovative solution the market requires. However, I do know how desperate businesses are in my constituency and in those of other hon. Members—those constituencies have probably not suffered quite as badly, but these things are pretty grim for anyone who is in this position. These businesses are relying on a long-term solution being found. I sincerely hope that the Government are able to identify the gaps in the market, to better understand the nature and extent of the problem and to work with the insurance industry to develop a new facility to address these issues.

22:04

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

I pay tribute to my hon. Friend the Member for Calder Valley (Craig Whittaker) for a very quiet but very forensic speech that showed the deep care that he has for his constituency. I saw that directly myself when I walked through many of the businesses that he described. I saw how, in essence, a tidal wave had moved through a furniture factory, wiping out half a million pounds-worth of stock. I saw how a furniture warehouse was ruined and a community centre had been wiped out. I saw, as many hon. Members on both sides of the House have noted, the incredible impact that this has had on a very precious and beautiful area of our country and a historic community, and how intimately the subject of business insurance is connected to the livelihood and the longevity of these communities.

I will not get into a detailed discussion about the DEFRA survey, although I would point out that it is not quite as bad as it seems on paper. A total of 2,686 businesses were surveyed, but I absolutely agree with my hon. Friend that the 25 on whom an in-depth survey was conducted was not a large enough number to be a decent sample. I strongly encourage the hon. Member for Falkirk (John Mc Nally) and his APPG to get involved in the detailed investigation of what is happening in business insurance in Calder Valley. The hon. Member for Stockton North (Alex Cunningham) raised that issue powerfully.

There are improvements that we can already make without looking at a flood re scheme. First, we need to make information far more accurate so that businesses in a flood-vulnerable zone are not being punished when they are not actually flooded. Secondly, as has been pointed out, we need to make sure that businesses are more resilient. We have access to good public information about that. There is a very good example of a business in Cockermouth that took the right measures and, as a result, was able to come back from the flooding in two days whereas previously it took four months.

In relation to business, the Government have a part to play in investment and infrastructure. We need to guarantee broadband connections; there was a problem in that regard at Tadcaster bridge. Electricity substations and roads must be left open, because that matters not just for communities but for businesses. We need to acknowledge that the insurance industry cannot be the complete answer. As the hon. Member for West Aberdeenshire and Kincardine (Stuart Blair Donaldson) pointed out, it is important that there is an element of grant coming in. We have put a great deal of grant behind businesses—an average of £2,500 per business, but in some cases considerably more—because we acknowledge that the insurance industry does not produce all the answers. There is also the capital expenditure that we need to put into flood schemes in general.

My hon. Friend the Member for Calder Valley focused, as did the hon. Member for York Central (Rachael Maskell), specifically on whether there should be a Flood Re scheme. I am afraid that time will not allow me to answer this question in detail, but I will give some points to consider in looking at business insurance. First, setting up one of these schemes involves a very considerable cost to the dry. At the moment, within a Flood Re scheme, regardless of where someone is located—they could be on the edge of a river and flood every three years—they would be guaranteed that for a £250 premium, or the basic rate of council tax on a £250 excess, they would be insured. This would mean that businesses in dry areas would have to cover the cost of providing insurance in some of the cases that my hon. Friend raised. For example, if a business has indeed, as he said, flooded twice in four years at a cost of £500,000 to its stock each time, it will be difficult to provide insurance without some measure of cross-subsidy for businesses that are not in flood-affected areas.

The second problem is the complexity of flood insurance for businesses. It is much more straightforward for householders, who basically look to insure their buildings and contents. A business, on the other hand, has to look at how much cash it has in the bank, and how much it therefore wants to lower its premiums and self-insure against a higher excess. It has to look at whether it has high fixed structural assets and whether it wants to insure them. An internet company will not want to invest much in insuring the building that it is in, whereas for a farm, a property business or a restaurant, that fixed structural asset is absolutely essential to the continuity of its business.

The difference can be huge when it comes to business interruption insurance. For example, business interruption would be minimal for a company such as cheapflights.com, provided that its service was not located in the area affected. However, if the McVities biscuit factory in Carlisle were wiped out by a flood, the business interruption consequences would be catastrophic. That is why it is much more difficult to model business insurance than household insurance.

There is also, of course, the issue of moral hazard. We do not want to encourage businesses to locate themselves in flood-vulnerable zones if they have a high fixed structural asset cost. We want to keep those communities vibrant and alive, but we also want to do so in a way that makes sense.

Nevertheless, something must be done. The hon. Member for Halifax (Holly Lynch) has emphasised the importance of business insurance for retaining the communities for the sake of their history and the social costs involved. We therefore need to answer some questions. First, how much subsidy—because there will have to be an element of subsidy—do we wish to put into an individual valley? Secondly, as the hon. Member for Strangford (Jim Shannon) has asked, what should the balance be between the Government element of the subsidy and that provided by the insurance industry for businesses in non-flood-affected areas?

Thirdly, should we consider a different insurance model? One possibility—we have not done this in flood insurance before—is to consider the approach taken by travel and medical insurance, which have a fixed indemnity. If the Government are to be involved, it might be reassuring for them to know that a property had a fixed indemnity of £20,000 or £50,000 attached to it, rather than what we have at the moment, which is an unlimited flood insurance liability.

That is why I am delighted to say that tomorrow I will host a round table with BIBA, ABI, the Federation of Small Businesses and a dozen other stakeholders, to talk through the concrete, detailed issues involved in providing serious insurance for businesses.

[John Mc Nally]

I have sent the Minister a letter inviting him to the next meeting of the all-party group on flood prevention, but he has not replied. It would be an opportune time for him to meet us after his other meeting.

[Rory Stewart]

I would be delighted to do that. I have 45 seconds left. I pay tribute to a wonderful speech by my hon. Friend the Member for Calder Valley. It was a serious forensic analysis that tore the DEFRA report to pieces, for which I am grateful and I will follow up on it. I also thank the other Members who have contributed to the debate, and I pay tribute to the extraordinary community in Calder Valley, including the community activists in Hebden Bridge, individual businesses and, indeed, the military on the streets for the work they did. Finally, I give a commitment to my hon. Friend and to the House that we will, through the round table and over the weeks ahead, look in full, relentlessly and vigorously, at the costs, both economic and social, involved in failing to provide adequate business insurance.

Question put and agreed to.

22:13

House adjourned.

Better Regulation

Monday 8th February 2016 General Committees

The Committee consisted of the following Members:

Chair: Valerie Vaz

† Barclay, Stephen (North East Cambridgeshire) (Con)

† Burns, Sir Simon (Chelmsford) (Con)

† Campbell, Mr Alan (Tynemouth) (Lab)

† Glass, Pat (North West Durham) (Lab)

Grant, Peter (Glenrothes) (SNP)

Hopkins, Kelvin (Luton North) (Lab)

Kawczynski, Daniel (Shrewsbury and Atcham) (Con)

† Lidington, Mr David (Minister for Europe)

† Morris, James (Halesowen and Rowley Regis) (Con)

† Qureshi, Yasmin (Bolton South East) (Lab)

Rimmer, Marie (St Helens South and Whiston) (Lab)

† Shelbrooke, Alec (Elmet and Rothwell) (Con)

† Soubry, Anna (Minister for Small Business, Industry and Enterprise)

Anna Dickson, Committee Clerk

† attended the Committee

European Committee C

Monday 8 February 2016

[Valerie Vaz in the Chair]

Better Regulation

16:30

[The Chair]

Before we begin, let me briefly outline the procedure. A member of the European Scrutiny Committee may make a five-minute statement about the decision to refer the documents. One of the Ministers will then make a statement lasting no more than 10 minutes; questions to the Ministers will follow. Once questions have ended, one of the Ministers will move the main motion and debate will take place. We must conclude our proceedings by 7 pm. Does a member of the European Scrutiny Committee wish to make a brief explanatory statement?

16:31

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

It is a pleasure to serve under your chairmanship, Ms Vaz. I will set out why these documents have been put forward by the European Scrutiny Committee for debate in this Committee.

The documents, which form part of the better regulation package published on 19 May 2015, comprise an overarching communication by the Commission indicating how it intends to improve the quality of its proposals for legislation, as well as a proposal for an interinstitutional agreement on better regulation, to replace and expand on a number of previous interinstitutional agreements. The package also includes some additional documents internal to the Commission and therefore not formally subject to scrutiny by the House: better regulation guidelines, a better regulation toolbox, and a regulatory fitness and performance—REFIT—state of play and outlook.

The package focuses on better preparation for legislation, increased scrutiny and increased consultation. Headline elements of it are the production of a road map and inception impact assessments at an early stage of formulating legislation, to permit citizens and stakeholders to provide views before drafting of legislation starts; further consultation on drafts of legislation that are subsequently produced; a “Lighten the Load” web portal, inviting views on existing EU legislation and initiatives; a strengthened regulatory scrutiny board, including independent members, to examine the fitness of proposed legislation; more stringent examination of proposed amendments to a legislative proposal; and greater transparency in the preparation of EU subordinate legislation.

The Commission has put into effect the matters that are in its own hands. The interinstitutional agreement has now evolved into a final provisional text, which received political endorsement at a Council meeting of 15 December 2015 but remains under consideration by the European Parliament.

Better EU regulation is not a new aspiration. The latest initiative can be viewed against the background of the Commission’s intention that the EU should interfere less in matters where member states are better equipped to give the right response at national and regional level, and be more open and accountable about what it does and how it does it. Better regulation also now features in the competitive basket of the UK renegotiation. The European Scrutiny Committee has emphasised the importance of putting good intentions into practice and noted how the principle of early consultation could facilitate early, and therefore more effective, scrutiny by Parliament. It has noted that the proposals for greater consideration of amendments to legislation suggested by the Council or the European Parliament has been characterised as a power grab.

While the interinstitutional agreement has evolved in a way that is likely to be welcome, some elements cause the Committee concern and much of the agreement remains expressed in generalities. We therefore stress the importance of the commitment contained in the agreement being put into practice rigorously. There is no improvement on the earlier text in relation to the role of national Parliaments, but in correspondence with the Commission we have received an undertaking from the vice-president that the Commission’s inception impact assessments will be transmitted directly to national Parliaments, which will facilitate early and therefore more effective scrutiny. The possibility that impact assessments will be made public only at the end of the legislative process is of concern.

The interinstitutional agreement makes little significant improvement to the transparency of the EU legislative process, which is also a matter of concern. This issue is likely to remain in the public eye, due to the inquiry currently being undertaken by the EU ombudsman into the transparency of trilogues. The objective shared by the UK and other member states of having concrete targets for the reduction of the burden of regulation only finds expression in equivocal terms. That is why we felt it important to refer these documents to the Committee.

[The Chair]

I call the Minister to make an opening statement. I remind the Committee that interventions are not allowed during the statement.

16:35

[The Minister for Small Business, Industry and Enterprise (Anna Soubry)]

Thank you, Ms Vaz; it is a pleasure to serve with you in the Chair.

I am pleased to have the opportunity to discuss the European communication “Better regulation for better results”. My right hon. Friend the Minister for Europe and I will be happy to answer any questions the Committee may have about the better regulation agenda in the EU. As the Committee will be aware, the Government have introduced ambitious measures to minimise unnecessary red tape at national level, but action is also needed at EU level to limit the burdens on our businesses that stem from EU legislation, which the OECD has estimated to be about 50%.

Since taking office in 2014, the Juncker Commission has made welcome progress on better regulation, and the Government have lobbied consistently in Brussels to keep better regulation at the top of the Commission’s agenda. For example, the number of new initiatives proposed in the Commission’s 2015 and 2016 work programmes was 80% lower than the average in the previous five years, and more laws have been laid down for repeal in the past two years than during the whole of the previous Commission. In the “Better regulation for better results” communication, which was published in May last year, the Commission set out what more it plans to do. The communication addresses long-standing UK priorities and the Prime Minister welcomed it as a significant step in the right direction.

The communication has three main themes: transparency, tools for policy makers and reviewing the stock of legislation. Specifically, the Commission announces longer consultation periods on legislative proposals and greater independence for its regulatory scrutiny board. The board examines the quality of impact assessments and its favourable opinion is needed before the Commission may adopt a proposal. The Commission also renews its commitment to applying a small and medium-sized enterprise test in respect of new legislation, systematically considering lighter regimes for SMEs and exemptions for micro-enterprises wherever possible. That is one area in which I particularly welcome action that will reduce burdens: SMEs are the backbone of all our economies and the Commission estimates that they create 85% of new jobs in Europe. Finally, the communication describes how the Commission’s regulatory fitness, or REFIT, programme to evaluate existing EU legislation will become more targeted, quantitative and inclusive.

We welcome those better regulation reforms, which demonstrate the Commission’s positive attitude and intention to make rapid advances. The communication is evidence that our efforts to embed the EU’s focus on competitiveness, jobs and growth are bearing fruit. We continue to work with like-minded member states to achieve further progress on EU better regulation from all three EU institutions. That is genuinely a shared responsibility for minimising the burden of EU legislation.

The interinstitutional agreement—IIA—governs working practices between the Council, the European Parliament and the Commission, and it is one of the key institutional priorities of the Juncker Commission. It replaces the IIA on better law making, dating from 2003, and focuses on improving the operation of the legislative process in the EU. A draft text was published in May last year and tripartite discussions concluded in December, culminating in a political agreement at the General Affairs Council. A formal vote in the Council of Ministers is expected at the General Affairs Council next week.

The Government’s negotiating mandate adopted a two-pronged strategy for meeting ambitions for the IIA: to maintain interinstitutional balance at least where it was set by the Lisbon treaty and the previous IIA and to prevent encroachment on the Council’s powers and prerogatives; and to pursue a broad better regulation agenda, including through proposals for measures on better regulation and better impact assessment processes. The Government were also clear that where proposals on better regulation could not be achieved through the IIA negotiations, the door was to be left open to pursue them through other means.

The Government’s better regulation objectives were a priority during negotiations and they have been successfully achieved in a number of key areas, which is a real boost for small businesses, which are the motor of our economy. First, the Commission makes a firm commitment that impact assessments will include

“potential short and long-term costs”,

the impact on the competitiveness of a proposal, and subsidiarity and proportionality tests. It makes a specific commitment that its impact assessments will, in future, have

“particular regard for Small and Medium Enterprises”

through “think small first” principles. Secondly, the European Parliament and the Council confirmed that they will carry out impact assessments in relation to their substantial amendments to the Commission’s proposal, which is something that the United Kingdom has consistently called for.

Thirdly, and most important, the Commission commits for the first time to assessing the feasibility of establishing an EU burden reduction target—a significant achievement that was added to the text of the proposal as a result of the UK’s lobbying. However, we want to go further. As set out by the Prime Minister, the Government made better regulation one of the elements of our reform agenda ahead of the referendum, and as the Committee will know, the President of the European Council has proposed measures to address the agenda. That is a significant result for British businesses. We are pleased with the way in which the IIA preserves the level of interinstitutional balance, which was another of the Government’s key objectives during the negotiations. The IIA text reflects the UK’s call for a more systematic and timely consultation of co-legislators in agreeing the Commission’s annual work programme. It now provides clear provisions to hold the Commission to account to deliver its annual work programmes in line with the promised improvements to the process.

During negotiations, we explored the option of addressing the role of national Parliaments in EU decision making through the IIA. The IIA text acknowledges the need for national Parliaments to be able to exercise fully their prerogatives under the treaties, and commits the EU institutions in their legislative work to be fully compliant with subsidiarity and proportionality principles. However, the Commission and a clear majority of member states felt that that was a matter for debate between the Commission and national Parliaments directly, rather than as part of IIA negotiations. As a result, strengthening the role of national Parliaments remains a key element of the UK’s renegotiation agenda. We are seeking a new arrangement whereby groups of national Parliaments acting together can stop unwanted legislative proposals.

I hope my introduction assures members of the Committee that the Government have secured ambitious outcomes across a number of aspects of the legislative process in the EU. Crucially, the agreement strengthens the better regulation provisions in several key areas of UK interest. Hon. Members will have seen the letter from the Prime Minister to President Tusk, so they will know that better regulation is very much at the heart of our EU reform agenda. Huge progress has been made across the whole EU; awareness is growing that we must regulate less and ensure that existing regulation is doing the job it is meant to do, rather than holding back small and medium-sized businesses across the whole EU. We are leading the charge. I thank the European Scrutiny Committee for calling for this debate.

[The Chair]

We now have until 5.30 pm for questions to the Minister. I remind hon. Members that questions should be brief and that they may, subject to my discretion, ask related supplementary questions.

[Pat Glass (North West Durham) (Lab)]

It is a pleasure to serve under your chairmanship, Ms Vaz. I have two brief, pragmatic questions.

The document sets out ways in which consultation can be improved and cites the 12-week rule as the appropriate framework. That mirrors the Cabinet Office guidance on consultation, to which the Government—certainly, in my experience—rarely conform in practice despite requiring others, such as local government, to adhere to it. Is it possible for the document to be more closely aligned to our Cabinet Office guidance? The Cabinet Office guidance is really good. It specifies not only that there is a 12-week timescale, but that it should not span times when it is more difficult to engage with the public such as the six to eight weeks of the summer holidays or, at least, the month of August when the Government go into standby mode.

My second question is about feedback. The one thing that really irritates people about consultation is when they go to the trouble of giving their views, but receive little or no feedback. Are there any plans to ask the EU to look at that in the document—I did not see any—to ensure that feedback is built into the consultation process?

[The Minister for Europe (Mr David Lidington)]

I am glad that the hon. Lady drew attention to the 12-week rule. Of course, that also ties in with what is in the draft reform texts from President Tusk apropos the suggested red card for national Parliaments. President Tusk is talking about having a 12-week period during which reasoned opinions can be tabled, rather than the eight-week deadline that is set out at the moment. That is a real benefit to national Parliaments. I have a lot of sympathy with what the hon. Lady says on both counts. One has to have a caveat in terms of the ability of EU institutions to act urgently when there is urgent need, perhaps most obviously on issues to do with plant or animal health and the need to act swiftly to prevent the spread of disease.

I sympathise with the hon. Lady’s wish that we try to align European arrangements more closely to Cabinet Office guidance, but the reality is, of course, that at EU level we are dealing with 28 different Governments and 28 different Parliaments, each of which has its own arrangements for domestic legislative processes and, indeed, for parliamentary recesses and holidays. For example, in parts of Europe, including Scotland, the summer holiday starts towards the end of June, and there are other places where people break a lot later. It is similar at Christmas and new year, when the duration of the holiday depends on whether western or Orthodox Christianity is the mainstream in a particular country. Although we have probably got a decent distance, I accept that there is further to go, but we must bear in mind such complicating factors.

[Pat Glass]

And on feedback?

[Mr Lidington]

On feedback, the text of the interinstitutional agreement contains a certain amount that goes in the direction that the hon. Lady suggests, particularly annex 1 to the agreement and the new arrangements for consultations in the preparation and drawing-up of delegated Acts—in other words, EU secondary legislation, the equivalent of statutory instruments here.

One of the benefits of the interinstitutional agreement that we now have is that there is a commitment to involve member states’ experts much more closely in the preparation of draft delegated Acts and in a timely manner. There is a specific requirement for the Commission to say openly, at the end of any meeting of member state experts, what conclusions it has drawn, how it will take those experts’ views into consideration and how it intends to proceed. Those conclusions will be recorded in the minutes of the meeting. There is a permissive provision in the rules for broader groups of stakeholders to be involved in the preparation and drawing-up of delegated Acts, so there are some measures in the text that take us very much in the direction that the hon. Lady suggests.

More generally, in terms of its better regulation proposals, the Commission has chosen to make more information available at an earlier stage. Stakeholders’ comments will therefore be more relevant and helpful because they will have access to the documents—the road maps and the inception impact assessments—that will give more detail about the policy initiative in question. Clearly, the proof of the pudding will be in the eating, but the proposals amount to a very useful step forward from the previous position.

[The Chair]

As no more Members wish to ask questions, we will proceed to the debate on the motion.

Motion made, and Question proposed,

That the Committee takes note of European Union Documents No. 9079/15 and Addenda 1 and 2, Commission Communication: Better regulation for better results-An EU agenda and No. 9121/15 and addendum 1, Commission Communication: Proposal for an Interinstitutional Agreement on Better Regulation (IIA); welcomes the Commission’s intention to use these documents to refresh and take forward its work on better regulation; supports the negotiations on the Interinstitutional Agreement that started in June this year, aimed at setting out the commitments of the European Parliament, the Council and Commission concerning better regulation, interinstitutional relations and the legislative process; and welcomes the Commission’s report on the working of the comitology committees in 2014, which enables the Government to assess critically the effectiveness of these committees.—(Anna Soubry.)

16:49

[Pat Glass]

Better, more transparent regulation is difficult to argue against. We certainly do not want worse, more opaque or more cumbersome regulation. The documents attempt to set out a strategy to improve efficiency and therefore to deal with some of the more common criticisms made of the EU: that it is inefficient, bureaucratic and disengaged, and that it too often strays beyond the principles of subsidiarity and proportionality and hangs on too long to legislation that is no longer appropriate or required. Engaging with these proposals will hopefully provide a pathway towards addressing some of those criticisms, with agreed goals of efficiency, ongoing legislative renewal and review, and increased public consultation and awareness of the functions of the EU and its purposes and how citizens can participate in the formation of new legislation and the review of existing legislation.

The documents recognise the influence that member states have, in that, without their engagement, those good intentions cannot be delivered. We should welcome the fact that the EU, and in particular the Commission, has recognised that there are issues that need to be addressed and has set out a strategy for doing so. Good intentions are one thing, but the EU needs to will not only the ends, but the means to achieve its goals. It is important to recognise the difficulties it will face in bringing about these efficiencies. However, it is clear that there is an understanding that the future of the Union depends not only on its being relevant to ordinary people’s lives, but on ordinary people being able to engage and have some influence. In that sense, I think this is a major step in the right direction.

16:50

[Mr Lidington]

I am grateful to the hon. Lady for her contribution.

We have before us a welcome step forward. One has to look at the various things that are happening in the EU in smarter regulation to see that we are shifting the course of the super-tanker, albeit not as fast as I would perhaps wish. Whether Governments are from centre-right or centre-left political families, Europe is waking up to the existential nature of the crisis of economic competitiveness that faces it. We all know that unemployment in many parts of Europe, particularly youth unemployment, is far too high. We know, too, that Europe is struggling with sluggish growth rates. That is all happening at the same time as European economies are contending with the challenge of global competition and digital technology, which is starting to shake up our professional and white collar occupations in the way that automation did factory-floor working a generation ago.

In the light of those multiple economic challenges, the blunt truth is that unless Europe can raise its game, and dramatically, in terms of economic competitiveness, the next generation of Europeans will be able to afford neither the standard of living, nor the social protection, nor the public services that our children and our grandchildren will expect and that Europeans today, from whichever country they come, take for granted. If that were to come to pass, it would breed social and political tensions that would make the rise of extremist movements such as Jobbik and the Front National seem relatively mild.

That is a massive challenge, and what we are debating today is important because it is one element—I put it no more strongly than that—in addressing that profound economic challenge. It sits alongside other efforts to promote smarter, less burdensome regulation on business, alongside the drive to negotiate free trade deals between Europe and other countries and regions of the world, and alongside efforts to deepen the single market to make it as good a single market in services and digital as it already is in goods. Since the Juncker Commission came to office, we have so far seen an 80% reduction in new legislative and regulatory initiatives coming out of the Commission, compared with the last year of the Barroso Commission. We have also seen a large number of the measures that the Prime Minister’s business taskforce called for a couple of years ago translated into action at European level.

In the documents we are debating this afternoon, we see an effort to turn that mentality into something that is embodied within both the corporate culture and the systemic working of the European institutions. We have, in one set of documents, the Commission’s better regulation agenda, which is a declaration by the Commission that in future it will act in this particular deregulatory way. We have an interinstitutional agreement that takes us further than where we are at present towards greater transparency and greater involvement of national Parliaments, and a commitment to improve the general quality and comprehensibility of regulations made at European Union level.

At the same time, we have the renegotiation that my right hon. Friend the Prime Minister is leading and the draft texts from President Tusk that were published last week. Those texts provide, among other things, four specific targets for the reduction of regulation—something that has never been accepted previously. They provide too for a mechanism for the retrospective review of EU law and regulation and for the Commission, in doing that work, to seek the views of both the Council representing national Governments and of individual national Parliaments. If that approach is, indeed, reflected in a final negotiated settlement, I hope national Parliaments will seize the opportunity in practice to create a kind of green card mechanism whereby national Parliaments work together to promote particular objectives in terms of smarter, less burdensome and less complex European regulation.

While the measures are not a panacea—I would never claim that they are—they are significant moves that take Europe in the right direction, towards being more competitive, less burdensome on business and better at creating the jobs that our young people desperately want and need. We should therefore welcome those initiatives.

Question put and agreed to.

16:56

Committee rose.

The Committee consisted of the following Members:

Chair: Valerie Vaz

† Barclay, Stephen (North East Cambridgeshire) (Con)

† Burns, Sir Simon (Chelmsford) (Con)

† Campbell, Mr Alan (Tynemouth) (Lab)

† Glass, Pat (North West Durham) (Lab)

Grant, Peter (Glenrothes) (SNP)

Hopkins, Kelvin (Luton North) (Lab)

Kawczynski, Daniel (Shrewsbury and Atcham) (Con)

† Lidington, Mr David (Minister for Europe)

† Morris, James (Halesowen and Rowley Regis) (Con)

† Qureshi, Yasmin (Bolton South East) (Lab)

Rimmer, Marie (St Helens South and Whiston) (Lab)

† Shelbrooke, Alec (Elmet and Rothwell) (Con)

† Soubry, Anna (Minister for Small Business, Industry and Enterprise)

Anna Dickson, Committee Clerk

† attended the Committee

European Committee C

Monday 8 February 2016

[Valerie Vaz in the Chair]

Better Regulation

16:30

Before we begin, let me briefly outline the procedure. A member of the European Scrutiny Committee may make a five-minute statement about the decision to refer the documents. One of the Ministers will then make a statement lasting no more than 10 minutes; questions to the Ministers will follow. Once questions have ended, one of the Ministers will move the main motion and debate will take place. We must conclude our proceedings by 7 pm. Does a member of the European Scrutiny Committee wish to make a brief explanatory statement?

16:31

It is a pleasure to serve under your chairmanship, Ms Vaz. I will set out why these documents have been put forward by the European Scrutiny Committee for debate in this Committee.

The documents, which form part of the better regulation package published on 19 May 2015, comprise an overarching communication by the Commission indicating how it intends to improve the quality of its proposals for legislation, as well as a proposal for an interinstitutional agreement on better regulation, to replace and expand on a number of previous interinstitutional agreements. The package also includes some additional documents internal to the Commission and therefore not formally subject to scrutiny by the House: better regulation guidelines, a better regulation toolbox, and a regulatory fitness and performance—REFIT—state of play and outlook.

The package focuses on better preparation for legislation, increased scrutiny and increased consultation. Headline elements of it are the production of a road map and inception impact assessments at an early stage of formulating legislation, to permit citizens and stakeholders to provide views before drafting of legislation starts; further consultation on drafts of legislation that are subsequently produced; a “Lighten the Load” web portal, inviting views on existing EU legislation and initiatives; a strengthened regulatory scrutiny board, including independent members, to examine the fitness of proposed legislation; more stringent examination of proposed amendments to a legislative proposal; and greater transparency in the preparation of EU subordinate legislation.

The Commission has put into effect the matters that are in its own hands. The interinstitutional agreement has now evolved into a final provisional text, which received political endorsement at a Council meeting of 15 December 2015 but remains under consideration by the European Parliament.

Better EU regulation is not a new aspiration. The latest initiative can be viewed against the background of the Commission’s intention that the EU should interfere less in matters where member states are better equipped to give the right response at national and regional level, and be more open and accountable about what it does and how it does it. Better regulation also now features in the competitive basket of the UK renegotiation. The European Scrutiny Committee has emphasised the importance of putting good intentions into practice and noted how the principle of early consultation could facilitate early, and therefore more effective, scrutiny by Parliament. It has noted that the proposals for greater consideration of amendments to legislation suggested by the Council or the European Parliament has been characterised as a power grab.

While the interinstitutional agreement has evolved in a way that is likely to be welcome, some elements cause the Committee concern and much of the agreement remains expressed in generalities. We therefore stress the importance of the commitment contained in the agreement being put into practice rigorously. There is no improvement on the earlier text in relation to the role of national Parliaments, but in correspondence with the Commission we have received an undertaking from the vice-president that the Commission’s inception impact assessments will be transmitted directly to national Parliaments, which will facilitate early and therefore more effective scrutiny. The possibility that impact assessments will be made public only at the end of the legislative process is of concern.

The interinstitutional agreement makes little significant improvement to the transparency of the EU legislative process, which is also a matter of concern. This issue is likely to remain in the public eye, due to the inquiry currently being undertaken by the EU ombudsman into the transparency of trilogues. The objective shared by the UK and other member states of having concrete targets for the reduction of the burden of regulation only finds expression in equivocal terms. That is why we felt it important to refer these documents to the Committee.

I call the Minister to make an opening statement. I remind the Committee that interventions are not allowed during the statement.

16:35

Thank you, Ms Vaz; it is a pleasure to serve with you in the Chair.

I am pleased to have the opportunity to discuss the European communication “Better regulation for better results”. My right hon. Friend the Minister for Europe and I will be happy to answer any questions the Committee may have about the better regulation agenda in the EU. As the Committee will be aware, the Government have introduced ambitious measures to minimise unnecessary red tape at national level, but action is also needed at EU level to limit the burdens on our businesses that stem from EU legislation, which the OECD has estimated to be about 50%.

Since taking office in 2014, the Juncker Commission has made welcome progress on better regulation, and the Government have lobbied consistently in Brussels to keep better regulation at the top of the Commission’s agenda. For example, the number of new initiatives proposed in the Commission’s 2015 and 2016 work programmes was 80% lower than the average in the previous five years, and more laws have been laid down for repeal in the past two years than during the whole of the previous Commission. In the “Better regulation for better results” communication, which was published in May last year, the Commission set out what more it plans to do. The communication addresses long-standing UK priorities and the Prime Minister welcomed it as a significant step in the right direction.

The communication has three main themes: transparency, tools for policy makers and reviewing the stock of legislation. Specifically, the Commission announces longer consultation periods on legislative proposals and greater independence for its regulatory scrutiny board. The board examines the quality of impact assessments and its favourable opinion is needed before the Commission may adopt a proposal. The Commission also renews its commitment to applying a small and medium-sized enterprise test in respect of new legislation, systematically considering lighter regimes for SMEs and exemptions for micro-enterprises wherever possible. That is one area in which I particularly welcome action that will reduce burdens: SMEs are the backbone of all our economies and the Commission estimates that they create 85% of new jobs in Europe. Finally, the communication describes how the Commission’s regulatory fitness, or REFIT, programme to evaluate existing EU legislation will become more targeted, quantitative and inclusive.

We welcome those better regulation reforms, which demonstrate the Commission’s positive attitude and intention to make rapid advances. The communication is evidence that our efforts to embed the EU’s focus on competitiveness, jobs and growth are bearing fruit. We continue to work with like-minded member states to achieve further progress on EU better regulation from all three EU institutions. That is genuinely a shared responsibility for minimising the burden of EU legislation.

The interinstitutional agreement—IIA—governs working practices between the Council, the European Parliament and the Commission, and it is one of the key institutional priorities of the Juncker Commission. It replaces the IIA on better law making, dating from 2003, and focuses on improving the operation of the legislative process in the EU. A draft text was published in May last year and tripartite discussions concluded in December, culminating in a political agreement at the General Affairs Council. A formal vote in the Council of Ministers is expected at the General Affairs Council next week.

The Government’s negotiating mandate adopted a two-pronged strategy for meeting ambitions for the IIA: to maintain interinstitutional balance at least where it was set by the Lisbon treaty and the previous IIA and to prevent encroachment on the Council’s powers and prerogatives; and to pursue a broad better regulation agenda, including through proposals for measures on better regulation and better impact assessment processes. The Government were also clear that where proposals on better regulation could not be achieved through the IIA negotiations, the door was to be left open to pursue them through other means.

The Government’s better regulation objectives were a priority during negotiations and they have been successfully achieved in a number of key areas, which is a real boost for small businesses, which are the motor of our economy. First, the Commission makes a firm commitment that impact assessments will include

“potential short and long-term costs”,

the impact on the competitiveness of a proposal, and subsidiarity and proportionality tests. It makes a specific commitment that its impact assessments will, in future, have

“particular regard for Small and Medium Enterprises”

through “think small first” principles. Secondly, the European Parliament and the Council confirmed that they will carry out impact assessments in relation to their substantial amendments to the Commission’s proposal, which is something that the United Kingdom has consistently called for.

Thirdly, and most important, the Commission commits for the first time to assessing the feasibility of establishing an EU burden reduction target—a significant achievement that was added to the text of the proposal as a result of the UK’s lobbying. However, we want to go further. As set out by the Prime Minister, the Government made better regulation one of the elements of our reform agenda ahead of the referendum, and as the Committee will know, the President of the European Council has proposed measures to address the agenda. That is a significant result for British businesses. We are pleased with the way in which the IIA preserves the level of interinstitutional balance, which was another of the Government’s key objectives during the negotiations. The IIA text reflects the UK’s call for a more systematic and timely consultation of co-legislators in agreeing the Commission’s annual work programme. It now provides clear provisions to hold the Commission to account to deliver its annual work programmes in line with the promised improvements to the process.

During negotiations, we explored the option of addressing the role of national Parliaments in EU decision making through the IIA. The IIA text acknowledges the need for national Parliaments to be able to exercise fully their prerogatives under the treaties, and commits the EU institutions in their legislative work to be fully compliant with subsidiarity and proportionality principles. However, the Commission and a clear majority of member states felt that that was a matter for debate between the Commission and national Parliaments directly, rather than as part of IIA negotiations. As a result, strengthening the role of national Parliaments remains a key element of the UK’s renegotiation agenda. We are seeking a new arrangement whereby groups of national Parliaments acting together can stop unwanted legislative proposals.

I hope my introduction assures members of the Committee that the Government have secured ambitious outcomes across a number of aspects of the legislative process in the EU. Crucially, the agreement strengthens the better regulation provisions in several key areas of UK interest. Hon. Members will have seen the letter from the Prime Minister to President Tusk, so they will know that better regulation is very much at the heart of our EU reform agenda. Huge progress has been made across the whole EU; awareness is growing that we must regulate less and ensure that existing regulation is doing the job it is meant to do, rather than holding back small and medium-sized businesses across the whole EU. We are leading the charge. I thank the European Scrutiny Committee for calling for this debate.

We now have until 5.30 pm for questions to the Minister. I remind hon. Members that questions should be brief and that they may, subject to my discretion, ask related supplementary questions.

It is a pleasure to serve under your chairmanship, Ms Vaz. I have two brief, pragmatic questions.

The document sets out ways in which consultation can be improved and cites the 12-week rule as the appropriate framework. That mirrors the Cabinet Office guidance on consultation, to which the Government—certainly, in my experience—rarely conform in practice despite requiring others, such as local government, to adhere to it. Is it possible for the document to be more closely aligned to our Cabinet Office guidance? The Cabinet Office guidance is really good. It specifies not only that there is a 12-week timescale, but that it should not span times when it is more difficult to engage with the public such as the six to eight weeks of the summer holidays or, at least, the month of August when the Government go into standby mode.

My second question is about feedback. The one thing that really irritates people about consultation is when they go to the trouble of giving their views, but receive little or no feedback. Are there any plans to ask the EU to look at that in the document—I did not see any—to ensure that feedback is built into the consultation process?

I am glad that the hon. Lady drew attention to the 12-week rule. Of course, that also ties in with what is in the draft reform texts from President Tusk apropos the suggested red card for national Parliaments. President Tusk is talking about having a 12-week period during which reasoned opinions can be tabled, rather than the eight-week deadline that is set out at the moment. That is a real benefit to national Parliaments. I have a lot of sympathy with what the hon. Lady says on both counts. One has to have a caveat in terms of the ability of EU institutions to act urgently when there is urgent need, perhaps most obviously on issues to do with plant or animal health and the need to act swiftly to prevent the spread of disease.

I sympathise with the hon. Lady’s wish that we try to align European arrangements more closely to Cabinet Office guidance, but the reality is, of course, that at EU level we are dealing with 28 different Governments and 28 different Parliaments, each of which has its own arrangements for domestic legislative processes and, indeed, for parliamentary recesses and holidays. For example, in parts of Europe, including Scotland, the summer holiday starts towards the end of June, and there are other places where people break a lot later. It is similar at Christmas and new year, when the duration of the holiday depends on whether western or Orthodox Christianity is the mainstream in a particular country. Although we have probably got a decent distance, I accept that there is further to go, but we must bear in mind such complicating factors.

And on feedback?

On feedback, the text of the interinstitutional agreement contains a certain amount that goes in the direction that the hon. Lady suggests, particularly annex 1 to the agreement and the new arrangements for consultations in the preparation and drawing-up of delegated Acts—in other words, EU secondary legislation, the equivalent of statutory instruments here.

One of the benefits of the interinstitutional agreement that we now have is that there is a commitment to involve member states’ experts much more closely in the preparation of draft delegated Acts and in a timely manner. There is a specific requirement for the Commission to say openly, at the end of any meeting of member state experts, what conclusions it has drawn, how it will take those experts’ views into consideration and how it intends to proceed. Those conclusions will be recorded in the minutes of the meeting. There is a permissive provision in the rules for broader groups of stakeholders to be involved in the preparation and drawing-up of delegated Acts, so there are some measures in the text that take us very much in the direction that the hon. Lady suggests.

More generally, in terms of its better regulation proposals, the Commission has chosen to make more information available at an earlier stage. Stakeholders’ comments will therefore be more relevant and helpful because they will have access to the documents—the road maps and the inception impact assessments—that will give more detail about the policy initiative in question. Clearly, the proof of the pudding will be in the eating, but the proposals amount to a very useful step forward from the previous position.

As no more Members wish to ask questions, we will proceed to the debate on the motion.

Motion made, and Question proposed,

That the Committee takes note of European Union Documents No. 9079/15 and Addenda 1 and 2, Commission Communication: Better regulation for better results-An EU agenda and No. 9121/15 and addendum 1, Commission Communication: Proposal for an Interinstitutional Agreement on Better Regulation (IIA); welcomes the Commission’s intention to use these documents to refresh and take forward its work on better regulation; supports the negotiations on the Interinstitutional Agreement that started in June this year, aimed at setting out the commitments of the European Parliament, the Council and Commission concerning better regulation, interinstitutional relations and the legislative process; and welcomes the Commission’s report on the working of the comitology committees in 2014, which enables the Government to assess critically the effectiveness of these committees.—(Anna Soubry.)

16:49

Better, more transparent regulation is difficult to argue against. We certainly do not want worse, more opaque or more cumbersome regulation. The documents attempt to set out a strategy to improve efficiency and therefore to deal with some of the more common criticisms made of the EU: that it is inefficient, bureaucratic and disengaged, and that it too often strays beyond the principles of subsidiarity and proportionality and hangs on too long to legislation that is no longer appropriate or required. Engaging with these proposals will hopefully provide a pathway towards addressing some of those criticisms, with agreed goals of efficiency, ongoing legislative renewal and review, and increased public consultation and awareness of the functions of the EU and its purposes and how citizens can participate in the formation of new legislation and the review of existing legislation.

The documents recognise the influence that member states have, in that, without their engagement, those good intentions cannot be delivered. We should welcome the fact that the EU, and in particular the Commission, has recognised that there are issues that need to be addressed and has set out a strategy for doing so. Good intentions are one thing, but the EU needs to will not only the ends, but the means to achieve its goals. It is important to recognise the difficulties it will face in bringing about these efficiencies. However, it is clear that there is an understanding that the future of the Union depends not only on its being relevant to ordinary people’s lives, but on ordinary people being able to engage and have some influence. In that sense, I think this is a major step in the right direction.

16:50

I am grateful to the hon. Lady for her contribution.

We have before us a welcome step forward. One has to look at the various things that are happening in the EU in smarter regulation to see that we are shifting the course of the super-tanker, albeit not as fast as I would perhaps wish. Whether Governments are from centre-right or centre-left political families, Europe is waking up to the existential nature of the crisis of economic competitiveness that faces it. We all know that unemployment in many parts of Europe, particularly youth unemployment, is far too high. We know, too, that Europe is struggling with sluggish growth rates. That is all happening at the same time as European economies are contending with the challenge of global competition and digital technology, which is starting to shake up our professional and white collar occupations in the way that automation did factory-floor working a generation ago.

In the light of those multiple economic challenges, the blunt truth is that unless Europe can raise its game, and dramatically, in terms of economic competitiveness, the next generation of Europeans will be able to afford neither the standard of living, nor the social protection, nor the public services that our children and our grandchildren will expect and that Europeans today, from whichever country they come, take for granted. If that were to come to pass, it would breed social and political tensions that would make the rise of extremist movements such as Jobbik and the Front National seem relatively mild.

That is a massive challenge, and what we are debating today is important because it is one element—I put it no more strongly than that—in addressing that profound economic challenge. It sits alongside other efforts to promote smarter, less burdensome regulation on business, alongside the drive to negotiate free trade deals between Europe and other countries and regions of the world, and alongside efforts to deepen the single market to make it as good a single market in services and digital as it already is in goods. Since the Juncker Commission came to office, we have so far seen an 80% reduction in new legislative and regulatory initiatives coming out of the Commission, compared with the last year of the Barroso Commission. We have also seen a large number of the measures that the Prime Minister’s business taskforce called for a couple of years ago translated into action at European level.

In the documents we are debating this afternoon, we see an effort to turn that mentality into something that is embodied within both the corporate culture and the systemic working of the European institutions. We have, in one set of documents, the Commission’s better regulation agenda, which is a declaration by the Commission that in future it will act in this particular deregulatory way. We have an interinstitutional agreement that takes us further than where we are at present towards greater transparency and greater involvement of national Parliaments, and a commitment to improve the general quality and comprehensibility of regulations made at European Union level.

At the same time, we have the renegotiation that my right hon. Friend the Prime Minister is leading and the draft texts from President Tusk that were published last week. Those texts provide, among other things, four specific targets for the reduction of regulation—something that has never been accepted previously. They provide too for a mechanism for the retrospective review of EU law and regulation and for the Commission, in doing that work, to seek the views of both the Council representing national Governments and of individual national Parliaments. If that approach is, indeed, reflected in a final negotiated settlement, I hope national Parliaments will seize the opportunity in practice to create a kind of green card mechanism whereby national Parliaments work together to promote particular objectives in terms of smarter, less burdensome and less complex European regulation.

While the measures are not a panacea—I would never claim that they are—they are significant moves that take Europe in the right direction, towards being more competitive, less burdensome on business and better at creating the jobs that our young people desperately want and need. We should therefore welcome those initiatives.

Question put and agreed to.

16:56

Committee rose.

Assessment of Exhaust Emissions

Monday 8th February 2016 General Committees

The Committee consisted of the following Members:

Chair: Mr David Nuttall

† Anderson, Mr David (Blaydon) (Lab)

† Andrew, Stuart (Pudsey) (Con)

† Burden, Richard (Birmingham, Northfield) (Lab)

† Chalk, Alex (Cheltenham) (Con)

Davies, Geraint (Swansea West) (Lab/Co-op)

† Doyle-Price, Jackie (Thurrock) (Con)

† Glindon, Mary (North Tyneside) (Lab)

† Hepburn, Mr Stephen (Jarrow) (Lab)

† Howlett, Ben (Bath) (Con)

† Jones, Andrew (Parliamentary Under-Secretary of State for Transport)

† Knight, Julian (Solihull) (Con)

† McDonald, Stewart Malcolm (Glasgow South) (SNP)

† Tolhurst, Kelly (Rochester and Strood) (Con)

Fergus Reid, Committee Clerk

† attended the Committee

European Committee A

Monday 8 February 2016

[Mr David Nuttall in the Chair]

Assessment of Exhaust Emissions

16:30

[The Chair]

It may be of assistance to hon. Members if I go through the procedure that we will follow. First, a member of the European Scrutiny Committee may take up to five minutes to explain that Committee’s decision to refer the documents to this Committee for debate. Secondly, the Minister may take up to 10 minutes to explain the Government’s position, leading into up to one hour of questions and answers. Finally, the documents may be debated on the basis of the motion on the Order Paper, which is to be moved by the Minister. We may progress more speedily, of course, but I must put the question on the motion no later than two and a half hours after we began; that is to say, at 7 pm. To start the proceedings, does a member of the European Scrutiny Committee wish to speak?

16:31

[Kelly Tolhurst (Rochester and Strood) (Con)]

It might be helpful to the Committee if I take a few minutes to explain the background to the document and the reasons why the European Scrutiny Committee recommended it for debate. Before a vehicle can be placed on the EU market, it must pass certain safety and environmental tests. Exhaust emissions are determined by a laboratory-based test. However, as it has become apparent that emissions of cars driven on the road, particularly of nitrogen oxide from diesel engines, substantially exceed those measured in a laboratory, a European Commission regulation sought to address that issue towards the end of 2014.

However, Members will undoubtedly be aware that certain vehicle manufacturers have recently been found to have used so-called defeat devices to produce misleading results. The European Scrutiny Committee received an explanatory memorandum from the Government last November indicating that the Commission would be addressing the issue by introducing a further regulation establishing a new procedure for assessing tailpipe emissions under real driving conditions. The Government also said that they supported the proposal, and that the targets being set were achievable and would provide manufacturers with the certainty needed to develop cleaner vehicles.

Despite the absence of any official text for the proposed regulation, the European Scrutiny Committee took the view that as some manufacturers had sought to conceal true levels of vehicle emissions, it was clearly right that the Commission should address the issue. The Committee also considered that the circumstances prompting the need for such action raised a number of important issues about the enforcement of EU legislation in this area. It therefore recommended that this document be debated.

Members may be aware of the latest developments on 3 February, when the European Parliament voted by a narrow majority of 323 to 317 to support the Commission’s proposal. There were 61 abstentions.

16:34

[The Parliamentary Under-Secretary of State for Transport (Andrew Jones)]

It is a pleasure to serve under your chairmanship for the first time in this capacity, Mr Nuttall. I welcome the European Scrutiny Committee’s interest in the Commission’s proposals to introduce real driving emissions testing into the regulatory approval regime for vehicles.

As the European Scrutiny Committee said when recommending this debate, it is right that the Commission should take steps to address the issue. Although Volkswagen’s regrettable actions have undoubtedly concentrated minds on the issues surrounding type approval for vehicles, proposals for RDE testing were in development long before we became aware of that issue in the autumn. The proposal recognises the importance of improving real-world emissions controls of oxides of nitrogen, known as NOx, for diesel vehicles and of minimising the risk of manufacturers using defeat devices.

The Government are committed to taking action on vehicle emissions testing that restores consumer confidence and delivers our wider air quality and climate objectives. RDE is a vital step in tackling air pollution. It will make type approval emissions requirements significantly more stringent and ensure that new diesel vehicles achieve real-world reductions in emission levels of NOx, which is a harmful pollutant.

I should mention that, although the focus is on emissions of NOx from diesel vehicles, the proposal applies to vehicles that run on a range of fuels, from diesel and petrol through to biofuels and liquefied petroleum gas. It will ensure that vehicle manufacturers must achieve reductions in emissions across the board.

We strongly support the existing RDE agreement, which is expected to reduce significantly average, real-world NOx emissions from new cars and vans starting next year. The Government have been a strong advocate of implementing effective RDE testing since discussions began with European partners. We pushed for the introduction of RDE from 2017 at a meeting between the Commission and member states in October 2014. In May 2015 we abstained from supporting a Commission proposal on RDE, because it did not contain implementation dates. We worked to reintroduce dates in subsequent negotiations.

The objectives of the proposal are uncontroversial, but some reports have suggested that it will weaken Euro 6 requirements. I believe that such suggestions are unfounded, as RDE is a new conditional requirement that manufacturers will have to comply with over and above the existing laboratory emissions test. The RDE test is aimed at assessing average emissions over a typical driving cycle. The test procedures were finalised last year and are significantly more challenging than the lab test, since the new test can involve a vehicle being heavily laden, or travelling up a hill or at speeds of up to 100 mph. I doubt that the test will include all those extremes at the same time, but it is a possibility, which means that manufacturers must ensure that their systems are robust and capable enough to tackle such conditions and to stay within the limits.

[Ben Howlett (Bath) (Con)]

Will the Minister join me in welcoming the plans to build a real-world vehicle emissions testing centre at the Bristol and Bath science park, funded by the University of Bath?

[The Chair]

Order. Before the Minister responds, may I remind hon. Members that it is customary for the Minister to make his opening statement without interventions, because there will be plenty of time—at least an hour—for questions to be asked? Notwithstanding that, the Minister may respond.

[Andrew Jones]

Thank you, Mr Nuttall. I welcome my hon. Friend’s intervention. I know that his area has a strong record in developing engineering and new technology. It is therefore appropriate that we see some such developments taking place in his area. I welcome them most strongly.

I stress that the Euro 6 limits for the laboratory emissions test remain unchanged. RDE introduces a compliance criterion defined as a conformity factor. The conformity factor is the ratio of emissions recorded during the real-world test to the limit on the laboratory test. That must not be exceeded during the real-world, on-road testing.

Under the proposal the requirements for RDE are to be phased in with a two-step process to allow manufacturers time to bring compliant products to the market. Step 1 mandates a conformity factor of 2.1 for all new models in 2017. Step 2 achieves full compliance with Euro 6 standards for all new model types in January 2020, with an additional conformity factor margin of 0.5 to take into account measurement uncertainties. Set against the existing situation in which European air quality planners estimate that vehicles emit three times as much NOx and published research has shown some vehicles to be emitting even higher levels than that, the steps represent significant and achievable reductions in pollution levels.

The proposal means that after 2019 all new models brought to market must meet Euro 6 limits in the real world, with a margin for measurement error of at least above the test equipment. The European Parliament’s environment committee and other commentators have identified the margin for measurement error as a permanent increase in Euro 6 emission limits. That is simply not the case. The proposal will place an obligation on the Commission to review that annually, with a clear aim of reducing the measurement margin in the light of technological progress. We supported that obligation, and the Government look forward to seeing the evidence for setting the correct measurement tolerance, as experience is gained in RDE testing over the coming period.

The UK automotive industry has been supportive of the introduction of RDE, and although the first-step conformity factor is more stringent than it had expected, it is generally content with the agreement, believing it to be tough but achievable.

I wish to draw the Committee’s attention to the significant role that real-world testing has had in reducing emissions from trucks, buses and coaches. On-road portable emissions measurement testing has been used to verify emissions for heavy-duty vehicles registered since January 2014. A study by the Dutch research organisation TNO shows that real-world emissions of NOx from heavy-duty vehicles have fallen by 90% for motorway driving and by at least 30% under urban conditions. The proposal is set to make significant improvements for passenger cars too.

It is also relevant to note that the European Commission recently published a separate proposal for the approval and market surveillance of vehicles. We are assessing that proposal, and I will provide an explanatory memorandum on the matter to the European Scrutiny Committee shortly. I expect the proposal to contribute to how vehicles are approved for sale and how they perform in the real world.

Reducing vehicle emissions is a high priority for the Government, and Ministers and officials have been active in speaking with MEPs and European counterparts to promote the importance of RDE. I am glad, therefore, that the European Parliament chose to support the Commission’s RDE proposals in its vote on 3 February, and I expect that the Council of Ministers will also support them when it votes in the next couple of weeks. I welcome the opportunity to have this debate today.

[The Chair]

We have until 5.35 pm for questions to the Minister. I remind hon. Members that questions should be brief. There will be an opportunity for debate after the questions, and I may, at my discretion, allow supplementary questions.

[Richard Burden (Birmingham, Northfield) (Lab)]

I apologise to the Committee in advance, Mr Nuttall, as I am suffering from a cold. I hope that I do not tax Hansard too much, and that it does not mess up the Official Report too much if I start coughing, spluttering or sneezing.

I have two sets of questions. I welcome the fact that the regulation has been scheduled for debate; I thank the European Scrutiny Committee for recommending it. My first set of questions is on the regulation itself, and the second set is on the subject of Volkswagen, which both the European Scrutiny Committee and the Minister have mentioned as being directly related to it.

A number of organisations opposed to the revision of the emissions testing rules, including, I understand, the European Parliament’s own legal affairs committee, have argued that the introduction of conformity factors runs counter to the aims and content of the 2007 EU regulation on the type approval of vehicles. Will the Minister confirm what legal advice the UK Government have received on that matter, and can he assure the Committee that the UK would not end up being prosecuted in the event of a legal challenge?

Will the Minister also confirm how he expects the review mechanism to work in practice? He is absolutely right that the regulation itself will not weaken Euro 6 regulations, but let us be clear that the criticism has been that by allowing a conformity factor of 0.5, there could be an open-ended permission after 2020 for manufacturers to breach the standards by up to 50%. If the reason for the conformity factor is technical deficiencies, or potential technical deficiencies, in testing machinery, what will be done to stimulate the technological improvements that will avoid the need for a conformity factor so great after 2020, and hopefully altogether?

My third question relates to recent discussions in the Select Committee on Transport. In correspondence with the Committee and the Commission, the DFT emphasised its willingness to focus on a new test approach based, I understand, entirely on real-life driving. Will the Minister tell us what feedback the Department has received from the Commission about supporting research by the Joint Research Centre, and what steps the Government are taking to implement that approach?

To simplify administration and the cost of testing, manufacturers will need to test only a minimum number of vehicles representing extremes of performances of wider families of vehicles. How will the Minister ensure that that is done appropriately, and what assessment has he made of smaller manufacturers, for which testing costs could be most acute?

I turn to the VW scandal. The Minister will be aware that legal proceedings are under way in several countries, including Germany, the United States of America and South Korea. What discussions has he had with the Serious Fraud Office and the Competition and Markets Authority, and why is the UK not suing VW? In a written answer before Christmas, he assured me that he would make a statement in the new year on the emissions inquiry, so can we have one now on how many vehicles have been re-tested, what has been found, at what cost, and when he expects the programme to be completed? Will he confirm that the Government will still seek reimbursement for the Vehicle Certification Agency’s re-testing? Does he agree with VW’s decision not to compensate VW owners in the European Union?

Finally, in addition to the 1.2 million customers affected by the NOx defeat devices, I understand that Volkswagen has since admitted to irregularities in tests for carbon dioxide affecting up to 36,000 vehicles. What tests have the Government done to verify that, and can the Minister assure us that VW will be liable for the costs relating to the tests and any shortfall in vehicle excise duty that arises from those irregularities?

[Andrew Jones]

The hon. Gentleman asked quite a number of questions. I will take the questions on VW first.

The Government first became aware of the installation of software fitted to Volkswagen vehicles to distort emissions testing following the announcement of the US Environmental Protection Agency’s investigation on 18 September last year. We have widely condemned VW’s behaviour and demanded that it take early action to rectify the situation. Our priority is to protect the consumer, to restore confidence in the real-world performance of diesel vehicles and to ensure that VW supports its UK customers.

The VCA has secured an assurance from all automotive manufacturers outside the VW group for which it has issued emissions type approvals that defeat devices have not been used. The Government have called on the EU to conduct a Europe-wide investigation into whether there is evidence that cars have been fitted with illegal defeat devices. We have obviously gone on to test vehicles, and on 10 November, the Secretary of State announced an emissions testing programme to look for defeat devices and to improve our understanding of the real-world emissions performance of vehicles used in the UK. That investigation is vital to restore public confidence.

The VCA, our type approval authority, first reran lab tests for those VW group vehicles for which it had provided approval. Those initial tests provided valuable information for improving our ability to detect a defeat device and strengthened our understanding of the impact on vehicle emissions. To ensure the independence of the testing, the Department is funding the programme and neither the cars nor the testing facilities will be provided by the vehicle industry. We are completely distant from anything in the sector. We are testing 40 vehicles that are representative of a significant proportion of the overall vehicle fleet. The testing is proceeding well and we are using all the facilities we have in our country to make the process happen as quickly as possible, but we are only halfway through it. That is why we have said that the findings will be published in the spring. It would be premature to make further announcements today because we would be doing so only halfway through the programme, which would not be appropriate. We have been clear that we will not provide an ongoing commentary because we will need to conduct in-depth analysis when we have completed the process and ensure that the results are viewed in context, which can be done only at the completion of the testing. I cannot say more than that on the VW issue today.

I emphasise to the Committee, however, that although the VW crisis has brought things more into the public eye, the work on real driving emissions started long before the VW issue was on anybody’s radar, and that will continue. The proposal before us is about testing for all marques, not just one, and for all vehicle fuels, not just those diesel fuels used in the particular type of engine that caused the problem at VW. While VW is a part of this, that is only in the sense that it has brought the issue further into the public domain. On how we can improve performance, we are building on the success and progress that we have had on air quality over some years—we have gone from Euro 3, Euro 4 and Euro 5 up to Euro 6—and these proposals are a step change. I just want to put things in context for Members, because while that issue is related, it is not the key one.

I will now deal with some of the other questions. Provisions for small manufacturers will be discussed and agreed in the package 3 negotiations, which will take place later this year. The UK has already highlighted the importance of the matter to the Commission and is in discussions with manufacturers here, such as Aston Martin.

I can certainly confirm that discussions are continuing with the Serious Fraud Office and the Competition and Markets Authority. They are independent bodies, so it is for them to decide whether to investigate. We are fortunate to live in a country in which politicians do not direct the legal process.

We need to reflect a little on the issue of changes to measurement tolerance, which is a significant factor. The intention, with the first transition step in 2017, is that the conformity factor can be reached through software and calibration changes alone, and a conformity factor of 2.1 has been agreed. That includes any measurement uncertainty.

The second and final step, in 2020, will brings the conformity factor down to 1, which represents parity with the lab test plus, again, measurement uncertainty. Research conducted by the European Commission’s Joint Research Centre examined the various sources of error in on-road emissions measurements. Its conclusion was that there was a worst-case error margin of 0.375, which was why the UK supported 0.4 as a conformity factor. However, some member states argue that other factors that increase NOx emissions in real-world conditions should be taken into account, so an overall figure of 0.5 was agreed.

The Commission has committed to the European Parliament to review the tolerance quickly. We are dealing with new equipment and relatively new technology. The reason why such testing has been used for heavy goods vehicles before cars was simply that the equipment was so big—it could be put in the back of a truck, but not in the back of a car. We are not in that position now as technology is miniaturising. The Commission has committed to a quick review of the tolerance and possibly to moving to much tighter tolerance. We therefore know exactly the direction of travel and there is clear technological progress.

A further question was asked about reviewing our own position on real-world testing, but we have to be clear about what we are asking for before we speak to the European Commission. The Department and chief scientists are considering the matter. Once we know what must be done, we will engage with the Commission and the Joint Research Centre.

On the question of legal challenge, I think that we can be very secure and we have no concerns about that. Our legal opinion is that real driving emissions measures are consistent with Euro 5 and Euro 6 measures. We are not aware of legal challenges on that, and the Commission and the European Parliament are also content. The proposal will complement Euro 5 and Euro 6 testing in a laboratory.

[Stewart Malcolm McDonald (Glasgow South) (SNP)]

I promise to be brief. I have two quick questions, following on from what the Minister said about the Serious Fraud Office and the Competition and Markets Authority. Of course he is correct that those bodies are independent and must be able to make their own decisions, but the Secretary of State has the power, when he believes that an illegal defeat device has been used, to impose fines or to take legal action against a company. He has not done so, because he has come to the same conclusion as Volkswagen: what VW installed in cars in Europe does not actually constitute a defeat device. Does the Minister therefore share my disappointment that these new proposals from the Commission do nothing to alter the definition of a defeat device in Europe? Why has the Commission not gone for the American definition, which is much tougher to get around? To implement such a measure wholesale in Europe would show consumers that we take the issue seriously. Will the Minister consider the definition of a defeat device here in Europe? I urge him and the Secretary of State to get it changed quickly.

[Andrew Jones]

Our priority is to protect the consumer and to restore confidence in the real-world performance of diesel engines, ensuring that VW supports its UK customers. We have launched an investigation, and re-tested diesel cars to gather much-needed evidence to restore public confidence and to improve our understanding of vehicles’ real-world emissions performance. We are only halfway through that testing process. We have said that we will not bring the matter to a conclusion or take any further steps until we are absolutely clear about the extent of the problem, but we have not ruled anything in or out. We are still working and are only halfway through the process. On the definition of a defeat device, the real driving emissions proposal includes an amendment to bring requirements on defeat devices in line with those for the USA.

[The Chair]

If there are no further questions, we will proceed to debate the motion.

Motion made, and Question proposed,

That the Committee takes note of European Union document No. 14506/15 and Addendum, a Commission Regulation (EU)…of…amending Regulation (EC) No. 92/2008 as regards emissions from light passenger and commercial vehicles (Euro 6); and urges the Government to continue to press for action so that EU emissions testing accurately reflects real-world performance of vehicles on the road.—(Andrew Jones.)

16:58

[Richard Burden]

A lot of things to talk about arise from those questions and answers. The relationship between emissions and air quality is fundamental. We know that road transport is a key cause of the pollution that is damaging public health in towns and cities in this country, in the EU and around the world, so it is absolutely right that we are having this debate. Various Committees of this House have had and continue to have hearings on this matter, but it is important that other Members have the opportunity to scrutinise Ministers, and this is one such important opportunity.

However many issues are at play, we risk them being lost or conflated if we are not clear about two things. The accuracy of emissions testing has been an issue for a long time; it has not simply come up as a result of the VW scandal. Despite the leniency of the existing EU testing regime, it appears that in the European Union, as well as in the United States, VW has been involved in actively distorting test results.

I will return to the VW aftermath later, but let us consider specifically the regulation of testing. For a long time, emissions testing has been known to be inaccurate. Given the challenges of technology and the importance of getting variables to be as similar as possible for all tests, there is a gap between lab tests and emissions tests that reflects real-life driving. Policy makers and the industry have been aware of that for a while and have worked to improve the situation. In fact, an EU working group was set up as long ago as 2011, but the response has been woefully slow.

The well-known air quality crisis facing many of our urban areas, plus the opportunity for the UK automotive sector to become a leader in developing the necessary technology, should have prompted the UK Government to push for more action much earlier than they did. Despite what the Minister says, there is little evidence to suggest that the Government as a whole have not dragged their heels. As recently as July, there have been reports that the Department for Environment, Food and Rural Affairs was briefing MEPs to oppose measures on real-life emissions testing, and it is still not clear what was happening there or, indeed, whether DEFRA was consulting DFT. It seems that it was only when the VW scandal made emissions testing a concern for the wider public that the Government felt compelled to act.

We are where we are, and the regulations before the Committee have left the European Parliament, and all of us, in an impossible position, stuck between a rock and a hard place. Plain and simple, the choice is between consenting to regulation that sets a series of standards but that, after 2020, has built into it an open-ended permission to breach those standards by up to 50%, or getting something in place now to avoid more delays and get the testing improvements that we need in the long run.

Most people accept that limitations in the technology used for testing cannot yet provide 100% accuracy in all conformity tests. That is why we will not oppose the motion, because we must be realistic and get the regulations in place for their planned introduction in 2017, which is important for policy certainty and for ensuring that air quality improvements happen as soon as possible. Lessons have to be learned, however, and the Government must realise their responsibilities.

Labour welcomes the efforts by the European Parliament and, from what the Minister says, the Government to ensure that a review mechanism is built in to the regulations. Saying that there will be a review mechanism is one thing, but ensuring that that happens and means something is something else. It is crucial that the Government do not think, “Job done,” and that pressure on that review mechanism remains. For the sake of public health, we cannot afford to have open-ended emissions breaches in real-life driving tests.

As well as advocating research into the measuring capabilities, there must be a consistent and constant review of the regime to ensure that manufacturers do not avoid limits through other means. The Minister says that all manufacturers in the UK, other than VW, have made it very clear that they have not been involved in the kinds of practice with which VW has been involved. I accept and welcome that, but it is important that the tests provide a failsafe, because public confidence is at stake. The industry is as aware of that as anyone else.

Group testing is a reasonable measure to keep costs down, but the Government must support the VCA to ensure that we get an accurate snapshot of all necessary vehicles. In the longer term, the Government have to be a leader in the European Union and press for a whole new approach that focuses on real-life driving scenarios in a way that is seen to be representative and reliable. Domestically, I will welcome a statement from the Government on what assessment Ministers have made of the Environmental Audit Committee’s recommendations for an older diesel scrappage scheme and a review of vehicle excise duty.

Beyond the regulations, we must encourage the media, publications and consumers to maintain pressure for standards to be met. Manufacturers need to be encouraged to go below the emissions standards that are set out. It is easy to think that motorists do not care about emissions, but Which? magazine’s “Come Clean on Fuel Claims” petition suggests otherwise.

Turning to Volkswagen, the public outrage at what it has done has been real and marked. Not only has Volkswagen undermined trust in that company, but public trust in the whole automotive industry has taken a knock. That industry is vital to the UK and Europe, and is doing many good things, but the impact of the scandal has been very detrimental. Its aftermath and outcome are still not clear, however, and I appreciate the opportunity to put concerns to the Minister.

When did the Government actually know? I think that the Minister touched on this earlier, but before the scandal broke in the United States—back in 2013—the European Commission’s Joint Research Centre expressed concerns about the possible use of defeat devices. Why was that allegation not followed up? There is a need for a pan-European inquiry. The Socialists and Democrats in the European Parliament are pushing for that and have written to all member states. Are the Government responding to that request and, if so, what will they be saying?

The second issue is to do with what is going on now. The crux of the matter is that still no one fully understands what has happened. Lawsuits are taking place in Germany, South Korea and the United States. There is talk of fines and compensation in some countries, but not in others. The fact that 40,000 drivers have contacted Volkswagen directly underlines the uncertainty facing retailers, workers and drivers. In October, in front of the Transport Committee, Volkswagen apologised profusely and said that it had let everyone down. Now Volkswagen suggests that in Europe the defeat devices were not actually defeat devices at all, and that it will not pay compensation to European Union owners, even though compensation might be paid to owners in the United States of America.

Part of the problem is that our Government have not done enough to press Volkswagen because otherwise why is there still so much confusion among motorists about what is going on? It took a month before Volkswagen first wrote to its customers. No cars have been fixed and no one has an idea of what impact any repairs will have on fuel economy. We need to know what needs to happen and who will pay for it. There is a real risk that the Government’s failure to handle Volkswagen properly will be seen in the same light as their handling of Google, for example. We cannot allow VW to be treated as a Google and to be let off the hook. I appreciate that Volkswagen wants to make sure that the solution does not impact on vehicle performance, fuel consumption or driveability—that is reasonable—but at the same time, the delay is causing extra problems for air quality. At what cost are we letting Volkswagen sort out the problems in its own time?

There are other concerns that the Government have to address. The latest figures suggest that the impact of the scandal on sales figures has not been as bad as was originally feared, but what if there are traceable costs for the retail industry as a whole? Years of false emissions data means, in practice, lost vehicle excise duty. Ministers have promised that drivers will not face higher tax bills as a consequence of Volkswagen’s actions, and we will hold them to that pledge. To do that, however, the Government have to be able to calculate the shortfall for the 36,000 vehicles that apparently have irregularities in not NOx but CO₂.

The Government also need to look at what the cost of VCA re-testing has been and how to recover those costs. Will any fines be levied? As the hon. Member for Glasgow South said, while no one wants to get in the way of the investigations of the Serious Fraud Office or other bodies, there is still a question about whether fines could be levied and hypothecated to promote sustainable transport in the UK.

The development of an accurate emissions testing regime is fundamental to improving air quality and public health and has to be a priority for the Department for Transport. It should not have taken this long, but while the regulation is not to everyone’s liking or ideal, it is a step in the right direction. The important thing now is that the Government have to back their words with actions and not think, “Job done.” That means pressing for the Joint Research Centre to develop better measuring equipment and ensuring the VCA has the resources and finances it needs to do its job effectively.

Let us continue the re-testing, but in respect of VW, surely the time has come for the Government to give their backing to the call for a full Europe-wide inquiry. Nothing short of that will dispel the suspicion that VW could become another Google. If that impression is out there, it is bad for consumers and for the Government, but it is also bad for the automotive industry as a whole, which across the piece seriously wants to tackle the air quality challenge. Part of doing that is restoring public trust, which has to be done by drawing a line under the VW scandal, and that can only be done by maximum transparency, a proper Europe-wide inquiry and appropriate accountability being ensured.

17:12

[Stewart Malcolm McDonald]

We have been brought to this point by the soap opera of the Volkswagen scandal and by the fact that one in two cars sold in Europe is a diesel car. This is an enormous public health and consumer issue. I fear that the Government are at risk of sitting on their hands, as we hear that country after country in a list as long as my arm are taking action of some kind against Volkswagen. It is interesting that the hon. Member for Birmingham, Northfield mentioned the Google issue. I worry that the Department for Transport risks being seen to be as feckless as Her Majesty’s Revenue and Customs when it comes to standing up for the public interest against big corporations.

Volkswagen, quite simply, has managed to pull the wool over so many consumers’ eyes, but because of the inadequate rules here in Europe, it will probably get away with it. In the United States, Volkswagen drivers are being compensated with $500 in cash and $500-worth of credit vouchers. Here in the United Kingdom, Volkswagen drivers will not receive a single penny. What of the fact that it was a United States authority that caught out a major European car manufacturer? Not a single one of the EU’s 28 member states caught Volkswagen out; instead, it was a Californian authority.

There is undoubtedly some good stuff in the documents produced by the European Commission, but I feel an opportunity has been missed. We have an opportunity to strengthen the proposals. There are some technical elements that need to be strengthened, but really we need to see more from the European Commission to tackle the culture in the car industry and its relationship with testers and regulators across the EU. We must see proposals that put an end to manufacturers being able to shop around in Europe to get the most favourable tester to give them the results that they want. In the Transport Committee we heard evidence from Transport & Environment, a Europe-based think-tank that does a lot of work on emissions regulations. It seems strange that an awful lot of manufacturers go to Luxembourg—a country not exactly known for its car industry. What is going on in Luxembourg? What are manufacturers getting there that they cannot get elsewhere? The proposals do nothing to crack down on that, and that is where the Minister needs to focus his attention in future.

At the moment, 45 lobbyists are working in the European Parliament on behalf of Volkswagen, which over the years spent millions of pounds to get the results it wanted. My goodness, that was money well spent. Look at the result in the Parliament only last week: the right number of abstentions to ensure that these watered-down proposals, which still allow manufacturers to exceed the legal limit on NOx, went through. We must turn the corner and get to grips with an industry that for too long has perverted environmental regulations and treated consumers with disdain—an industry that does not give a damn about regulators because it has creative engineers who help it get around regulations. My fear and that of so many people who are much more qualified than me, whether those who work in the transport sector or those such as the British Lung Foundation, is that that will continue.

This is a major public health issue. We know that pollution from NOx is killing about 500,000 people across Europe every year, so I want to see some enthusiasm from the Government to get to grips with the opportunity before them. The proposals are a good starting point, but the Minister must assure us that he will put British consumers and British public health first by arguing for strengthened proposals. He could give us some confidence by taking a tougher line on Volkswagen than simply stating that it has been naughty, naughty. All of those statements, correct though they are, are a wee bit wet. People expect a bit more from Her Majesty’s Government on this, probably the biggest corporate scandal to engulf the motoring industry for quite some time. For that reason I will oppose the motion.

17:18

[Andrew Jones]

We have talked about critical issues in the debate, and it is absolutely right that improving our national air quality is a top priority. We must remember that the wider impacts of poor air quality are equivalent to about 29,000 early deaths in the UK. It is a huge and significant public health issue and that is an important factor.

We must also recognise the progress that has been made in tackling air quality issues by the automotive sector. Responding to challenges from Government and its own desire to improve its performance, the sector has shown creativity and determination in improving its engineering to deliver benefits for drivers and, through them, the rest of our community. We only have to look at the difference between Euro 5 and Euro 6 to see the progress made. We are looking here at how we can build on that progress.

I do not think that any Government have been complacent—far from it. However, it is fair to say that there is significant public concern on air quality issues and I share them entirely. The idea that the Government have been complacent is just wrong. In May, we abstained in protest after pressing for the introduction dates to be included in the EU motion. They were not included and we wanted them to be. I remember that particularly well because it was the first decision I had to make as a Minister and it happened about three days after the general election. It is critical to recognise that the Government have been pressing for action, and that started long before I took this job.

Have the reputations of the automotive sector and of Volkswagen been damaged by these events? Yes, it would be ridiculous to suggest that they have not been. We only have to look at the impact on share prices and sales figures to see that there is huge concern.

[Stewart Malcolm McDonald]

The Minister is right to say that the reputation of the auto industry has been damaged. Does he accept that the reputation of regulators in the UK has also been damaged, given that it took an American authority to find out what was going on?

[Andrew Jones]

I gently remind the hon. Gentleman that it was the portable emissions measurement equipment, which has been developed largely in response to the UK and others in Europe pushing for RDE, that actually enabled the investigators to unearth the VW issue in the first place. Europe is the first place in the world to introduce on-road emissions testing. The idea that we have been off the pace, complacent or asleep at the wheel is simply not true.

Has the reputation of the sector been damaged? Yes, it has. Has VW’s reputation been damaged? Yes. For what it is worth, my car has been recalled as part of the process. VW is not quite the company I thought it was when I bought the vehicle, and indeed paid extra for the environmental package as I sought to be a low-emitter driver. I am sure that the sector recognises that its reputation has been damaged. I have had that conversation with automotive industry players and with the Society of Motor Manufacturers and Traders. Real driving emissions testing is part of the answer and the key to recovering trust.

[Richard Burden]

I think the Minister is running two things together now; they are related, but they are separate. One is the need for real-life driving emissions testing, which is the purpose of this regulation, but the second point relates to VW and I do not think the Minister has addressed it. Before the scandal broke in the United States, in 2013 the EU Commission’s Joint Research Centre raised concerns about the use of defeat devices. I am not aware that that was followed up on. Was it and, if so, where was the follow-up? If it was not, why not?

[Andrew Jones]

Well, no hard evidence was shared by the Commission or the Joint Research Centre, and we cannot take action without hard evidence. It goes back to the point about real driving emissions testing being the answer. It is not a question of conflating different issues. VW and real driving emissions are separate but related issues. The VW crisis has brought to a head the work on real driving emissions, but that work started long before the VW crisis and will continue after the situation is resolved.

The Department was first aware of the situation on 18 September, as my right hon. Friend the Secretary of State said in his written ministerial statement. He has been following up on the matter and pressing VW to take care of its UK consumers. For example, he took the issue up with its UK chief executive on 10 December. There was a further question about whether VW has breached EU regulations. I have to say that it is not clear that VW has breached EU regulations, which is why the RDE package 2 agreement has included an amendment of the text relating to defeat devices to require vehicle manufacturers to declare any alternative emissions strategies.

The situation regarding compensation is also different in the USA and in Europe. In the USA, Volkswagen does not have a technical solution; in Europe, it does. However, the point remains that we are in the middle of the testing process. We have ruled nothing in or out and we will not comment further until we get to the end of the process and put all of it into context, but we will certainly speak up for UK consumers, and that is what we have done consistently.

We are committed to improving air quality, and the RDE agreement is crucial to delivering improvements in UK air quality and decreasing real-world NOx emissions. The current arrangement is the best option we have for environmental and health benefits and to ensure that vehicle manufacturers improve real-world emissions now. The implementation dates and conformity factors are challenging, as everybody in the industry recognises, but they are achievable. It is right to set demanding targets, because the goal of clean air will benefit our communities and is clearly important. It will require vehicle manufacturers to produce cleaner cars, starting next year.

I recognise that more work needs to be done at technical level. The UK is committed to playing a full and active role in finalising the remaining technical issues. We will certainly press the Commission to start a review of how RDE functions, with the clear aim of reducing the margin for measurement uncertainty that is in the final agreement.

The motion urges the UK Government to continue to press for action on real driving emissions. I am happy to make that commitment, but I hope that it has become clear in the course of this debate and in the answers that I have given that we are not just pressing for action; we are taking action, and we are leading the way on taking action. We started a long time ago, and we will continue to do so. The UK has a strong record on public health and automotive, and we have brought the two together to provide significant benefits for the people of this country.

Question put.

Division 1

Ayes: 7

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Conservative: 7

Noes: 1

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Scottish National Party: 1

17:28

Committee rose.

Protection of the EU’s Financial Interests

Monday 8th February 2016 General Committees

The Committee consisted of the following Members:

Chair: Sir Edward Leigh

† Burns, Conor (Bournemouth West) (Con)

† Gauke, Mr David (Financial Secretary to the Treasury)

Goodman, Helen (Bishop Auckland) (Lab)

† Grant, Mrs Helen (Maidstone and The Weald) (Con)

† Green, Damian (Ashford) (Con)

† Hammond, Stephen (Wimbledon) (Con)

† Hayman, Sue (Workington) (Lab)

† Hopkins, Kelvin (Luton North) (Lab)

Kaufman, Sir Gerald (Manchester, Gorton) (Lab)

† Marris, Rob (Wolverhampton South West) (Lab)

† Mullin, Roger (Kirkcaldy and Cowdenbeath) (SNP)

† Stride, Mel (Lord Commissioner of Her Majesty's Treasury)

† Swayne, Mr Desmond (Minister of State, Department for International Development)

Clementine Brown, Committee Clerk

† attended the Committee

European Committee B

Monday 8 February 2016

[Sir Edward Leigh in the Chair]

Protection of the EU’s Financial Interests

16:30

[The Chair]

Before we begin, I will outline the procedure. First, a member of the European Security Committee may make a five-minute statement about that Committee’s decision to refer the documents for debate. The Minister—or, in this case, the Ministers—will then make a statement of no more than 10 minutes, and questions will follow. The total time for the statement and subsequent questions and answers is up to an hour. Once the questions have ended, the Minister will move the motion and it will be debated. We must conclude our proceedings by 7 o’clock. Does a member of the European Scrutiny Committee wish to make an opening statement?

[Damian Green (Ashford) (Con)]

It is a pleasure to serve under your benign tutelage, Sir Edward. I will take a few minutes to explain the background to these documents and the reasons why the European Scrutiny Committee recommended this debate.

The first document is the Commission’s annual report for 2014 on protecting the EU’s financial interests, in which the Commission summarises and evaluates measures taken by it and member states to counter fraud and irregularities against EU expenditure and revenue in 2014. It is supplemented by six detailed annexes, including a statistical evaluation of irregularities reported in 2014, a follow-up to recommendations to member states in the 2013 report, and the methodology regarding the statistical evaluation of reported irregularities for 2014.

The European Court of Auditors must report each year on implementation of the EU’s annual general budget and the European development funds for development aid. The second document is the ECA’s 2014 reports on the general budget and the EDFs budget. The documents also contain the statements of assurance—commonly referred to as the DAS, from the French—concerning the reliability of the accounts and the legality and regularity of the underlying transactions that the ECA is required to produce.

Because the ECA’s annual audit reports have for many years revealed serious inadequacies in the implementation of the EU general budget, it has become customary each year for the latest report to be debated with the Commission’s annual anti-fraud report. Although the current ECA report affirms the reliability of the accounts for the 21st successive year, there is not a positive statement of assurance, so the European Scrutiny Committee had no hesitation in recommending that this document be debated. We suggested that Members might wish to focus on the Government’s efforts to improve EU financial management. They might also examine the ECA’s comments about the ineffectiveness of some of the UK’s management of EU funds, the Government’s response, and the reasons for the welcome that the Government gave to the qualified statement of assurance in the report of the European development fund audit.

16:33

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

It is a great pleasure to serve under your chairmanship, Sir Edward. It is also a pleasure to be joined by the Minister of State, Department for International Development, my right hon. Friend the Member for New Forest West to discuss the three reports outlined by my right hon. Friend the Member for Ashford. The Government welcome the three reports—the European Court of Auditors’ annual audit report for the 2014 budget, the ECA report on the European development funds in 2014 and the European Commission’s “Fight against fraud 2014 Annual Report”—which continue to play a key role in informing the UK’s approach to EU fraud and financial management. The Council vote on the discharge of the EU budget in 2014 will take place at ECOFIN on 12 February and will be discussed in COREPER the day after tomorrow. The Government’s priority is to hear the Committee’s contributions on EU fraud and financial management before those meetings.

As the Committee is aware, the Government take a tough stance on EU financial management. The Prime Minister’s 2013 deal, which represented the first ever real-terms cut to the EU budget framework, set the context and imposed financial constraints that are forcing the Commission to prioritise spending and focus on value. Against that backdrop, we welcome the European Court of Auditors’ report on the 2014 EU budget, which, in particular, increased the focus on performance and results.

Compliance is important, but without considering performance we will never achieve the maximum value for money. It is necessary, but not sufficient. As Vice-President for budget Kristalina Georgieva said, a 100% compliant road to nowhere

“is a 100% waste of our taxpayers’ money”.

We are therefore pushing hard for a more effective EU performance framework that delivers results.

Proper financial management is essential and it is clear that the ECA’s verdict on the EU accounts does not yet give taxpayers sufficient confidence in the system. While EU revenues and commitments were given a clean audit, the Government regret that there has been no significant improvement in the estimated level of error for EU payments. Consequently, the ECA has been unable to grant EU budget expenditure a positive statement of assurance for the 21st consecutive year. This estimated level of error in the EU budget—reflecting expenditure that is not compliant with EU regulations—stands at 4.4%, which is well above the acceptable 2% threshold, and shows only marginal improvement on last year’s 4.5% error rate. We are not achieving the rigorous standards of budgetary management that we expect to see at EU level. We are therefore pushing all those involved to make further improvements.

Until the 2009 audit, previous Governments had consistently voted to approve the discharge of EU annual budgets. However, in 2010, under the current Chancellor, the UK took the unprecedented step of abstaining on the Council decision to approve the Commission’s management of the EU budget. Subsequently, for the past four years, the UK has voted against the discharge of annual EU budgets. We intend to continue to do so this year, issuing our own counter-statement calling for an increased focus on performance and setting out our own recommendations.

On EU spending in the UK, I am pleased to confirm that where the ECA has identified specific cases of potential weakness in the UK, the relevant authorities have engaged with the Commission and the ECA to resolve those issues. In the majority of cases, the necessary recovery action or sanction has either been completed or is under way.

Finally, I turn to the Commission’s report on the fight against fraud in 2014. Based on Commission estimates, established fraud is likely to affect only about 0.02% of EU payments. None the less, any fraudulent misuse of EU funds is unacceptable. That is why the Government take a zero tolerance approach to such criminal activity by fully supporting anti-fraud in the EU, including co-operating with the European anti-fraud office, OLAF.

I want to conclude by assuring the Committee of the Government’s strong commitment to improving EU budget management, borne out by our focus on three key areas: driving simplification to reduce compliance errors; encouraging a sharper focus on performance and results; and continuous improvement of domestic control systems to ensure the effective management of EU funds in the UK.

I will now hand over to the Minister of State, Department for International Development, to say a few words about the report on European development funds. I look forward to the subsequent debate.

[The Chair]

Mr Swayne, do you wish to make a short statement?

[The Minister of State, Department for International Development (Mr Desmond Swayne)]

Mr Leigh, I had not realised that the statement was voluntary. Had I done so, I might have chosen not to make a statement. However, on the basis that I have prepared one, it is probably best if I deliver it.

[The Chair]

Make it snappy!

[Mr Swayne]

I will endeavour to do so.

The issue is of enormous importance to DFID, given that 11% of our official development aid is spent through the EU institutions. It is vital that we ensure it is spent well and according to our own priorities and objectives, to which end we employ 19 officials between Abercrombie House in East Kilbride and No. 22 Whitehall to ensure that that is the case, and we deploy 26 officials as secondees to the European institutions directly. Their main effort is to ensure that the EU’s priorities align with ours and that their procedures and standards reflect ours.

I come to these debates with a certain prejudice. When people complain to me about the unsatisfactory nature of European institutions, I am inclined to say, “Not me, guv. I voted no in 1975.” Nevertheless, notwithstanding such prejudices, I have been impressed by the quality of European aid delivered by the European institutions. What is more, when overseas in some of the countries in which we operate, I find that humanitarian staff are equally complimentary of the quality of European aid. Having read the documents, which are not a particularly good read, it seems that the EU is delivering high-quality aid in spite of lapses in some of its management systems. It is vital that we get on top of that, so that those management systems do not begin to undermine the quality of European aid.

We are concentrating on various aspects of the EU’s procedures. Members of the Committee may remember that we focused last year on the results framework and how results are calculated. We are currently working on a review of procurement and counter-fraud policies. There is an element of frustration in dealing with the reports, because the Committee will appreciate that we made all sorts of observations and criticisms last year that we would expect to be taken into account, but the period covered by the report precedes the criticisms that we made last year, so there is an element of catch-up. It will take time for our observations and demands to be reflected in the reports that we see before us.

As for the development funds, I expect that the auditors will be quietly confident that the appropriate level of seriousness is being attached to the criticisms that were made, but there is an elephant in the room, namely, the European Parliament’s report of some two weeks ago, which made headlines in The Times in London. It reported that half of EU aid is wasted, more specifically that 53% of €20 billion will not be deployed and will not deliver the intended effects.

However, as Field Marshal William Slim used to observe, nothing is ever as bad as first reported. It turns out that it was a report not of the European Parliament but of a Member of the European Parliament who had access to an external assistance management report that was published on the European Parliament website in what I would call a rather unnecessary and unwise fashion. We would not publish live management documents of that sort. Some Members may recall the arguments in the previous Parliament over just such a management document: the risk register. This document is a risk register, on which officials would be expected to record everything that could possibly go wrong unless steps are taken to prevent it from going wrong. The document’s purpose is to ensure that action is taken to prevent that.

Nevertheless, the document has been used to draw up the criticisms that were made, in particular that it will take some 27.5 years to disburse the commitments that have already been made to development projects. That shows the limitations of using a management document that is a snapshot. There will be always be points in a development cycle when more will have been pledged than has actually been deployed and disbursed, particularly in a humanitarian environment such as we have at the moment, with huge crises in Syria, Yemen and South Sudan. Large amounts may have been pledged, but not actually disbursed. I would be more concerned about criticism that we were shovelling money out of the door rather too fast in order to meet commitments, rather than dealing with them proportionately. Typically, a European project lasts some four years, which is to be expected in the circumstances.

Nevertheless, the European Court of Auditors judged that the cost-effectiveness and efficiency of controls have not been demonstrated and it is therefore important that an action plan to deal with that is put in place. That action plan involves intensive management training to ensure that officials comply with the rules, and the deployment of new financial tools to ensure that they are complied with.

In 2011, the financial resource management estimate that we made for the European Union in our own multilateral aid review was that it was actually very good. We have to see this report in that context, but it is vital that this is got right, because one of the most corrosive things in relation to international development is the undermining of public confidence in our commitment through people being told that the money is wasted. Therefore, we have to deal with these issues to ensure that there is no question of that arising.

[The Chair]

We now have question time. Who wishes to kick off?

[Rob Marris (Wolverhampton South West) (Lab)]

It is a pleasure to appear before you, Sir Edward; I do not think that I have had the pleasure before. I have a brief question for the Financial Secretary to the Treasury. I understood him to say that 0.2% of EU spending was thought to be subject to fraud. Have the UK Government made an assessment of the level of fraud and irregularities, which can be different, relating to the UK’s share of that EU expenditure?

[Mr Gauke]

I thank the hon. Gentleman for his question. It is 0.02% that is identified as being fraud. I think that a slightly larger number is suspected of and looked at as being fraud, but when it comes down to it, only 0.02% is established as being fraud.

In terms of the UK comparison, it can be difficult to make exact comparisons. All managing authorities across the UK have in place robust anti-fraud measures. Those include fraud risk assessments, mandatory checks on payments, fraud awareness training and regular referrals to OLAF where suspected fraud arises. We also support OLAF through the work of the designated UK anti-fraud co-ordinator, AFCOS, which is based in the City of London Police alongside Action Fraud. AFCOS continues to engage actively with OLAF and other member states to investigate and bring criminal proceedings against perpetrators of EU fraud. It would also be fair to say, looking at the ECA’s assessment of member states, that it samples member states’ activities; it is not intended to be a thorough audit of each and every member state to produce those numbers, so there is not a specific UK error rate on fraud, just as there is not for financial management errors.

[Kelvin Hopkins (Luton North) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Edward. Hon. Members may notice a sceptical note in my questions, but—[Interruption.] They are just very accurate. We are a very substantial net contributor to the European budget, and 4.4% of the budget going amiss is the equivalent of certainly £1 billion and possibly more. Should we not be more concerned than some of the large recipient countries, because it is our money that is going into the wrong pockets?

[Mr Gauke]

It is certainly right that we should be concerned about that money. That would be the case regardless of whether we were a net contributor, but the hon. Gentleman makes a fair point: we make a substantial contribution to the EU budget every year. The UK has traditionally played a leading role in ensuring budgetary discipline in the European Union, and I highlight the Prime Minister’s achievement in 2013 of a real-terms cut in the EU budget for the multi-annual financial framework. An important area for us is ensuring that money is spent wisely and that we do not spend too much money at an EU level. We are a strong advocate of sound financial management and are committed to ensuring that EU funds are safeguarded and managed well. The Commission has ultimate responsibility for the implementation and management of the EU budget, but all member states, including the UK, must take responsibility in terms of putting pressure on the Commission and ensuring that money spent by member states is spent well.

[Kelvin Hopkins]

No doubt there are particular budgets that are more vulnerable and particular countries where the budget is not as appropriately controlled as it might be. The Financial Secretary talked about simplification. Are the British Government targeting certain areas and do they have concerns about particular countries where the budget might not be appropriately spent?

[Mr Gauke]

In terms of the UK’s action in this area, we have in place comprehensive procedures to ensure that EU funds comply with UK and EU rules, including a role in programme audits and preventive anti-fraud measures. The hon. Gentleman raises concerns about particular areas. Structural funds, for example, which are a sizeable part of the EU budget, have to be focused upon. The Commission set up a high level group on European structural investment funds simplification last year, whose work is ongoing. Although the agenda is in its early stages, the UK continues to engage actively by advising on simplified costs and financial instruments.

In agreeing the terms of the 2014 to 2020 structural funds regulations, the UK actively pushed for and achieved greater use of simplified costs, reductions in document retention periods, and lighter and more automated annual reporting. In terms of good practices, DCLG’s work in improving public procurement procedures was highlighted in an ECA special report last year. The Department has set up an internal network to review public procurement issues, including the issue of guidance, case studies and reviews of public procurement checks and audits.

As I have said, the UK takes this matter very seriously. Although the Commission has ultimate responsibility for implementation and management of the EU budget, we have a role in taking responsibility to push for reforms.

[Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)]

It is a pleasure to serve under your chairmanship, Sir Edward. May I say I admire how you have generated such a beautiful gender balance on the bench beside you?

I have two questions, if I may. My first is for the Minister of State. I am interested in this issue because I have spent much of my life in parts of the developing world and on aid projects. I have a very precise question, but, by way of a short preamble, I have a lot of sympathy with those who are at times critical of agencies that operate internationally. At one stage in my life I was in Yemen to look at a college built with World Bank money and with United Nations Food and Agriculture Organisation development. My terms of reference were simple: we have built this building, now tell us what to do with it. It was not necessarily the best project that had been set up. The Minister mentioned the recent report, published on the EU website, on the amount of money wasted. He said that in his and the Government’s view, the report was “very good”. Will he explain precisely what “very good” is?

[Mr Swayne]

I was referring to the multilateral aid review that we carry out periodically. The last update was in 2011. We assess the effectiveness of all the multilateral organisations through which we operate as a prelude to deciding on what terms we are prepared to continue using them as development partners. The EU institutions are part of that review. Specifically, we judged their financial controls and their effectiveness in deploying the finance that they are given to deliver projects on the ground to be very good. I said that to counter the criticism set out a couple of weeks ago that they are too slow and that it will be 27.5 years before they can deploy the finance that they have been given. That is a snapshot, or the use of a management tool to draw a wholly inappropriate conclusion.

[Roger Mullin]

My supplementary to the Financial Secretary is also about the international aspects of fraud. Many projects funded through the European Union require multinational partnerships. I am aware that some fraud has occurred in more than one member state. Does he have a general view of how the UK compares with other EU member states on multinational projects?

[Mr Gauke]

There is a general view that the UK is strongly determined to address fraud. We have a strong record of budgetary discipline in the EU and with multinational projects, and we have demonstrated that we take fraud very seriously.

From the documents before us, it is hard to draw comparisons between the UK and other member states. There is no directly comparable error rate for the UK’s management of EU funds against which the ECA’s error rate for the EU budget can be measured. To our knowledge, there are no national accounts of major economies, including the UK’s, that can be meaningfully compared with the ECA’s audit of EU accounts. Only a few countries—the UK is one—produce whole of Government accounts. It is hard to compare precisely our record with those of other member states or countries outside the EU. The UK remains determined to root out fraud, wherever it might be.

[Stephen Hammond (Wimbledon) (Con)]

Like so many others, I want to say that it is a pleasure to serve under your chairmanship, Sir Edward. I confess to my right hon. and hon. Friends on the Front Bench that I have not read these documents cover to cover.

[Mr Swayne]

Shocking!

[Stephen Hammond]

It is indeed shocking, although I thought it would be more useful to spend my weekend trying to ensure that my hon. Friend the Member for Richmond Park (Zac Goldsmith) is elected in May.

I agree with my right hon. Friend the Member for Ashford that it is shocking that this is the 21st year in which the accounts have not been properly audited and signed off. That would not be acceptable in the financial world. With my financial hat on, I read three of the chapters, and I would like to test something with the Financial Secretary. Chapter 3 is about getting results from the EU budget. The common themes include poor performance setting, poor planning and objectives that are not fit for management purposes. My hon. Friend will have noticed that it states that budgetary strategy is not aligned with political strategy, which is an explicit criticism of the inability to make proper financial judgments.

Hidden in the documents—the Commission did not even bother to reply—is paragraph 3.79, which gets to the heart of the lack of results in partnership arrangements. I would like to hear from my hon. Friend exactly how the Government will put pressure on the Commission to respond with more a bit more force than its bland statements.

[Mr Gauke]

My hon. Friend raises an important point. It is traditional in these debates that we focus on error and specifically on fraud, but as I touched upon in my opening remarks the focus on performance should not be forgotten. We welcome the ECA’s increased focus on performance while retaining its valuable role on compliance. That shows there is recognition that compliance without performance will achieve little. Strengthening the ECA’s work on performance could help to maximise the efficiency, economy and effectiveness of EU spending.

It is also in line with Vice-President Georgieva’s budget for results initiative, which aims to develop a more performance-orientated budget that delivers tangible results for EU citizens. We see this as an important opportunity to help to improve the transparency of EU spending to taxpayers, and its value and efficiency. My right hon. Friend the Chancellor made our position clear at ECOFIN last year.

We are working closely with the Commission on this issue, offering our expertise in areas such as transparency and value for money. The Commission is keen to drive this agenda forward. In particular, it is our priority to ensure that this work feeds into the mid-term review of the multi-annual financial framework this year. It is important that the work in this area is joined up with other related initiatives to improve budgetary management, such as proposals for simplification of the common agricultural policy and structural funds, which were launched earlier this year by the Commission, and the wider mid-term review this year.

My hon. Friend the Member for Wimbledon raises an important point. Having heard Vice-President Georgieva discuss these matters on a number of occasions, I know that she is clearly very personally committed to a move towards ensuring that performance is at the forefront of how EU money is spent, and that is an initiative that we support and welcome.

[Stephen Hammond]

I am grateful for that response and I am sure that many in this Committee will hope that Vice-President Georgieva’s performance will show the result of that next year.

The one other issue that I just wanted to raise with my hon. Friend is the contentious nature of state aid rules and infringements, because obviously that goes quite far towards the heart of trade. Paragraph 6.39 indicates that there were 14 projects that infringed state aid rules and the Commission’s response is, “We’ll deem whatever action’s necessary.” Given that these projects are obviously usually highly controversial and get to the source of quite a lot of disagreements, can he assure the Committee that we will be pushing the Commission to act where deemed necessary so that action is taken?

[Mr Gauke]

In terms of UK infringement of state aid rules, the mandate of the relevant audit authorities for structural funds in the UK includes checks on compliance with state aid rules. The UK project reference here is not identified by the ECA, so it is not possible to comment on the nature of the errors. However, if my hon. Friend’s concern is about ensuring that state aid rules are properly enforced, I say to him that we will continue to push the Commission to focus on the areas of greatest error, and we think that that would be beneficial in ensuring that the EU state aid regime works as effectively for Europe as it can.

[Rob Marris]

I have a question for the Minister of State. In her explanatory memorandum dated 10 December, Baroness Verma, the Under-Secretary of State, Department for International Development, pointed out that the European development fund is the European Union’s main development co-operation instrument and that the total budget for it in 2014 was £34.5 billion. She also said that about 15% of that came from the United Kingdom. I say “about 15%”, because in paragraph 2 she says it was 14.68% and in paragraph 21, on page 391 of the bundle, she says it was 14.82%—it is about 15%. The Minister of State referred to 11% of DFID’s budget being spent via the European Union. Could he say briefly what the process is for deciding the percentage of DFID’s budget that is spent via the European Union?

[Mr Swayne]

The fact that 11% of our overseas development aid goes via the European Union is not inconsistent with the fact that 15% of what the European Union spends is accounted for by us. I am not quite sure how that works out mathematically, but I am confident that it is true. The issue of how much is spent—how much comes from us—is an assessment of our share of the European budget. My understanding is that that works on the same basis—[Interruption.] The seventh cavalry has arrived. The ratio of UK funds to the EDF is determined by our gross national income at the beginning of the period. Well, there it is.

[Kelvin Hopkins]

I have one or two questions for the Minister of State. I have attended many such European Committee debates over the past 19 years. There have been concerns in the past about the allocation of aid by the European Union, including that it is less efficient and less well-directed than British Government aid, but the Minister seems to suggest that that is no longer the case. There were two specific accusations: that the aid was not directed to those most in need—the poorest countries, such as sub-Saharan Africa—and that there was a bias towards the better-off Francophone countries around the Mediterranean. Can the Minister tell us whether that matter has been addressed?

[Mr Swayne]

The hon. Gentleman refers to the fact that he has experienced these Committees over a number of years. I wonder if it has occurred to him that there is at least a possibility that this might be the last such feast he has to attend, depending, of course, on a democratic process somewhat down the road. Nevertheless, with respect to the substantive issue he raises, I am certainly alive to that concern. I came to this role with a whole series of prejudices that have largely been dispelled in respect of the quality of aid delivered by the EU institutions.

[Rob Marris]

You might vote yes.

[Mr Swayne]

There are other priorities.

Given that we spend 11% of our official development aid through the EU institutions, it is important that they reflect our priorities, including that of concentrating on the poorest, rather than on those groups mentioned by the hon. Member for Luton North. I am confident that we have been moving the European Union much more significantly in that direction. I am also satisfied with the progress of the reform programme, certainly in respect of gender—I think we have scored highly on moving the goalposts towards where we want to be.

[The Chair]

If no more Members wish to ask questions we will proceed to the debate on the motion. I call the Minister to move the motion.

Motion made, and Question proposed,

That the Committee takes note of European Union Document No. 11470/15 and Addenda 1 to 6, a Commission Report: Protection of the European Union’s financial interests—Fight against fraud 2014 Annual Report, and unnumbered European Union Documents, the European Court of Auditors’ 2014 Annual Reports on the implementation of the budget and on the activities funded by the 8th, 9th, 10th and 11th European Development Funds; agrees that budgetary discipline and robust financial management at all levels remains crucial, and that EU taxpayers must have confidence that their funds are being effectively managed and implemented at an EU level; expresses disappointment that the error rate for EU budget payments shows only a slight improvement on last year; supports the Government’s efforts to continue to engage with the Commission and Member States to drive improvements to reduce the error rate, in particular, advancing the simplification agenda; stresses the importance of the EU budget achieving results as well as being compliant; and presses the Commission for a clear action plan to address the European Court of Auditors’ recommendations relating to the European Development Fund in order to improve its error rate.—(Mr Gauke).

17:08

[Rob Marris]

I have a few minutes of remarks, Sir Edward, but I know that you wish to make progress.

[The Chair]

Take as long as you like.

[Rob Marris]

Please do not tempt me. I congratulate the Financial Secretary to the Treasury. The European Commission report came out on 31 July and he signed off the explanatory memorandum for Parliament on 24 August—during the holiday period. Clearly his family never get their holiday though, and I urge him to change that. Similarly, the Minister in the House of Lords, Baroness Verma, promptly signed off her explanatory memorandum on the European foreign aid report from the Court of Auditors on 10 December, and here we are having a fairly prompt debate.

The explanatory notes, as ever, are helpful—the Financial Secretary knows my penchant for reading explanatory notes carefully. Paragraph 2 refers us to the report:

“The report summarises and evaluates measures taken by the Commission and Member States to counter fraud and irregularities against EU spending in 2014.”

That is a major area of concern, as my hon. Friend the Member for Luton North mentioned. Page 2 of the document from the European Parliament refers to the amount of fraud, saying

“the Commission estimates that tax fraud in all its forms amounts to EUR 1 000 billion in the EU, or EUR 2 000 per European citizen.”

That is a huge amount of tax fraud.

The reports deal with the monitoring and auditing to see that there is not fraud—not only tax fraud, but fraud and irregularities in other spending. The Commission report on page 21 of the bundle refers to measures already taken and to AFCOS, to which the Financial Secretary to the Treasury referred earlier. It also refers to

“a draft directive on the fight against fraud by means of criminal law, proposed in July 2012,”

and goes on to refer to

“a draft regulation on the establishment of a European Public Prosecutor’s Office (EPPO), proposed in July 2013.”

The EPPO would be established under article 86 of the treaty on the functioning of the European Union. I hope that one of the Ministers present—I imagine the Financial Secretary to the Treasury—will be able to indicate what progress is being made on that draft directive and that draft regulation. With the passage of time, I hope that there has been progress.

There is a huge problem with fraud and irregularities, not just in terms of tax. What is meant by irregularities? Just as my father used to say—I do not know why he used this example—all St Bernards are dogs, but not all dogs are St Bernards, so all fraud is an irregularity, but not all irregularity is fraud. An irregularity can occur when a beneficiary is not in compliance with the EU rules, which could be down to a genuine mistake.

[Kelvin Hopkins]

Should we accept that the term “irregularities” is merely a euphemism for fraud and that we should use the term “fraud” when we mean it?

[Rob Marris]

That is not my understanding of how the term “irregularities” is used in Euro-speak. It could be that there is non-compliance with the rules, but the reason for that non-compliance is not fraud but, for example, laziness, misunderstanding and so on. It does not necessarily have what us lawyers would call the mens rea for fraud.

[Kelvin Hopkins]

It is perhaps the same as the difference between tax avoidance and tax evasion.

[Rob Marris]

That is perhaps not the greatest of parallels, but I understand where my hon. Friend is coming from. Of course, tax avoidance is not illegal, but tax evasion is. Nevertheless, some tax avoidance—by, for example, Google—raises serious questions that my hon. Friend and I would agree on.

There is a great deal of difficulty with the error rates, some of which, again, will be driven by fraud and some by non-fraudulent irregularity. Take, for example, funds for jobs and growth on page 382 of the bundle. The hon. Member for Wimbledon talked about chapter 3, but, as lawyers often do, I went to the back to get to the juicy bits. The explanatory memorandum dated 9 December that was submitted by HM Treasury refers to chapter five of the European Court of Auditors annual report. That chapter is on funding for jobs and growth, for which research and innovation accounts for 60% of spending. At paragraph 16, the explanatory memorandum states:

“The estimated error rate for this area of expenditure is 5.6%, an increase on 4.6% for the 2013 budget.”

It refers to the European regional development fund and the cohesion fund. It states in paragraph 20, on page 383 of the bundle:

“The overall estimated error rate is 5.7%, an increase on 5.3% for 2013.”

The bête noire, of course, is the common agricultural policy and the common fisheries policy. Paragraph 26 states:

“The ECA estimates that the overall error rate for this area of expenditure stands at 3.6%, the same as in the 2013 budget.”

There are considerable concerns about error rates. A company trading in Britain, for example, with an error rate of 3.6% in its accounts would be open to serious questions about whether it knew what it was doing. The situation is more difficult with the number of member states in the European Union and the number of disbursements that they make to the hundreds of thousands of individuals and organisations in the European Union, but that is quite a large error rate.

In paragraph 4 of the Financial Secretary’s helpful explanatory notes, he refers to

“the various initiatives taken by the Commission in 2014 to counter fraud affecting the EU budget”.

If you will forgive me, Sir Edward, I will, because I have questions on these points, read out quite a long quote from paragraph 4. It concerns a series of 10 different areas and, with your indulgence, it will be simpler if I just read those out. They will then be on the record in Hansard. The areas are:

“negotiations between the European Parliament and the Council on the proposed Directive on the protection of the EU’s financial interests by means of criminal law; ongoing negotiations concerning the proposal to set up a European Public Prosecutors’ Office”—

I referred to that earlier—

“a Commission proposal to partially revise the Financial Regulation to align it with the revised public procurement Directive; the 2014 Communication on fighting corruption in the EU; negotiations relating to four delegated and four implementing Regulations on the reporting of irregularities; actions concerning anti-fraud policy in customs; measures taken to fight against VAT fraud; negotiations to include anti-fraud provisions in international agreements; the entry into force of new public procurement rules; a Directive on protection against currency counterfeiting; and progress on the implementation of the CAFS and Hercule and Pericles Programmes.”

For those hon. Members who have temporarily forgotten, Pericles is a European Union exchange, assistance and training programme for the protection of the euro against counterfeiting, so it is not directly of interest to the United Kingdom, but is indirectly; and Hercule is the European Union programme to promote activities related to the protection of EU financial interests, which is very much of interest to the United Kingdom. I therefore hope that the Financial Secretary, either today or perhaps later in writing, can give me and the rest of the Committee an indication of what is happening as regards those 10 items of anti-fraud policy at European Union level, helpfully delineated in the Minister’s explanatory notes, and of how the European Union, in co-operation with the United Kingdom, is getting on in those areas.

The explanatory notes, at paragraph 7, say:

“The Commission considers that Member States have, in general, adequately implemented the recommendations in its 2013 report, for example, the designation of an AFCOS”.

I hope that the Financial Secretary can say a little more about what is going on in that regard.

The explanatory notes also say, at paragraph 14:

“The use of false or falsified documentation or declarations remained the most common type of fraud.”

The Financial Secretary will remember the debate that we had in Westminster Hall on 14 January regarding VAT fraud on online purchases. Online retail purchases in the United Kingdom have gone up by two thirds since 2010. It is a growing area and will continue to grow as an area of retail sales. One hopes that there will not be a commensurate growth in fraud, but that is of great concern.

The note from the European Parliament—this is on page 2—states:

“Two directives were also adopted in 2013, one on the common system of VAT concerning an optional and temporary application of the reverse charge mechanism in relation to supplies of certain goods and services susceptible to fraud, the other concerning a quick reaction mechanism against VAT fraud”.

Will the Financial Secretary indicate, first, what a reverse charge mechanism is in relation to supplies of certain goods and services susceptible to fraud, because I do not know, and, secondly, what is being done about it? Clearly the European Parliament thinks it is a problem, and so do the member states, because a directive was adopted in 2013, more than two years ago—perhaps three years ago.

The second directive is a quick reaction mechanism against VAT fraud. Will the Financial Secretary enlighten us on what the European Union and, indeed, the United Kingdom are doing about a quick reaction to VAT fraud? As he will remember, considerable concern was expressed in the Westminster Hall debate of 14 January on both sides of the House about VAT fraud in online retail. VAT fraud does not only happen in online retail, but online retail is perhaps more susceptible to VAT fraud, as it is more difficult to address. As I have indicated, online retail is a growing area of commercial activity, and it is very big in this country.

Paragraph 22 of the Financial Secretary’s helpful explanatory notes refers to four specific recommendations contained in the report from the Commission on financial interests:

“urging Member States to use their AFCOS to its full potential; encouraging Member States to put in place effective measures to tackle conflicts of interest; asking specific Member States to strengthen their detection and/or reporting of fraud against the EU budget; and inviting Member States to inform the Commission of measures taken to fight customs fraud.”

Can he indicate, either today or later in writing to members of the Committee, what is happening in each of those four areas in terms of both the United Kingdom and the European Union? The report has indicated that something should be happening in each of those areas.

The European Parliament report—this is on page 4 —states:

“Particular attention should also be paid to the development of mechanisms for prevention, early detection and customs transit monitoring”.

Can the Financial Secretary enlighten the Committee on what customs transit monitoring is? I suspect, perhaps wrongly, that it could be related to VAT fraud, which is of considerable concern on both sides of the House.

Paragraph 36 of the Financial Secretary’s helpful explanatory notes—he has repeated this today—states:

“The Government believes that the best way to reduce the level of irregularities and fraud is through a more preventative approach, such as greater simplification of the systems and regulations.”

I agree that simplification is desirable—he and I have discussed it many times over the years—but I draw his attention to paragraph 14 of his own explanatory notes, which I read out earlier, regarding the use of false and falsified documentation or declarations. Some of that might be addressed through simplification, but if false documents, et cetera, are the most common type of fraud, as he indicates in paragraph 14, I suggest that simplification, as per paragraph 36, although welcome, is not necessarily the best way to address false documentation. I hope he can enlighten the Committee as to what Her Majesty’s Government propose to do about false documentation.

17:25

[Kelvin Hopkins]

It is interesting to sit on one of these Committees for possibly the 19th time. I have debated in almost all of them, if not in every one. I was a permanent member when there was fixed membership of such Standing Committees, and for several years I have taken part in debate on the issue we are considering, as a member of the European Scrutiny Committee.

It is amazing that no one has said how unacceptable and astonishing it is that for 21 consecutive years the European Court of Auditors has failed to sign off the European Union budget. If the National Audit Office could not sign off the budget of a Government Department for 21 years, and up to 4.4% of the Department’s funding had gone missing through fraud or irregularities, there would be a scandal.

We should raise our concerns again. We cannot just roll over and say, “Oh, well, it’s the European Union. What do you expect?” We should say it is not right. People’s money is involved—that is particularly an issue for substantial net contributors, of which we are one. We should not accept fraud or corruption, especially when, as I suspect, it happens in particular countries, and is less likely to happen in the United Kingdom and some of the better regulated countries. Perhaps I am claiming too much, but I suspect that certain countries and budgets in particular are involved.

I remember, going back years, a report of a beef subsidy being paid to a resident of a tower block in Turin. I suspect that there were not too many beef cattle in his tower block flat. I hope that these more extreme cases have been dealt with; nevertheless, there are clearly still things taking place that should not be. I hope that the British Government will take issue with the European Union over the matter in the strongest terms, once again. As the International Development Minister said, this sitting may well be the last of its kind. Who knows? I would certainly vote for that—not, I may say, with all my Opposition colleagues. Some of us, however, do take that sensible view, as I would describe it.

The level of corruption is ridiculous. Because of my concern, I made a serious suggestion in previous Parliaments that I want to repeat now. Let us consider, setting aside aid that goes to countries outside the European Union, fiscal transfers between members of the European Union. They could be made to member states’ Governments, so that there would be a net contribution to the budget of Latvia, for example. I know that there is a substantial net contribution to Latvia, and that a high proportion of its gross domestic product comes from European Union transfers.

If the transfers were done on the basis of GDP per head, so that those with the lowest level of GDP per head received the most net transfers, and those with the highest made the biggest contributions, but it was done to and through Governments, I think we would overcome much of the problem. The Governments of those member states would have the job of sorting out how the money would be spent—whether they would subsidise agriculture or industry, or simply reduce taxes. Whatever they did, it would be their choice, and they would do it democratically through their own Governments.

That would be seen as fair because rich countries would be contributing assistance to poorer countries on a proportional basis.

[Rob Marris]

My hon. Friend raises the intriguing prospect of a European Union Barnett formula, such as we already have, of course, in the United Kingdom. Perhaps I may take him back a bit, to his reference to fraud of more than 4%, and contrast that with what I understood from the Minister. Perhaps this is a comparison between apples and oranges, but the Financial Secretary mentioned 0.02%. There is a big discrepancy between those two figures. From where did my hon. Friend get his figure—or are we talking about two different measurements?

[Kelvin Hopkins]

I took my figure of 4.4% from the Minister at the beginning, but I notice that the table on page 37—or 21; there are two figures—suggests that the actual amount involved is €500 million, as opposed to 4.4% of the budget, which would be much more. Nevertheless, substantial fraud is still going on, and substantial sums of money are still going missing inappropriately and sometimes corruptly, so we ought to take it seriously.

My suggestion for simplification is that even if we stay in the European Union, the budget should be allocated simply on a proportionate basis according to GDP per head, so that the fiscal transfers are from rich to poor and the countries themselves decide democratically how they allocate that budget. We would have the same privilege as well if we were in that position. If they want to subsidise their agriculture, they can; if they do not, they should not.

I was in Lithuania a couple of years ago with the European Scrutiny Committee. Lithuania used to be self-sufficient in food, but it is now being paid not to grow food, so thousands of acres in Lithuania are left fallow because the European Union does not want it producing too much food. That is nonsense. Lithuania ought to be able to decide for itself what it spends its income on. If it wants to stay self-sufficient in food, that is a sensible thing to do.

As I said, I put this particular suggestion in more than one previous Parliament, and the response—not to me personally, but in European documentation—suggested that people did not like it. The reason was clearly that it would weaken the glue holding the EU together, because there would be no European common agricultural policy—or fisheries policy; it would be very sensible to get rid of that. Instead, each country would get a fiscal transfer, or pay out a fiscal transfer, and expenditure would be decided democratically within member states.

That would make the European Union a very different place. If we must have a European Union with large fiscal transfers, it would be a much more sensible way to do it, and we would avoid all the problems with fraud. If there is fraud within countries, it would be their problem to sort it out. If they did not sort out their own fraud, it would in a sense be their problem, and it would be the problem of the democratic electors of those countries to ensure that their Governments did the right thing. Anyway, those are my thoughts. I think it is ridiculous that we have a vast amount of fraud every year, year after year.

I have one final question to the Minister. There is a table on page 129 showing the evolution of budgets and payments from 2010 to 2014. Interestingly, in the last four years, the payments made have been larger than the final voted budget in each case. The last time the payment was less was in 2010. Also, the amount spent on the budget increased substantially between 2010 and 2013, by 21% over those three years, which is way beyond inflation. Last year, because there was such pressure and such concern, it decreased, but payments made were still higher than the final voted budget.

Even over those four years, there is still a 17% increase in budget expenditure, at a time when we are supposed to be more concerned about reducing spending in the European Union. Can the Minister comment on that? He might be able to explain it simply to me as a problem that is not serious, but it looks serious in the table, given the calculations that I have suggested.

17:33

[Roger Mullin]

Of course it is a terrible problem—absurd, in many ways—that for 21 years a budget of this scale has not been signed off. A major concern on which people have concentrated in this debate so far has been fraud. One thing that we know about fraud is that often it can be underestimated, particularly in situations of great complexity involving many partners. That is the situation that we face, so we must take it seriously, but if I knew what the solution was, I would have mentioned it long before now, because this is a difficult matter.

One of the things I agreed very much with in the Financial Secretary’s opening remarks was when he hinted that we needed to move much more towards being concerned about outcomes. As we know, many types of European projects involve a fascination with measuring every input—in education projects, for example, every partner often has to record every single teacher and every single hour worked every day on a particular project. More and more, as that builds up in many projects, with many partners, over many years, that can create circumstances in which those who are less scrupulous than others might find an easy way to massage how they record inputs, showing much less concern for moving projects further towards achieving the necessary outcomes. I am not sure of the solution, but the Financial Secretary was wise to say in his opening comments that the Government want to see more pressure towards concern about the impact and outcomes of such projects.

I also share some of the scepticism expressed by my hon. Friend the Member for Luton North—I hope he does not mind me calling him an hon. Friend—about practices in different countries. I hinted at that in my question earlier. Certainly people involved in education projects in the past have come to me and said that whereas in the UK a pretty conscientious approach is taken, they sometimes find that their partners in other countries have perhaps felt slightly less burdened by the need to dot every i and cross every t. Parts of the communities that we represent feel that at times our scrupulousness is not necessarily matched by that of other beneficiaries of EU funding. We do not know the comparative data, but it might be worthwhile raising with the European Union how we satisfy Governments about so many countries and so many participants.

I thank the Minister and the shadow Minister for their helpful and frank responses to the questions. With those few remarks, I will leave it there.

17:37

[Mr Gauke]

I thank all right hon. and hon. Members for their participation in the debate. I thank the hon. Member for Kirkcaldy and Cowdenbeath for his warm words of appreciation. He brings an amiability to his role as the Member of Parliament for Kirkcaldy and Cowdenbeath that is perhaps unprecedented.

[Mr Swayne]

In recent times.

[Mr Gauke]

Indeed.

I thank the hon. Members for Luton North and for Wolverhampton South West for their questions, which I will attempt to address. I also thank other hon. Members who participated in the debate.

As the Committee is aware, the Government have taken an increasingly robust stance on financial management. Although the estimated European Court of Auditors 4.4% error rate from the 2014 EU budget shows a slight improvement in the estimated level of error, it is a marginal reduction from the 4.5% error rate in the previous year and remains well above the ECA’s acceptable threshold of 2%.

We want to see more ambition and progress in the area, so, as I confirmed earlier, the Government will vote against discharge of the 2014 EU budget at this month’s ECOFIN. That is the most public way for member states to take a tough stance on financial management and the Government continue to make that stand for UK taxpayers. None the less, we welcome the efforts of Vice-President Georgieva to manage the budget better and to focus on performance. The UK is taking a proactive role in driving that agenda forward.

The hon. Member for Luton North asked about the difference between fraud and error, which was touched on by his Front-Bench colleague. Fraud is the deliberate criminal misuse of EU funds. Financial errors are breaches of often complex EU regulations. Of course, the Government take a zero-tolerance approach to fraud. As I said earlier, only an estimated 0.02% of EU payments are established as fraudulent, according to Commission data. The “Fight against fraud 2014 Annual Report” shows that, across the EU, cases of suspected or potential fraud affected around 0.26% of EU payments and 0.8% of EU revenues. Of these, Commission estimates suggest that around 8% are likely to go on to be established as actual fraud. So I do not think we should consider that that 4.4% is all fraud.

[Kelvin Hopkins]

I thank the Minister for his explanation. However, the discrepancy between definitely defined fraud and the money that has been spent inappropriately suggests a relaxed attitude to expenditure—money splashing about and finding its way into the pockets of people who might be politically helpful and so on. It may not be fraud, but it leans that way.

[Mr Gauke]

First, where I would agree with the hon. Gentleman is that failures of financial management matter. Whether it is fraud or not, we should have stringent standards and take a robust approach. However, there is another context. We often talk about fraud and error, or error and fraud, in the context of welfare payments, and when politicians allow the percentages that refer to fraud and error to be described as simple fraud, those politicians tend to be criticised. Indeed, I have heard people make the case that we should refer to error and fraud, not fraud and error, because the larger part of the error and fraud budget relates to error and is not proven to be fraud. So I think that approach should also be borne in mind.

It is also the case that, as has been mentioned, much of the legislation governing the EU funds is complex, and the associated guidance does not always offer the necessary level of clarity. Some of the errors identified are systemic, recurrent, and affect various member states and EU institutions. It is therefore clear that the overarching rules governing these areas need to be addressed. I do not wish to downplay the importance of dealing with error or any kind of financial mismanagement, but it is not the same as fraud. It is not synonymous with fraud, and the element that can clearly be identified as fraud is a subset of the overall 4.4% number that we are talking about.

[Kelvin Hopkins]

rose—

[Mr Gauke]

I will give way again, but I am keen to make progress.

[Kelvin Hopkins]

Clearly, we must not confuse error and fraud. Nevertheless, if the vast proportion of the money that is inappropriately spent is described as error, it enables those who want to play it all down to be successful in reducing concern about the money that is misspent. There might be a penumbra somewhere between fraud and genuine, innocent error.

[Mr Gauke]

Yes. I do not in any way want to downplay that 4.4% number. It is too high and needs to be addressed. On the 0.02% that is identified as fraud, there may well be sums of money that in the end are not identified as fraud, but might be getting close to it. I recognise that point. However, I would not want us to consider that the two are synonymous.

The hon. Gentleman raised a point about expenditure levels. It is worth reiterating again that in 2013 the Prime Minister secured the first ever real-terms cut to the multiannual financial framework for the period 2014 to 2020, forcing necessary budget restraint. For example, both the 2014 and 2015 budgets represented cash and real-terms cuts compared with the 2013 budget, which was the last year of the previous MFF. From 2010 to 2013, we were still working on the MFF that had been agreed by the previous Government. Tempted as I am to debate the weaknesses of that agreement, I would rather focus on the successes of the 2013 agreement, negotiated by the current Prime Minister.

Turning to the detailed points made by the hon. Member for Wolverhampton South West, he first raised the directive on the fight against fraud to the Union’s financial interests by means of criminal law—the PIF directive. The UK supports the directive’s broad aims, but the draft text contained several unacceptable elements, such as the inclusion of VAT in the directive’s scope. While the Council’s general approach of 2013 removed many of the unacceptable elements, discussions are ongoing and the final text is yet to be agreed. As such, the UK has elected not to opt in to the PIF directive at this stage but continues actively to engage in EU negotiations and will consider the case for a post-adoption opt-in once the final text has been agreed. I will of course keep hon. Members informed of progress in that respect.

We of course continue to take VAT fraud seriously at both national and EU levels. In addition to working to tackle VAT fraud domestically, Her Majesty’s Revenue and Customs continues to work closely with other member states and international agencies to combat VAT and other cross-border fraud. Additionally, member states continue actively to work together to share knowledge and expertise through the Fiscalis programme and exchange information on potential missing trader intra-community fraud in the EUROFISC network. The UK has also successfully pushed for the increased use of multilateral control systems, involving a co-ordinated exercise in which two or more member states verify the tax liability of businesses, to investigate cross-border VAT fraud. However, the UK Government’s position on VAT fraud is that it should be dealt with at a national level, not an EU level, as it is primarily a national resource.

As for the other detailed points that the hon. Member for Wolverhampton South West raised, I will write to him on the specific policies outlined in the explanatory memorandum to the Commission’s “Fight against fraud 2014 Annual Report”, which, as he said, I signed on 24 August. I reassure him that it did not get in the way of the Gauke family holiday, much excitement though there would have been at the opportunity to run through the memorandum on a wet afternoon in north Wales. In the event, it did not interrupt us and I think we played Uno instead.

On missing trader intra-community fraud, it is worth pointing out that the estimates of attempted MTIC fraud have now decreased from some £2.5 billion to £3.5 billion in 2008-09, which I suspect we debated back then, to between £0.5 billion and £1 billion, which has held steady over the past four years. Nevertheless, we recognise that fraud poses a constant threat, but HMRC remains vigilant. HMRC has been in the vanguard of member states developing tools and arguments to deal effectively with VAT fraud, MTIC fraud in particular, and is active in EU forums to ensure the spread of good practice and greater co-operation between tax authorities.

Rather than attempt a definitive definition of the reverse charge this afternoon, I will include one in my letter. In short, it is about shifting the responsibility for reclaiming input taxes within a chain of transactions involving VAT. The reverse charge was something used by the previous Labour Government to counter MTIC fraud. I will write to hon. Members with a definitive definition.

On the European Public Prosecutor’s Office, the UK will not participate in the establishment of any European Public Prosecutor. Nevertheless, the Government retain a considerable interest in negotiations on the European Public Prosecutor, given its potential impact on us and bodies such as Eurojust in which we currently play a role. The Home Office leads on that matter.

The role of the anti-fraud co-ordination service varies across member states. The UK’s role includes investigating irregularities involving criminal behaviour—a function that the City of London police is well placed to perform. The AFCOS has attended EU conferences designed to facilitate the sharing of information and best practices across member states, enhancing co-operation on the important issue. The UK’s AFCOS actively supports OLAF in investigations in Brussels through facilitating interviews, statements and visits to the UK.

On structural funds, the ECA has indicated that a significant proportion of errors in its audits are related to public procurement procedures, which is partly due to the complexity of the rules. The ECA acknowledged in a recent special report on public procurement issues the good practices introduced by the UK since the errors in 2009-10. The UK authorities are aware of the need to continue improvement of public procurement procedures in structural funds programmes for the 2014 to 2020 period.

The UK welcomes the fact that the ECA recognised the different definitions of customs audit applied across member states and revised its assessment accordingly. The hon. Member for Wolverhampton South West raised a further point about preventing the falsification of documents—one of the primary ways in which fraud is committed. The UK has a number of policies in place. The Government support efforts to reduce fraud in the EU, including the work of the European anti-fraud office, OLAF, in detecting and tackling fraud, and in seeking financial redress for the EU budget when it is found.

Finally, the hon. Member for Kirkcaldy and Cowdenbeath raised the issue of different countries’ practices in ensuring compliance with EU aid spending. Member states are responsible, but ultimate responsibility lies with the Commission, which needs to ensure compliance across the EU by issuing clear guidelines and ensuring that effective control systems are in place.

I hope that those points of information and clarification are helpful to the Committee. I thank hon. Members for their ongoing engagement with the issues and for their continued support of the Government’s strong position on financial management and fraud.

Question put and agreed to.

Resolved,

That the Committee takes note of European Union Document No. 11470/15 and Addenda 1 to 6, a Commission Report: Protection of the European Union’s financial interests—Fight against fraud 2014 Annual Report, and unnumbered European Union Documents, the European Court of Auditors’ 2014 Annual Reports on the implementation of the budget and on the activities funded by the 8th, 9th, 10th and 11th European Development Funds; agrees that budgetary discipline and robust financial management at all levels remains crucial, and that EU taxpayers must have confidence that their funds are being effectively managed and implemented at an EU level; expresses disappointment that the error rate for EU budget payments shows only a slight improvement on last year; supports the Government’s efforts to continue to engage with the Commission and Member States to drive improvements to reduce the error rate, in particular, advancing the simplification agenda; stresses the importance of the EU budget achieving results as well as being compliant; and presses the Commission for a clear action plan to address the European Court of Auditors’ recommendations relating to the European Development Fund in order to improve its error rate.

17:53

Committee rose.

Written Statements

Monday 8th February 2016 Written Statements

Monday 8 February 2016

Informal Competitiveness Council

Monday 8th February 2016 Written Statements

[The Minister for Universities and Science (Joseph Johnson)]

My noble Friend the Parliamentary Under-Secretary of State for Business, Innovation and Skills (Baroness Neville-Rolfe) has today made the following statement.

The Informal Competitiveness Council took place in Amsterdam on 27 and 28 January. The UK was represented by Minister of State for Universities and Science (Joseph Johnson) on day one (Research) and myself on day two (Internal Market and Industry)

The research day began with Bill Gates giving a keynote speech on the importance of public research and development in overcoming global societal challenges. He gave examples of work by the Gates Foundation, including the recently announced work with the UK to expand research into malaria that will see £3 billion committed over the next five years. Mr Gates highlighted that clear policies on open access to research could help stimulate innovation.

This was followed by a discussion on the current environment for innovation; there was a debate about the need for a visible return for taxpayers and a focus on funding excellence in research.

The discussion turned to how the current research funding programme (Horizon 2020) could be improved. A number of suggestions were put forward, including: simplification of the programme process, leading to faster decisions; simplification of state aid rules; encouragement of open innovation; better communication; and better skills support for businesses (for example in marketing) to allow successful innovation.

In the afternoon, the debate focused on how legislation can facilitate research and innovation. The digital revolution and ageing populations were noted paradigm shifts that will create both opportunities and threats. To allow opportunities to be grasped the EU must both reduce the amount of regulation and improve the quality of the regulation that remains. Ultimately, EU rules need to be as flexible as, or more flexible than, those of our global competitors.

The Commission confirmed that the number of initiatives in the EU research programme has reduced from 130 in 2014, to 23 this year and that state aid rules have been updated and are more flexible than before. It agreed that efficiency and innovation are the means to create jobs, and that the real challenge for the EU is to develop legislation that can create new opportunities from disruptive technology and innovation.

The Internal Market and Industry Council meeting started with an evening event that brought together Ministers and entrepreneurs who had been invited to the Council by each member state (the UK invited Mr Riccardo Zacconi, the CEO of King, the computer games developer behind games such as Candy Crush Saga). Gunther Oettinger, Commissioner for the Digital Economy and Society opened the discussion with a speech on the digitising of industry and noted that he would shortly be bringing forward a strategy on this issue in April. During the discussion a number of themes were explored including the wide range of different business models that were being disrupted or created by digitisation. A number of entrepreneurs emphasised the need to make it easier for start-ups to access markets in other member states. Many of the entrepreneurs also discussed the importance of a skilled workforce, noting that the diversity of talent within Europe was a significant advantage.

The plenary programme started with short speeches by two businesses leaders: Herna Verhagen (CEO, PostNL) and Corinne Vigreux (co-founder of TomTom). They highlighted the importance of digitisation in driving innovation and expansion into new business models, which in turn led to new jobs.

Ministers then held two breakout sessions in small groups focused on upcoming Commission proposals related to the single market. In the first, on geoblocking (discrimination based on grounds of country of residence), Ministers agreed that it was important to make clear that discrimination has no place but there should not be extra burdens on businesses, and there was broad agreement that the Commission’s proposals should cover business-to-business transactions. Vice-President Andrus Ansip, responsible for the Digital Single Market, made clear that the proposal was not intended to lead to uniform pricing nor to an obligation for businesses to deliver goods throughout the EU.

The second breakout session focused on the proposed services passport. The chairs noted that there was consensus that the passport could be useful in reducing barriers to businesses wanting to trade across borders but that it should not lead to additional burdens. There needed to be analysis of the existing barriers and a suggestion that the passport could then be introduced in stages. While it was appropriate to have national rules in some areas, there was a need to increase transparency about different national requirements and potentially to undertake some further harmonisation in certain areas. The UK noted the importance of tackling regulatory barriers as well as administrative ones via the passport initiative. Others noted the relationship between the passport and the proposed analytical framework for assessing the proportionality of regulations on professionals. Commissioner Elzbieta Bienkowska responsible for Internal Market and Industry noted that she expected to be able to share more detail of the Commission’s thinking on the passport soon.

The final agenda item was a plenary discussion on the collaborative economy. The Chair of OuiShare Fest, Francesca Pick, in an invited speech, highlighted the prevalence of cross-border business models in the collaborative economy, but noted that there were challenges of regulatory uncertainty in respect to consumer rights, liability, labour rules, and tax. Many member states noted the consumer benefits from the new and innovative services being offered. The UK agreed that the collaborative economy could deliver significant benefits to consumers and workers, and could play an important role in opening the labour market to those who might otherwise be excluded. It noted that there was still a need to regulate these businesses, but that regulations may need to be updated so as to enable these new business models. It highlighted the best practice work done by the UK body, sharing economy UK and their Trustmark initiative, which Vice-President Katainen asked to explore further.

[HCWS516]

Government Grant Agreements: Guidance

Monday 8th February 2016 Written Statements

[The Minister for the Cabinet Office and Paymaster General (Matthew Hancock)]

Today I have announced a new policy to restrict inappropriate use of taxpayers’ money for lobbying purposes. From 1 May, or before where feasible, the following standard clause will now be applied to new and renewed grants.

“The following costs are not Eligible Expenditure:- Payments that support activity intended to influence or attempt to influence Parliament, Government or political parties, or attempting to influence the awarding or renewal of contracts and grants, or attempting to influence legislative or regulatory action”.

This clause will not prevent organisations from using their own privately-raised funds to campaign as they see fit. This will ensure that freedom of speech is protected, while stopping taxpayers’ money being diverted away from good causes.

Departments will engage with organisations most likely to be affected by the clause. Implementation guidelines are available at: www.gov.uk.

[HCWS517]

Grand Committee

Monday 8th February 2016 Grand Committee

Monday, 8 February 2016.

Arrangement of Business

Monday 8th February 2016 Grand Committee

Announcement

15:30

[The Deputy Chairman of Committees (Baroness Henig) (Lab)]

My Lords, if there is a Division in the Chamber, the Committee will adjourn for 10 minutes.

Transport for London Bill [HL]

Monday 8th February 2016 Grand Committee

Motion to Take Note

15:30

Moved by

[Lord Dubs]

That the Grand Committee takes note of the delays in the passage of the Transport for London Bill [HL] and the case for land disposed of under the provisions of that Bill being used to increase social housing.

[Lord Dubs (Lab)]

My Lords, it is quite unusual for a private Bill to be the subject of a certain amount of political attention and controversy. I have had a bit of a job explaining to friends what the difference is between a private Bill and a private Member’s Bill—it is not that widely understood.

Let me explain what my concerns are, because I put a stop to a fairly smooth process so that there would be a chance to have a debate, which is what I was after. Why has this Bill been around for so long? I understand that it first got to Parliament in 2010, nearly six years ago. It may have got stuck in the House of Commons—or it may not—but I am puzzled as to why it has taken so long. It is important to note that the time lag has meant that the housing market in London has changed, becoming much more acute and difficult. In one sense, the Bill is a bit out of date because of the passage of time. I have had quite a large number of representations about the Bill and am grateful to Transport for London, which came in to discuss it with me.

I have mentioned my first concern—the length of time the process has taken. It is quite difficult to remember the situation when the Bill first came to this House. It may have been more recently but it still means that some of us are not as up to date as we might be on what happened when it was before the House. What is not controversial is that the property market has changed quite a lot in the last six years, especially in residential housing. There are far more housing pressures and many people in London are finding it hard to find property to rent or to buy.

I understand that Transport for London is facing a large cut in its budget—up to £800 million in the year and £2.8 billion over a five-year period. I may be corrected on the precise figures, but it is a large cut. The politics of the Bill are that TfL has been told that its funding has been cut and it has to raise money by some other means. The main means open to TfL as far as this Bill is concerned is to dispose of assets of land at or near stations. In the initial phase, most of the sites—there are about 50—have been in zones 1 and 2 but the plan is to expand into wider zones. Of course, the value of the sites in zones 1 and 2 far exceeds the value of the sites further out.

TfL is intending to dispose of land for housing; some will be used for offices as well. It is obviously a good thing to use the land for housing but the next question is what sort of housing. Will it be for more affluent people or for ordinary people who are bearing the brunt of the housing crisis in London? The Minister wrote me a letter, for which I thank him, about the Bill and about housing. He mentioned three ongoing planning applications at Nine Elms, Northwood and Parsons Green, saying that these,

“will deliver … affordable housing levels ranging up to 40%”,

of the total.

The problem is: what is affordable housing? I have spent some time doing research into this. We understand what social housing is but affordable housing is variable and there is no clear indication as to whether housing that is affordable can be accessible to ordinary people. I have been looking at various definitions. For example, from the national policy and planning framework there is a glossary that mentions affordable housing. It says:

“Eligibility is determined with regard to local incomes and local house prices”.

and it talks a lot more about affordable housing. I find it difficult. If the answer is that all the housing, or a large part of it, will be affordable then that is not quite clear enough and I would like to know more about what sort of housing it will be. I appreciate that London boroughs decide how they define affordable locally and that is a difficulty. London-wide, a lot of the affordable housing is beyond the reach of ordinary people. Therefore, whereas I welcome the idea that the land to be disposed of is for housing, I question for what sort of people it will really be intended for. Of course we could discuss the definition of social housing and affordable housing for a long time but I put it as a question.

As I said, TfL is under enormous pressure from the Government to maximise its return. In a way I have sympathy for TfL, which is caught between pressure from the Government who are cutting its money and pressure from people who want better housing for Londoners at prices that Londoners can manage to pay. It is a bit unfair that TfL is put in this difficult position. Furthermore, TfL has the power via the Greater London Authority to make compulsory purchase orders for land adjacent to these properties. That will of course be a way of increasing the return but, again, it might be a way of taking housing away from ordinary people. So that is also a matter of some concern.

The land we are talking about is currently public land: it is a public asset. It is not a matter of one private developer selling to another, and it is a pity that some of that is not going to social or decently affordable housing. We are talking about public assets spread where there are TfL assets, particularly at stations. I believe the priority in disposing of public land should be land that would be used preferably for social housing or affordable housing at a price that would mean something significant.

In the Bill, TfL is to engage with property developers and there is this slightly puzzling concept of limited partnership; it has been much criticised for being less transparent and is a device used to minimise tax obligations. I am not certain whether joint ventures and limited partnerships are the same thing or whether there are technical differences between the two. All I know is that in joint ventures the private developer can have anything between a 10% and 90% stake. Therefore, there is an issue that is of real concern. Those of us who believe passionately that London has a housing crisis that should be tackled urgently do not want to support anything that means moving backwards and losing valuable land that can be used for ordinary people.

I understand that the contentious clause—Clause 5 —may be taken out of the Bill when it gets to the House of Commons. I do not think it is a secret so I am not giving anything away in saying that. First, I hope that can be confirmed. If it is taken out, can we have some indication as to the remaining basis on which TfL will be able to sell land? It still has the powers to do it though it will be more limited if Clause 5 disappears. Therefore, I would find it useful to know what sort of powers TfL will have left and whether there will be sufficient safeguards in that arrangement to meet some of the concerns that I have expressed. The proposition is a very simple one. I beg to move.

15:39

[Baroness Jones of Moulsecoomb (GP)]

My Lords, I apologise for not having put my name down to speak. I support the noble Lord, Lord Dubs, because the whole issue of affordable housing is very complex. The waters have been completely muddied by the Mayor of London, who changed the whole concept.

Another issue that I want to put on the table in an urgent way is what is already happening on some of these sites; for example, at Parsons Green there is a thriving artisans’ hub and it seems very strange that those people should be driven out without any confirmation of where they can go or the possibility of return. So I stress to TfL that the direction is not only about housing. We all want housing, we all want affordable housing—some of us even want social housing—but we also want jobs and it is incredibly important that those factors are brought in as well with this Bill.

15:40

[Baroness Randerson (LD)]

My Lords, I thank the noble Lord for initiating this debate. It is important, given the age of the Bill, that we have the opportunity to say something about it. As the noble Lord said, it has been around for a long time and I would argue that the financial and political mood has changed in that time. The Bill may no longer be as in tune with its time as it was four or five years ago.

There is greater concern now about corporate social responsibility, financial transparency and corporate taxation. Tied up with all this is a general public unease about the predominance of foreign ownership of much of our infrastructure. TfL itself has an excellent reputation for what it does and it is essential that it does not undermine that reputation. As a company owned by the public and working for the public, it needs to set the highest possible standards of social and financial responsibility and transparency.

I understand the imperatives behind the Bill. They have been reinforced since it was introduced. The Government’s spending review last November cut the revenue grant faster than ever—faster than expected—and it will be cut by £2.8 billion over the period up to 2021. In addition, the London housing crisis has intensified. The truth is, we desperately need the land that TfL will sell as surplus for new homes. So I support TfL in doing that, but with caveats.

First, Clause 5 deals with limited partnerships, which in my view are a step too far for a public body. It could mean additional risk for TfL and it certainly would mean a lack of transparency on ownership of land and who exactly the partners of TfL are. In addition, I urge TfL not to repeat the mistakes that have been made, for example, at Earl’s Court. That really is a recipe for how not to do it. I very much hope TfL will learn from that situation. There are too many flaws and disadvantages to that development for it to be called a bonus for the people of London. I would like TfL to commit very strongly and transparently to social housing and rentable housing—not just the umbrella term of “affordable housing”—on the sites that it sells.

Secondly, we need more public consultation and engagement, and more transparency, please. With that in mind, I strongly welcome the announcement last week that Transport for London is partnering with 13 specific organisations with which it plans to undertake long-term development. That is a really good step.

Finally, I urge TfL to take a long look at the mistakes of the past in the transport industry in general. Too often, land used for transport infrastructure was sold off too quickly and was then discovered to be strategically important. I know that there are clauses in the Bill—and indeed TfL manages its business in this way in general—which require it to get permission from the mayor and, in some cases where the land is of strategic importance, from the Secretary of State. However, there is no role, for example, for the National Infrastructure Commission, although that is understandable because it did not exist until recently. However, I ask both the Minister and TfL to consider whether there should be a role for the infrastructure commission in advising on the sale of large parcels of land, which could well prove to be of strategic importance.

15:45

[Lord Kennedy of Southwark (Lab)]

My Lords, I thank my noble friend Lord Dubs for enabling us to have this debate today in Grand Committee. We should all be grateful to him for enabling us to highlight the important issue of social housing in London.

As we have heard, we have a housing crisis in London, and in particular a social housing crisis, which the Government are doing nothing to help us with. Only 11,000 council homes were built last year compared to 33,000 across the country in Labour’s last year in office. It is so disappointing that we are seeing people on modest incomes being driven out of central London. London is a wonderful city—probably the best city in the world. That is why the Olympics and Paralympics were such a success—the languages spoken, the community ties from all over the world, the art scene, the sport, the history, and the spectacle of London. However, for that to continue to grow and to keep London at the top we have to make proper provision for people on all incomes doing every job you can imagine to be able to live in this great city, from emptying your bins to sweeping the street, to working as a classroom assistant through to social workers, lawyers and business men and women, to some of the highest earners on the planet, who run some of the biggest companies in the world. Social housing provision with proper social rents has to be part of the housing tenure throughout this capital city.

If the noble Lord, Lord Ahmad of Wimbledon, comes back and talks about all the affordable housing in London, it would be better if he called it “unaffordable housing” for large numbers of people living in the capital. Where I live in Lewisham, which is a lovely part of London with rows and rows of Victorian terraced housing, people in the private rented sector pay over £2,000 a month to live in an ordinary terraced property, which is £24,000 a year. The new national minimum wage, which will come into force in April, will mean that you will earn £14,000 a year. Even if two people earn £20,000 in London, paying rent of £24,000 a year does not give a huge amount to live on for all the other expenses.

I am very grateful for the briefing note and for the meeting I had with TfL last week. I can understand that TfL must be very frustrated at the time the Bill has taken and the fact that it is still making its way through Parliament. It was originally deposited in 2010, as my noble friend Lord Dubs said. It is in everyone’s interest that these private Bills from TfL and other public bodies make much speedier progress through Parliament. I am sure that TfL would have preferred that the Bill was decided on, either way, in a much more timely fashion. It is probably not in his remit but can the noble Lord, Lord Ahmad of Wimbledon, talk to whoever is responsible for managing the process of getting these Bills through Parliament? I suggest that the time for a review is well and truly upon us. Six years on an eight-clause Bill, even though it is opposed, is far too long.

The most controversial clause is Clause 5; it is connected with the Earl’s Court development we heard about before, which delivers such a poor rate of return on affordable homes. TfL will say that the development would have gone ahead anyway, as the land it controls is not crucial to the development. I also understand and accept that in order to deliver a transport system that can meet the ever-growing demands of London, options need to be looked at for maximising revenues and minimising costs. That is of course due to the budget cuts we heard about earlier in today’s debate. However, when it comes to the redevelopment, rezoning and using public land to build housing, TfL has a responsibility to London and Londoners not only to seek to maximise the money it receives for the assets but also to ensure that it understands its responsibility and demonstrates its commitment to using its assets in a way that delivers the housing schemes, big or small, which it is involved in. That will enable Londoners to live in their community in a property they can afford to live in and be a part of this great city—and the affordable rent model is only one part of that. As I said, charging 80% of market rent is not affordable for many people in parts of London; in fact, it is totally unaffordable. My plea to TfL would be to make proper provision for property at social rents in schemes that it is involved in.

I understand that we will shortly be advised by the noble Baroness, Lady Grey-Thompson, of some amendments to be made to the Bill later, and I am happy with what is proposed. I concur with the questions of my noble friend Lord Dubs. With that, I welcome the Bill back to your Lordships’ House and we will look with interest at its progress through this House and the other place with the amendments we will shortly be advised of.

15:50

[The Parliamentary Under-Secretary of State, Department for Transport and Home Office (Lord Ahmad of Wimbledon) (Con)]

My Lords, first, I join other noble Lords in congratulating the noble Lord, Lord Dubs, on securing this important debate. I have listened with interest to the contributions that have been made by noble Lords.

As we have already heard, the Bill will enable Transport for London to use financial practices and mechanisms which will allow it to release greater value from its assets and financing arrangements.

Before I come to that, the noble Lord, Lord Dubs, and others raised the issue of the time it has taken for the Bill to reach this stage. It is not often during my five years or so in your Lordships’ House that I have taken up a Bill which was commenced prior to my joining, but this is one such.

If we look into the history of the Bill for the record, it is appropriate to note that it was read for the first time in the House of Lords on 24 January 2011, and received its Second Reading on 13 December 2011, when it was debated. As noble Lords may recall, the Bill was petitioned against by the West London Line Group. This petition was withdrawn when TfL agreed to delete a clause, and an Unopposed Bill Committee took place on 28 January 2014. The Bill was then read for a third time on 4 March 2014, and transferred to the House of Commons, where it had its First Reading that day. The Bill’s Second Reading took place on 9 September 2014, and the Opposed Bill Committee eventually took place on 13 January 2015. However, the Bill was blocked when it came up for consideration on 12 February 2015; that necessitated a debate, which was held on 16 March 2015. Time then ran out to debate all the amendments tabled by opposition MPs, which included the honourable John McDonnell and the right honourable Jeremy Corbyn.

We are back, however, in this Committee today to debate the use of financial practices and mechanisms which will allow TfL to release greater value from assets for financing. This is a principle that I welcome, especially given the Government’s continuing commitment to finding significant efficiencies in public spending, in the interests of both the taxpayer and the travelling public.

The noble Lord, Lord Dubs, raised the issue of the settlement. As the Minister responsible for London at the Department for Transport, I am acutely aware of the challenging budget discussions that we have had with Transport for London, but they have been held in a very co-operative climate, including those meetings we have held with the Mayor of London.

For information, as noble Lords may well be aware, TfL will receive about £11 billion of government support for the next control period, which runs from 2015-16 to 2020-21. This is a good settlement for London, and will enable TfL to continue to deliver the biggest ever investment across London’s roads and streets. TfL has confirmed that the settlement will ensure that it can continue the modernisation of the capital’s networks across transport, support thousands of jobs and the creation of new homes and promote economic growth across the UK.

I concur with noble Lords that London is an important city—indeed, it is the capital city of our great country—and therefore requires support and investment. The Government have underlined their commitment. I continue with other colleagues to work very closely with TfL to ensure the delivery of the infrastructure required so that London not only sustains its position on the global stage but strengthens it.

I understand from TfL that the Bill could realise in excess of £50 million in immediate benefits by improving its hedging power, enabling it to borrow money in a more cost-effective way and allowing it to make the most of its assets.

The department supports TfL’s commercial programme, and we want it to maximise its unique commercial position to ensure its assets are generating revenues to their greatest potential. We believe absolutely that giving TfL greater financial flexibility will provide it with the opportunity to run its business in a more efficient way.

I know that we will be hearing from the noble Baroness, Lady Grey-Thompson, shortly on some of the matters relating to revised amendments to the Bill but, in principle, for all of the reasons I have given, the Government continue to support this Bill and hope that, after the long delays it has suffered in its passage through Parliament, it can soon be enacted.

15:55

[Baroness Grey-Thompson (CB)]

My Lords, I declare an interest as a board member of Transport for London, which is a public body constituted under the Greater London Authority Act 1999, as listed in the register of interests.

The first part of the Motion of the noble Lord, Lord Dubs, asks the Committee to note the delay in the progress of the Bill. I thank the Minister for giving a brief history of the slow transition of the Bill. Following the debate on 16 March 2015, time ran out to debate all the amendments tabled by opposition MPs, and the debate was adjourned. At that point, TfL asked the House authorities to table a revival Motion following the State Opening of Parliament. This was tabled and the Motion was blocked. TfL subsequently asked the House authorities for a debate on the revival Motion in order to overcome the blocking Motion. Time was allocated on 16 November 2015, when the Commons voted to revive the Bill. On 30 November 2015, the revival Motion in the House of Lords was withdrawn when the noble Lord, Lord Dubs, asked to speak to the Bill, leading to this debate before the revival Motion on the Bill can be tabled again. The revival Motion is tabled for 9 February, after this debate, and only at that stage can the Bill progress through its next stages in the Commons.

Although the Bill has had a long passage through Parliament, it remains relevant and important as it will provide TfL with additional powers, so that it can meet its business needs more flexibly and take advantage of more efficient arrangements for the stewardship of its financial affairs. London’s growth is relentless. It is driving up demand for our services. There is record ridership on the Tube and on the roads. To keep London working and growing, TfL has to invest just to keep assets in good repair, modernise the rail and road networks and continue to improve reliability. TfL’s £11 billion capital funding settlement from government covers the period from 2015-16 to 2020-21, and includes a total of £5.8 billion in investment grant, £1.4 billion in general grant from the Department for Transport, alongside £3.8 billion in borrowing powers. This allows TfL to continue to invest some £1.7 billion a year to modernise London’s road and rail networks. The Circle, District, Hammersmith & City and Metropolitan lines will be the next four Tube lines to be upgraded.

From 2019, TfL’s objective is to cover all the operational costs of running the Tube and bus networks in London through non-DfT grant sources of income. It has planned for some time to achieve operational breakeven by running its business more effectively and efficiently. As part of a continuous savings programme, TfL has already taken 15% out of its costs.

Following the spending review in November, TfL must now accelerate and build upon its cost reduction programme because the revenue grant is being cut faster than anticipated, reducing its overall income by £2.8 billion over the period to 2020-21. The Bill will help TfL with this task by providing it with additional powers so that it can run its business more flexibly and take advantage of more efficient and economic financial arrangements. This will allow TfL to maximise the value of its assets, bear down on fares and deliver significantly better value for money to the public.

The second part of the Motion of the noble Lord, Lord Dubs, asks the House to note,

“the case for land disposed of under the provisions of that Bill being used to increase social housing”.

The provisions of the Bill do not give TfL any new or additional powers to dispose of an interest in or develop its land, contrary to assertions made. TfL has had powers to dispose of land since it was created in 2000 and the Bill makes no reference to them nor does it expand them in any way.

Under its existing powers, TfL must obtain the consent of the mayor to dispose of an interest in its land by sale or granting a long-term lease. If that land is operational, or has been operational land in the past five years, the Secretary of State must also give his or her consent. The Bill does not affect these arrangements.

Using these existing powers, TfL has already begun to undertake development on its land, and will be developing more than 300 acres of land to help create more than 10,000 new homes across London using its existing powers. TfL is working with the mayor, London borough councils and the commercial property development sector to bring forward developments in an innovative and creative way. TfL is committed to ensuring that it can achieve the right balance between providing affordable homes, delivering revenues to reinvest in the transport network and delivering local transport improvements. Local authorities set the levels of affordable housing in their areas in accordance with local policy. TfL currently works closely with local authorities, and will continue to do so, at each of its sites and engages in active discussions on a site-by-site basis to ensure that development plans reflect local borough priorities and needs.

TfL has established a commercial development advisory group which provides non-executive guidance to its commercial development programme. The group includes experienced advisers who have expertise in social and affordable housing provision. TfL has recently submitted three major planning applications which will deliver £100 million in revenue for investing in the transport network, a new step-free Tube station and 600 homes with affordable housing levels ranging up to 40%.

The proposed development above the new Nine Elms Tube station will deliver 362 new homes—around 25% of which will be affordable—2,318 square metres of office, 550 square metres of retail, a new public square, play space, pedestrian and cycle connections, cycle parking, and disabled car parking. Revenue generated from the new development will support the funding of the Northern line extension.

The proposed development at Northwood will deliver 127 homes, around 20% of which will be affordable, as well as a new Tube station with step-free access and a new bus and train interchange. It will also deliver a new public space and 300 parking spaces, as well as 1,300 square metres of retail floor space. TfL is exploring options to accommodate existing tenants in the development and is providing relocation options to assist them in continuous trade.

I thank the noble Baroness, Lady Jones, for her contribution—her comments about Parsons Green have been noted. The proposed development is on the site of a former London Underground depot adjacent to Parsons Green Tube station, which is currently used as workspace. The scheme will deliver 119 new homes, 40% of which will be affordable, as well as over 4,000 square metres of retail, workspace and restaurants. The development will also support around 300 jobs and enable the opening of three arches for commercial use.

The Motion of the noble Lord, Lord Dubs, raises a wider issue of policy concerning the disposal or development of land by the public sector generally, not just TfL. However, the discrete scope of the Bill should be taken as indicative of a desire by TfL to meet its business needs more flexibly and cost effectively. The provisions of the Bill will impact on TfL’s ability to manage its financial affairs more efficiently and flexibly, which will assist it in being able to operate effectively and bear down on fares, while still being able to provide a world-class transport network.

To summarise the Bill’s provisions, Clause 4 will give TfL subsidiaries the ability to access cheaper finance, subject to the consent of the mayor and, in respect of core operational assets, the consent of the Secretary of State. Clause 5 would have allowed TfL to form limited partnerships subject to the consent of the Secretary of State by way of order debated in both Houses of Parliament. However, TfL took note of the strength of feeling in the House of Commons during the revival debate about this clause. TfL recognises that, notwithstanding the amendments which were made to that clause by the Opposed Bill Committee, concerns remain about the possible future exercise of the powers which would be conferred by Clause 5. Accordingly, if the Bill is revived in the House of Lords, amendments will be tabled in the House of Commons at consideration stage to remove Clause 5 and references to limited partnerships from the Bill.

Clause 6 expands the list of entities through which TfL can undertake commercial activities to include limited liability partnerships and companies limited by guarantee, thus enabling TfL to conduct its affairs more flexibly and net the maximum value from its assets. Clause 7 gives TfL greater flexibility to mitigate its risks through hedging, including by allowing TfL to hedge commodity prices when it is exposed to fluctuations as a consequence of a transport contract and TfL’s contribution risk to the pension fund. In view of the significant benefits that it will bring to TfL, it is essential that the Bill becomes law as soon as possible.

16:04

[Lord Dubs]

My Lords, I am extremely grateful to all noble Lords who took part in this debate. I repeat my thanks to all those who provided me with help in preparing for the debate today. I also thank my friend in the House of Commons, Andy Slaughter MP, who was very useful in giving me helpful advice in preparing for today’s discussions.

One or two things puzzle me a little. I have heard words such as “hedging power”. I am not an expert in finance, and am grateful to the noble Baroness, Lady Grey-Thompson, for the detailed exposition she gave us, but I do not know what hedging powers are, frankly. I do not have a clue what that means. I am suspicious of it, as it seems to be some sort of financial services device.

[Lord Ahmad of Wimbledon]

I am a former financial services professional. In essence, it is about mitigation of risk—lowering risks and ensuring that you can use the markets to minimise your risks in any investment decisions taken.

[Lord Dubs]

I am most grateful. I have learned something that is going to stand me in good stead in the future. In giving the TfL position, the noble Baroness said that revenue had been cut faster than anticipated. That is really the clue. Transport for London has taken a bigger hit in its finances that it had expected. We all want more housing in London but we also want housing that people can afford, not in the Government’s definition of affordable housing but in the common-sense definition: housing that ordinary people can manage to buy or afford to rent. The temptation in a debate like this is to range widely over housing policy. Clearly that is a temptation I have to resist because it would not be proper to do so. However, the temptation is very strong indeed.

I hope that when the Bill is revised and goes to the Commons, the Commons will have another good look at it and deal with some of the other concerns that have been alluded to. I also hope that TfL will reflect on the concerns expressed in both Houses of Parliament about the possible danger in its proposals of reducing the possibility of developing social housing for ordinary Londoners. That is the real risk. I hope Transport for London will take that on board. Of course, it is in difficulty. It is caught between two opposing forces and has been put in an almost impossible position, for which I have much sympathy. I hope, nevertheless, that Transport for London will do its best and maybe a new Labour Mayor of London will move things on in a better way. I beg to move.

Motion agreed.

Pensions Act 2014 (Consequential and Supplementary Amendments) Order 2016

Monday 8th February 2016 Grand Committee

Motion to Consider

16:09

Moved by

[Baroness Altmann]

That the Grand Committee do consider the Pensions Act 2014 (Consequential and Supplementary Amendments) Order 2016.

Relevant document: 12th Report from the Joint Committee on Statutory Instruments

[The Minister of State, Department for Work and Pensions (Baroness Altmann) (Con)]

My Lords, I beg to move that the Grand Committee considers the State Pension and Occupational Pension Schemes (Miscellaneous Amendments) Regulations 2016 and the Pensions Act 2014 (Consequential and Supplementary Amendments) Order 2016. As the regulations and order both make provisions relating to the new state pension, it seems sensible that they should be discussed together. I confirm that the statutory instruments are compatible with the European Convention on Human Rights.

I propose to speak in most detail about the regulations. In summary, they enable a widowed person whose late partner was in the old state pension scheme to inherit graduated retirement benefit. They modify the rules for calculating a deferred increase, so that the payment accurately reflects the amount of new state pension the person had deferred. They maintain the long-standing policy of not uprating the state pension for people resident in certain countries overseas. Lastly, they insert a provision relating to survivor benefits that was in a previous set of regulations into the new set that replaces them.

Regulation 3 is a technical provision which relates to the calculation of the weekly pension increase for a person who defers their new state pension. The standard calculation method is set out in the Pensions Act 2014. It provides for the increment for each week in the deferral period to be based on the rate of pension that would have been in payment at the end of the deferral period, if the person had not been deferring. This allows the pension increase to reflect any annual upratings that would have been awarded in that period.

The provision made by Regulation 3 modifies that calculation to cater for what will be the relatively rare situation of a change in the weekly rate while a person is deferring for a reason other than uprating. The most likely reason for a non-uprating change would be where a person is widowed and becomes entitled to an inherited amount under the transitional arrangements. The modification is needed to ensure that the increase is based only on the rate of pension applicable at each stage of the deferral period rather than the rate at the end of the period.

Regulation 4 inserts a new Part 6 into the State Pension Regulations 2015, which will provide for a widowed person who reaches state pension age after 6 April 2016 to inherit graduated retirement benefit. These provisions correspond to the transitional arrangements set out in the Pensions Act 2014, which enable a person whose deceased spouse or civil partner was in the old state pension to inherit SERPS or state second pension in line with the pre-2016 rules. The survivor will be able to inherit half the deceased person’s graduated retirement benefit—the same as they would have inherited under the pre-2016 rules. This is provided that the same conditions are met as would have applied in the old system and the marriage or civil partnership existed before 6 April 2016.

Although the great majority of people in the old scheme have accrued some graduated retirement benefit, the amounts involved are small. As a result, we estimate that, on average, widows would inherit around £2.50 a week and widowers less than £1 a week under these provisions. They are therefore principally about maintaining consistency between the way we treat graduated retirement benefit—which was, of course, the first earnings-related state pension—and the rules for inheriting SERPS and state second pension.

The provisions introduced by Regulation 4 also enable the survivor of a pensioner who deferred their old state pension to inherit a weekly pension increase or, if applicable, a lump sum payment based on the deferred graduated retirement benefit. Again, these mirror equivalent provisions in the Pensions Act 2014 that protect the existing inheritance arrangements for the survivors of people who deferred an old state pension.

Regulation 6 is also a minor technical provision and inserts a new Regulation 27A into the Occupational Pension Schemes (Schemes that were Contracted-out) (No.2) Regulations 2015. The 2015 regulations replace the current 1996 contracting-out regulations. It was decided to replace the whole of these regulations to deal with the requirements necessary for the end of contracting-out, rather than simply amend the 1996 regulations. The aim was to produce a coherent set of new regulations for the end of contracting-out to assist the reader.

In fact, Regulation 27A replaces Regulation 69B of the 1996 regulations without amendment. It requires a scheme converting guaranteed minimum pension, or GMP, into scheme benefits to provide a survivor’s benefit in the same circumstances as a survivor’s GMP. However, new Regulation 27A requires the affirmative procedure and therefore needs to be debated before it is made, so it is inserted by this instrument.

16:15

Regulation 6 also addresses a procedural error. The provision now within new Regulation 27A was originally made as part of the new set of contracting-out regulations by the negative procedure last July. It should not have been, and the error was addressed very soon after those regulations were made. The regulations were revoked and remade as the 2015 No. 2 regulations without that provision, and these regulations now insert that provision to comply with the requirement for a debate before it is made. This debate would have been needed regardless of the mistake that was made in the earlier instrument. Regulation 6 also makes some necessary revocations in the earlier instrument.

I turn now to the provisions in these regulations that deal with overseas residents. Regulation 4 inserts a new Part 7 into the State Pension Regulations 2015 which provides for restrictions on uprating the new state pension for persons living overseas. Although we are making new regulations that will apply to people in the new state pension, the essential policy, which has been the policy of successive Governments for the last 70 years, remains the same: although we will continue to pay the state pension worldwide irrespective of where a person resides, only people who are ordinarily resident in Great Britain, who are covered by European co-ordination regulations or who are resident in countries with which there is a reciprocal agreement that provides for uprating will receive upratings.

We are introducing a change in the way we treat deferral where the deferrer is resident in a country where we do not uprate the state pension. Under the current arrangements, such a person will effectively get a double benefit from deferral when they finally claim: first, they will get the deferral payment like anyone else; secondly, that payment, and the amount of their weekly pension, will be based on the rate of state pension that is currently in force at the point of claim—that is, the rate of the state pension including any upratings. This applies even though they would not have received the upratings if they had not deferred their pension.

The regulations remove this anomaly for those in the new scheme, so that both the deferral payment and the weekly pension will exclude upratings that would not otherwise have been paid. The person will get a payment based on the rate of pension that would actually have been paid during the deferral period, in the same way as anyone else who defers. As we have explained in the Explanatory Memorandum to these regulations, this is to ensure we are consistent in how we apply deferral rules.

Lastly, I turn to the second of the two instruments we are considering today, the Pensions Act 2014 (Consequential and Supplementary Amendments) Order 2016. As the title indicates, these amendments are essentially technical in nature rather than implementing substantive policy measures. The order basically makes consequential amendments that result from the introduction of the new state pension. They ensure that national insurance credits for parents and carers awarded after April 2016 that relate to a period before April 2016 are included in a person’s starting amount. They also ensure that inherited additional pension payable to a survivor in the old state pension whose spouse is in the new scheme includes the appropriate revaluation and upratings. They provide for taxation of inherited lump-sum payments based on deferred graduated pension in line with the arrangements that apply to inherited lump-sums based on deferred main old state pension. They extend the list of factors that can be considered when setting the earnings trigger for auto-enrolment to include the rate of the new state pension. The list already includes the basic state pension. Finally, they amend a provision in the Equality Act so as to allow pension schemes to continue to offer bridging pensions, where tax rules allow, until November 2018, when men’s and women’s state pension ages equalise.

I trust that on that basis your Lordships will be content for me not to take up time going into any further details on the order. With that, I commend the regulations and the order to the Grand Committee.

[Lord McKenzie of Luton (Lab)]

My Lords, I thank the Minister for her introduction of these regulations and the order and note that the two Motions are to be taken en bloc.

The draft Explanatory Memorandum reminds us that this is the second tranche of affirmative legislation which is needed to support the introduction of the single-tier or new state pension on 6 April 2016, and there is more secondary legislation to come. We have been asked today about taking some SIs on 22 February. Is that it or is there still more to be scheduled?

We know that part of what is to come will cover national insurance credits for spouses and civil partners of Armed Forces personnel to cover past periods of accompanied service overseas. We obviously support this but recall that when we debated this before there were concerns, surprisingly, about the data. Perhaps the Minister will confirm how these have been satisfactorily addressed.

The scope of these regulations is a reminder of the complexity which is still very much a part of our pensions system—state and private—and whatever the promise of simplicity to come from the new state pension, that simplicity is, frankly, some way off. The need for effective communication could not be greater, especially as the change comes in the midst of other pension changes, including the accelerated changes to the state pension age, particularly hitting women, and the so-called flexibilities for private provision. This complexity also requires particular diligence in drafting. I am bound to say that slipping through regulations just before a Summer Recess, which have to be unpicked subsequently is not an efficient way to legislate. However, we acknowledge that eventually the new state pension will simplify matters and bring forward the point at which women get equivalent state pension outcomes to men, but not until the 2040s. We also note that the IFS concluded that in the long term the new pension will be less generous than the current system to almost everyone.

We have heard this afternoon that the regulations cover four main topics: deferral of the new state pension; transitional arrangements for inheriting graduated retirement benefit; pension uprating for those living abroad; and technical amendments relating to contracted-out occupational schemes. As we have heard, Regulation 3 deals with the deferral of the new state pension. The opportunity to do this exists, of course, under the current system and is something we support. It is an encouragement to those who wish to stay in the labour market and earning. However, the terms are to be less generous in the future, with the reduction in the accrual rate from 10.4% to 5.8% a year and no opportunity, outside transitional arrangements, to take a lump sum. Any increase is applied to the weekly rate of pension immediately before the end of the deferral period, but this is now to be reduced when there has been an increase other than through uprating. As regards what has been described as an anomaly, does this happen under the current system? What has changed in the need to back out these issues?

The Explanatory Memorandum tells us that the most likely cause of such upratings is where someone has inherited an amount on the death of a spouse or civil partner, so could the Minister please tell us what percentage of entitlements to inherited amounts on death accrue to women rather than men? What is the estimated saving to the Treasury from this measure? Although for those wholly in the new scheme there will not be opportunities to inherit a percentage of a late spouse or civil partner’s additional state pension, we can at least support the transitional arrangements that enable someone to qualify for a survivor’s pension in respect of additional state pension entitlement built up in the current scheme. We also support the new provisions introduced by Regulations 4 and 5 enabling the inheritance of graduated retirement benefit, including deferral payments. Even though amounts are likely to be small, as has been said, it is reasonable that the transitional arrangements are consistent.

With regard to the uprating of pensions paid abroad, I confirm that what the Minister said is correct: in government we, too, resisted calls to uprate the state pension payable abroad other than to those territories set out in the Explanatory Note. This, too, was largely on the grounds of cost, as well as the uprating factors. Carrying over these provisions to the new system is therefore reasonable. We note, however, that one small change is to include Sark in the reciprocal arrangements. Where on earth did that come from? Can the Minister tell us why and say what representations have been received and from whom in respect of this matter? The definition of an overseas resident is somebody,

“not ordinarily resident in the UK”.

But can the Minister confirm that a person could be ordinarily resident in the UK but still not domiciled in the UK? As we have heard, the substantive change to the arrangements relates to the deferral rights of overseas residents. It is understood that the position is to back out the uprating component of the deferral calculation to prevent a benefit being received which would otherwise not be available if there were no deferral. We have no problem with that.

We note that the legislation is deficient in other respects in not allowing a disapplication of uprating where a survivor’s benefit is not to be uprated because the deceased person’s pension was not to be uprated—perhaps the Minister could expand a little on those circumstances. So I ask: can we therefore look forward to another Pensions Act if that is what it is going to take? The provisions generally relating to contracted- out defined benefit occupational schemes, the GMP requirement and the right to convert to ordinary scheme benefits take us back to the challenges of the 2007 Act. What was essential for conversion was the need to enable a survivor to have benefits at least equivalent to the survivor’s GMP. This looks to have eventually been achieved under the new arrangements by paragraph (6) of these regulations and Regulation 27A of the 2015 Regulations. However, this reminds us that contracting out is no longer available from April 2016, with higher rates of national insurance contributions being payable by individuals as a consequence. We have probed before what this means in terms of extra tax and perhaps the Minister would like to take this opportunity to update us on precisely how much the Treasury expects to garner from the switching off of contracting out.

As far as the order is concerned, we support the provisions enabling credits for parental and caring responsibilities awarded after but relating to pre-6 April being included in a person’s “starting amount”. We wonder why HMRC has to take over the Secretary of State’s authority in connection with entitlement to credits but note that this is not a new provision. As for extending the factors that the Secretary of State can take into account to trigger auto-enrolment and set the band of earnings to include the full rate of the new state pension, can the Minister please explain what practical effect it is considered that this change will have?

Paragraph 9 of the Explanatory Note refers to the multichannel communications campaign. Perhaps the Minister can tell us how this is is going. Mention is made of a new online service to be rolled out in 2016, which will provide a projection of the new state pension at state pension age. Is this on schedule? What volume of inquiries is currently being experienced and what are the response times?

The regulations and order are complicated but we thank the Minister and officials for a very detailed Explanatory Memorandum. Overall, we judge that they contribute to making the new state pension work properly, and we will not oppose them.

16:30

[Baroness Altmann]

My Lords, I am grateful to the noble Lord for his contribution to this technical debate. He has raised several questions, and I will attempt to answer some of them. If he requires further answers, I will of course write to him.

It is indeed the case that the analysis conducted by the department shows that the majority of those reaching state pension age between now and 2013 will receive more from the new state pension than they would have done under the old system. In the long run, the aim is that the rollout of automatic enrolment will provide a supplement to that state pension for future generations of retirees. Therefore, in the long run, the overall amount paid out by the state may reduce, but that is to be offset by the impact of automatic enrolment.

Women will get more state pension, on average, under the new system than they would have done under the old one. Notwithstanding the equalising of state pension ages, over their lifetime women will on average get 10% more state pension in total than men of the same age. The idea that women are losing out needs to be modified by some of the data that we have already produced.

[Lord McKenzie of Luton]

I was not suggesting that women were going to lose out. My point was that there is movement towards equalisation with men, although that is some time in the distance—I think that the 2040s has been the calculation.

[Baroness Altmann]

The equalisation between men and women of state pension payments may come in the future but, in the mean time, notwithstanding whether they get slightly less than men—the gender gap will be much narrower—over their lifetime they will get more, because the average woman lives longer than the average man. Once equalisation occurs, the gender favour to women will be even greater. In the mean time, the new state pension will put women in a much stronger position under the new state pension rules relative to the old ones. This is a significant improvement in the position of state pension payments for women on average, who, as we all know, have lost out in the past; we are remedying that to a large degree.

The noble Lord asked about contracting out. The idea of removing contracting out is not so much about cash flow or increasing the amount of money that comes to the state, because contracting out merely replaces what the state would have otherwise paid out in the state pension. By ending contracting out, the national insurance payments that are increasing will be offset over the long run. Indeed, depending on the average life expectancy, it could perhaps end up meaning that the Government pay out more in state pension as a consequence of ending contracting out than they do under the current system, where part of the state pension is contracted out to an employer who promises to replace the additional state pensions.

Therefore, it is not clear to me that there is a cost saving. It is clear to me that it is absolutely essential that we move to a simpler state pension system, which people can understand and deal with, because currently they cannot do so. At present, the existence of contracting out means that part of people’s state pension builds up in a private pension, which confuses the messages and the planning. Therefore, the principle of the new state pension is that everybody pays the same type of national insurance without some people being able to pay less than others because they are in a particular type of private pension scheme, and that everybody, regardless of their earnings, the type of credit they have or the type of national insurance contribution they pay, will be able to build up the same state pension each year as they accrue another year on their contracting-out record.

[Lord McKenzie of Luton]

In relation to the year we are just about to enter—2016-17—is the Minister saying that there will not be extra net revenue in the system that year from the abolition of contracting out?

[Baroness Altmann]

Of course that is not what I am saying. I am saying that we have to look at the state pension over the long term. National insurance is paid now but it relates to liabilities that will be paid over a long period of time, and Governments, quite rightly, have to plan for that with regard to the money flowing in now and the liabilities that will ensue from that over the longer term. As we know, the new state pension is expected to be cost-neutral to the taxpayer. Given that, I am not convinced that it is appropriate to consider contracting out as a money-saving exercise.

I am delighted that the noble Lord supports Regulations 4 and 5. Most of the measures that are being put in place here are indeed technical in nature and try to maintain the principles of the new state pension as well as protect people when we move from the old system into the new system—in particular, as we said, widows or widowers who inherit parts of the state pension entitlements that they would be able to inherit today.

The noble Lord also mentioned the importance of communications, and I completely agree with that sentiment. Indeed, as he alluded to, we are engaged in a widespread campaign to inform people and improve communications around state pensions. An enormous amount of time, effort and money has been put into this exercise, and we will continue that over the coming period. I assure the noble Lord that we have very much adopted the idea of communications being particularly important and will continue to work in that way.

The noble Lord also mentioned the complexity of the new state pension rules and some of the issues that have arisen with the drafting of the regulations. Of course it is a matter of regret that we had to come back with an affirmative regulation, which should have been done in the appropriate way in the first place. However, the debate is now taking place, as required.

We must not forget that the old state pension is what is so complicated. Dealing with past complexity is imposing difficulties when moving to a new state pension system. We have not been able to just sweep away the old system; we have to carry people into the new state pension system. That means carrying with it the complex rules and the many adjustments that were made over the many years for which it has existed. Once that new system is in place, the scale of complexity will be vastly reduced. For most people, it really will be a simple system, but we have to get from the old system into the new one, when it is fully up and running, and that will take some time before we can reconcile all the records as at April 2016 to know what everyone is starting the new system with.

As for national insurance credits for spouses and partners of people in the Armed Forces, we will be providing data when we bring forward those regulations. As the noble Lord said, we plan to have that debate on 22 February. We believe that we have reliable data that we can put before the House. Unfortunately, as I explained, the old system is very complicated. We need to bring in a huge number of moving parts from the current system to try to ensure that people do not lose out.

The noble Lord mentioned inheritance. In the new state pension system, widows will be able to inherit the additional pensions of their late spouses or partners. That inheritance currently exists and will be carried forward. I can reassure the noble Lord on that matter.

The noble Lord asked me about digital state pension statements. At the moment, they are in testing. The testing will be carried out over the next few weeks, and we will then be gradually rolling out the new digital statements, which will be much clearer and more helpful, so that people can see forecasts of what their new state pension will be able to give them.

As for the issue of deferral, as I said, the regulations will correct an anomaly that exists. The new state pension will ensure that the deferral for those who live in overseas countries which do not have a reciprocal arrangement with us, and those countries in which pensions are not uprated at the moment, will apply only to the pension at the date at which the person reached state pension age. That is the increment that will be added for deferral, rather than adding an increment to an increased state pension, which would otherwise give them a double benefit.

The debate has ranged rather widely—probably more widely than the provisions—so it may be helpful if I remind the Committee of what the regulations do. They enable a widowed person whose late partner was in the old state pension scheme to inherit the graduated retirement benefit. They provide for increments from state pension deferral to be based on the amount of new state pension the person would actually have been entitled to if they had been receiving their pension instead of deferring it. They maintain the long-standing policy of not uprating the state pension for people resident in certain countries overseas. They replicate a provision relating to survivor benefits that was in an old set of regulations in the new set that replaces them. The order simply makes consequential amendments that result from the introduction of the new state pension. I therefore commend the regulations and the order to the Grand Committee.

[Lord McKenzie of Luton]

Would the Minister mind looking at the record after this and perhaps writing where she has not been able to cover matters this afternoon?

[Baroness Altmann]

Yes. As I said, I am more than happy, if there are issues that have not been covered, to write to the noble Lord.

Motion agreed.

State Pension and Occupational Pension Schemes (Miscellaneous Amendments) Regulations 2016

Monday 8th February 2016 Grand Committee

Motion to Consider

16:45

Moved by

[Baroness Altmann]

That the Grand Committee do consider the State Pension and Occupational Pension Schemes (Miscellaneous Amendments) Regulations 2016.

Relevant document: 12th Report from the Joint Committee on Statutory Instruments

Motion agreed.

Producer Responsibility Obligations (Packaging Waste) (Miscellaneous Amendments) Regulations 2016

Monday 8th February 2016 Grand Committee

Motion to Consider

16:46

Moved by

[Baroness Chisholm of Owlpen]

That the Grand Committee do consider the Producer Responsibility Obligations (Packaging Waste) (Miscellaneous Amendments) Regulations 2016.

Relevant document: 14th Report from the Joint Committee on Statutory Instruments

[Baroness Chisholm of Owlpen (Con)]

Before I explain the specific changes, I remind noble Lords why the Government are amending these regulations or, to be precise, deregulating. The Government remain committed to reducing burdens on businesses—none more so than in the waste sector. Today, we are considering the important topic of packaging. We all use packaging in our day-to-day lives and it serves many essential purposes. These include keeping our food fresher for longer, protecting products from damage and providing security. For instance, the humble cucumber can have its shelf life extended by up to 14 days with proper packaging. Vacuum-packaging and shrink-wrapping can keep meat fresher for twice as long, and resealable packs prevent foods such as cheeses from drying out.

Packaging therefore has a key role to play in the prevention of waste. In addition, at the end of its useful life, packaging can be recycled into a number of new products including clothing, chairs, car parts or construction materials, and there is closed-loop packaging recycling such as bottle back to bottle. Like the valuable role of packaging, the changes we propose are equally important. They are deregulatory and part of this Government’s ongoing commitment to cutting unnecessary red tape. These particular changes stem from and build upon the earlier Red Tape Challenge initiative, and have the potential to deliver a net benefit to businesses of about £20.4 million over the next 10 years.

We know that around 10.38 tonnes of packaging were placed on to the UK market in 2013, and 64% of our packaging is currently recycled or recovered each year. Although it is difficult to be sure of exact costs for the financial damage of improperly disposing of packaging waste, we know that local authorities spend nearly £798 million a year clearing up litter, of which about 30% is packaging in some form.

Turning to the legislative changes, as I said, the Government want to do ever more to reduce waste and encourage the recycling of valuable secondary resources such as packaging. Importantly, we also want to streamline the processes that packaging producers have to go through to adhere to regulations. There are four main proposed changes. First, the removal of operational plans will remove the requirement for packaging compliance schemes, or directly registered producers of packaging, to provide operational plans. This change, subject to full take-up by industry, will reduce significantly administrative burdens, with a potential saving to business of up to £5 million over 10 years.

However, in order to ensure that packaging compliance schemes continue to function efficiently and effectively, we have made provision to retain some key safeguard elements by incorporating these within revised conditions of approval. There are three retained conditions in respect of compliance schemes, and they will ensure that our environment agencies are able to monitor the accuracy of information provided by scheme members; that compliance schemes acquire packaging recovery notes, or PRNs, and packaging export recovery notes, or PERNs, in a manner that least hinders the ability of operators to purchase them; and that compliance schemes preserve sufficient financial resources to maintain the necessary expertise to acquire PRNs or PERNs.

The second proposed change is to the approving body. This change will transfer the responsibility for the approvals process for packaging compliance schemes from the Government to the appropriate agency. Currently, the regulations require Defra to approve a packaging compliance scheme and for one of the environment agencies to register the scheme. Although this is a small transfer between government bodies and a small additional function for the agencies, the change will put both the approval and registration processes directly into the hands of those with the most appropriate expertise to best assess applications.

The third change is the delegation of sign-off arrangements. This will allow an approved person in a packaging business to delegate their responsibilities for signing off reports. This will remove a significant burden on business and will ensure that the authorisation for the signing of reports rests with the person who is the most appropriate and knowledgeable in the organisation. A quality assurance backstop will be put in place that requires the appropriate environment agency to be notified so that appropriate checks can be carried out.

The fourth change is the one-stop shop for packaging scheme application approvals. This will provide operators of packaging compliance schemes based in both Great Britain and Northern Ireland with the right to apply for approval from one UK approving body. This is in contrast to the present arrangement, where operators face the significant burden of having to make applications to two bodies. It will also allow the Northern Ireland Environment Agency to act on behalf of the British agency and vice versa.

The Government consider that the changes proposed in the order provide a significant opportunity for businesses to reduce their administrative burdens and costs. These changes will allow even greater focus by industry and regulators on what really matters: increasing our recycling rates, reducing waste, protecting our environment and continuing to build an economically strong and ever-more-resilient waste industry. I therefore commend the order to the Committee.

[Baroness Jones of Whitchurch (Lab)]

My Lords, I am grateful to the Minister for introducing the amended regulations. On the face of it they appear to make sense. Certainly, the changes to the approving bodies, the extended sign-off arrangements and the one-stop shop for the devolved nations are broadly welcomed and have clearly received considerable support during the consultation. It seems that the claims of savings that will be made by these changes are slightly overegged, but I take the point that there is an established way of calculating such savings and I am not going to quibble about the methodology at this point. That is a matter for another day.

I have two main questions arising from the proposals. First, they remove the requirement to produce an operational plan, as the noble Baroness outlined. I appreciate that the current requirements may be unwieldy and overdetailed, but is it not probable that removing the operational plans altogether also removes a major discipline and pressure on packaging producers to comply with their obligations under the EU directive?

We all acknowledge, as did the noble Baroness, that the priority is to increase our rates of packaging recycling, so how does the complete removal of the operational plan help that? Might we not be better off replacing it with a simplified format that achieves the same objectives? How will its complete removal impact on the monitoring of performance and compliance of individual companies? The noble Baroness referred to that, but perhaps she will enunciate it a little further. Also, would we not be wiser to delay the changes to these regulations so that we can take account of the proposed extension of producer responsibility schemes in the Commission’s new circular economy package which relates to these measures?

Secondly, what more is being done to ensure that producers cover the full cost of processing their packaging waste? As I understand it, unlike the rest of Europe, in the UK, the producers’ fees cover only about 10% of their waste costs. As a result, a disproportionate cost for collecting and recycling falls on local authorities. This, in turn, means that much of the cost is met by taxpayers rather than the product manufacturers. This goes against the principles of producer responsibility as originally envisaged by the EU. What more are the Government doing to ensure that the costs fall where they belong: at the door of the manufacturers? What further pressures can we bring to bear to encourage excess and unnecessary packaging to be designed out before goods hit the marketplace in the first place?

This is a policy area where we cannot afford to be complacent, because we still have some way to go before we meet our EU targets. Therefore, it would be helpful if the Minister could make it clear what new levers will be introduced to drive up compliance and innovation in the sector. I realise that these latter points are slightly wide of the content of the new drafts before us today. Nevertheless, they are important and I look forward to her response.

[Baroness Chisholm of Owlpen]

My Lords, I am most grateful to the noble Baroness, Lady Jones, for her remarks and for the fact that she broadly approves of what we are trying to do.

As regards operational plans, any producer who does not comply with their obligations will face enforcement action by the Environment Agency. We feel that the current operational plan does not add to the value of its function. We are very conscious of the circular economy in relation to recycling. Any amendment will not come into force until 2020 at the earliest. These deregulatory changes will reduce the burden on businesses ahead of that. I hope that that answers the noble Baroness’s questions. These additional regulations will allow the Environment Agency further to increase its focus on tackling those who may seek to skirt around or deliberately evade their obligations.

Another piece of inspiration has come from behind me. We acknowledge that producer responsibility costs do not all fall on producers, as they do in Europe, but our market-based system delivers comparable recycling rates. Does that answer the noble Baroness’s question?

[Baroness Jones of Whitchurch]

I was suggesting that the cost is falling on the taxpayer, because local authorities have to do the collection rather than the product manufacturers. Is there anything more we can do about that?

[Baroness Chisholm of Owlpen]

I may have to write to the noble Baroness to make sure that I get that exactly right for her. I commend the regulations to your Lordships.

Motion agreed.

17:00

Sitting suspended.

Infrastructure Planning (Onshore Wind Generating Stations) Order 2016

Monday 8th February 2016 Grand Committee

Motion to Consider

17:03

Moved by

[Lord Bourne of Aberystwyth]

That the Grand Committee do consider the Infrastructure Planning (Onshore Wind Generating Stations) Order 2016.

Relevant documents: 15th Report from the Joint Committee on Statutory Instruments, 23rd Report from the Secondary Legislation Scrutiny Committee

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, I will set out the impact of the statutory instrument which I am bringing forward. This affirmative instrument seeks to amend Section 15 of the Planning Act 2008, removing the obligation in that Act to obtain consent from the Secretary of State for Energy and Climate Change to construct, extend or operate an onshore wind farm in England or Wales. To be clear, this provision relates only to proposed new wind farms with a capacity greater than 50 megawatts. Smaller wind farms, including those owned by the community, are already consented by the relevant local planning authority.

This change, alongside secondary legislation and proposed primary legislation in relation to the Electricity Act 1989, will have the effect of removing the requirements for planning consent to be obtained from the Secretary of State for the construction of new onshore wind farms. Instead, developers will need to apply for planning permission under the Town and Country Planning Act 1990, where the primary decision-maker is the relevant local planning authority. This Government were elected with a clear commitment to give local people the final say on whether to have a wind farm in their area. These changes help deliver just that, as was stated in our manifesto.

The changes are further supported in England by the implementation of the Written Ministerial Statement outlined by my right honourable friend the Secretary of State for Communities and Local Government on 18 June last year. The combined effect of the measures is to ensure that new onshore wind is consented to at local level and built only where local people have said they want it.

Finally, I remind the Committee of the support that the Government have received on this issue both in this House and during the Committee sittings in the other place which were held just last week. I should also be clear that the intention of this statutory instrument, and indeed of the statutory instrument already made to the Electricity Act 1989, is purely fully to implement the devolution of onshore wind-consenting powers to local authorities and away from Whitehall. The order does not change or affect the regime for town and country planning in either England or Wales.

Furthermore, once onshore wind-consenting powers are fully devolved to Wales, it will be for the Welsh Assembly and the Welsh Government to determine how new onshore wind farms in Wales are granted consent. On that basis, I beg to move.

[Lord Teverson (LD)]

My Lords, I thank the Minister for his brief introduction. I fear that I will show a lot of my own personal ignorance about the subject in my questions because, as he said, it is one part of a jigsaw; the question is how it fits in.

Perhaps I am being naive but I expect the Explanatory Memorandum to be fairly objective. Paragraph 7.1 states:

“Local communities are often opposed to onshore wind farm development, arguing that they have direct noise and detrimental impacts on their communities”.

Yes, it is true to a degree that some are opposed but, on the whole, they are not. It is usually a vociferous number of people who object to them and make planners’ and local councillors’ lives very difficult. It is up to them to stand up to that sort of pressure and make the right decision. That does not represent the majority.

Paragraph 7.3 states:

“Such reviews help to strike the right balance between keeping consumers’ bills as low as possible, while reducing emissions in the most cost effective way and ensuring public acceptability of particular technologies”.

As we know, wind power, as shown by the ROC rates and everything else, is one of the cheapest renewable sources of energy, so I am not sure how that paragraph fits in.

Part 10 of the Explanatory Memorandum concerns the impact. I have not read the impact assessment: I think that there was a problem in that it originally referred to the wrong one, but the memorandum states:

“There is no impact on business, charities … voluntary bodies”,

or,

“the public sector”.

Then what is the point of it? I can see the point, but if there is no impact whatsoever, that is rather strange.

I actually welcome the order in principle. The Minister is absolutely right: local communities should have much more say over their local areas and decisions such as these. Placing them back into the local authority planning process is the right thing to do, so I welcome that.

What I want to understand—this is where my ignorance comes out—is how it interacts with the National Planning Policy Framework, which specifically uses the phrase “a golden thread” of sustainable development: that there should be acceptance that schemes should go ahead if they promote sustainable development. Does that still apply when local authority planning decisions are questioned further up the decision tree on appeal?

Paragraph 97 of the National Planning Policy Framework states:

“To help increase the use and supply of renewable and low carbon energy, local planning authorities should recognise the responsibility on all communities to contribute to energy generation from renewable or low carbon sources”.

Then it goes through a list of bullet points of things they ought to do. How do those obligations on local planning authorities tie in with this secondary legislation and the other areas that the Minister mentioned around it?

The Explanatory Memorandum also says that local authorities’ planners have to take account of neighbourhood plans or local plans. I want to understand whether that is a “both” or an “either/or”, because a lot of local plans have renewable energy and wind farms in them. What happens if this is not included in the neighbourhood plan but is included in a local plan, for instance? I suspect that that will often be the case given that neighbourhood plans still do not cover large proportions of areas that local planning committees take an interest in.

I have a couple of other quick things for the Minister. Five-megawatt wind farms are pretty large, and I would be interested to know how many applications for such wind farms there have been over the last five years or so. I do not need a specific answer but perhaps the Minister could give an idea of the kind of scale we are talking about. Also, are there other areas where local authorities do not have control over less than 30 megawatts? A number of parallels have been made with shale gas—which I am not against—where there is a big push the other way in terms of trying to put pressure on local authorities to give permission or to call the decisions in if they do not. I would be interested to hear how the Minister reconciles the two opposite directions that energy policy seems to be going in at present.

[Lord Grantchester (Lab)]

I thank the Minister for his explanation to the Committee today. The order seems to be primarily technical in that it changes the planning consent process from one where the Secretary of State is included to one where the local planning authorities make the decisions on an application concerning onshore wind-generating stations over 50 megawatts—that is, from the Planning Act 2008 to the Town and Country Planning Act 1990. This is in the context of the Conservative Party’s manifesto for the 2015 election and will make the procedure for consent for stations that generate above 50 megawatts consistent with that governing those that generate less than 50 megawatts. Perhaps to underline the simple policy objective sought here, can the Minister confirm that, apart from changing the ultimate determining authority from the Secretary of State to local planning authorities, no other feature will be affected by this change and that there is no other difference between the two processes for onshore generating stations above and below 50 megawatts?

We are content to support this SI. Indeed, we support the right of local authorities to decide onshore wind power applications so that they can decide on the case made in terms of them supporting jobs, providing energy stability, cutting energy bills and contributing to action to mitigate possible global warming. This change is also reflected in Clause 79 of the Energy Bill, which is currently undergoing scrutiny in the other place. During consideration of the Bill, it has been noted that the Conservative Government judge local authorities effective to rule on onshore wind applications, yet will not allow local authorities to assess applications regarding fracking. We consider that communities should be allowed a pertinent voice in both situations.

Your Lordships’ Secondary Legislation Scrutiny Committee drew attention to the lack of a wider impact assessment on the UK’s generating power. The noble Lord, Lord Teverson, drew attention to the wider impact on the national infrastructure framework. I support him in asking the Minister whether he will report to Parliament six months after the passage of the present Energy Bill to update Parliament on the effect of this SI, especially in relation to the carbon impact and the Energy Bill.

[Lord Bourne of Aberystwyth]

My Lords, I thank noble Lords for their contributions and for their general support. I turn first to questions posed by the noble Lord, Lord Teverson, on the Explanatory Memorandum. He is absolutely right that with this policy we are emphasising the importance of the local say for communities—that is the predominant factor in this legislation. The noble Lord quoted from the Explanatory Memorandum and suggested that it was tilted in favour of one particular view of onshore wind. I recognise, as has become very apparent from the Energy Bill and contributions in other debates, that opinions vary on onshore wind.

17:15

Picking up the points on the impact assessment raised by the noble Lords, Lord Teverson and Lord Grantchester, I apologise that initially a wrong impact assessment was posted. It was corrected fairly expeditiously but I apologise for that. Criticisms have been made about the fact that the impact assessment does not assess the number of likely applications or the economic impact of the measure. Our point here is that it was a manifesto commitment. More importantly, we cannot second-guess the planning system. We cannot know how many applications are going to come forward and how many will be successful. It is in that context that we approach that criticism.

The noble Lord, Lord Teverson, asked about the national policy framework and whether sustainability was still important. Yes, it still is, although obviously within the context of local decision-making, which I am pleased he recognises as being important. He asked about the interrelationship between the local and the neighbourhood plans. The neighbourhood plan is discretionary, it is not as of right, and the local plan will prevail over the neighbourhood plan. It needs to take account of it but in the pecking order, as it were, the local plan will have the superior say. It will take account of the neighbourhood plan but is not obliged to follow it. The noble Lord also asked about wind farms of over 5 megawatts—I wonder whether he meant 50.

[Lord Teverson]

I meant over 50, I apologise.

[Lord Bourne of Aberystwyth]

Not at all. I guessed that was what he meant but I just wanted to confirm that. Two developers were involved in discussions about the transition from the old scheme to the new scheme. That perhaps gives a flavour of the fact that it is not that many. I believe that the noble Lord also referred, as did the noble Lord, Lord Grantchester, to the different regimes in relation to shale. In both, local involvement is key. We recognise that. It is right to say that there is talk about a new system for shale gas exploration. There is a difference when a new technology is being brought on but I reiterate that in both systems we consider a local dimension to the decision-making to be vital.

[Lord Teverson]

Actually, I liked the Minister’s first response, the global one. I thought that was very good.

[Lord Bourne of Aberystwyth]

I am most grateful. I have mislaid the further questions from the noble Lord, Lord Grantchester. I am not sure whether I have covered everything. Here we are: the noble Lord, Lord Grantchester, asked whether there was any move other than making local authorities responsible for these decisions rather than the Secretary of State. That is essentially true. There is an element of devolution to Wales as well but it just mirrors that in relation to the Welsh Government and Welsh Assembly. There is no other intention here. The noble Lord also referred to the fact that this is coupled with what is now Clause 78 of the Energy Bill—we have lost a clause somewhere along the way—he is absolutely right on that. With that, I commend the order to the Committee.

Motion agreed.

Committee adjourned at 5.18 pm.

House of Lords

Monday 8th February 2016 Lords Chamber

Monday, 8 February 2016.

14:30

Prayers—read by the Lord Bishop of Chester.

Refugees: Unaccompanied Children

Monday 8th February 2016 Lords Chamber

Question

14:35

Asked by

[Lord Roberts of Llandudno]

To ask Her Majesty’s Government what action they are taking to relieve the situation of unaccompanied refugee children.

[The Minister of State, Home Office (Lord Bates) (Con)]

My Lords, the Government are working with the UNHCR to resettle unaccompanied refugee children from conflict areas where it is in the best interests of the child to do so. These are likely to be exceptional cases: for most children, their needs are best met in the region. We are providing an additional £10 million of support for vulnerable children in Europe.

[Lord Roberts of Llandudno (LD)]

On 2 December, the Prime Minister said that he was thinking again about our moral duty towards these children. That was 10 weeks ago. What has happened in that 10 weeks, and what is going to happen in the next 10 weeks, to those children who are spread out in so many ways? They are deserving of our compassion, and those who are showing compassion are the people—young people especially—working as volunteers in Calais, Dunkirk and other places. As a House, we should express our appreciation of everything that they are doing.

[Lord Bates]

I certainly endorse what the noble Lord says about the volunteers who are giving up their time to help those people in need. The noble Lord asked what has happened since 2 December. On 28 January, the Prime Minister made a Statement outlining what he had done in the interim period, and he announced four new initiatives. He said that he was going to send the Independent Anti-Slavery Commissioner, Kevin Hyland, to look at the hotspots, as they are called, or reception centres, to see what was happening to children. We announced an additional £10 million of support, particularly for children who had arrived there. He also said that we would meet the UNHCR and Save the Children, and that is happening this Thursday. However, I thought the noble Lord might have given a passing mention to the fact that, last week, the Prime Minister announced a doubling of the aid we are giving to Syria—from £1.1 billion to £2.3 billion—by the end of the Parliament, which I am sure is welcomed by everyone in the House.

[Lord Alton of Liverpool (CB)]

My Lords, following the statement last week by Brian Donald, the head of Europol, that 10,000 children had disappeared and an entire criminal infrastructure dedicated to exploiting migrants had been established, will the Minister tell the House what representations we have made to Europol and what discussions we are having with it about tackling this? Also, given that the 100,000 people now massing at Oncupinar, on the Turkish border with the Aleppo province, are facing an aerial bombardment campaign and the borders are closed to them—many of those refugees will be children—what action are the Government taking to ask that those borders be opened to allow the refugees safe passage across?

[Lord Bates]

The noble Lord is absolutely right to focus on this. Europol estimates that some 90% of people who arrive at Calais have been trafficked by criminal gangs. That is why the Prime Minister announced that we are setting up the Organised Immigration Crime Task Force, and there have been some early successes, although we need to work much harder on that. That is also why Kevin Hyland—I know the noble Lord knows him and respects his work—is looking at those issues. On the situation in Turkey, that is why we have announced a further £275 million as part of the EU-Turkey agreement, to provide aid to that southern border.

[Lord Lexden (Con)]

My noble friend recently told the House he hoped that more local authorities would extend a warm welcome to refugee children and ensure that they are well cared for, in accordance with the traditions of our country. Has there been progress?

[Lord Bates]

I must admit that I wish there had been more. My noble friend is right to raise this matter. Kent is bearing an unfair share of the burden of caring for unaccompanied asylum-seeking children: more than 1,000 are being cared for there. The Home Secretary, the Secretary of State for Education, and the Secretary of State for Communities and Local Government wrote in November asking local authorities to come forward. So far we have had interest from 24—but that is out of 440. Only eight children out of 1,000 have so far been offered places. I would like to think that all Members of this House who have links to their local authorities would be encouraging them to look again and see what can be done to help Kent in its hour of need.

[Baroness Kinnock of Holyhead (Lab)]

My Lords, as the Minister may know, Eritrean children are fleeing from their country because of their experience of the most brutal human rights violations, often described as crimes against humanity. Will the Minister comment on the fact that, on the most recent evidence, the UK continues to reject Eritreans, including children, on the basis of a discredited Danish report, rather than using a balanced UN report?

[Lord Bates]

The noble Baroness asked a Question on this subject a couple of weeks ago. We still accept a large number of Eritreans who come here, because of the open-ended nature of the military service that they have to undertake. So far, we have accepted a large number of them. The UN report to which the noble Baroness refers did not have access in-country; our policy is based on in-country information from our embassy, and we will continue to keep the situation under review.

[The Lord Bishop of Rochester]

My Lords, as one of the bishops from Kent, may I take the Minister back to his previous answer? In fact, some 1,300 unaccompanied refugee children are housed in Kent, and the local authorities and the voluntary agencies are under very significant pressure. May I push him a little as to whether, in the light of the somewhat unencouraging response from other local authorities, Her Majesty’s Government intend to do anything else to ensure a more effective national dispersal programme—given that we are talking not just about this moment, but about the likely 10 years that will be needed to get a young person from the point of arrival to full integration, with all the work in education, language and healthcare needed to go with that, and the considerable investment required? Some assurance would help my colleagues in Kent.

[Lord Bates]

It is absolutely right to raise that point: we have a particular problem there, and we need more local authorities to come forward. We will take some action: the Immigration Bill before your Lordships’ House includes a provision that will allow the Secretary of State, where people do not step forward, to impose a settlement on local authorities—and that comes not only with the child, but with about £40,000 of funding per head. So we are not simply asking people to take additional responsibilities. If there is anything that can be done through the diocese of Kent to exert pressure on local authorities more widely to take their fair share, we would of course all welcome that.

[Lord Dubs (Lab)]

Is the Minister aware that all over the country, the British public are anxious to do something to help Syrian refugees, particularly children? There is an enormous surge of enthusiasm to do something. Could the Minister, and the Government, not make a more positive appeal? I hear from people who want to be foster parents: foster parents will be forthcoming. We cannot leave these children to fester somewhere in Europe, uncared for and vulnerable to trafficking gangs.

[Lord Bates]

Absolutely right—and I certainly join the noble Lord in appealing for more foster carers to come forward, to help not only children who are refugees but all children; there is a great shortage. But I also hope that the people of this country can take some pride in the fact that through their aid—through their taxes, which go through the Government—we shall be able to provide £2.3 billion-worth of aid, which is keeping 227,793 children in education and providing livelihood assistance to 600,000 families in the region, 2 million medical interventions and 15 million food rations. That is something we can be proud of.

Creative Industries

Monday 8th February 2016 Lords Chamber

Question

14:43

Asked by

[Baroness Afshar]

To ask Her Majesty’s Government what steps they are taking to nurture and support the creative industries to ensure their continuing success.

[The Earl of Courtown (Con)]

My Lords, the latest statistics, released in January, show the creative industries going from strength to strength, with growth of almost 9% in 2014, nearly double that for the UK economy as a whole. The core sector was worth more than £84 billion in 2014—just over 5% of the UK economy. The Government support the UK creative industries in a number of ways, through direct and indirect funding, infrastructure provision, facilitation, advocacy and the production of statistics.

[Baroness Afshar (CB)]

I am grateful to the Minister for that Answer and for the information about how active the industry is and how it is one of the best industries in the country. I declare an interest: my daughter is a music teacher. However, given the role that the industry plays, there is a fear that if music—which is one of the bases of the creative industry—and art are not part of the compulsory bacc, many schools would choose not to teach them and, therefore, the industry would not be able to continue to play the part it has played in the economy. Would the Government consider including both music and creative art in the EBacc?

[The Earl of Courtown]

My Lords, the noble Baroness draws attention to music in education, in particular in the EBacc. Young people should have the opportunity to study art subjects alongside the strong academic core curriculum, including the EBacc. Music is a compulsory subject within the national curriculum for five to 14 year-olds. All pupils in maintained schools will therefore study music for a minimum of nine years.

[Lord Clement-Jones (LD)]

My Lords, I share the concerns of the noble Baroness, Lady Afshar, about EBacc. However, turning to another aspect of the creative industries, does the Minister agree that Channel 4 and BBC Worldwide make a major contribution to the creative industries, both here and abroad? Will he commit the Government to supporting and protecting Channel 4 and BBC Worldwide, subject to their current arrangements, so that they can continue to deliver those benefits?

[The Earl of Courtown]

My Lords, as ever, the noble Lord makes an important point relating to overseas, the BBC and Channel 4. I know he is aware that the charter review is in progress at the moment and many representations have been made. I also know that there was a Question last week on Channel 4, which was answered by my noble friend.

[Baroness McIntosh of Hudnall (Lab)]

My Lords, on the Answer given by the noble Earl to the noble Baroness, Lady Afshar, it is true that the creative industries are doing very well just now. However, she made a serious point about whether they will do so in the future. Does he agree that the problem about them not being included in the EBacc is that there is a systematic erosion of their status in education and that, over time, the implication grows that they are not important and will not lead to good jobs? This is fundamentally untrue and unhelpful. Will he talk to his colleagues in the Department for Education to see whether that can be changed?

[The Earl of Courtown]

My Lords, the DCMS and the Department for Education liaise on all these matters, particularly in relation to music. I should add that, between 2012 and 2016, the Department for Education invested £246 million in a network of music education hubs. These hubs have a number of roles, including ensuring that all children have the opportunity to learn to play a musical instrument.

[Lord Grade of Yarmouth (Con)]

Does the Minister agree that there cannot be much wrong with the creative industries in the United Kingdom if they can produce anything that will be missed as much as “War and Peace” on the BBC over the past few weeks? I am mourning it already—I do not know what I am going to do with Sunday nights. The growth of the creative industries in this country through the recession and so on is a testimony to successive Governments’ policies in respect of the creative industries. Does the Minister agree that the best thing the Government can do is to leave well alone?

[The Earl of Courtown]

I hope my noble friend finds something to do on Sunday afternoons. Apart from that, I agree with him entirely.

[Lord Wigley (PC)]

My Lords, does the noble Earl accept that the creative industries make a massive economic contribution to these islands? The cuts that may be affecting them may emanate from local government, but the benefit of the economic input does not come to local government. Can central government find some way of ensuring that we do not lose out on the creative arts and the economic benefit that they bring to these islands?

[The Earl of Courtown]

My Lords, I do not agree with the noble Lord that we are losing out on creative arts, but I can tell him about examples of our funding, such as creative content tax relief. The noble Lord is no doubt aware of that. BIS, DCMS and UKTI offer access to finance, skills and export funding programmes. Then there is funding via arm’s-length bodies and other organisations, such as the British Film Institute, Arts Council England and Innovate UK.

[Lord Stevenson of Balmacara (Lab)]

My Lords, the Enterprise Bill introduces an apprenticeship levy and the Government have said that they recognise the need to discuss with the creative industries how to increase their apprenticeship levels without destroying the four voluntary levies currently run very successfully by Creative Skillset. What progress is being made on these discussions? Will the Minister reassure the industry that it is the Government’s intention to ensure that the apprenticeship levy is aligned with the current voluntary levies so as to protect the skills investment fund?

[The Earl of Courtown]

My Lords, the noble Lord, Lord Stevenson, asked about the apprenticeship levy in relation to this department. The levy will put apprenticeship funding in the hands of employers, encouraging them to invest in their apprentices and take on more. It will be collected by HMRC at a rate of 0.5% of an employer’s pay bill via monthly pay. In addition, the noble Lord mentioned the SIF, which is another way in which we have been developing training throughout the United Kingdom.

Tourism

Monday 8th February 2016 Lords Chamber

Question

14:51

Asked by

[Lord Lee of Trafford]

To ask Her Majesty’s Government what is their latest assessment of tourism’s contribution to the economy of the United Kingdom.

[Lord Lee of Trafford (LD)]

I beg leave to ask the Question standing in my name on the Order Paper and declare an interest as chairman of the Association of Leading Visitor Attractions.

[The Earl of Courtown (Con)]

My Lords, the Office for National Statistics estimates that tourism directly contributed £59.6 billion to the UK economy in 2014, accounting for nearly 4% of the UK’s gross domestic product. Through our five-point plan, this Government are committed to further growing the tourism industry and spreading the benefits of its growth across the whole of Britain by encouraging more visitors to travel beyond the capital.

[Lord Lee of Trafford]

My Lords, I am delighted that the Houses of Parliament are making a significant contribution. Parliament gets around 1 million visitors a year; 33,000 people sat in our Gallery last year and the purpose-built dedicated education centre is now operating at full capacity. It can take 100,000 pupils a year or 20 school groups a day. May I urge the noble Earl to pay tribute to the 100 or so staff who work in Visitor Services here and urge more parliamentarians to visit the superb education centre?

[The Earl of Courtown]

My Lords, the noble Lord took most of my answers. He is quite right: everyone who works in Visitor Services does a great job. As the noble Lord suggested, last week I went to have a look at the education centre in Black Rod’s Garden, where I was told that 100,000 children will visit each year and how they have the different rooms available to look at. I very much recommend that all noble Lords go and take a look.

[Lord Harrison (Lab)]

Given the importance of the tourism and hospitality industries to the United Kingdom, and the importance of the free movement of people and services within the single market of 28 countries in which we prosper, has the department made any analysis of the jobs that would be lost and the businesses that would close as a result of our absenting ourselves from that crucial market?

[The Earl of Courtown]

My Lords, the noble Lord made a point about how important the entertainment industry and those supporting it are to the economy as a whole and to all those who work in it—what a great job they do. I cannot say whether there has been any assessment of the situation to which the noble Lord referred, but I congratulate all those who work in that area on the work they do.

[Lord Glenarthur (Con)]

My Lords, can my noble friend say what proportion of the £59.6 billion to which he referred can be attributed to Scotland?

[The Earl of Courtown]

My Lords, no. I will write to my noble friend.

[Lord Gordon of Strathblane (Lab)]

My Lords, would the Minister acknowledge, a great success story though British tourism is, that it is important that we do not price ourselves out of the market? There is a grave danger of us doing that because we are one of only four countries in Europe that charges VAT at the full rate on hotels and other tourism products. Will he ask his colleagues in the Treasury to model the effect of a major reduction in VAT on tourism? It may be that the lump sum that comes to the Treasury would be greater as a result of the growth of tourism.

[The Earl of Courtown]

The noble Lord makes a very good point. I know from other Questions that I have answered on similar subjects that my right honourable friend the Chancellor always keeps these matters under review.

[Lord Cormack (Con)]

My Lords, will my noble friend take the opportunity to pay another tribute to those volunteers without whom many of our most notable visitor attractions, such as English cathedrals, could not be properly open?

[The Earl of Courtown]

My Lords, my noble friend is quite right, in particular when he brings to mind cathedrals, where many people volunteer without any recompense whatsoever.

[The Earl of Glasgow (LD)]

My Lords, 20 years ago there were hundreds of tourist information centres all over Britain. They are now becoming very rare because local tourist boards and councils cannot afford to maintain them. I hope that the Government will agree that tourist information centres are really important to tourism in this country. Is there anything that the Government can do, possibly through VisitBritain, to try to revitalise tourist information centres in Britain?

[The Earl of Courtown]

My Lords, the noble Earl makes a good point. In 2007 there were 510 information centres; there are now 390. But it is important to note that each location and destination has different views as to what its funding and operational focus should be. One should not ignore the effects of the internet and the information available there for people who want to visit certain areas. Over the weekend I inquired locally where I am in the Cotswolds, which is a big destination area. More than 1 million hits go to our local website from people looking for what they can do in the area.

[Lord Stevenson of Balmacara (Lab)]

I am very surprised to hear that the Minister can get on to the website, given where he lives. In the current edition of The House Magazine, the Secretary of State explains that another major issue clogging up his in-tray is the Government’s aim of providing superfast broadband. He goes on to confess that providing a service which is fast becoming as essential as electricity is easier said than done. Last month, 52 chambers of commerce representing 750,000 companies said that companies’ performance is being “severely affected” by poor broadband. Many of these companies work in the tourism sector. Other than wringing their hands, what are the Government doing to remedy this sorry state of affairs?

[The Earl of Courtown]

My Lords, the noble Lord referred to where I live and my broadband speed. He will no doubt be very glad to hear that, for 18 months now, we have had fast broadband in Gloucestershire. I will not tell noble Lords what the mobile signal is like, but the broadband is quite excellent. We have been working at a number of different areas. In my area, Fastershire has been providing much improved broadband in the three counties surrounding Gloucestershire. The noble Lord is quite right that there is still much to do.

[Lord Grocott (Lab)]

The noble Earl referred to 100,000 people coming through the education centre each year. Will he tell the House, if not now, by letter, what proportion come from the London area, and what from the other countries and regions of the United Kingdom? Those figures would be useful.

[The Earl of Courtown]

My Lords, the noble Lord makes a very good point. I will write to him, because I do not have the exact details, but the whole point of our tourism strategy and the Discover England fund is to get people out of London and into the other areas of the United Kingdom to visit these attractions. I will write to him.

Allied Health Professionals: Training

Monday 8th February 2016 Lords Chamber

Question

14:59

Asked by

[Baroness Finlay of Llandaff]

To ask Her Majesty’s Government what discussions they have had with Health Education England to ensure that the number of student commissions for 2016–17 supports the goal of increasing the number of student places for allied health professionals set out in the comprehensive spending review, and ensures stability in allied health professionals’ education provision and workforce supply.

[Baroness Finlay of Llandaff (CB)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper and I declare an interest as the honorary president of the Chartered Society of Physiotherapy.

[The Parliamentary Under-Secretary of State, Department of Health (Lord Prior of Brampton) (Con)]

My Lords, Health Education England plans to commission, overall, 7,554 AHP training places in 2016-17—an increase of 344, or 4.8%, compared to 2015-16. The announcement in the 2015 spending review to move nursing, midwifery and AHP students on to the standard student loan system is for new students commencing their courses from 2017 only and therefore does not affect students commencing their courses in 2016-17.

[Baroness Finlay of Llandaff]

Do the Government recognise that 500 more physiotherapy places will be needed in training each year until 2020 just to meet current needs? With Health Education England proposing cuts in training places in six out of 10 of the allied health professions—cuts ranging from 3.4% to 9.7%—how will the new models of care in prevention, patient treatment and reablement be met, given that they depend on these professionals taking on extended roles? This goes across sectors commissioned by the NHS and by other departments, including the Department for Education, the Home Office and the Ministry of Defence.

[Lord Prior of Brampton]

My Lords, Health Education England is proposing a net increase of 334 places in 2016-17 and we expect a growth in overall numbers of nurses and AHPs from 2017 onwards as a result of moving on to the standard student loan system.

[Lord Hunt of Kings Heath (Lab)]

My Lords, will the Minister clarify that? He says that there is to be a net increase, but he will know that in relation to some specialties there is actually to be a reduction next year. This is a shambles. The Government have announced an increase in figures by 2020, but next year we are going to see an actual reduction in some of those places. What is going on?

[Lord Prior of Brampton]

My Lords, as I said, overall there is a small net increase of 334. That is largely for paramedics, where HEE believes that there is a more serious shortage than for other allied health professions. As I said, we have seen a significant increase in AHPs of more than 16% over the last five years and we expect that growth to continue after 2017.

[Baroness Walmsley (LD)]

My Lords, how will the Government achieve their objectives in relation to modernised cancer treatment and an enhanced role for radiographers when Health Education England is cutting the number of training places for therapeutic radiographers by 4.3%?

[Lord Prior of Brampton]

Actually, I think the number of radiographers is going up slightly. I will check, if I can, and write to the noble Baroness. It is also worth mentioning that the number of medical endoscopists is planned to go up by 200 over the next three years.

[Lord Quirk (CB)]

My Lords, while I welcome the 4.8% increase for the allied health professions, I deplore the fact that this increase is accompanied by really quite savage cuts in some of the professions concerned: 6% in the case of speech therapy. Does the Minister accept that our ageing population presents us with an increased incidence of stroke and dementia, and that the skills of speech therapists are essential to maintain and repair the language faculty? As a past president of the Royal College of Speech and Language, I urge the Government to think again. Is the Minister aware that costs would be far exceeded by benefits and that, for example, the west Birmingham rapid response team has saved the NHS more than £7 million a year by making unnecessary 17,000 bed days per annum?

[Lord Prior of Brampton]

My Lords, I entirely agree with the noble Lord that the role of speech and language therapies, particularly in treating people with stroke and other serious conditions, is absolutely vital. Perhaps I may correct a previous answer that I gave to the noble Baroness, Lady Walmsley. Therapeutic radiographers have gone down slightly but diagnostic radiographers will go up slightly.

[Lord Harris of Haringey (Lab)]

My Lords, the Minister told us that the increase is among paramedics, which presumably balances the cuts in other areas. Is this the Government’s strategy for sorting out the problems in the ambulance service, which around the country is failing to meet emergency targets? Do the Government hope that by training some more paramedics, they will somehow solve the problem and money will magically become available for the ambulance service to function?

[Lord Prior of Brampton]

My Lords, having more paramedics is part of the solution, but the major part of the solution is to treat more people outside A&E departments, so that people do not require ambulances to take them into A&E departments but are treated at home.

[Baroness Howe of Idlicote (CB)]

My Lords, can the Minister tell the House how diabetic patients’ needs will be met by maintaining foot care and thereby decreasing the risk of amputations, given Health Education England’s proposed decrease in training places in podiatry of 9.7%? That is at the top end of the list which my noble friend Lady Finlay was talking about.

[Lord Prior of Brampton]

My Lords, I first extend my congratulations to the noble Baroness: it is her birthday today. I of course understand the vital importance of podiatrists. We are looking at a very small reduction in the planned number of training places next year of some 35 places. I would also make a more general point: in the mandate to Health Education England, we have set it a target of reducing the attrition rate among people starting training by 50%.

Riot Compensation Bill

Monday 8th February 2016 Lords Chamber

First Reading

15:06

The Bill was brought from the Commons, read a first time and ordered to be printed.

Criminal Cases Review Commission (Information) Bill

Monday 8th February 2016 Lords Chamber

First Reading

15:07

The Bill was brought from the Commons, read a first time and ordered to be printed.

Immigration Bill

Monday 8th February 2016 Lords Chamber

Motion to Approve

15:07

Moved by

[Lord Bates]

To move—

(1) that the order of commitment of 22 December 2015 be varied so that the provisions which have not yet been considered in Committee (from after Clause 43 to Clause 65, Schedules 10 to 12 and the Title) be considered in Grand Committee;

(2) that the Instruction to the Committee of the Whole House of 12 January (order of consideration of clauses and Schedules) be an Instruction to the Grand Committee; and

(3) that on completion of consideration of the Bill in Grand Committee the Bill be reported to the House in respect of its consideration in both Committee of the Whole House and Grand Committee.

Motion agreed.

Education and Adoption Bill

Monday 8th February 2016 Lords Chamber

Third Reading

15:08

Clause 3: Other warning notices

Amendment 1

Moved by

[Lord Nash]

1: Clause 3, page 4, line 4, at end insert—
“(5) In section 69B (power of Secretary of State to direct local authority), in subsection (3)—(a) omit paragraph (c);(b) in paragraph (d), for “60A(10)” substitute “60A(1)(b)”.”

[The Parliamentary Under-Secretary of State, Department for Education (Lord Nash) (Con)]

My Lords, I am delighted to be opening the Third Reading of the Education and Adoption Bill. I take this opportunity to express my thanks for the support, challenge and rigorous scrutiny that the Bill has received in your Lordships’ House. It has been a pleasure to see the expertise that Peers from all sides of the House have brought to bear on the important matters of ensuring that our children receive an excellent education and improving our adoption system. I hope noble Lords will agree that our debates have been constructive and that the Bill has been improved as a result of the comments and contributions of your Lordships’ House.

Turning to the amendments the Government have tabled, Amendment 1 would make it explicit that two further sections of the Education and Inspections Act 2006 will be amended as a consequence of the Bill. The purpose of Amendments 4 and 5 is to tidy up the drafting of the Bill by removing and replacing a cross-reference which would misdirect the reader of the Bill and lead to confusion. Our aim in tabling these amendments is to ensure correct cross-referencing within the Bill and that consequential amendments to other Bills are identified. I hope noble Lords will agree that these amendments are straightforward and I beg to move.

Amendment 1 agreed.

Amendment 2

Moved by

[Lord Addington]

2: After Clause 12, insert the following new Clause—
“Regional Schools Commissioners
(1) The Secretary of State must make widely available to the public a coherent document that sets out the powers and responsibilities of the Regional Schools Commissioners which are connected with the provisions of the Education and Adoption Act 2016.(2) The document under subsection (1) must contain—(a) a list of the Acts of Parliament and regulations from which each responsibility and power of the Regional Schools Commissioners is drawn;(b) a user-friendly executive summary.”

[Lord Addington (LD)]

My Lords, it became obvious during the progress of the Bill that the action proposed by Amendment 2 was needed. Regional schools commissioners are a new subject for us all. I became increasingly aware of just how important they are to the new structure roughly at the same time as the entire House of Commons did; nevertheless, we do what we can. It became clear that we could not find out very easily how this occurred. It needed a little bit of digging, and I thank Thomson Jones—a young lad who has been helping in my office—who did some of it. He is good at reading back on bits of legislation. Several bits had to be referred to, to find exactly what was going on and how it functioned and fitted together. Legally it was there, but you could not find it. Anecdotally, a lot of people are telling me that education authorities have people phoning up and saying, “What do I do about the academy?”. They do not know the new chain of command.

This is merely a sin of omission, but if we can get it right now, we will save a great deal of trouble for ourselves in the future. Even if we do not like the structure that is coming, it is clearly going to be with us for a while, so we must make it function properly. The objective of the amendment—and presumably those which have been tabled as amendments to it—is to make sure there is a clear way of getting to the legal basis for operation. The schools commissioners are soon going to have far more of the problems of the education system put on their doorstep to deal with. I hope the Minister can give positive answers to show exactly how this is going to be done, even if he does not—for some bizarre reason—choose to accept this amendment. I beg to move.

Amendment 3 (to Amendment 2)

Moved by

[Lord Watson of Invergowrie]

3: At end insert—
“(c) a guide for parents; and(d) information on other matters to do with the powers and responsibilities of Regional Schools Commissioners as may be appropriate.”

[Lord Watson of Invergowrie (Lab)]

Amendment 3 seeks to add two further requirements to the document on regional schools commissioners mentioned in the amendment tabled by the noble Lord, Lord Addington. Since noble Lords considered the Bill on Report, the House of Commons Education Committee has published a report entitled The role of Regional Schools Commissioners, which was not exactly uncritical of the role of these commissioners and the manner in which they have operated since they came into being in September 2014. Indeed, the report contains a total of 24 recommendations, to which the Minister will, no doubt, respond in detail in due course. I hope his response will not be delayed for long and that he will accept and implement most, if not all, of the very thoughtful suggestions made after hearing evidence from a variety of sources—not least the Minister himself. I dare say he will regard the report as carrying a considerable amount of weight, given that it was produced by a committee which is chaired by a member of his party, which has an inbuilt majority on the committee.

It is striking that there remain so many questions about the precise role of the regional schools commissioners and in whose interests they operate. This means that a guide for parents, as suggested in Amendment 3, is a necessity. Ensuring parents understand who to hold accountable for their child’s experience at school and how to do so is vital, yet the Bill consistently treats parents with disdain. I have given examples before, but if a group of parents wants to break away from a maintained school and establish their own free school, they are welcomed with open arms by the Government and given every assistance, as well as considerable amounts of cash, to enable them to do so. Put simply, they are listened to and treated with respect. However, should another group of parents want their children’s maintained school to keep that status in the face of forced academisation, they are ignored, told the decision is nothing to do with them and that the change will take place no matter what they think. Put simply, they are not listened to and are effectively treated with contempt. So under the Bill, parents are denied the right to have a say when the school attended by their children is forced to become an academy. We have said on various occasions that consultation is appropriate for all parents if they want to take advantage of it.

15:15

When the Bill was discussed in Committee, the Minister assured noble Lords that governing bodies of academies would include parental representatives. It was understood that those representatives would, in some limited form at least, have the ability to hold their school to account and have an influence in areas such as hiring senior staff, monitoring budgets and standards. Well, my Lords, just last month it was announced that those notions had been effectively thrown out of the window by the E-ACT academy group which, as noble Lords may be aware, has unilaterally decided to scrap local governing bodies for the 23 schools that it operates. There will be a centralised process for monitoring standards, and the governing bodies will be replaced by so-called advisory bodies, the chairs of which, to no one’s surprise, will be appointed by the academy chain. That is not merely a top-down but a closed-door approach, which it appears will brook no questioning of how the chain operates.

The fact that this has been handed down by an organisation that receives £135 million of public funds annually makes it even more serious. It appears that E-ACT is content to treat the public purse with respect, but quite unwilling to treat the public with respect. This behaviour would be serious enough for a chain that was operating effectively, but in 2014 E-ACT had the control of 10 of its academies taken away after Ofsted raised serious concerns about its performance. Not only its educational competence has been questioned; until July last year, the Education Funding Agency forced the chain to operate under a financial notice to improve. One might have thought that such inadequacy would have produced some humility at E-ACT, but as we have heard, the opposite is the fact. Perhaps the Minister can give noble Lords his take on this rather sorry state of affairs, including the action, if any, of the various regional schools commissioners, under whose auspices the chain operates.

My Lords, there are no circumstances in which a regional schools commissioner should stand by when an academy chain seeks to exclude parents, staff, local businesses and local politicians from the governance of their local schools. If regional schools commissioners are not there to ensure that academies operate to the highest standards, what, one might ask, is their purpose?

The education report highlighted a number of questions about whether the key role of regional schools commissioners was to help raise standards or whether it is simply to bring about more academies and free schools as quickly as possible. The key performance indicators institutionalise this confusion, which is a problem that must be dealt with, and soon.

It is not appropriate at this stage to go into greater detail on the recommendations of the Select Committee, which I believe has carefully put together a report that requires careful scrutiny. I am sure the Minister will scrutinise that report, but I hope that in doing so he will bear in mind the importance of parents being able to have some say in the way their children receive their education and how it is framed and delivered by academies. For that reason, I beg to move.

[Lord O'Shaughnessy (Con)]

My Lords, as we are dealing with this issue of regional schools commissioners, I thought it might be useful to share with the House a personal story giving our experience at Floreat Education Academies Trust, which I founded, of dealing with the regional schools commissioners and of their role in regulating the system as it stands today. The noble Lord, Lord Watson, chose the example of E-ACT, which has had some problems in recent times, but it is important to note that the regional schools commissioner system has helped to generate the changes that have happened—schools have been taken away from E-ACT. To me, that is an example of a system that is working to crack down on low quality rather than one that is not working.

[Lord Watson of Invergowrie]

Does the noble Lord know whether E-ACT consulted the regional schools commissioner before it decided to scrap the governing bodies for the schools that it operates?

[Lord O'Shaughnessy]

I have no idea. I was referring to the fact that schools of low quality were taken away from E-ACT.

The Select Committee report, to which noble Lords have referred, talks about in a specific recommendation the importance that,

“the Government reflect on the need to improve understanding of the role of the RSCs”.

I think that is what lies behind the amendments, so I welcome the sentiment, if not the vehicle itself. Our own experience at Floreat is from dealing with two RSCs: Dominic Herrington in south London and the south-east and Martin Post in south-central and north-west London. As a new provider, we found them open and responsive in a way that dealing just with the department would not have been by dint of the capacity at the department. So far, there has been just the right amount of support and challenge, which is at the heart of the role.

An example of the support offered—in this case, by Dominic Herrington’s schools commissioner region—was for multi-academy trust leaders’ training sessions: getting together with others, learning what works, being exposed to the new Ofsted framework, and so on. An issue of challenge would be around understanding the capacity and capability of a multi-academy trust to take on new schools and open new schools, and whether we have the finance and the expertise for doing so. That is a conversation that I had with our commissioner, Martin Post, on Friday.

So far, the experience has been of a productive relationship based very clearly at all times on raising standards for pupils. That shared purpose comes through clearly at all times. While I agree that it is necessary, given the importance of RSCs, to continue to explain in more detail the importance of the role and what it can and cannot do, I do not see that it requires an amendment to the Bill to achieve this, and I hope to hear positive news from the Minister about how the Government will actively promote the regional schools commissioners from now on.

[Lord Nash]

My Lords, I shall speak to Amendment 2, moved by the noble Lord, Lord Addington, and Amendment 3, tabled by the noble Lords, Lord Watson and Lord Hunt. Both concern the responsibilities and powers of regional schools commissioners. The noble Lord, Lord Addington, has proposed that the Secretary of State should be required to publish a document that would describe the powers and responsibilities of RSCs arising from the provisions in the Bill and other Acts of Parliament. Amendment 3 would extend this requirement to specify that the document must include a guide for parents and any other information to do with the powers and responsibilities of RSCs as may be appropriate.

I am grateful to the noble Lord, Lord Addington, for raising this issue once again, following the exchanges that he had with my noble friend Lady Evans on this matter on Report in this House. Since the last debate, he has also met officials from the Department for Education and he and I have had a number of exchanges on the matter. I hope that he has found these discussions helpful and has been reassured that the Government are committed to meeting the objectives of his amendment.

As my noble friend Lady Evans explained in the previous debate, RSCs are not defined in legislation: they are civil servants, and exercise only the powers and duties of the Secretary of State that he chooses to delegate to them. Accountability for the decisions made by RSCs rests with the Secretary of State, who remains fully accountable to Parliament. It is important to emphasise that the role of RSCs is very different from the role of local authorities. RSCs operate within a clearly defined framework, with the focus on monitoring and tackling educational underperformance in academies and free schools, approving new academies, advising on free school applications and approving changes to open academies, such as expansions or age-range changes.

To support these functions, RSCs also work to develop the sponsor market in their regions. Subject to the passage of the Bill, RSCs will also take on responsibility for formal intervention in underperforming maintained schools. RSCs carry out their functions within a national framework and individual decisions are made in accordance with the relevant legislation, academy funding agreement and/or published criteria.

Information on the work of RSCs is already publicly available. We have already set out the remit of our RSCs and the membership of each head teacher board, published registers of interest and made available the criteria for RSC decision-making. Academy funding agreements are publicly available, as are the criteria for other individual RSC decisions. For example, the criteria that RSCs use to assess schools applying to become academies are set out online in the guidance document, Convert to an Academy: Guide for Schools. Notes of board meetings that detail each decision made are also published on a monthly basis.

In addition, we have recently consulted publicly on revising the statutory Schools Causing Concern guidance that describes the responsibilities and powers delegated to RSCs resulting from the provisions in the Bill, and how they will be used in practice by RSCs to intervene in failing and coasting maintained schools and academies. Alongside this document the Government are also required, under the Academies Act 2010, to provide an annual report to Parliament on the expansion of the academy programme and the performance of academies during the year. This year’s report will include commentary on RSCs.

We recognise, however, that we need to go further. We acknowledge that RSCs are a new concept and that, as more schools become academies and the RSC remit expands, we need to clearly articulate the role, improve understanding of its responsibilities and increase transparency. Noble Lords will be reassured to hear that the new national schools commissioner, Sir David Carter, considers raising awareness, particularly among parents, as one of his top priorities and he made this clear in a Radio 4 interview last month.

As with any new system, we expect the level of awareness to increase over time, but to expedite this I am today making a clear commitment to the House that the Government will publish a full description of the RSC role and a guide to all RSC powers and responsibilities. We will ensure that this more detailed information is in understandable form, includes a succinct summary of the role and has clear links for the public to find more detailed information should they require it. We will make clear that this information is for parents and the sector.

The information will be published on the education pages of the government website, GOV.UK. This is the website where all government policies, publications, statistics and consultations are published. It is already used by parents to find information on matters such as school admissions, school performance and childcare. It is used extensively. In January of this year alone, there were nearly 1.3 million visitors to the education pages of GOV.UK. The website is designed for the public and is intended to be simple, clear and quick to find information. We will make sure that the information is collated and published in good time for the Bill coming into force. Furthermore, I assure noble Lords that we will keep the information up to date and revise it as necessary, following any changes to legislation or to RSCs’ non-statutory responsibilities.

Alongside publishing more detailed information, we recognise that it is equally important to ensure the public know where to find it. Once the new information is published, we will alert parent and governor groups such as the National Governors’ Association and the National Confederation of Parent Teacher Associations and encourage them to direct their members towards it. We will also publicise the information through the email which the Department for Education issues direct to schools at the start of every term and which sets out important changes. RSCs will also be carrying out a range of activities within their regions to improve awareness, to raise their profile and to ensure the sector understands and is prepared for the new legislation.

As the noble Lord has described, since we last debated this matter the Education Select Committee has published its report on the establishment of RSCs. While the committee welcomed the introduction of RSCs as a pragmatic approach to the expanding workload of academies oversight, the report also made a number of recommendations, including that the Government should reflect on the need to improve understanding of the role of RSCs. I assure noble Lords that the Government take this issue very seriously and will increase and improve the information available to the public on RSCs, with a particular focus on simplifying and improving the information for parents.

The noble Lord, Lord Watson, referred to the situation in relation to E-ACT and parents. I can assure him that we regard the involvement of parents in education as crucial. The best way to do this is not necessarily through having two parents on a governing body. An equally good or better way may be to have parent forums. I understand that E-ACT has plans to do this and is meeting with Sir David Carter this week to discuss this further.

[Lord Watson of Invergowrie]

I certainly accept what the Minister is saying about parent forums, but why should that be to the exclusion of parent representatives from governing bodies? Can the two not exist equally well together?

[Lord Nash]

They can. They will have parents on their advisory boards and E-ACT is required, as are all multi-academy trusts if they do not have local governing bodies, to have two parents on their multi-academy trust board. So parents will still be intimately involved in decisions.

15:30

[Lord Watson of Invergowrie]

Perhaps I may follow that up. That is two parents in a multi-academy chain board. E-ACT has been mentioned by me. As I understand it, it has 23 schools and one academy chain board. Out of all those schools, only two parents would have any kind of representation. They could not possibly be representative in any way of the views of the parents in 21 other schools.

[Lord Nash]

That is why, as I understand it, they will have advisory bodies, which will consist of parents. As I have said, the same point can be made about individual schools. Two parents cannot necessarily be representative of the body of parents, which is why a parents’ association may be a much better way of engaging with parents across a broader church.

I hope that, given the further explanations and reassurances I have been able to give in relation to information about the RSCs, the noble Lord will be assured that we are committed to improving understanding and increasing transparency relating to RSCs and will be content to withdraw his amendment.

Before I sit down, I would like to take this opportunity to put my wider thanks on the record for the careful consideration the Bill has received throughout this House. First, I thank my noble friends on the government Benches, in particular my noble friend Lady Evans, who has provided strong support and kept the Bill on track over the past few months. I also thank my noble friend Lady Perry for her continuing support and advice and my noble friend Lord Harris for his passionate words on Report about the difference that becoming a sponsored academy can make.

I also thank my noble friends Lord O’Shaughnessy and Lord True. I would particularly like to thank the noble Baroness, Lady Howarth, for ensuring that the best interests of children are always at the forefront of all our considerations. Of course, I must pay tribute to my right honourable friend the Secretary of State for Education who is committed to taking forward essential reforms to achieve real social justice for all children and young people.

I also particularly thank the noble Lords, Lord Watson and Lord Storey, who have provided strong and thorough opposition alongside their colleagues the noble Lords, Lord Hunt and Lord Addington, and the noble Baronesses, Lady Massey and Lady Pinnock. I also thank the noble Baronesses, Lady Morris and Lady Hughes, for their contributions. While we may have crossed swords on many things, their challenges have been constructive and it has been clear throughout our debates that across the House we are united in our belief in the life-transforming power of education and in the desire to give every child the best start in life.

There have been very important contributions on this Bill from all sides. On the Cross Benches, I am grateful in particular to the noble Lord, Lord Sutherland, for bringing his extensive knowledge and experience of our education system to bear on this Bill and to the noble Earl, Lord Listowel, for his considered comments and amendments on children in care and mental health issues. I also thank the right reverend Prelate the Bishop of Ely for supporting the Government’s ambitions with the important role that church schools play in our education system.

I also thank the organisations that have engaged with the Bill and contributed to ensuring that its content will benefit children waiting to be adopted and pupils in our schools. In particular, I wish to thank the individual head teachers and MAT CEOs who freely gave up their time to share with Peers their experience of school improvement at the outset of the Bill entering this House. They have improved our understanding of the very real issues that the Bill seeks to address.

Finally, I would like to put on record my thanks to the officials from the Department for Education, the Bill team, in particular Louise Evans and Kayleigh Walker, the lawyers, including Caroline Chalmers, the policy officials and others who have worked on this Bill and helped to ensure the good progress we have made in this House.

As noble Lords will have heard me say previously, the Bill has one essential principle at its heart: that every child deserves an excellent education and a secure and loving home. This Bill is about social justice and about building a fairer society in which every child has the same opportunities to reach their potential regardless of their background. To ensure that adoption is always pursued when it is in the child’s best interests, we have recently announced increased funding totalling £200 million over the course of this Parliament to further develop regional adoption agencies, fund the interagency fee and extend the adoption support fund.

To achieve a world-class education system, we need a school system that consistently and universally delivers high academic standards. To help deliver that, this House has accepted an important amendment to the Bill to give more consistent and effective powers to regional schools commissioners when academies underperform. The amendments we have made, alongside the original Bill provisions to strengthen our ability to turn around failing and coasting maintained schools, mean that I am confident that the Bill leaves this House with the potential to ensure that many more children and young people will have the opportunity to make the best start and succeed in life. I commend it to the House.

[Lord Watson of Invergowrie]

My Lords, I did not expect the Minister to make those remarks at this stage—I thought he would do it at the Bill do now pass stage. I would like to say a little more about my amendment on the question of regional schools commissioners. The Minister was kind enough to facilitate a meeting with the regional schools commissioner who covers the area in which I live. In a sense, that encapsulated one of the anomalies of regional schools commissioners—the way that they are divided geographically. The Education Select Committee report highlighted the fact that London is covered by three regional schools commissioners. The committee suggested that there should be a ninth commissioner for London, to mirror Ofsted regions, which is a very sensible suggestion. The fact that I live in a region that covers places as diverse as West Ham and Great Yarmouth suggests that there is room for improvement.

There is also room for improvement in the role of parents in education. That must be about the hundredth time I have mentioned it in our many hours of debate. I believe that the Government are plain wrong in trying to say that parents do not have a meaningful contribution to make—and not the token that the Minister recently mentioned of two parents on a board that covers 23 schools. Most parents care passionately about their child’s education. The fact that they have effectively been brushed aside by much of the Bill is unfortunate, to put it mildly. It is also grossly unfair. Many people who want to have that input are now going to be unable to do so. So even a parents’ guide to regional schools commissioners would be a step forward, to at least make sure that people know where to go and who to speak to when they have a complaint, and how to forward it. I regret that it has not been possible to get agreement. Perhaps we should await the Minister’s response to the Education Committee report; I do so with some interest. In the mean time, I beg leave to withdraw my amendment.

Amendment 3 (to Amendment 2) withdrawn.

[Lord Addington]

If we may draw back from the amendments we are actually discussing, I thank the noble Lord for his work and the courtesy of his department. There have been a lot of emails going back and forth. There was also an entertaining point when the good old-fashioned steam telephone was not working in my office, so in the end a piece of paper was handed to me by one of the doorkeepers. That meant that I knew the noble Lord was getting back to me, for which I thank him.

If we address what the noble Lord said about this amendment, it is a triumph of the bleeding obvious, if I may put it like that. We should let people know what is changing. What he has done is not quite as much fun as getting an amendment accepted, but half a loaf is better than no bread—and this is a bit more like three-quarters, so I thank him for that.

Given that we seem to be going slightly off-piste, I shall also take the opportunity of thanking the noble Baroness, Lady Evans, for giving the assurance at an earlier stage that the KPIs for increasing the number of schools becoming academies were withdrawn. I should have mentioned that at the time, but it got rather swamped by other matters. Having heard that, and having those assurances on the record, I thank the noble Lord for his work on this and beg leave to withdraw the amendment.

Amendment 2 withdrawn.

Clause 14: Academies causing concern

Amendments 4 and 5

Moved by

[Lord Nash]

4: Clause 14, page 9, line 41, leave out “1A” and insert “14”

5: Clause 14, page 10, line 22, leave out “1A” and insert “14”

Amendments 4 and 5 agreed.

Motion

Moved by

[Lord Nash]

That the Bill do now pass.

[Lord Nash]

My Lords, I beg to move.

[Lord Watson of Invergowrie]

My Lords, we have now reached the point where this Bill must return to the other place. From these Benches we have to say that it is regrettable that it will take so little in terms of amendments with it. As has been outlined, it has many faults, and despite claims by both Ministers that it is all about rescuing children from underperforming schools, many noble Lords believe that there is rather more to it than that.

I should say that I do not doubt the bona fides of either Minister. The relish with which they have advanced their arguments during the Bill’s time in your Lordships’ House reflects their own backgrounds and motivation. I understand that the noble Baroness has a history in the free schools sector and that the noble Lord has a history in the academies sector, each with some success. If I may draw an analogy, to be handed this Bill is tantamount to a girl and boy being given the keys to the toy shop. It is clear that they are in their element, because it allows them to pursue their personal and particular priorities. But it has to be said that their priorities are not necessarily those of wider society, judging by the briefings we have had from a very wide range of organisations, all of whom I thank, and not to any significant extent those of the education professionals, all of whom also have as their raison d'être providing the best possible education for our children.

We have spent almost 24 hours in debate on this Bill—a full day. I wonder whether we might ask ourselves whether we might have put it to better use—some may say yes—and I am sure that we are now all ready to move on to other things. But before we do so, I want to thank the Bill team. We on these Benches have worked rather hard. On my behalf I pay tribute to my assistant, Molly Critchley, who did the heavy lifting when it came to negotiating over amendments. She did much more besides, and both I and my noble friend Lord Hunt of Kings Heath are indebted to her for her tireless efforts. This is the first piece of legislation for which I have had Front-Bench responsibility and I have leaned much and often on the experienced shoulders of my colleague Lord Hunt, for which I am most grateful. Having leaned much, I like to think that I have now learned much—but I suppose time will tell.

I think I am correct in asserting that this is also the first Bill as a Front-Bencher for the noble Baroness, Lady Evans of Bowes Park. She has perhaps had a slightly tougher baptism than she might have hoped for, but through it all she has retained an upbeat manner and an ability to assure—or at least attempt to assure—those on these Benches that the Bill was much more benign than we believed.

The noble Lord, Lord Nash, and I have had—what shall I say?—our moments throughout those 24 hours. It seems that neither of us is ever going to convince the other of the veracity of our respective arguments, but at least we have given it our best shot. I have made a discovery about the noble Lord and, in spite of the fact that he has offered precious little in terms of concessions on the Bill, I am about to offer him one of my own. I think he and I have only two things in common. One is clearly membership of your Lordships’ House. The other, I have learned, is that we were born in the same year. I am not about to divulge the year, but we were born just five weeks apart—and that provides me with both good news and bad. The good news is that the Minister was born first. The bad news is that it does not show.

[Lord Storey (LD)]

My Lords, I take the opportunity once again to thank the Minister for being prepared to listen. There have been a number of changes—including changes of interpretation—to the Bill. I said to my colleagues at the beginning, “I am sure that Lord Nash will listen”, and he has done. This is a very small Bill, really. On the adoption side, I think real progress has been made.

On the school side, there are a few issues for me. The first is whether this is not just about the academisation programme and the slow strangulation of maintained schools and local education authorities. Maybe there is a much fairer way of achieving that. I recall the statement from the Chancellor that he wants all schools to become academies, and the same from the Prime Minister.

The second issue is that of parents. I have always believed that one of the hallmarks of a successful education system is that parents are at the heart of it. I think we said in Committee that if the school that your children go to is being closed, that is quite a traumatic occasion; you want to be involved in those discussions and to know the reasons and what is happening. To then be told that you are not even going to have a say on the new school or new academy sponsor is something that I am concerned about.

Another issue follows a couple of Questions that I tabled regarding the governing bodies of schools. Again, it seems bizarre that you can have academy trusts abolishing governing bodies. In maintained schools, of course, you have to have a governing body—quite rightly; parents are an important voice in a school—but in multi-academy trusts you can have one governing body for, say, 50-odd schools. In the Harris Academy chain there are now, I think, 52 schools. One governing body—which could be in another part of the country, for that matter—being the parental voice is really not good enough. It could be said—well-meaningly, I am sure—that parents’ associations are quite important. But many schools do not have parent associations; they tend to be, I have to say, in middle-class areas.

The area of schools commissioners is one that has vexed us for some time. Light needs to be shone on the work and there needs to be transparency, and I am delighted with the comments the Minister has made on that. It is a very important step forward.

Some of us have always believed that driving up standards in our schools is not about waving the proverbial big cane but about professionalism and trusting in the leadership of schools. One of my regrets from the coalition period was that we abolished the leadership academy. That was a great mistake. You need to make sure that the people you put as leaders of your school are of the highest calibre, quality and training. You have to have good leaders.

Secondly, it is all for nought if you do not have quality teachers. It is about ensuring that teachers are respected, highly trained and highly valued. It worries me that 40% of teachers leave in the first five years of their teaching. That is a very worrying trend. I hope that, now that the Bill is out of the way, we can do what the Minister is good at—listen and evolve policies or procedures that work for all our education services.

Bill passed and returned to the Commons with amendments.

Trade Union Bill

Monday 8th February 2016 Lords Chamber

Committee (1st Day)

15:45

Relevant documents: 15th and 20th Reports from the Delegated Powers Committee

Clause 1 agreed.

Clause 2: Ballots: 50% turnout requirement

Amendment 1

Moved by

[Lord Kerslake]

1: Clause 2, page 1, line 14, at end insert—
“(3) Subsection (1) shall not come into force until—
(a) an independent report is published, and laid before each House of Parliament, which has been prepared by the Central Arbitration Committee in consultation with qualified independent persons, on the delivery of secure methods of electronic, postal and workplace balloting for the purpose of ballots held under section 226 of the 1992 Act, and(b) the Secretary of State has considered the report and published, and laid before each House of Parliament, a verification strategy for the rollout of secure electronic, workplace and postal balloting methods for the purpose of ballots held under section 226 of the 1992 Act.(4) The Secretary of State must publish and lay before each House of Parliament the strategy provided for by subsection (3)(b) no later than two months after the date on which this Act is passed.
(5) The report provided for by subsection (3)(a) must include—
(a) an analysis of different methods of authentication that can be used to enable voters to cast their electronic votes such as single use security codes, personal identification information or membership affiliation information; (b) an assessment of the ability of electronic voting systems to identify that the information being provided to authenticate the voter is the information required to enable a vote to be cast and recorded in that particular ballot and that the information is unique to the voter;(c) an assessment of the ability of trade unions appropriately to secure means of distribution required for the delivery of electronic voting information to maintain the security and integrity of any ballot;(d) a cost benefit analysis of the risks involved in methods of distribution such as email, post, text messaging and face-to-face methods;(e) an assessment of existing recognised industry standards for online voting systems; and (f) analysis of the role of third party administrators and the benefits of using rigorous quality assurance procedures and processes for delivering electronic voting.(6) The verification strategy provided for by subsection (3)(b) must include an assessment of how alternative, secure, methods of balloting will impact voter turnout.
(7) For the purpose of preparing the strategy, the Secretary of State must consult relevant organisations including professionals from expert associations to seek their advice and recommendations.”

[Lord Kerslake (CB)]

My Lords, I rise to move Amendment 1 and indicate my support for the other amendments in this grouping. The central tenet of all the amendments, tabled and supported by Members of all parties and none, is the same: namely, that if we are to introduce thresholds on trade union ballots before industrial action is taken, we should seek to enable the widest range of methods for members to place their vote.

This seems such an obviously right thing to do that it is surprising to me that we have to debate it. If we believe that important decisions on whether to take industrial action should have the widest possible engagement and participation of those involved, we must surely all want to take whatever practical steps we can to encourage it.

Currently, ballots for industrial action can take place only through postal ballots. However, ballots for trade union recognition, which apply the same thresholds as proposed in the Bill for industrial action, can now take place through workplace ballots, so we already have a difference. At present, neither can be done through electronic balloting.

Digital technology has moved on fantastically since the Trade Union and Labour Relations (Consolidation) Act 1992 was passed. We now expect routinely to undertake activities such as banking and shopping in a way that would have been unimaginable then. Today, 82% of adults are online. The public in general and trade union members in particular now expect to have the digital choice—an important point. It is a choice that their trade unions ought to be able to give them. The Government’s own policy is to be digital by default in the delivery of their services.

There is absolutely no doubt that electronic balloting can be made to work. I used it myself in Sheffield for the local and general elections as far back as 2007. The use of electronic voting has come on in leaps and bounds since then. For example, in 2014, more than 400 organisations throughout the UK provided their stakeholders with the opportunity to cast votes electronically using the services of Electoral Reform Services Ltd, an independent supplier of ballot and election services. These involved a wide range of bodies from companies to community-based organisations, with more than a million votes cast.

ERS is confident that it can meet the required standards for ballots under the 1992 Act—namely, that those who are entitled to vote have the opportunity to do so; that votes are cast in secret; and that the risk of unfairness or malpractice is minimised. It believes that it can meet all those tests. Given the widespread use of electronic balloting, the only possible remaining issue is security.

As a former returning officer, I take the issue of voting security very seriously. We should take every practical step to ensure that ballots of all types are as secure as they can possibly be. However, we should also be realistic and say that no system of voting can be made completely and utterly secure, just as no system of online banking can be completely protected from fraud. Therefore, the question is whether electronic balloting can be done in a way that is as secure, if not more so, as postal balloting. That is the key test. I am absolutely convinced that it can, and there is good evidence from Electoral Reform Services and others to back that up.

The response from Ministers so far to what I think is a perfectly reasonable request from the trade unions is to raise—rather vaguely, in my view—security concerns and then to seek to push the issue off for another day. I really do not think that this is an adequate or fair response when there is an opportunity to deal with the issue now. My amendments therefore propose that before the thresholds set out in the Bill come into force, two things should happen: first, an independent report should be undertaken by the Central Arbitration Committee on the delivery of secure methods of electronic, postal and workplace ballots; and, secondly, the Secretary of State should have considered this report and laid before each House of Parliament a verification strategy for the rollout of such balloting methods. I have set a timetable of two months after the Act has passed for the strategy to be done.

The amendment would allow the CAC, a well-established and respected arm’s-length public body, to look at the issues objectively and to give us its views. It is well within the remit of the CAC to undertake this review. Indeed, there is provision within its regulatory framework to introduce electronic methods for recognition ballots now—a provision that has so far not been taken up. The CAC has considerable experience in organising secure ballots but would not claim to be expert in electronic balloting. I have therefore included in the amendment provision that it could draw on an independent qualified person who is such an expert.

I am absolutely persuaded that we could securely introduce electronic and workplace balloting now. However, I recognise that to date this has not been the Government’s position. I have therefore, through this amendment, sought to meet the Government half way. Whether they are prepared to go the other half will be a test of their willingness to engage in open and constructive debate on the Bill. I beg to move.

[Lord Monks (Lab)]

My Lords, I am pleased to support the amendment which has just been so ably moved by the noble Lord, Lord Kerslake, and I also support other amendments in this group.

As the Committee will see, Clauses 2 and 3 introduce arbitrary thresholds of turnout and majorities in relation to union strike ballots, particularly affecting certain sectors. Never mind, for the moment, that no other organisations are under the same statutory restrictions as far as their ballots are concerned. Never mind, for the moment, the glaring discrepancies between these requirements and the requirements that exist for ballots in political life; for example, we all know the embarrassment of the low turnout for police commissioner elections in particular, and there are one or two other examples. And perhaps never mind, for the moment, the unprecedented nature of these requirements on trade unions, certainly in western Europe. The fact is that these thresholds must be seen alongside the existing requirement that a union must use postal ballots. As the noble Lord, Lord Kerslake, has just explained, this has been the case since 1992.

Looking at different countries, only in Australia are there similarly tough thresholds on unions as far as strikes and other industrial action ballots are concerned. But in Australia, it is normal to use workplace ballots, with the postal ballot as the default position, and unions there can use online balloting too. This amendment seeks to develop that case for the United Kingdom.

In the impact assessment, which I am pleased we have now had a chance to look at—better late than never—the Government claim that the proposals are not about banning strikes and, rather disingenuously, claim that the thresholds are in fact an attempt to make the balance better. Other countries in western Europe are mentioned in the impact assessment, including Denmark and Germany, which do use thresholds in strike ballots. However, in both cases, those are agreed arrangements with the unions concerned that go back a number of years and, in the main, were done just after the end of the Second World War. But, again, there is no requirement on the method of balloting to be used in those countries. So, nowhere else in the advanced world is the requirement on how to ballot linked to questions of threshold, and nowhere else is there a requirement to have a mandatory postal ballot.

Those familiar with parliamentary elections—and there are many in this House—will know that easier rules on postal balloting were introduced to increase turnout. People apply for a postal vote from the local returning officer. In the union world, the ballot form is different; it is not solicited in the same way. It drops through the post with all the other stuff that we get and, too often, gets put to one side, forgotten about and ends up in the recycling bin. It has depressed turnout figures in most unions; it has certainly not increased them. The Government clearly do not trust—at the moment, anyway—alternative methods. In their wish to curtail the relatively few strikes that do take place in the UK today, the Government are using the combination of high thresholds plus postal ballots as a way of stamping out dissent and protest.

What redress is left to employees in these circumstances? Just imagine, for a moment, a large retailer with many casual workers, often low paid, a very high labour turnover and some harsh management practices: Sports Direct just happens to spring to my mind immediately. Under the proposed provisions in the Bill, how could workers do much collectively about the conditions in which they work? It would be virtually impossible, for example, to take lawful industrial action. I have to say that in some of these companies, it would not be easy to do that at all, even without postal ballots or any thresholds. However, it seems to me that an important artery of democracy is being blocked by making things more difficult. Not everybody is in a school or works for Transport for London—a tight group of workers with a common identity who are therefore relatively easy to organise.

The amendment in the names of the noble Lords, Lord Kerslake and Lord Oates, and myself suggests that Clauses 2 and 3 should not come into effect until an independent review has been carried out by the CAC. The Central Arbitration Committee is probably not very well known to most of the British population. It is a relatively small organisation, but it conducts ballots under the law on trade union applications for recognition. The turnouts in the ballots that it conducts are always high, and no evidence of fraud has been found since it started doing this work. It can decide on the most appropriate means of holding a recognition ballot—for example, with a dispersed workforce it could well use postal balloting, whereas with a concentrated workforce it would make sense to have a properly supervised ballot box. The key is proper supervision, with an independent scrutineer and a properly secure balloting method. The CAC has not yet used e-balloting, although as the noble Lord, Lord Kerslake, said, it has the ability to use it.

16:00

Our amendment asks that before the provisions of the Bill come into force, the CAC be asked to conduct a review of the delivery of the various means of voting on industrial action. It would be asked to prepare an independent report to be laid before both Houses of Parliament considering the different methods of authenticating voter identification and security systems for electronic voting, and providing a cost-benefit analysis for unions using those different methods of balloting. As has been explained, the Secretary of State would be required to lay before Parliament,

“a … strategy for the rollout of secure electronic, workplace and postal balloting methods”,

on industrial action.

That seems to me, as I hope it seems to most noble Lords present, a very reasonable proposition, and I hope the Government will open their mind to it. It must be obvious to any fair-minded person that, provided that the balloting method is secure and can be trusted, unions should not be impeded from taking lawful steps in the interests of their members. The current proposals are draconian—unacceptably hard. The measures in the amendment and the other amendments in the group seek to make them more practical and fairer.

If e-balloting is good enough for the Conservative candidate in the London mayoral election, surely it is good enough for wider application—and it could ease the burdens that the Bill is putting on unions. I have a vision of a certain Minister acting like the sorcerer’s apprentice in Whitehall, scurrying around collecting ideas for hobbling trade unions and slapping as much red tape as they can find on them. This is unfair and unjust: it is the opposite of one-nation Conservatism. There are huge problems in the British labour market—problems of inequality, casualisation and productivity—but what trade unions are up to at the moment is not one of those problems. Rather, it has been picked on by the Government to attack. I hope they will think a bit more maturely about what they are doing, and try to find a way of making some of these provisions more acceptable. I hope that by adopting the amendment, or one very much like it, we will get a better, fairer and much more balanced Bill—one that the Government can be proud of, and the rest of us can live with.

[Lord Oates (LD)]

My Lords, I am pleased to speak in support of the amendment moved by the noble Lord, Lord Kerslake, and of the other amendments in the group. I should first apologise to the Committee as I was not able to speak at Second Reading. That was an administrative mess-up on my part. I hope the Committee will forgive me, as a relative newcomer, for such a breach of protocol. I was, however, present throughout the debate, and listened carefully to the many significant points made by noble Lords, and to the Minister’s response.

We shall have the chance to discuss the merits or otherwise of the introduction of thresholds later today, but without doubt, as the noble Lord, Lord Monks, made clear, this is a significant departure from the usual democratic practices of this country—indeed, from those of any comparable democracy in the world. Given that fact, I would expect the Government, in putting forward such radical proposals, to accompany them with a means to ensure maximum participation and to take the opportunity to modernise balloting procedures.

The Minister stated at Second Reading that the Government’s purpose in bringing forward the Trade Union Bill was to modernise the relationship between trade unions and their members. One might debate whether that is not more properly an issue for trade unions and their members rather than for the Government but, be that as it may, if Ministers are sincere in their protestations about modernisation, it is unclear why they are resisting the one obvious modernisation measure—the proposal to allow electronic and other forms of balloting that could help increase participation.

The other amendments in the group, in slightly different ways, seek to achieve that purpose with the safeguard of independent scrutiny to ensure those ballots are conducted properly and without intimidation. I support those amendments because I am convinced that we could introduce electronic and workplace balloting now. However, we heard at Second Reading that the Government remain opposed. The Minister questioned whether electronic ballots would be secure or open to intimidation and vote-buying. The amendment in the names of the noble Lords, Lord Kerslake and Lord Monks, and myself, provide the Government with the opportunity to properly test this issue with the assistance of the Central Arbitration Committee, a respected body which has considerable experience on the issue of balloting, as well as with others with expertise in the specific field of electronic balloting. If security really is the issue, these amendments can help get to the bottom of whether it is possible to use alternative means of balloting in a manner as secure as, if not more secure than, the current postal ballot system.

The Government’s approach to these amendments will be important because it will give an indication of whether they are sincere in the claim, repeated by the Minister at Second Reading, that the Government’s objection to electronic voting is not a matter of principle but one of practicality. It will reveal whether the Government really want more people to participate in trade union ballots but cannot see a practical way to make it happen, as they claim, or whether, as many of us believe, their sole objective is to make it as difficult as possible for trade unions to take industrial action. I hope I am wrong in that belief and that the Minister will expose it as entirely unwarranted cynicism by accepting these amendments. If she is unable to do so, we will know where the Government stand.

[Lord Pannick (CB)]

My Lords, your Lordships will have seen the report published last Friday by the Joint Committee on Human Rights on the application of Article 11 of the European Convention on Human Rights, which guarantees freedom of association, including the right to form and join a trade union. This is of particular relevance to the issue we are debating—electronic balloting.

The Joint Committee’s report mentions that in 2014 the European Court of Human Rights dismissed a complaint brought by the National Union of Rail, Maritime and Transport Workers about the ban on secondary action. I declare an interest: I was counsel for the United Kingdom Government in that case. The European court said that it will generally respect a legislature’s policy choices in relation to social and economic issues, including its laws on industrial relations, which it accurately describes as a,

“legislative policy area of recognised sensitivity”,

unless the choices the legislature makes are “manifestly without reasonable foundation”.

The European court said that a democratically elected Parliament is “better placed” to identify,

“what is in the public interest on social and economic grounds”.

The Joint Committee points out that the European court added that, the more far-reaching the interference with a core trade union activity—for example, requiring the dissolution of a trade union—the greater the justification required. I think, however, that the European court and courts in this country would almost certainly regard the basic provisions in Clauses 2 and 3 as not going to the core of trade union activity because the existence of trade unions and the rights to call a strike are unaffected, albeit that important limits and conditions are imposed. Parliament would, I think, be acting well within its broad scope of discretion if we decided that the disruption to the lives of others caused by strikes, particularly in the public sector, justified the general measures in Clauses 2 and 3.

I would be very surprised if the European court were to agree with the noble Lord, Lord Monks, that the threshold provisions are arbitrary. However, I agree with the Joint Committee that the Government may be vulnerable to a legal challenge under Article 11 because a court will consider the package of statutory provisions as a whole when it assesses whether those provisions are proportionate and whether they have an objective justification. If the Government do not compromise on some of the less attractive provisions of the Bill, to which we will come, such as check-off, they will be at much greater risk of a human rights complaint being taken seriously by the court.

Clauses 2 and 3 would be particularly vulnerable to legal challenge if the Government refuse to allow for electronic balloting. Allowing online balloting would manifestly promote the professed objective of the Bill to enhance democratic decision-making on strikes. My advice to the Government is to consider carefully the amendments in this group and to seek an accommodation to allow electronic balloting to reduce what will otherwise be the legal vulnerability of Clauses 2 and 3, which could damage an important objective of the Bill.

[Lord Balfe (Con)]

My Lords, I declare my interests as president of the British Dietetic Association, a TUC-affiliated union, and an unpaid adviser to BALPA, the pilots’ union. I also remind the Committee, as I do virtually every time I speak on the trade unions, that 30% of trade unionists—in fact, slightly more, we estimate—vote for the Conservative Party in general elections. Sometimes we tend to forget that and to think that the trade union movement is a sort of Labour Party at play. It is not. It is as diverse, almost, as the rest of the country.

In speaking about electronic balloting, I point out that I am always pleased when Governments carry out what is in their manifestos. It is not something that I have been used to for the whole of my political life. However, I must say to the Minister that at no point in the Conservative Party manifesto is anything mentioned about electronic balloting not being allowed. Therefore, this clause in the Bill is in no way connected with the election manifesto, although quite a few other clauses are and I will not be opposing them.

16:15

I think that the Government are under the illusion that a lower turnout would somehow help to prevent industrial action. There is not much evidence for that. If anything, the people who do not vote may be less likely to support industrial action, but I do not think that one really knows. However, I know that strikes are not undertaken lightly. I have never been on strike in my life, but that is not unusual. Most trade unionists have never been on strike. They join their trade union for a wide variety of reasons. For instance, lollipop ladies who join UNISON get £5,000-worth of life insurance—an extremely valuable benefit that comes with their subscription. Most other unions offer a package of services. My union, Unite, offers a free legal advice service to all its members. I must say, having used it on two occasions, that it is an excellent service staffed by good solicitors.

I digress slightly, but by tabling my amendment I am not saying that this is the only way to deal with electronic balloting. There are, after all, five separate amendments on it. We will not force them to a Division, but I hope that the Minister will take the opportunity after the debate to look carefully at what has been said and who is in favour. She will have had a paper from 16 of what I would call the most moderate unions in Britain, all affiliated to the TUC. It says:

“At a time when many government departments are adopting a ‘digital first’ approach it is perverse that the … bill prevents unions”,

from running online ballots. It continues:

“If the government wishes for unions to ballot … members more often, and to shorten timeframes for industrial action”,

then unions should be allowed to,

“operate in the most efficient way possible”.

The First Division Association, which is the union of the most senior civil servants and which would look at how to make this work, has stated:

“The continued prohibition of electronic balloting for statutory ballots supports the view that the purpose of these reforms is to impede trade unions rather than encourage democracy as claimed”.

Despite this opportunity to make a positive reform, the Government have chosen to retain the ban on electronic balloting. These are not wild people.

As the Minister will know, because she was good enough to meet BALPA with me last week, and in response to her request, the general secretary of BALPA, Jim McAuslan, sent her a two-page letter, three-quarters of which is a list of organisations that have allowed electronic balloting to take place without any problems coming up. I will quote one other group that is not normally found in the same box as the TUC. The Institute of Directors has stated:

“Provided that a fair and transparent system of electronic voting can be delivered, there is no reason why—in return for asking for a higher level of legitimacy—the union movement should not be allowed to embrace technological advances to increase participation”.

That is fairly clear.

My challenge to the Minister and to the Government is to take the words of Nick Boles in another place that the Government did not object in principle to the introduction of e-balloting, but they had reservations about security. My view is that those reservations can be addressed and that, in a fast-moving technological world, they are not significant enough to keep this out of the Bill. The technology moves extremely fast. My amendment, like the others, provides safeguards in the implementation of the proposed new clause. It does not say that unions can set up their own electronic balloting company and have a closed system. All the amendments, in some way or other, provide for checks and balances that would enable the reservations of the Minister to be met.

Recently, an organisation called WebRoots Democracy produced a rather thick report dealing with many of the objections to e-balloting and pointing out ways forward. What is certain is that we will not get those ways forward and we will not end up where we want to be unless this goes into the Bill. So I ask the Minister to go away, rethink, look at what can be done and take note of the very strong feeling in many parts of this House that the time has come for the legislation to be put in place. This is a reform that can be made to work and I urge the Minister to make it possible.

[Lord Lea of Crondall (Lab)]

My Lords, I shall give two reasons as to why the Central Arbitration Committee is uniquely qualified to carry out the inquiry and report as stated in the lead amendment in this group. I declare an interest as an ex-member of the Central Arbitration Committee. It has the following qualities. Most inquiries are judge-led. There is typically a judge, someone with experience of employers’ organisations—that is, an employer—and someone with experience of an organisation of workers, normally a trade union person. So employers would be confident that their experience was built in to the inquiry. I think the Minister could take that as an indication of the confidence that one should have in such an inquiry.

Secondly, the CAC has unique experience of what one might call access to the workplace. Of course, there are different models on show in this debate and no one is trying to say, as I understand it, that only one model can work. However, there are enormous issues around contact in the workplace and it is a fact, as far as I know, that over the 15 years or so of the operation of the CAC, no one has ever queried the standards. The noble Lord, Lord Kerslake, is nodding his head. I think it is a remarkable record that everybody has confidence in the modus operandi of the Central Arbitration Committee.

[Lord Brown of Eaton-under-Heywood (CB)]

My Lords, I, too, support this group of amendments; indeed, the arguments in favour seem compelling. It is a modest enough proposal and its safeguards are implicit in the very nature of the report which is canvassed. Personally, I support the turnout requirement in Clauses 2 and 3, but I cannot resist pointing to the bizarre consequences that could, at least theoretically, result from the new provision.

To take the illustration used in the Explanatory Notes to the Bill of a bargaining unit of 1,000 union members, if 499 vote in favour of industrial action and none against, a strike would be unlawful. If, however, 499 vote in favour and one against, then, because at least 50% of those eligible will have voted, a strike is permitted. So, too, of course, if 499 vote in favour of industrial action and 498 against. Doubtless, such anomalous possibilities as these are inevitable in any scheme, which, as here, has a combination of a turnout requirement but then a decision on the basis of a simple majority. However, it surely underlines—and this is my point—the imperative of ensuring that the best possible way is sought of achieving a maximum turnout of those eligible to vote. These amendments surely allow for that better way.

[Lord Morris of Handsworth (Lab)]

My Lords, I, too, support the amendment moved by the noble Lord, Lord Kerslake. I ask myself: why? I will make a plea for a travelling section of workers who are sometimes never seen because they are on unsocial hours and shifts—transport drivers, in particular. Not so long ago, a transport driver would work a five-day week. At the weekend, he—and it was more likely to be a he—would go along to the branch meeting in a local pub and cast a vote. Those arrangements no longer exist because of domestic and other demands on the time of the driver, who might be away throughout the week.

Very often the press, and indeed the general public and some politicians, cast real doubts on balloting arrangements. They reckon that they are unconstitutional, not fair and subject to a host of practices which are not democratic. I am pleased about this amendment because, at last, a methodology of engagement and participation can be found. It can be trusted and realised. Democracy at work in today’s world is important; Amendment 1 brings about its achievement.

The flexibility offered by the amendment will improve that democracy and public confidence in trade unionism. I am sure that it will find support among the large majority of employers, because when the press reports any malfunction of a process in a particular workplace, it is about not just the trade unions or the individual but the name and reputation of that enterprise. This amendment would therefore, in my judgment, bring about support and authority for all the parties concerned.

For those reasons, and because I believe that democracy can be found in and out of the workplace, I hope that Amendment 1 will carry support in this Chamber.

[The Lord Bishop of Chester]

My Lords, it was nearly 50 years ago that I enrolled as a member of the Transport and General Workers’ Union. I say that I enrolled, but I was enrolled—I had no choice. I was working between school and university and I worked in the Land Rover factory in Solihull helping to make Land Rover Defenders, the last of which have recently rolled off the production line. Since then, because of my career in the church, my direct involvement in the trade union movement has obviously been less, but I endorse what has been said about the union Unite, which some clergy belong to. It provides good advice and I much encourage my clergy, if they want, to join that union.

The 50 years since I ceased to be a member of the Transport and General Workers’ Union have been difficult for trade unions, one way or another. But they have a vital role going forward, not least in our globalised world which is driven by large economic forces. They have a place, but the key thing is to emphasise the process of modernisation, to which reference has been made. I, for one, fully accept that strike action should not result from a small and vocal minority dictating things to others, and I can broadly support the provisions in Clauses 2 and 3. It is a matter of judgment and it is in one sense arbitrary just where you draw that judgment. We will come on to that later. It seems to me that at the heart of the combination of Clauses 1, 2 and 3 is—to use a word which I think we have not used so far in the debate—a matter of fairness. That is what lies behind Article 11, to which the noble Lord, Lord Pannick, referred. It is fundamentally a question of what is a fair position, balancing all sorts of different considerations.

Having listened to the debate so far and some very interesting speeches—not least that by the noble Lord, Lord Balfe, behind me—issues of fairness indicate that a proper consideration of electronic voting should be part of the process of modernisation. I offer, in conclusion, a final encouragement. If the General Synod of the Church of England can embrace electronic voting, so can we.

16:30

[Lord Cormack (Con)]

My Lords, I was wholeheartedly with the right reverend Prelate until he called the General Synod in aid, but he was totally right about fairness. As someone who does nothing electronically and has no intention of doing anything online at all, I believe we have to accept that those who want to move with the times in that way should be able to do so. My noble friend Lord Balfe made an impeccable case, as did the noble Lord, Lord Pannick. I find no particular affection for this Bill, but it is essential that when it goes on to the statute book—as it surely will—it must be seen to be fair. The right reverend Prelate is, of course, right. I pulled his leg, but if the Church of England can do it then we must allow the trade unions to do it. It must be fully supervised and properly secure. As the noble Lord, Lord Kerslake, said, nothing is ever 100% secure—which is why I would never do online banking—but we can do most things to ensure that the system is secure.

I want to do one thing and one thing only: to appeal to the fairness of the Minister who will come to reply. It is the function of this House, from time to time, to ask another place, and the Government, to think again. In no sense does this destroy or undermine the Bill, but it allows those who wish to vote to do so, in privacy, online. One could argue that they might be under less pressure than if they voted in my preferred way—in the workplace—or by post. We have seen so many abuses of the postal voting system in general elections that we cannot hold that up as a great example. I hope my noble friend will bear in mind the words of Mr Nick Boles in another place, which have already been quoted: if there is no objection in principle then let us make sure we enact in practice.

[Lord Dykes (Non-Afl)]

My Lords, I added my name enthusiastically to that of the noble Lord, Lord Balfe, on Amendment 22 about electronic voting. I thank him for his wise words, spoken with authority and knowledge of trade union activities. That is not necessarily linked automatically to the Labour Party in any way. This is especially so in the modern world, compared to the past when it might have been more automatic with the big trade unions. We now see a much more open scenario and there are many who support or vote for the Conservative Party in general elections who are enthusiastic about their own membership of different kinds of trade unions. That should be the norm in any modern, balanced society. It should not be two competing elites with nothing moveable in between.

This amendment helps to widen the possibilities for voting for strike action in the future. This is so infrequent and rare in British society nowadays, compared to the past, that it is not a general problem at all. That adds to the need for this cluster of amendments. I am referring now to Amendment 22, but the rest all fit together. They ask the Government to think again carefully about the underlying reasons why the Bill was introduced. There is still an element of surprise in wider society among people who follow new Bills about why the Bill was engineered and created as it was. Any Government, as was said in the Second Reading debate, who have the authority of only 24% of the electorate, have to be careful to introduce legislation that is not only properly drafted and intelligent but creates consensus, fairness and balance to deal with areas of pressing need for public governance.

There is considerable dismay about the Bill among those who are not keen on any limits on trade union voting activity. In my view, it should be completely open, but the threshold idea has caught on with some people, so one has to accept that it will be supported in the future, to whatever extent that is rational. The Government have to respond to that pressure and think again.

One of the ironies is that the Bill would be easier to get through if the Government responded to intelligent amendments that represent the views of Members from all parties in this House. I hope that the amendments will be received with some interest and enthusiasm in the other place if the Government do what we are requesting today.

On electronic voting, the noble Lord, Lord Kerslake, referred in his speech to what he did in Sheffield. Electronic voting is feasible and can be just as secure as any other method of voting if proper procedures are put in place. It can be secure, as provided for in the Central Arbitration Committee report system, which is an excellent part of the amendment drafted by colleagues including Lord Monks.

The noble Lord, Lord Pannick, expressed reservations about Article 11 of the European Convention on Human Rights, and the noble and learned Lord, Lord Brown referred to the potential mathematical absurdity of the Government’s latest 50% proposal, which needs changing. All those problems were raised by Cross-Benchers, which is yet another illustration of the substantial changes that need to be made to the Bill.

I was in business for many years and we may compare the fairly easy-going procedures for corporate AGMs with what is being planned to bring the trade unions to heel. That might be an emotional phrase that is used fairly by some people and probably with enthusiasm by some of our right-wing newspapers. It would be a great tragedy if there were one standard for one set of people and another for another.

I thank the noble Lord, Lord Balfe, very much for his advice on the common-sense element of trade union behaviour. There is a real need to make progress on this cluster of amendments. This is a great opportunity for the Government to refer positively to them and accept the ideas behind them. Then the Bill would make progress in other important areas.

[Lord Clinton-Davis (Lab)]

For 30 years, I was president of BALPA, and I notice that the union is very well represented in the Committee today. I beg the Minister to think again about the Bill. Every speech that has been made so far has indicated that the Government ought to think again. We do not know whether the Minister will think again. I plead with her to do so, because this is not an ordinary Bill. It goes to the very heart of what not only the trade union movement or the Labour movement but the whole country thinks about this issue. I hope that the Minister will be more placatory than the Government have indicated so far. I repeat that the Bill is misplaced, as it is written. Therefore, I hope that she will say later on that she is prepared to think again about what the Government are putting forward.

I am very glad that BALPA has set a good example. Although on the whole the executive has been Conservative—there are one or two people who are not, but not many—the important thing about the union is that it is prepared to put aside its political views and think in a way that is representative of the country as a whole. BALPA has done a great deal for British aviation. It is not always right, but on the whole what it has advanced has been for the benefit not only of pilots but of those who use all the airlines in the world. Will the Minister say today that she will think again about the whole virtue and principle of this Bill, which is vitally important?

[Lord King of Bridgwater (Con)]

My Lords, I rise to make clear right at the start that I strongly support Clauses 2 and 3 in this Bill, and I will describe the reasons why. The amendment proposed by the noble Lord, Lord Kerslake, obviously impinges on them, so I shall say a word about that.

The amendment refers to introduction of voting by,

“electronic, postal and workplace balloting”.

I am struck by one thing; this was described as the e-voting debate, but I have not heard a single person yet say that they think that workplace ballots should be reintroduced. In my own judgment, that is the reason why in the 1984 Act, which I had the honour of taking through Parliament, we introduced compulsory postal voting. I am not at all persuaded of the idea that you can get safely back to workplace ballots without intimidation or corruption in certain areas.

There is a need for trade unions, government and the public estate to carry public confidence at all times. If their lives are to be significantly inconvenienced, and in some ways seriously inconvenienced, with great personal distress, there should be proper protection for those people. As has been said already, striking should be only the last resort. That is in the interests of the union members themselves, for whom it may be a very expensive operation that may involve significant loss. They should never be taken out on strike by union leaders except as a last resort. But at all times we have protected that last resort of the right to strike, as was rightly said by the noble Lord, Lord Pannick. It is the ultimate freedom—the right that people have under the law.

We talk about trade unions in general as if we were talking about—

[Lord Morris of Handsworth]

My Lords—

[Lord King of Bridgwater]

May I just finish this point and then I shall give way? We are talking also about the change in the number of strikes. What is very significant is—and the right reverend Prelate referred to 50 years ago being on the shop floor, or maybe in a more senior position at Land Rover—that it was a very different world indeed. The world was very conscious at that time of strikes in the car industry. The noble Lord, Lord Monks, paid an indirect tribute to the progress that had been made under Conservative legislation. He pointed to the much more constructive industrial relations that now exist between the workforce and the management, which has been a major factor and a key to the success of our car industry at the present time. I give way to the noble Lord.

16:45

[Lord Morris of Handsworth]

I thank the noble Lord. I have great respect for his views but the debate that we are having is not about strikes; it is about a method of voting.

[Lord King of Bridgwater]

The point is: how do you maximise voting? It is very important that the public have confidence in the number of votes cast in these situations. The latest figure I saw, if it is correct, showed that there are now seven times as many strikes in the public sector as in the private sector. Public sector industries tend to be monopolies and you do not have to live long in London to see that a public sector or monopoly strike, such as happens, sadly, on the Underground and perhaps on the buses, can cause huge disruption and distress for millions of people. This is an issue for Parliament; it is not a party issue. We all have a duty to ensure that the public have the correct protection without preventing the right of a trade union in the final analysis to use its ultimate right to strike. I make that point very clearly. There must be a maximisation of that vote, without corruption and intimidation. It must be a full and correct vote.

The noble Lord, Lord Kerslake, piloted electronic voting in Sheffield in 2007 and that is very impressive. I wonder how many people in Sheffield at that time were really familiar with the internet and whether the electronic possibilities had spread to the extent that they obviously have now. What has come with that spread is a far greater threat from the corruption of the internet itself. Everybody knows the challenges of cyber. It is a major defence issue now. We now know that nothing is secure against a cyberattack and the problems associated with hacking are much more prevalent. That is not an argument against electronic voting—before everybody sucks their teeth and thinks I am about to oppose it. I actually think we should bring in electronic voting, but we must do it with our eyes open to the fact that there are now far more risks than existed in 2007.

I think the noble Lord, Lord Kerslake, will accept that there are now far more challenges and difficulties. I do not think many people outside realise just how insecure those systems are and just how professional different organisations and Governments are which do not bear us any good will and are interested in corrupting and damaging our systems. So if we are going to go ahead with electronic voting, we have to do it after the most careful examination of the challenges, because the worst thing to do would be to introduce electronic voting and then find that it does not work because it is corrupt. That would bring discredit on the whole system.

I do not claim to be an expert on the Central Arbitration Committee and whether that is the best body to do this, but one line in the amendment worries me. It states:

“Subsection (1) shall not come into force until—”.

I worry that this is trying to kick the whole thing out and that it might be used as a device to prevent Clauses 2 and 3 from coming into effect. The noble Lord, Lord Kerslake, gave a very helpful speech making it quite clear that it is not his intention to do that, but there is an alternative way to proceed. The Secretary of State has the power under existing legislation, if he wishes to use it, to introduce electronic voting after a proper examination of these issues. That is the alternative way to go.

This is Committee. We shall no doubt return to these issues on Report, but I put that thought to the Minister as a possible way to proceed. I do not want to find that we have delays. If there could be proper consideration and the best possible examination of this by bodies really capable of really examining these very difficult issues that now surround the electronic world, I would support it in the interests of maximising the voting possibility because—my noble friend Lord Balfe made this point very well—the fullest turnout is the best safeguard against the wrong result. Active minorities working against idle majorities is the danger we have to guard against. We need the maximum commitment and the maximum vote in these situations. If electronic voting genuinely free from corruption and distortion can be made to work, I would support it.

[Baroness Prosser (Lab)]

My Lords, I want to raise a couple of points that are rather different from those which we have heard thus far.

First, what is the purpose of this legislation? What is the purpose of the Government’s proposal to increase the thresholds for turnout and participation, when we have not heard an inkling about their interest in enabling that increased participation to take place? Many noble Lords have already spoken about using electronic voting. It would be a real step forward and really interesting and heart-warming if the Government were prepared to say that they are prepared to trial it, look at it and to set up a group to study it, but thus far they have said nothing. That makes me very suspicious about the real intention behind the proposal. Could it be that the Government do not want an increase in thresholds to come about? Do they really want more participation, or is this a way of demonstrating that they do not want any strikes, particularly in the public sector, without actually saying that they do not want any strikes, particularly in the public sector?

The noble Lord, Lord King, said that nobody thus far has mentioned workplace voting. I know there is a range of issues and problems, but it might well be useful to take a look at whether, in certain circumstances and certain kinds of workplaces, workplace balloting would be appropriate. However, it seems to me that none of this is the object of the Bill. Increasingly, it looks as though it is an exercise in how to ban strikes without actually banning them. It is very clever. It saves all that performance of perhaps having to face legislation—all the global public opprobrium that would be likely to come from the ILO and others if strikes were banned. It makes it so difficult that most attempts at industrial action would fail. That is how it reads and that is how it is going to work out, it seems to me, if we do not have some measure of understanding from the Government about what is actually being suggested.

I am moved to comment in this way because this is not the only legislation or policy we have had in recent times which makes it appear that the Government are trying to close down voices of opposition. I mentioned at Second Reading the areas where this dismissal of opposition has become apparent. For example, there is English votes for English laws: of course, no pesky Scottish National Party is going to get in the way of things. There are the Boundary Commission’s changes to the electoral register; proposals elsewhere in the Bill to make it more difficult for unions to return and retain their membership lists, thereby certainly reducing membership income; and changes to unions’ ability to build up and retain funds for political and other forms of campaigning. Further, this weekend we heard that restrictions are to be placed on the charitable sector’s ability to conduct public policy campaigns. All that adds up to a frightening and worrying scenario. It all adds up to political interference. As I said earlier, I believe that it will be seen by many people as a very poor show and by many more as a demonstration of very poor judgment.

Many speakers have spoken in detail about the problems associated with postal ballots and participation and I am not going to repeat what they said. However, if industrial action is being considered, the most important work to be done—by unions and employers—is to engage in debate and try to solve the differences that have led to the industrial relations breakdown. Unfortunately, with one or two very good exceptions, few of the people involved in drawing up this legislation seem to have had any experience of the world of work or, certainly, any knowledge of trade unions.

The noble Lord, Lord King, commented that industrial relations now are very different from those that pertained in the days of “the Rover”, as union members always referred to the factory. That is absolutely correct; but the reasons for those changes are many and various. Not least, the improvement in industrial relations has something to do with having a better-trained management than we ever had in the past.

[Viscount Colville of Culross (CB)]

My Lords, I apologise for not being available to speak at Second Reading. I now rise in support of Amendment 20. Along with many other noble Lords, I feel that Clause 2 is an attempt by the Government to increase the participation in voting for industrial action. Surely the Minister will support any way of ensuring as large a turnout as possible.

I have taken part in postal votes on industrial action, and other trade union elections, as a member of my present union, BECTU, and as a former member of the NUJ. I have also taken part in elections electronically. I can tell noble Lords that it is much easier for me to take part in the latter ballots. When I talk to my younger colleagues in the media about whether e-voting should be allowed in trade union votes, frankly they are astonished, and in some cases appalled, that it does not happen already. Along with many of us, they already carry out incredibly secure transactions and make huge decisions electronically every day. For them, e-voting would dramatically increase their willingness to take part in any strike votes—which, after all, must be one of the aims of the Bill. Online transactions and decision-making are in every sphere of our lives; they are the reality of the 21st century and ought to be represented in this Bill.

I have read the objections of the Minister in the other place to allowing electronic voting to take place in industrial ballots and other trade union elections. He quoted from the Speaker’s Commission on Digital Democracy, which recommended not introducing e-voting yet on the grounds that e-voting equipment could not be trusted—that electronic voting software is not accountable and its complexity makes voting insecure. It strikes me that the Speaker’s Commission was looking at UK national elections and European elections, so the issue of trade union elections was not actually relevant. Even so, its recommendation 26 says that secure systems for electronic voting should be an option for voters in the 2020 general election.

17:00

Like my noble friend Lord Kerslake, I have spoken to Electronic Reform Services. As he said, it has supervised elections involving 400 organisations, and of course the Conservative Party used electronic voting in its own primaries for the London mayoral elections. If electronic voting is fine for these organisations, surely it should be considered for trade union elections as well. I also understand that, under the previous coalition Government, work was commissioned by the then BIS Secretary, Vince Cable, to investigate whether e-voting for trade unions was viable. I would be grateful if the Minister let the House know the findings of that work.

The noble Lord, Lord King, expressed his concern about how insecure electronic voting could be. Amendment 20 is a convincing response to any fears there might be about trade union e-voting being insecure, and whether the systems would be accountable. The Minister in the other place said he was willing to discuss practical objections with opposition parties, and anyone else in society, to overcome those objections. This amendment is a very good basis for such discussions.

Electronic Reform Services has indeed brought out a report, which seems to work very well with paragraphs (a) to (e) of new subsection 6 in the amendment. It has a voting system that could be made secure by separating the database used for the distribution of voter information from the database of the system used to store the votes that have been cast electronically. In that way, ERS can ensure that the voter’s identity is separated from their preference, as currently happens with postal votes in public elections. It can also ensure that the identity of the voter is authenticated by issuing randomly generated single-use security codes to enable them to access the electronic voting system. Alternatively, voters could provide personal identifiers such as dates of birth and membership numbers, but the former has been recommended as less open to manipulation.

New subsection 6(c) would work very well with ERS’s suggestion that security codes be sent only to the email address registered by the voter, a method that could be enhanced by delivering part of the authentication by a separate means—by email or by post. However, ERS points out that splitting information can be problematic. Through new subsection 6(e), we could ensure that the software system used for electronic voting was built independently using industrial standards, and regularly tested by an approved vendor.

These measures have been good enough for the millions of votes cast electronically over the past few years, and for the Government’s own party’s elections in the London mayoral elections, so surely this method would be good enough to ensure a high turnout for trade union votes. I commend the amendment to your Lordships’ House in the name of democracy.

[Lord Dobbs (Con)]

My Lords, I must apologise to the House. My head is full of cold, and if I expire half way through my remarks I know that at least I shall have the support of a large number of your Lordships in that. I shall be mercifully short.

I have listened carefully to this interesting debate. I hope that the noble Lord, Lord Oates, was wrong when he said in promoting his amendment that the Government were opposed to electronic voting. I trust that they are certainly not opposed in principle; it is more that they have not yet been persuaded of its practicality. That is an important distinction.

The noble Lord, Lord Monks, said that surely any system should be right provided that the balloting method is secure and can be trusted. I think we can all agree with that; the question is what that method should be. Anyone who can remember the remarks I made at Second Reading will know that I am generally in favour of e-voting. Postal balloting itself has scarcely been known for its security in many areas. We simply need to get on with it and find the right practical decision.

The amendment in the name of the noble Lord, Lord Kerslake, has a fundamental flaw. It makes the threshold provisions of subsection (1), which I think are hugely important, consequential on the means of voting. The noble Lord, Lord King, has pointed out the flaw. It is as if the means of voting are more important than the principle of voting itself. I do not think that that is good enough.

The threshold provisions are a manifesto commitment of the Government. I am a little prejudiced—sceptical—about manifesto commitments. We all know how much work goes into manifestos and we all toil away as parties to get to the right sort of provisions. We then ask ourselves how on earth we get anybody to read it and take notice of it. This simple argument—that because a manifesto contains something, it inevitably must pass into law because it has the support of the people—can be stretched too far. When I was responsible for these things in Conservative Central Office back in the 1980s, faced with the problems of trying to get our manifesto publicised and read, we came to the conclusion that the only way to do so was to leak it to the Guardian, where it ended up on the front page. Nevertheless, we are talking about a clear public commitment of the Government, made in a manner that would satisfy the Government of any political persuasion.

I hope and expect the Government will take away the comments that have been made this afternoon in a very serious and sensible fashion, bang them about a bit, get it right and make it work, so that we have the safest possible mechanism to get the maximum turnout in any ballot. By putting the cart before the horse—the mechanism above the principle—the amendment is not helpful and is not the way to go. Although I support many of the details that have been expressed in support of the amendment, I myself cannot support it.

[Lord Stoneham of Droxford (LD)]

My Lords, I support the amendments and in particular Amendment 21. In my working career there has been a huge improvement in achieving a democratic mandate for strike action. The House has made the point that strikes are an action of last resort and it is important that whatever mandate is achieved for that strike should have the biggest and most representative turnouts.

If your Lordships look at the ballots and strikes that we have had in recent years—they have decreased in number, which is good—you will see that about 50% have already been achieving 50% turnouts. There has been a huge improvement in the way in which the ballots are conducted, certainly compared with the experience that the noble Lord, Lord King, talked about. We know that a very important social development took place at that time. There was a reaction against the intimidation of the factory gate meetings, but also in unions themselves a big change was going on because people were not attending branch meetings. As a result, those unions that depended on branch meetings to determine strike action were not fully representative.

I remember as a young graduate working for Sid Weighell in the National Union of Railwaymen going along to the No. 1 Euston branch of the NUR on the eve of a one-day strike, which was an action against the Conservative Government’s plans for transport at the time. It was remarkable—there was a room for 50 people, but there were 200 people queuing outside to come in. The branch secretary who was presiding was in a fluster and very bad tempered as to why all these people were suddenly turning up for a branch meeting when they had never come before. The following day, there was an action and Sid Weighell sent me there to find out how representative the feeling was in the union. Clearly, the reason people were turning up was because they did not want the one-day strike to continue.

Anyway, we then introduced postal ballots. We have had long experience that they are secure. We have good experience of them. Fundamentally, they have independent scrutineers to ensure that they are fair and representative, and we have 25 or 30 years’ experience of them. However, there is one problem—that the turnout in postal ballots is still not as high as we would like. If we have this threshold, trade unions will have to work harder to get the turnout up, and they will. They will be able to do second mailings and will use all sorts of means to encourage turnout and make sure that people vote in these important ballots. As we know is the case in general elections, people do not vote when they think that the outcome is predictable but they do vote when it is close, and the unions will be able to get this turnout. I am sure that they will use things such as second mailings and emails to get the turnout up.

The noble Lord, Lord Dobbs, was right to say that in the other place the Minister said that he was not convinced about the practicality—he used the Speaker’s commission for that. However, that is unrealistic, because the numbers involved in national elections are vast compared with the numbers in ballots for this sort of strike. Therefore, we need to look at the idea of extending the different ways of voting and it is right that we should also now look at workplace balloting. If there are independent scrutineers, there is no reason why that should not be secure as well. There has been quite a social change. People are willing to use emails and digitisation to vote, and organisations are already doing that. That will help the turnout.

I do not think that we should consider putting a burden on the unions to get turnout up if we do not help them to do it. That seems to be a fundamental principle, and it will have a benefit. My experience is limited but I am sure that unions already use email addresses. If they go in for electronic voting, they will have to extend email use, and that will improve communication and turnout.

The CAC is already using a variety of methods to test people’s views on recognition, as has been mentioned in this debate. It deals with very sensitive issues. As those experienced in union processes will know, recognition is one of the most bitterly contested issues because employers are sometimes concerned to stop it and the unions are determined to get it. So these are very sensitive ballots and the CAC now has experience of using not just postal ballots but workplace ballots and electronic voting. Therefore, we support the changes proposed in the amendments.

In ending my remarks, I have three questions for the Minister. First, have the Government and Ministers had conversations with the Central Arbitration Committee about the processes used to improve turnout in ballots? Secondly, do the Government not think that the whole digitisation strategy means that, in all sorts of processes, electronic voting is the next stage in extending the voting process in all sorts of organisations? My final question, which is an abrupt one, is: is the Conservative Party satisfied that it had a fair election for its mayoral candidate in London when it used the sorts of processes advocated in these amendments?

[Lord Collins of Highbury (Lab)]

My Lords, the first question for me is: will minimum thresholds for industrial action ballots improve democracy in the workplace? If postal voting remains the only option available to trade unions wishing to ballot their members, the answer must be no, and that is because, putting aside the question of whether the introduction of statutory thresholds is desirable, it is in the interests of trade unions and employers for a ballot properly to reflect the opinions of workers. I appreciate and thank—

[A noble Lord]

The right reverend Prelate?

[Lord Collins of Highbury]

No. I was thinking of the noble Lord, Lord Pannick, and trying to think of the correct term for the legal profession—but in fact I do not need to do that. I hate breaching protocol. The noble Lord, Lord Pannick, makes a very valid point in this debate: whatever our opinions of thresholds—and this is where the Government will, I hope, think hard about what the noble Lord said—it will undermine the Government’s position, if there is a legal challenge, by denying the opportunity for unions to ensure that there is a full turnout in the vote. So it is incumbent on the Government, in my opinion, to think hard about whether they can push through thresholds without allowing unions to consider other secure methods of voting.

17:15

I think that the Government’s response surely must be to see that the best way of increasing participation in union democracy would be to bring ballots into the 21st century by permitting the use of electronic and workplace ballots. Unions are the only organisation in the UK that are legally required to hold postal-only ballots. Postal ballots tend to be more expensive and lead to lower turnout. Postal-only ballots can also unnecessarily extend the voting period. Again, this is an important issue in industrial democracy and industrial action. Faster and equally secure balloting methods could support the earlier resolution of disputes and would also increase participation in union democracy. In answer to the question from the noble Lord, Lord Dobbs, clearly the method of voting is a critical factor in participation. The evidence we have is that where unions have the ability to run secure workplace ballots, turnout increases.

What the noble Lord, Lord King, failed to mention in his contribution is that unions are now permitted to use workplace ballots for statutory recognition purposes. That is a very important and vital element to the success of an enterprise: whether a union is recognised. I would say that it would be for the benefit of an enterprise, but maybe the owners of the enterprise would have a different view. But workplace ballots are permitted in these circumstances. We are not talking about going back to the 1970s, with a show of hands and decisions being made at the gate. We are talking about new and modern methods of balloting.

In CAC recognition ballots, individuals vote using paper ballots and secure ballot boxes, and that is overseen by a qualified independent person. Average turnout is significantly higher in workplace ballots, at 88%, than all postal ballots, where the average is 71.6%. Also, there is no evidence that individuals feel pressurised to vote in support of union recognition where workplace ballots take place. Since 2004, the CAC has received a total of only seven complaints of unfair practices during statutory recognition ballots, none of which was upheld.

Can we be assured that secure workplace ballots will not be open to abuse? Electoral Reform Services, which is highly experienced in running industrial ballots, confirms that it is perfectly possible to run workplace ballots that are secret and secure against any possibility of fraud or intimidation. Amendments 19 and 21 in this group, which I have put my name to, would ensure that all ballot methods are confirmed by a scrutineer as safe and secure before they take place. All ballots would be monitored during the process and all outcomes declared safe by the scrutineer. The union would also be required to comply with any recommendations made by the scrutineer.

Amendment 19, in my name and that of my noble friend Lord Mendelsohn, keeps the responsibility for the conduct and integrity of the ballot with the existing statutory independent scrutineer, but we recognise that the CAC has experience of statutory workplace recognition ballots, and such expertise should be available to the scrutineer. Existing legislation already requires that scrutineers must be independent of unions. BIS maintains a statutory list of approved scrutineers, and the vast majority of industrial action ballots are overseen by organisations on that list—primarily by Electoral Reform Services.

When a workplace ballot, or any other ballot, is conducted, it is important for employers to have a duty to co-operate with the ballot, as they have in relation to statutory recognition ballots. This could include a duty for employers to work closely with balloting agencies to ensure that company firewalls do not prevent union emails reaching members and that websites are not blocked. This co-operation is already common practice in workplaces holding elections for staff associations, and for information and consultation. Spaces should also be provided for voting free from surveillance by management, and employers should have a duty to ensure that union members can vote free from interference or constraint. Of course, this duty mirrors the existing duty on unions and is therefore even-handed.

As we have heard in the debate, we are not alone in supporting the use of electronic and workplace balloting methods. As the noble Lord, Lord Balfe, said, even the Institute of Directors has long held the view that unions should be permitted to use electronic voting. Its 2012 policy paper stated,

“Provided that a fair and transparent system of electronic voting can be delivered, there is no reason why—in return for asking for a higher level of legitimacy—the union movement should not be allowed to embrace technological advances”.

I stress the words,

“a higher level of legitimacy”.

Surely that is what the Government are after in imposing thresholds. If they want to ensure that the case for thresholds is sustainable, they should consider the reasonable requests made in the amendments.

The case for electronic ballots has been strongly put in the debate. According to the latest Ofcom figures, 83% of people now have access to broadband and 66% of households own a smartphone. These figures are much higher among those of working age. There is also a growing expectation that individuals should be able to vote electronically in elections. The 2014 Electoral Commission survey found that 42% of respondents felt online voting would increase confidence in the way that elections are run in the UK. These views are particularly prevalent among younger people.

A further indication of the appetite among the British public to digitise democracy is shown by the Government’s own voter registration data. Between the launch of online registration in June 2014 and October 2015, 12 million people registered to vote online. Online balloting can be safe and secure, much like online banking. It is already used for a variety of purposes in both the public and the private sector.

As we have already heard, the Government are proactive in extending digitisation. The Minister has prime responsibility for that, so it is a pity she cannot turn that responsibility away from businesses alone and focus on the needs of workers, too. As the noble Viscount, Lord Colville, pointed out, political parties use electronic voting. Most recently, the Conservatives utilised online voting in the selection of their London mayoral candidate. More than 9,000 people recorded votes on line in that ballot.

As the noble Lord, Lord Kerslake, highlighted, the Government are increasingly committed to digitisation of government services. Citizens are required now to make changes to their driving licences, pay vehicle excise duty and renew their tax credits—and, in the future, apply for universal credit—online. According to the Government Digital Service, 85% of tax returns are now filed online. On concerns that people are not used to it or are not accepting it, the key point is that people are asking for it.

That is when we come to this debate. The ability of people to exercise their responsibility will be governed by the options of secure voting. While I am satisfied that there is sufficient evidence for the introduction of secure alternative methods of balloting, I accept that if this proposal for a range of secure balloting methods was reviewed and examined by a totally independent source, such as the CAC, others may be more readily convinced than me. This is one measure the Government must surely consider appropriate. They should not sit back and delay but instigate quickly proper measures to ensure a system of alternative secure methods of voting. That is why I, too, support the amendment of the noble Lord, Lord Kerslake.

I hear what noble Lords have said, particularly the noble Lord, Lord Dobbs, about whether the issue of security is acting as a barrier to the introduction of a commitment in the manifesto. I believe that if the commitment in the manifesto was to be made secure, then the Government would commit to do this first. It sustains the Government’s argument. Of course, in another group I shall be arguing the complete opposite but, for the purpose of this issue, it is important that there is a reasoned and responsible response from the Government. I hope the Minister will engage in an open and constructive debate on this specific aspect of the Bill to ensure that we end up with a system that creates greater participation.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills and Department for Culture, Media and Sport (Baroness Neville-Rolfe) (Con)]

My Lords, I thank the noble Lord, Lord Kerslake, for his amendments and for bringing his wide experience of the public sector to this matter. I welcome new voices and new participants to our debate. We have heard from the noble Lords, Lord Oates and Lord Pannick, the noble and learned Lord, Lord Brown of Eaton-under-Heywood, the right reverend Prelate the Bishop of Chester and the noble Viscount, Lord Colville of Culross. It is good to have lots of people involved in our debate.

The essence of the Bill is to improve fairness and to protect the public from disruptive and undemocratic strike action. As this is the first day in Committee, I want to say that we will be in listening mode.

Let me turn to the subject of these amendments—electronic balloting—which was not in our manifesto, as my noble friend Lord Balfe pointed out. However, let me be clear that the Government have no objection in principle to electronic voting; indeed, we are encouraging a huge programme of digitalisation of the economy as a government. We are moving with the times, in the words of my noble friend Lord Cormack. It is an area of mutual interest to me and the noble Lord, Lord Collins of Highbury.

However, it is vital that union members, employees, and the public have utmost confidence in ballot processes. Without that, of course, the integrity of the whole system is called into question. Members will not use it, unions will not rely on it, and employers and the public will not trust it. That is not in anyone’s interest.

17:30

I should at this point reply to the noble Viscount, Lord Colville of Culross, and say that the former Secretary of State’s group was looking into the very issues that we are concerned about today, on legitimacy, safety and security of voting. It is clear from this work and from the various reports published on this matter that some important issues still need to be explored further.

The noble Lord, Lord Kerslake, made this point neatly in the types of issue he outlined and wrote into his amendment. These are the matters that the Government have said need further consideration. Although there are more: I believe the amendment fails to address the security issues, such as hacking and malicious attacks, which my noble friend Lord King emphasised. I note that the noble Lord, Lord Kerslake, proposes the use of the Central Arbitration Committee, also mentioned by the noble Lords, Lord Lea of Crondall, and Lord Dykes, but it has no experience of industrial action or electronic balloting. The noble Lord acknowledged that today, but I am not sure that allowing it to bring in an expert quite does it for me.

[Lord Collins of Highbury]

I am not keen to stop the flow here, but does the noble Baroness not recognise that the CAC does have experience of workplace ballots, statutory recognition ballots? They are not a minor matter for those balloting or, for that matter, the companies subject to those ballots. Does she feel that those are somehow insecure or not valid because they are conducted in the workplace, overseen by the CAC?

[Baroness Neville-Rolfe]

That is a different matter. To respond to the question that was asked, we are in fact in contact with the CAC, but to bring in electronic balloting, as I have said, you need to be clear that the matter is extremely carefully addressed. A key area is to ensure that the electronic system correctly establishes an individual’s eligibility to vote. It has to capture the vote accurately while at the same time protecting the individual from being identified. The system needs—and I think there will be a lot of agreement on these points—to be both anonymous, to preserve individual privacy and secrecy, and accountable, to guard against malpractice and fraud.

[Baroness Armstrong of Hill Top (Lab)]

Is the noble Baroness therefore questioning ballots such as the one in Durham, which finished last weekend, on whether the population want to accept the Northern powerhouse? Is she saying that such ballots, because they include online voting, are not legitimate and should be rejected?

[Baroness Neville-Rolfe]

If the noble Baroness will let me make a bit of progress, I am going to address the difference in good order. Obviously, avoiding malpractice and fraud is absolutely critical. I will explain why. There are many respectable organisations that were mentioned this evening, such as the National Trust, that choose to use electronic means to capture votes. However, strikes have a huge effect on our public services and can cause enormous problems for hardworking people. We heard a number of examples at Second Reading.

The public sector strikes in 2011 closed 62% of the schools in England and led the NHS to cancel tens of thousands of operations. We therefore need people to have confidence both in the way the ballot is conducted and in the outcome obtained. Thresholds will provide the level of confidence we need in the outcome that is currently lacking, but the method of voting is a separate matter. Postal ballots already provide appropriate confidence in the way the ballot is conducted, though there have been comments today about them. I note what the noble Lord, Lord Collins, said about postal voting, but the Government recognise this, which is why we do not object in principle to electronic balloting.

John Cridland, the then director-general of the CBI, spoke to the Public Bill Committee, which discussed this matter at some length, as I am sure you know. On thresholds, he said:

“I think the provisions in the Bill that are of most concern to businesses are those that ensure that where there is strike action … it reflects a significant voice from the workforce … In principle, I think these are the right provisions”.

On e-balloting, he said that,

“we do not think at the moment the evidence is there that e-balloting can be secure and effective. We do not have a problem in principle with e-balloting, but it is probably premature to have it available … The need to protect the privacy of an individual trade-union member voting is important to their employer, and we would want more assurance that that could be effectively conducted”.—[Official Report, Commons, Trade Union Bill Committee,13/10/15; col. 6.]

Perhaps this is the point at which I should respond to the noble and learned Lord, Lord Brown of Eaton-under-Heywood—

[Lord Mendelsohn (Lab)]

John Cridland did make the point that he was unclear that there was sufficient assurance that the personal details could be maintained, although all companies now put their individuals’ records in electronic form. He never explained any of the duality of that particular point, nor did he go into detail as to why they were more at threat than any other form of individual record. By way of contrast, at the same committee, Dr Marshall from the British Chambers of Commerce said this matter could be dealt with, so I was very dubious as to the evidential basis of John Cridland’s comments. Can the Minister shine any light on that, rather than just quoting his opinion?

[Baroness Neville-Rolfe]

I think different people have different opinions on this matter; as the amendment of the noble Lord, Lord Kerslake, recognises, there are issues that need to be looked at.

I think there is recognition on all sides of the House that checks and safeguards are essential to any electronic balloting process. The noble Lord, Lord Balfe, made this point admirably in his amendment. It is clear from today’s debate that noble Lords have given this issue very serious consideration. I have listened very carefully to the points that have been made, and in particular to all the ideas that noble Lords have put forward from all sides of the House. They have expressed their concerns on how to conduct safe and secure electronic ballots for trade unions. I will take a little time to reflect on these points.

In saying that, I want to be clear that it is modernisation of voting systems to which we have no objection in principle. As a Digital Minister, I can say with conviction that online is the way forward, but I agree with my noble friend Lord King of Bridgwater that workplace balloting would be a regressive step. We must not lose sight of the fact that, however well supervised the ballot, people still need to get to it. That, unfortunately, provides scope for them to be under pressure of influence or intimidation.

Therefore, while we are keen to explore how to make electronic balloting work, we are not convinced that we could provide, especially in high-profile ballots, sufficient protection for employees voting in the workplace—that is, the protection of privacy and from the risk of intimidation or other influence, be it from the employer or the union.

The noble Lord, Lord Monks, was concerned that the practical effect of the thresholds would stop strikes taking place, and that results of other ballots in different areas would not have been legitimate had these thresholds been required. He quoted elections from the other place and, of course, those of the police and crime commissioners. However, the important point relating to all the examples given by noble Lords is that this is not a fair comparison. Everyone could participate freely in these elections and have a democratic say on the outcome. By contrast, only union members are eligible to vote in ballots for strike action and large numbers of people who do not get a say are affected by the outcome. It seems right that stronger support is required for strike action.

[The Lord Bishop of Chester]

My Lords, I am reluctant to intervene and I do not normally, but I am genuinely puzzled by the arguments. Apply all this to the choice of the Conservative candidate for the Mayor of London, which was done electronically: was that not a significant choice? Could it not have a big impact on working people? There seems to be something not quite joined up in the thinking expressed.

[Baroness Neville-Rolfe]

I thank the right reverend Prelate, but I see it as different. The difference is that strikes have a huge effect on our public services and can cause significant disruption for hard-working people. We are legislating here not for the mayoralty of London, but for industrial relations. Statutory ballots require strong assurance on issues such as legitimacy, safety and security of voting.

The noble Lord, Lord Monks, mentioned that Germany and Denmark use thresholds and that these are not tied to particular ways of voting. However, I do not think that it is helpful to compare UK law and that of other countries when the context of each is so different. It is clear that all the relevant international treaties require national laws to be considered.

Finally in that connection, the noble Lord, Lord Pannick, suggested that the proportionality of the proposed thresholds might be vulnerable to challenge were the Government to refuse to allow e-balloting. I note that he acknowledges that thresholds are a proportionate response, given the widespread impact of strikes on the public. I repeat what I have said twice now: we have no objection in principle to electronic methods of balloting, but we need to be reassured on issues of legitimacy, safety and security of voting.

[Lord Pannick]

I am grateful to the noble Baroness. All noble Lords now live their lives electronically. I exempt the noble Lord, Lord Cormack, from that, but the rest of us shop, bank and conduct any number of transactions electronically. What is it about a trade union ballot that exempts it from principles that are commonplace in society nowadays?

[Baroness Neville-Rolfe]

My Lords, the simple point is that we need to be assured that the electronic ballot will give us a safe and secure outcome. I have heard from many noble Lords, including my noble friend Lord King, whose conclusion I agree with, that the fullest turnout is the best safeguard against a wrong result. Frankly, that has been the spirit of several comments this evening. I want to ensure that we take fully into account noble Lords’ detailed knowledge of these matters and experience of how we can get round the difficulties on electronic balloting. I want to reflect further on the very excellent arguments we heard today. I ask noble Lords not to press their amendments.

[Lord Stoneham of Droxford]

Before the noble Baroness sits down, I am sorry, but I asked three questions, none of which has been answered. I will not go into all three, but first, have the Government talked about the CAC’s experience of dealing with workplace ballots? Secondly, will she tell us whether the Conservative Party regards the ballot it recently had for its mayoral candidate as safe and secure?

[Baroness Neville-Rolfe]

My Lords, I did try to answer in passing the noble Lord’s questions. I think that I answered all three of them. We are satisfied that the arrangements used in London were appropriate for the purpose, but as I have sought to explain, this is a little different. We need to reflect further on the best way to conduct electronic balloting, which we have agreed to in principle.

17:45

[Lord Kerslake]

My Lords, I am grateful to the Minister for her response, in particular her undertaking to reflect further on these issues. There were a large number of contributions—I counted a total of 17; I may have missed some—for which I am very grateful to the House. Recognising the length of the debate, and the fact that there are urgent debates to follow, I will not go through every one of those contributions. I ask noble Lords to bear with me. I shall highlight some of the key points.

There is absolute common agreement in the House about the need to maximise engagement. Nobody is arguing about this. There is absolute agreement in the House, including from the Minister, who spoke just a minute ago, about the principle of using digital means to carry out activities. There is no doubt about that point either. We are left with one question: can it be established that you can do this in a secure way? As a large number of Members said, there is ample evidence of very important transactions that are done securely. They do not get more important than how you manage your banking; perhaps with the exception of the noble Lord, Lord Cormack, a lot of us use that method. The crucial point I make is that we do very important and serious things through electronic means. I cannot believe that it is beyond the wit of the House, and, indeed, of the Government, to find ways to ballot for industrial action in the same way.

[Lord King of Bridgwater]

Would the noble Lord not agree that anybody who has an understanding of the situation in the internet world and its security knows that every responsible bank is extremely worried about being able to maintain security? There are current stories of major companies that have had huge losses of information about their customers. I say to the noble Lord that the ballot on the Mayor of London was a little time back. We need to ensure that we have a fresh look at this in the current climate of risks to security.

[Lord Kerslake]

The noble Lord is absolutely right that cybersecurity is critical. Indeed, I was going to come on to that. It is critical across every aspect of digital technology and use of digital systems. In fact, many security systems in this country are highly dependent on tackling cybersecurity issues. There is no doubt that we need to deal with it. I venture to suggest that, in comparison with those risks and issues, the risks associated with electronic balloting for potential strike action may not be quite as big.

The noble Lord, Lord Pannick, made a powerful argument about how this issue sits in the wider context of balance and proportionality as the Bill is taken forward. We are applying quite significant thresholds. Have we done everything possible to enable unions to achieve that turnout? Are we acting in a proportionate and balanced way? That is critical. In many ways, the amendment may well save the Government from themselves and a potential successful legal challenge in the future.

I will finish with two points. First, the whole purpose of my amendment is to actively and independently look at issues of security. I am 100% persuaded that we can have sufficiently secure electronic balloting, and, indeed, workplace balloting, which, as has been said, happens now through the CAC. Secondly, the purpose of my amendment is to look at this issue through an independent process. Let us not put it above the principle of thresholds, as the noble Lord, Lord Dobbs, said, but if we put these thresholds in place, we should reasonably and independently explore the question and report back to the House.

This is most definitely not a manoeuvre to delay the Bill. In fact, I have put a time limit of two months in which to carry out the work, which should be more than ample to do work of this nature. Therefore, this is not about saying that we have definitive answers—although I personally think we do—but that we should properly and independently test this issue.

My last point goes to the argument made by the right reverend Prelate the Bishop of Chester. Ultimately, this is about fairness. Are we acting in a fair way in the changes we are making, which affect a very important issue in this country: the right to strike? That should be our determination and, if we believe that that is the core of this issue, the amendment is entirely reasonable. I really hope the Minister will think about how we might do this. Given her very constructive commitment to think seriously about this issue, I will of course withdraw the amendment and hope to have further conversations on this issue.

[Lord Balfe]

Before the noble Lord sits down, we have of course discussed five different amendments. My amendment says that a trade union may only use electronic voting,

“subject to the agreement of the Certification Officer”,

which would obviously be if the system was secure. So I draw the noble Lord’s attention to the fact that the Minister has many different options to choose from, as well as his own very well-drafted, crafted and spoken to amendment. The principle of electronic balloting is at the heart of this debate.

[Lord Kerslake]

The noble Lord, Lord Balfe, makes a very powerful point. I entirely agree that the aim here is to be able to say, by the point at which we introduce these thresholds, that we have given the widest range of choices. That is where we are trying to get to. If there are alternative ways of doing it, I am very open to that conversation. That is why I am willing to withdraw the amendment at this point, and to continue that conversation. It will not be good enough simply to let the issue drift and return to it as and when appropriate. We need to sort it out now, as part of the Bill.

Amendment 1 withdrawn.

Clause 2 agreed.

House resumed.

Junior Doctors

Monday 8th February 2016 Lords Chamber

Statement

17:52

[The Parliamentary Under-Secretary of State, Department of Health (Lord Prior of Brampton) (Con)]

My Lords, with the leave of the House, I shall now repeat in the form of a Statement the Answer to an Urgent Question on junior doctor contracts given in the other place by my honourable friend the Minister for Care Quality. The Statement is as follows:

“Mr Speaker, I will be delighted to update the House on the junior doctors’ proposed industrial action.

This Government were elected on a mandate to provide for the NHS the resources it asked for and to make our NHS a truly seven-day service. The provision of consistent clinical standards on every day of the week demands better weekend support services, such as physiotherapy, pharmacy and diagnostic scans, better seven-day social care services to facilitate weekend discharge, and better primary care access to help tackle avoidable weekend admissions.

However, consistent seven-day services also demand reform of staff contracts, including those of junior doctors, to help hospitals roster clinicians in a way that matches patient demand more evenly across every day of the week. In October 2014 the BMA withdrew from talks on reforming the junior doctors’ contract and, despite the Government asking them to return, did not start talking again until the end of November last year, in talks facilitated by ACAS. Throughout December we made very good progress on a wide range of issues and reached agreement on the vast majority of the BMA’s concerns.

Regrettably, we did not come to an agreement on two substantive issues, including weekend pay rates, so, following strike action last month, the Secretary of State appointed Sir David Dalton, one of our most respected NHS chief executives, to take negotiations forward on behalf of the NHS. Further progress has been made under Sir David’s leadership, particularly in areas relating to safety and training. However, despite agreeing at ACAS to negotiate on the issue of weekend pay rates, Sir David Dalton has advised us that the BMA has refused to discuss a negotiated solution on Saturday pay.

In his letter to the Secretary of State last week Sir David stated:

‘Given that we have made such good progress over the last 3 weeks—and are very nearly there on all but the pay points—it is very disappointing that the BMA continues to refuse to negotiate on the issue of unsocial hours payment. I note that in the ACAS agreement of 30 November, both parties agreed to negotiate on the number of hours designated as plain time and I hope that the BMA will still agree to do that’.

The Government are clear that our door remains open for further discussion and we continue to urge the BMA to return to the table. Regrettably, the BMA is instead proceeding with strike action over a 24-hour period from 8 am this Wednesday. Robust contingency planning has been taking place to try to minimise the risk of harm to the public, but I regret to inform the House that latest estimates suggest 2,884 operations have been cancelled. I hope honourable Members from all sides of the House will join me in urging the BMA to put patients first, call off its damaging strike action and work with us to ensure we can offer patients consistent standards of care every day of the week”.

17:56

[Lord Hunt of Kings Heath (Lab)]

My Lords, I am grateful to the Minister for repeating the Answer given in the other place. Clearly, the current situation is very worrying and we all want a speedy resolution of it, but I have three quick points to put to the Minister. First, he will know that imposing a contract which the overwhelming majority of junior doctors oppose risks industrial action further than that to which he has referred tonight, and more anger among NHS staff at a time when morale is low. If a new contract cannot be agreed, will he now rule out imposing one?

Secondly, the Minister knows that much of the angst among junior doctors has been caused by the Health Secretary’s repeated attempts to conflate reform of the junior doctor contract with the issue of a seven-day NHS. Will the Minister tell the House, for the record, which hospital chief executives have told the Government that the junior doctor contract is a barrier to seven-day service working? Will he tell me why this Health Secretary has gone out of his way to pick a fight with the very people who are already working across seven days?

The Minister is very well acquainted with the NHS and, indeed, with the views of junior doctors, with whom I know he keeps in very close touch. Does he not consider it absolutely appalling that these hugely important people, on whom the health service is going to depend for the next 20 or 30 years, have been so upset by the Health Secretary’s approach that they feel such estrangement from the NHS? Does he not think that the Government need to completely reset this process and what they have been saying about junior doctors and seven-day working, to get a proper resolution of this dispute?

[Lord Prior of Brampton]

My Lords, the noble Lord said he had three questions; I think there were only two questions there, which is unusual, if I may say so. We do not want to impose a contract. We want the BMA to come back and continue the talks and we still hope that that will happen. Clearly, imposing a contract is not what we ever wanted to do when this whole process started. As was said in the Statement, the Secretary of State’s door is open and we hope that we can resolve these difficult issues in a negotiated, consensual way.

On the noble Lord’s second question, he rightly said that this is an appalling situation, but actually I describe it more as a tragedy. Let me quote from a trainee doctor:

“I feel undermined and not valued at work and I have seen how this flagging morale among colleagues has caused more than ever to leave the profession. It is a hard job that takes dedication and stamina to continue. But as we are criticised and treated as ‘cogs in a wheel’ rather than as individual professionals, I think we will see ever increasing numbers of people leaving this profession”.

That was in 2005, after the contract came in. The issues facing the junior doctors go back a long way. It is not just about plain time on Saturdays or this particular contract but about how we value, reward, train and trust junior doctors. That is the issue we must come to when the current dispute is resolved.

[Baroness Walmsley (LD)]

My Lords, I think that the Minister did not answer the question from the noble Lord, Lord Hunt, about which hospital chief executives believe that the junior doctors’ contract is what is getting in the way of seven-day services. Surely the state of primary care, which is stretched all over the country, and the lack of diagnostics, laboratory services, X-rays and so on in hospitals are much more significant.

My own question is about plain time, which I believe is the sticking point. It occurs to me that the best way of ensuring patient safety is to make sure that we do not have tired doctors. Can the Minister convince me about the fact that we are being told that junior doctors will not have to work any more hours than they do now? If you are extending plain time from 8 am until 10 pm, instead of 7 pm, and into Saturdays, then it strikes me as quite possible that they will work much longer hours. I would be very interested to know what the average working week of a junior doctor is now compared to 20 years ago, because it strikes me that we are in danger of going backwards.

[Lord Prior of Brampton]

My Lords, I apologise for not replying to the question earlier about the number of chief execs. The point is that this is not just about junior doctors; I think we all understand that totally. We are hoping to have more primary care, more social care, more diagnostics and more senior consultant cover at weekends, which will support junior doctors and make their lives better at night time and over the weekend. As far as the hours are concerned, the new contract proposal puts far greater safeguards over the amount of time that junior doctors will be working. I think that is largely accepted by the junior doctors. Going forward, the maximum number of consecutive nights will be down from seven to four; the maximum number of long shifts—that is, over 10 hours—will be down from seven to five; the number of consecutive late shifts will be down from 12. We are putting in those safeguards to ensure that we do not go back to the bad old days of very long hours. They were the bad old days on one level but if you actually talk to most doctors, they did get tired and it affected safety but it built a sense of teamwork, camaraderie and purpose in hospitals. We need to be careful about rubbishing the old days when they built up a lot of really serious, good professional work.

[Lord Warner (Non-Afl)]

My Lords, can the Minister clarify whether this dispute has to be settled within the Government’s pay guidelines of a 1% annual increase for the rest of this Parliament?

[Lord Prior of Brampton]

It was always agreed that the package offered to junior doctors would be cost-neutral.

[Lord Lansley (Con)]

My Lords, does my noble friend the Minister recall, as I do, that it was a Conservative Administration who introduced the new deal for junior doctors and established a process by which unsafe, excessive hours for doctors were not to be pursued? That started happening in the early 1990s and no one is thinking that we would go back to that. I was delighted that my noble friend was able to make it clear how the negotiations can introduce additional guarantees about not having unsafe hours for junior doctors. However, I put it to him that at this stage in the negotiations there may be an alternative approach—an objective of enabling seven-day rostering for junior doctors, in this instance but also more widely, and an overall financial envelope. It might be put to the BMA that rather than it standing aside from the negotiations, it should take responsibility and say how it proposed that junior doctors should be remunerated within that financial envelope to meet those objectives.

[Lord Prior of Brampton]

My Lords, we certainly do not want to go back to the days when junior doctors were working very long and unsafe hours but nor should we ignore the fact that they do not, by and large, like being treated as shift workers. The continuity of care is very important to most professional doctors. As for the actual negotiations, I have not been directly involved with them so I do not know to what extent the junior doctors have been asked to consider what my noble friend Lord Lansley has suggested. However, what he says has much merit.

[Baroness McIntosh of Hudnall (Lab)]

May I take the Minister back to an answer which I think he gave to the noble Baroness, Lady Walmsley? He referred to his hope that other medical professionals will in due course be included in seven-day working in order, as I think he put it, to support the junior doctors. Can he say whether those people who are involved in the lab work, the diagnostics and so forth will also be asked to work on contracts comparable to those which the junior doctors are currently being asked to accept?

[Lord Prior of Brampton]

My Lords, I think that they will be different for different people but we already have seven-day working in some of our hospitals. Salford Royal is a case in point where we have a lot of seven-day working. This is something which will evolve over the next three years.

Syria

Monday 8th February 2016 Lords Chamber

Statement

18:06

[The Parliamentary Under-Secretary of State, Department for International Development (Baroness Verma) (Con)]

My Lords, with the leave of the House, I will now repeat a Statement made in the other place earlier today by my right honourable friend the Secretary of State for International Development. The Statement is as follows.

“With permission, Mr Speaker, I shall make a Statement updating the House on the recent Syria conference, which the UK co-hosted with Kuwait, Norway, Germany and the United Nations last Thursday. For nearly five years, the Syrian people have suffered unimaginable horrors at the hands of the Assad regime and, more recently, Daesh. Inside Syria, there are 13.5 million people in desperate need and a further 4.6 million people have become refugees. As we have seen over the past 72 hours alone, the impact of this crisis on the people of the region is terrible and profound.

I was in Lebanon and Jordan last month and spoke to refugees, some of whom are now facing their fifth winter spent under a tent. Their stories are similar: when they left their homes, they thought that they would be back in weeks or perhaps months at most. It has turned out to be years, with no end in sight. Syria is now not only the world’s biggest and most urgent humanitarian crisis; its far-reaching consequences are being felt across Europe and touching our lives in Britain. More than 1 million refugees and migrants risked their lives crossing the Mediterranean last year. Of these, around half were fleeing from the bloodbath in Syria.

Since the fighting began, Britain has been at the forefront of the humanitarian response to the Syrian conflict. Aid from the UK is helping to provide food for people inside Syria every month, as well as clean water and sanitation for hundreds of thousands of refugees across the region. Our work on the Syrian crisis gives people in the region hope for a better future and is also firmly in Britain’s national interest. Without British aid, hundreds of thousands more refugees could feel that they have no alternative but to risk their lives by seeking to get to Europe.

But more was needed. The UN’s Syria appeals for the whole of last year ended up only 54% funded. Other countries needed to follow the UK’s lead and step up to the plate. That is why the UK announced that we would co-host an international conference in London on behalf of Syria and the region. This would build on three successful conferences held in Kuwait in previous years. On Thursday last week, we brought together over 60 countries and organisations including 33 Heads of State and Government.

The stage was set for the international community to deliver real and lasting change for all the people affected by this crisis, but in the end it will all come down to choices. Could we pledge the record-breaking billions needed—going much further than previous conferences? Could we commit to going beyond people’s basic needs and deliver viable, long-term solutions on jobs and education for Syria’s refugees and the countries supporting them?

At the London conference, the world made the right choices to do all of those things. Countries, donors and businesses all stepped up and raised new funds for this crisis to the amount of over $11 billion. This included $5.8 billion for 2016 and another $5.4 billion for 2017 to 2020. This was the largest amount ever committed in response to a humanitarian crisis in a single day. It means more has been raised in the first five weeks of this year for the Syria crisis than in the whole of 2015. The UK, once again, played our part. We announced we would be doubling our commitment—increasing our total pledge to Syria and the region to over £2.3 billion.

Going beyond people’s basic needs, at the London conference the world said there must be no lost generation of Syrian children, pledging to deliver education to children inside Syria and education to at least 1 million refugee and host community children, in the region outside Syria, who are out of school. This is an essential investment, not only in these children, but in Syria’s future. It also gives those countries generously hosting refugees temporarily the investment in their education systems that will benefit them for the longer term.

The London conference also made a critical choice on supporting jobs for refugees and economic growth in the countries hosting them. We hope historic commitments with Turkey, Lebanon and Jordan will create at least 1 million jobs in countries neighbouring Syria, so that refugees will have a livelihood close to home. This will create jobs for local people and leave a legacy of economic growth. By making these choices, we are investing in what is, overwhelmingly, the first choice of Syrian refugees: to stay in the region and closer to their home country and their families still in it. If we can give Syrians hope for a better future where they are, they are less likely to feel they have no other choice left but to make perilous journeys to Europe.

The world has offered an alternative vision of hope to all those affected by this crisis, but only peace will give Syrian people their future back. The establishment of the International Syria Support Group at the end of 2015 was an important step on the path to finding a political settlement to the conflict. The Syrian opposition has come together to form the Higher Negotiations Committee to engage in negotiations on political transition with the regime, and the UN launched proximity talks between the Syrian parties in January.

The UN Special Envoy for Syria took the decision to pause these talks following an increase in air strikes and violence by the Assad regime, backed by Russia. The UK continues to call on all sides to take steps to create the conditions for peace negotiations to continue. In particular, Russia must use its influence over the regime to put a stop to indiscriminate attacks and unacceptable violations of international law. Across Syria, Assad and other parties to the conflict are wilfully impeding humanitarian access on a day-by-day basis. It is brutal, unacceptable and illegal to use starvation as a weapon of war.

In London, world leaders demanded an end to these abuses, including the illegal use of siege and obstruction of humanitarian aid. Our London conference raised the resourcing for life-saving humanitarian support. It must be allowed to reach those in need as a result of the Syria conflict, irrespective of where they are.

I also want to take this opportunity to provide an update on the campaign against Daesh in Iraq and Syria. Since my right honourable friend the Foreign Secretary last updated the House on the campaign against Daesh in Syria and Iraq, the global coalition, working with partner forces, has put further pressure on Daesh. Iraqi forces, with coalition support, have taken large portions of Ramadi. In Syria, the coalition has supported the capture of the Tishrin dam and surrounding villages as well as areas south of al-Hawl.

The UK is playing our part. As of 5 February, RAF Typhoon, Tornado and Reaper aircraft have flown over 2,000 combat missions and carried out more than 585 successful strikes across Iraq and Syria. We are also leading efforts to sanction those trading with, or supporting, Daesh. My right honourable friend the Prime Minister gained agreement at the European Council in December on asset freezes and other restrictive measures.

Since day one of this crisis, the UK has led the way in funding and shaping the international response. We have evolved our response as this incredibly complex crisis itself has evolved. There will be no end to the suffering until a political solution can be found. The Syria conference, co-hosted by the UK and held here in London, was a pivotal moment to at least respond to help those people affected and those countries affected. We seized the chance to offer the Syrian people and their children hope for a better future. The UK will now be at the heart of making that ambition a reality and keeping the international community’s promise to the Syrian people. This is the right thing to do on behalf of those suffering and, fundamentally, it is the right thing to do for Britain, too”.

My Lords, that concludes the Statement.

18:17

[Lord Collins of Highbury (Lab)]

My Lords, I thank the Minister for repeating the Statement. I also congratulate the Government on bringing together last week more than 30 Heads of State, the UN Secretary-General, heads of international organisations and NGOs. I particularly welcomed the inclusive sessions on how we build support for Syria and address the growing needs of the Syrian people. There is no doubt that the conference has generated significant new help for the immediate and longer-term needs of those affected by the conflict, including increased funding.

I read a recent Save the Children report, which found that 47% of refugee households in Jordan rely, at least in part, on putting boys and girls to work to make ends meet. Even after up to five years of exile, the majority of refugee boys and girls are still out of school. All of this is amid the endemic hunger, biting poverty and untreated disease which affect the mass of the displaced persons. I also welcome the education policy changes announced by the Governments of refugee-hosting countries, including support for non-formal education which will need to happen hand in hand with increased funding to ensure children can access quality schooling.

However, any plan for the region must ensure that we in Europe do what our values command: treat humanely those refugees who are here now with a planned and orderly resettlement across the continent. While we seek the elusive peace, we must guarantee the regular flow of food, shelter and healthcare for those cut off at the centre of the conflict. Despite the panic we see in the media surrounding the levels of migration into Europe, 14 in every 15 of Syria’s displaced persons are still in the region. If we want families to stay in the region, we have to give them a reason to hold on. We have to give them hope. We have to ensure that their families have more than just food and shelter. The children need education and the adults need jobs.

Will the Minister outline in more detail the plans to create jobs in the region? How is it going to be done? I am keen to understand better how we can boost the economies of the host regions, so that assistance is not simply seen as a scheme for the refugees but as a plan to promote sustainable development in the host regions.

[Baroness Verma]

My Lords, I thank the noble Lord for welcoming the work that was done at the Syria conference last week. I think he will agree that many of the NGOs and civil society organisations that were present demonstrated their gratitude for the opportunity to establish a response on the ground that suits the needs and challenges of the people in Syria and in the region.

I agree with the noble Lord when he says that we must go beyond providing basic aid. That is why I was so pleased that the UK stepped up to the mark and doubled its pledge to £2.3 billion and other countries also demonstrated that they were keen to go beyond the basic needs and assist with livelihoods so that people could contribute to the economies of the host countries.

I agree with the noble Lord that we must not lose a generation of children who will not have the education and skills that will be really needed to rebuild Syria when peace comes—sooner rather than later, we all hope. Of course, these are complex and difficult crises, and we must respond to them.

I am pleased that the action that the UK Government have taken has encouraged others to raise their ambitions. But as the noble Lord rightly says, we can give hope only when genuine peace negotiations are going on. That is why we will push hard for those who are involved to press the Assad Government to deliver a successful peace negotiation as well as deliver support while the crisis continues.

[Baroness Northover (LD)]

My Lords, I thank the Minister for repeating the Statement and for the Government’s continuing and massive commitment to Syrians in the region.

How will the Government seek to ensure that others who have pledged at this conference will in fact deliver? For those who are now besieged in Syria, will there be systematic air drops? For those who are on the border with Turkey—they are, apparently, not being let through that border—how will we guarantee their security if they are not allowed to cross that border?

[Baroness Verma]

I thank the noble Baroness for welcoming the conference and the commitments made by all those present. She is absolutely right to say that we need to press hard for others to make sure that they fulfil their commitments. It is right that, once we have made commitments, we deliver on them. The people who expect us to support them depend on all our commitments.

The noble Baroness is also right to say that in some areas it will be incredibly difficult to deliver aid. She asked whether we would try to use air drops. We do not believe that is an effective way to get food and other essential aid to people. We believe that using UN agencies and others delivering aid by road, and others who are respected and understand the situation on the ground, is probably the best way to ensure that the aid gets through to the people who most require it. But we do not rule anything out. We have to keep everything under check, as the noble Baroness, Lady Northover, will be aware from when she did my job in government.

However, what is really important is to recognise that we cannot allow starvation to be used as a weapon. We must press hard those who have influence on the Assad regime to make them understand that it is criminal to use food starvation sieges as weapons of war.

18:25

[Lord Alton of Liverpool (CB)]

My Lords, within the past half hour a Yazidi woman gave evidence here in the House about the plight of the minorities in the region. The Minister will know that the European Parliament passed a resolution last week declaring these events to be genocide. The Parliamentary Assembly of the Council of Europe has done the same. What effort was made at the conference to prioritise the needs of groups such as the Yazidis, the Christians, the Shabaks and others who have suffered this genocide? Although everyone has suffered in this conflict, these people are peculiarly and specifically targeted because of their ethnicity or religion. What is being done to assist them?

Will the Minister return to the question that the noble Baroness, Lady Northover, put to her about events in the province of Aleppo today? Around 100,000 people are amassed on the border with Turkey. Because of the aerial bombardment by the Russians, these people’s lives are in the balance, but they are not being allowed over the border. What are we doing to persuade Turkey to open the border to give safe refuge to those people?

[Baroness Verma]

My Lords, on the question of the minority groups within Syria, there have been horrific attacks by violent extremists on Christians and other religious minorities within Syria. As the noble Lord is aware, all our UK-funded humanitarian assistance is distributed on the basis of need alone, to ensure that civilians are not discriminated against on the grounds of race, religion or ethnicity. We prioritise reaching the most vulnerable across Syria, and that includes all groups. Of course, it is a challenging environment; these are incredibly complex, difficult areas to navigate, but I take the noble Lord’s point. Of course, where we can, we will work closely with the NGOs on the ground to get aid to as many people as possible.

The noble Lord mentioned the latest indications about the numbers of people being displaced from Aleppo. We know that many of them are sheltering in the border area, with more people on the move. We are exploring all options on how we can ensure that their humanitarian needs are met.

[Lord Howell of Guildford (Con)]

My Lords, I agree with the noble Lord, Lord Alton, that with Daesh we are seeing genocide. I know that the word has to be clearly defined, but the sooner that is recognised and settled, the better. The Statement was mostly about the humanitarian side, and it is perfectly clear that very fine work indeed has been done. I am afraid that the challenges will get very much worse in the future.

Does my noble friend accept that we need to be kept well informed and up to date on the apparent breakdown in the talks in Geneva and whether the Russians have almost deliberately undermined the talks by bombing the free Syrians with renewed ferocity? Will she reassure us that she and her colleagues will keep us up to date on that?

Could she just comment on reports that the British Army is now sending 1,600 troops to Jordan as part of some exercise, while the Egyptian troops are moving to Saudi Arabia to ally with them in preparation for possible moves to Jordan? The Jordan authorities have been urging for a long time that this is where we should open a new front, develop a buffer zone in the north and strike into the heart of ISIL territory. Is the war entering an entirely new phase? Could she just bear that in mind? She may not be able to answer that question at the moment, but we need to be kept up to date if things are changing as rapidly as it seems they really are.

[Baroness Verma]

My noble friend makes an important point about the talks and making sure that they do not stall. They have come to a pause. The UN special envoy decided to pause the talks until 25 February as it was apparent that there was little prospect of progress being made at this time. But my right honourable friend the Foreign Secretary will be in Munich on Thursday 11 February and will press the Russians, who I am sure will be attending, too, to ensure that they put pressure on the Assad regime, so that the conditions allow unfettered humanitarian access across Syria and that we have an end to the violations of international humanitarian law, as set out under the UN Security Council Resolution 2254.

My noble friend is absolutely right to ask that we keep the House updated and we absolutely commit to do so. He also mentioned Daesh—and of course our goal is to defeat Daesh so that it no longer presents a threat to the UK or to international stability. As he rightly says, we are dealing with very complex circumstances. He asked about the troops on the ground in the countries that he mentioned. I shall have to write to him, because I do not have that answer at hand—so if he will allow me to, I shall write to him and place a copy in the Library.

[Lord Judd (Lab)]

My Lords, I am sure that many of us in all parts of the House will want to express our appreciation to the Government for the successful work last week. It was very important. Does it not illustrate beyond doubt that, with all the tragedies that confront us now and in future, international co-operation and effective international arrangements are absolutely indispensable, and that, unless we work on foreign policy as a priority and build these up all the time, we shall be sticking our fingers in the dyke?

The Minister talked about the importance of education, and that of course is right. But if we are going to talk about reconstruction and the long-term future of these young people, it is not just a matter of getting children into schools; it is also a matter of further and higher education. Can she reassure us that there are plans in hand for adequate access to higher and further education, as well as to schools?

[Baroness Verma]

The noble Lord is absolutely right—it will not be just about primary and secondary education; it will be about vocational skills and higher education. Often, the length of time a person is a refugee is around 17 years, so he is absolutely right that we need to make sure that we are addressing not just children’s needs but wider needs, including making sure that people are being trained up with the right skills. That is why I am really pleased that we have doubled our efforts to give support in Jordan and Lebanon. We have put extra money there to ensure that people get that training and investment, and get the help that will help them to go on and rebuild Syria.

[Lord Naseby (Con)]

My Lords, I, too, congratulate Her Majesty’s Government on calling this conference and on the UK showing the lead that it has in money and resources to help the refugees. Nevertheless, I am reminded of what happened in the Second World War. Is my noble friend clear that the Americans and Churchill found themselves having to work with Stalin? I cannot understand why the West, and the UK Government in particular, cannot bring itself to do business with Assad. There is no way out for peace in that country—and certainly no way to deal with Daesh—unless there is some dialogue and connection with Assad.

[Baroness Verma]

My Lords, my noble friend absolutely puts the focus on Assad. Assad and his regime have got it in their hands to stop bombing their own people. If there is to be a political solution, it is incumbent on everyone to come around to the talks and ensure that we get a positive outcome that enables peace to take place.

[Lord Soley (Lab)]

My Lords, I noted with great pleasure the Government’s achievements the other day at the conference. However, I am deeply disturbed by the Russian bombing at the moment, which seems to have two clear aims—one to keep Assad in power and the other to drive thousands of new refugees towards Turkey, with all that that implies. Have there been any discussions with the Russians about that? Are the Russians giving any money to this fund?

[Baroness Verma]

My Lords, on the latter point, I shall have to write to the noble Lord; I cannot give him an answer right now. On his point around the Russians needing to do more, it is absolutely right that they need to do more to meet their obligations under international law. As a member of the UN Security Council and the International Syria Support Group, Russia needs to step up and put pressure on Assad. What I hope will happen when my right honourable friend the Foreign Secretary goes to Munich on Thursday is that those are the conversations that will take place.

[Lord Higgins (Con)]

My Lords, would my noble friend agree that negotiations are not likely to be successful and may not take place so long as Assad—clearly, in the present circumstances, backed by the Russians—believes that he might achieve a military solution? In that context, are we really sensible to use our resources and air power in bombing ISIL in Syria as well as in Iraq? Should not we redeploy those forces to attack ISIL in Iraq and, once that task is done, turn to ISIL in Syria? At the moment, in Syria we are helping Assad to take the pressure off as far as ISIL is concerned. We really ought to shift the balance more towards our intervention from an air power point of view into Iraq, until such time as that is solved, when we can go on to Syria.

[Baroness Verma]

My noble friend highlights the complexity and difficulty of what we are having to deal with, and what the international community has to deal with. It is really important to understand that our goal has to be to defeat Daesh so that it no longer presents a threat to UK or international stability, which means focusing on Daesh’s core in Syria and Iraq and working with our allies to support those countries where Daesh is becoming a threat to help them prevent its spread.

[Lord Hain (Lab)]

My Lords, in welcoming the Minister’s insistence that only political negotiations will end this disaster of almost biblical proportions, I ask for some recognition that western foreign policy has in large part been responsible for this disaster. Why? Because we insisted at the very beginning on imposing a precondition that Assad must go when he was never going to; then we tried to arm the rebel groups, when parliamentary support was not present for that; then an ill-fated decision to try to bounce Parliament into military strikes was attempted by the Prime Minister; and now we are still setting preconditions by saying that Assad must go within six months. You cannot get negotiations off the ground or deal with Russian malevolence—a fact my noble friend has drawn the House’s attention to—unless you learn the lessons from Northern Ireland, which are that you do not impose preconditions and you try to get a political settlement in the context of everybody co-operating and finding out where the different interests can be reconciled. I urge some sense of humility on the Government, who have acted with far too much bombast and blunder for years now and therefore bear a share of responsibility.

[Baroness Verma]

My Lords, it would be much more constructive for us to work with international partners to ensure that the voices coming from all of us are about supporting the people of Syria. While I understand the main thrust of the noble Lord’s points, it needs to be very carefully worded so that we give a very clear message that what Assad is doing to the people in Syria is not acceptable. Across Syria, Assad and other parties to the conflict are wilfully preventing and impeding humanitarian access on a day-by-day basis. That is why we need to be incredibly careful with our words and to continue with our ongoing support to the UN and international NGOs which risk life and limb every single day to help the people of Syria.

[Baroness Morris of Bolton (Con)]

My Lords, I declare an interest as the Prime Minister’s trade envoy to Jordan and Kuwait. I congratulate everybody who took part in the donors conference. There was a great deal of generosity and warmth of spirit in London last Thursday. I also congratulate the Prime Minister, who for some time now has been determined to provide jobs not only for refugees in the region but also for locals within those countries. It is going to be very important, if those jobs are going to be meaningful, for the private sector to be involved. Can my noble friend confirm that the private sector, both here and in the host countries, is being consulted at an early stage?

[Baroness Verma]

My noble friend is absolutely right. Like her, I congratulate the vision of the Prime Minister and the Secretary of State for DfID, who have led the charge in encouraging others to look at the long-term planning for a lot of economic investment and jobs not just for refugees but for people in the host countries. It was very evident when we were talking to people from Syria that that is exactly what they were looking for. I know that we will encourage that and work both across Whitehall and with other countries to ensure that investment does go in so that it gives confidence, hope and opportunity to not just the refugees but all of those very generous, very kind host countries which are taking so many of the people fleeing. The private sector is going to be key and it played a key role in the conference, particularly around the education agenda.

Local Government Finance

Monday 8th February 2016 Lords Chamber

Statement

18:43

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con)]

My Lords, with the leave of the House I will now repeat the Statement made earlier this afternoon in the other place by my right honourable friend the Secretary of State for Communities and Local Government.

“Mr Speaker, I am pleased to report to the House my response to the consultation on the provisional local government financial settlement for the next financial year. I have considered all 278 responses to the consultation. My Ministers and I have met with local government leaders of all types of authority from all parts of the country. I have listened carefully to each of them. I am grateful to everyone who has taken the trouble to make suggestions. The provisional settlement contains a number of important innovations.

First, although the statutory settlement is for 2016-17, I set out indicative figures to allow councils to apply for a four-year budget, extending to the end of the Parliament. Such a change permits councils to plan with greater certainty. The offer was widely appreciated in the consultation. This is not surprising, since it has been a key local government request for years. I want to give councils the time to consider this offer and formulate ways to translate the greater certainty into efficiency savings. I will therefore give councils until Friday 14 October to respond to the offer, although many have done so positively already.

Secondly, in the provisional settlement I responded to the clear call from all tiers of local government to recognise the important priority and growing costs of caring for our elderly population. In advance of the spending review, the Local Government Association and the Association of Directors of Adult Social Services had written to me requesting that an additional £2.9 billion a year be made available by 2019-20. Through a dedicated social care precept of 2% a year, equivalent to £23 per year on an average band D home, and a better care fund of £1.5 billion a year by 2019-20 to address pressures on care, the provisional settlement will be made up to £3.5 billion, available by 2019-20.

Thirdly, recognising that council services in rural areas face extra costs, I proposed in the provisional settlement that the rural services delivery grant should be increased from £15.5 million this year to £20 million in 2016-17—the year of this settlement—and to £65 million in 2019-20. Councils and colleagues who represent rural areas welcomed this, but some asked that the gap between rural and urban councils in central government grants should not widen, especially in the year ahead for which this statutory settlement is concerned.

Fourthly, this year’s provisional settlement marked the turning point from our over-centralised past. At the start of the 2010 Parliament, almost 80% of council expenditure was financed by central government grants. By next year, the revenue support grant will account for only 16% of spending power, and by 2019-20 only 5%. Ultimately, the revenue support grant will disappear altogether as we move to 100% business rates retention. Local financing through council tax and business rates rather than a central government grant has been a big objective of councils for decades. However, some authorities argued for transitional help in the first two years, when the central government grant declines most sharply. They argued that other local resources would not have time to build up fully. So, much in the provisional settlement was welcomed, but specific points were made about the sharpness of changes in the government grant in the early years of this Parliament and concerns about the costs of service delivery in rural areas.

Another very important point was made. Many councils felt that too much time has passed since the last substantial revision of the formula which assesses a council’s needs and the costs it can be expected to incur in delivering services. These responses to the consultation seem to me reasonable and ought to be accommodated if at all possible.

Everyone will appreciate that the need to reduce the budget deficit means that meeting these recommendations is extraordinarily difficult. I am pleased to be able to meet all of the most significant of them. I can confirm that every council will have, for the financial year ahead, at least the resources allocated by the provisional settlement. I have agreed to the responses to the consultation which recommended additional funding to ease the pace of reductions during the most difficult first two years of the settlement for councils with the sharpest reductions in revenue support grant. I will make additional resources available in the form of a transitional grant, as proposed in responses to the consultation by colleagues in local government. The grant will be worth £150 million a year, paid over the first two years.

On the needs formula itself, it is nearly 10 years since the current formula was last looked at thoroughly. There is therefore good reason to believe that the demographic pressures affecting particular areas—such as the growth in the elderly population—have affected different areas in different ways, as has the cost of providing services. So I can announce that we will conduct a review of what the needs assessment formula should be in a world in which all local government spending is funded by local resources, not central grant, and use it to determine the transition to 100% business rates retention.

Pending that review, I recognise the particular costs of providing services in sparse rural areas, so I propose to increase more than fivefold the rural services delivery grant from £15.5 million this year to £80.5 million in 2016-17. With an extra £32.7 million available to rural councils through the transitional grant I have described, this is £93.2 million of increased funding compared to the provisional settlement available to rural areas. Significantly, this proposal ensures no deterioration in government funding of rural areas compared to urban areas for the year of this statutory settlement. I have also, at the request of rural councils, helped the most economical authorities by allowing them to charge a de minimis £5 more a year in council tax without triggering a referendum. I will also consult on allowing well-performing planning departments to increase their fees in line with inflation at the most, providing that the revenue reduces the cross-subsidy that the planning function currently gets from council tax payers.

A final point from the consultation is that although the figures for future years are indicative, a small number of councils were concerned that as their revenue support grant declined, they would have to make a contribution to other councils in 2017-18 or 2018-19. I can confirm that no council will have to make such a payment.

These are important times for local government. The devolution of power and resources from Whitehall is gathering momentum, yet I am aware that there is serious work for councils to do to provide excellent services to residents at the lowest cost possible over the years ahead. I acknowledge the important role of councils which deliver the services on which all our constituents depend. I am grateful for all their contributions. My response to the consultation has responded positively to sensible recommendations, in as fair a manner as possible, while holding firm to our commitment to free our constituents from the dangers inherent in the deficit. I commend this Statement to the House”.

18:52

[Lord Beecham (Lab)]

My Lords, I extend the customary thanks to the Minister for repeating the Statement, although what is being offered to local government could best be described as the equivalent of a cup of hemlock, slightly diluted. It is seven weeks since the provisional local government finance settlement was announced. Today, barely a month before councils are required to determine their budgets and set the council tax rate for next year, we have the final instalment.

The reaction to December’s announcement was interesting. The Conservative leader of Bracknell, Paul Bettison, an old sparring partner of mine in the Local Government Association, protested vigorously at the cuts that his and other Berkshire councils were facing. The leader of West Berkshire district council rejected the notion, consistently promoted by Ministers, that councils could easily deploy reserves to close the gap, and the leader of Lincolnshire was critical of the Conservative-led Local Government Association for what he described as its muted response to the Statement, saying that it did not put across the scale of the issue. These are councils whose problems of deprivation and need are significantly less than those of many cities and urban areas—and, indeed, of some rural areas—which have been especially hard hit over the past five years.

The LGA in its response, while welcoming the four-year period of the indicative settlement, raised a number of issues. It asked that the rating appeals system be reformed and that the new system in which councils will retain business rates should be based on a fundamental review of the needs basis and include equalisation as well as incentivisation to promote business development. The Government have announced a long-overdue review of the needs assessment formula in the light of the abandonment of the revenue support grant, but what is the timescale? What is meant by the phrase that this will be used,

“to determine the transition to 100% business rates reduction”?

What action, if any, will be taken in relation to the rating appeals system?

The LGA pointed that while the better care fund is to enhance the amount spent on social care, there is no extra funding for next year and only £105 million for 2017-18, when not only is demand rising but councils will have to meet the cost of the national minimum wage rises, which will be £330 million next year and £834 million a year by 2020. Will the Government comply with the call for the better care fund increase to be implemented in 2016-17, as opposed to two years later, and how do they envisage councils meeting the longer-term costs, not least in relation to the minimum wage point?

Council tax freeze grant will no longer be paid as it has been for the past few years—although, of course, this was top-sliced from the settlement in the first place in a piece of political legerdemain. How do the Government respond to the complaint that £74 million included in the current year for local welfare schemes is not embodied in the settlement? What is the position in relation to the independent living fund, where the £191 million passing to councils last year should be updated to £255 million, the full-year cost? Is that provided for in the settlement? It is noticeable that there will also be a cut of £600 million in education services, notwithstanding the growing pressures reported in the press of rising school rolls and teacher shortages.

Today, it is fair to say that the Government have slightly softened the blow for rural authorities, which will be welcome so far as it goes, but severe problems remain for councils and their communities. The boasted 2% social care precept which councils can levy will help wealthier areas much more than those with high numbers in the lowest council tax bands. As I pointed out last week, Newcastle, with 70% of households in bands A and B, will gain only £1.7 million to reduce the severe impact on its social care provision within the £132 million cuts that the council faces next year. That sum, an annual sum for one council, is almost as much as the entire national transitional grant payable over two years and not far from 10% of the total national amount to be raised by the 2% precept and the better care fund contribution combined.

The Secretary of State claims:

“The devolution of power and resources from Whitehall is gathering momentum”,

and that he has,

“responded positively to sensible recommendations, in as fair a manner as possible, while holding firm to our commitment to free our constituents from the dangers inherent in the deficit”.

What is gathering momentum is the devolution of responsibility without power and the danger of the constant erosion of the services which a civilised nation should be providing across a range of services from social care to education, policing to child protection, public health to libraries, museums and the arts and many others—the very essence of community life and of a healthy local democracy.

[Baroness Williams of Trafford]

My Lords, in terms of the final settlement and councils about to set their budgets—and I totally appreciate that point because, like the noble Lord, I would wait with bated breath until I knew exactly what I was dealing with in terms of final settlement—through the final settlement today, the Secretary of State has made it quite clear that no council will be worse off and no council will lose anything from the provisional settlement. In fact, Newcastle will benefit to the tune of about £6 million because of the new approach to the settlement. We recognise the difficulties of the first two years, which is why we are providing this transitional fund.

The noble Lord talked about the national minimum wage. It is definitely a significant cost, particularly in the area of social care. That is why the 2% precept, plus access to the better care fund, is being made available.

The noble Lord asked about the review of the needs-based formula. I cannot actually remember the point he made. Does he want to repeat it?

[Lord Beecham]

How long will that process take and how will it work through?

[Baroness Williams of Trafford]

I think that that will be in place for 2019 and it will be based on wide consultation with local authorities.

The noble Lord also asked why the council tax freeze grant was going. For many local authorities, the council tax freeze grant was a mixed blessing, because, while councils received it, it would also put their baseline down the following year. So many local authorities are pleased in many ways not to be dealing with the freeze grant but having far more control of their own destinies.

The noble Lord asked also about the Independent Living Fund. That will continue to be a separate grant made available to local authorities.

[Lord Shipley (LD)]

My Lords, I am grateful to the Minister for repeating the Statement. I should declare that I am a vice-president of the Local Government Association. I welcome the four years of the settlement period. The decision by the Secretary of State to extend the consultation to October is the right one. Will the Minister confirm that underlying that four-year settlement is an expectation by the Government that council tax will rise by up to 4% a year, each year, for the period of this settlement? Secondly, in issuing a Statement of this kind, I wonder whether greater care might be taken with words. It says that a four-year settlement is better for generating efficiency savings, but it is not just about efficiency savings. There is rising demand and there are rising costs, of which the living wage is one.

On the extra £3.5 billion that is going to be available for social care by 2019-20, £1.5 billion of that will be from the better care fund. What more can be said about how the better care fund is going to be distributed and, indeed, whether it could be distributed starting earlier? The point is that some councils are under exceedingly great pressure on the matter and need to have support earlier—and we need to ensure that the distribution reflects that need.

We welcome the extra help that is being given to rural areas. Will the Minister confirm that that is real, extra money for the whole of the settlement period and will not in the future be simply a transfer from other parts of local government, particularly the urban areas?

Finally, on the issue of business rates, as we move to 100% retention, there is an issue about those places less able to raise money from business rates because they grow more slowly than others. It is good that there is going to be a two-year transition period, but what is going to happen after that? I hope that the consultation that was announced in the other place a little while ago is going to be a genuine one that will end up with a revision of the formula for central government support. The Statement reminds us that all local government spending is going to be,

“funded by local resources, not central grant”,

and says that there will be a consultation to determine the transition to 100% business rates retention. The noble Lord, Lord Beecham, talked about this. The implication is that the transition is going to be a great deal longer than two years. Will the Minister comment on that?

[Baroness Williams of Trafford]

I thank the noble Lord for raising some important points. His first question was about the four-year settlement and whether there was an assumption of council tax rises. We are not making any assumptions about what councils might want to do; in those figures we are making an assumption of CPI plus 2%.

The noble Lord asked about the better care fund and how it might be distributed. It is intended to benefit most those with the lowest tax bases, so that it is fairly distributed and helps the places most dependent on central government grant. The better care fund is distributed to take into account additional income that could be raised through council tax.

Did the noble Lord have another question?

[Lord Shipley]

It was about business rates and the two-year transition and how the consultation will be done to reflect needs.

[Baroness Williams of Trafford]

The Government are quite clear that the consultation will be done to reflect needs. The transitional fund is designed entirely to meet some of the pressures of getting through the period to 2018-19 that councils were talking to us about.

19:05

[Baroness Scott of Bybrook (Con)]

My Lords, I thank the Minister for all the work that has been done on behalf of local government. I have been in local government for 20 years and cannot remember a time when a Government have actually listened to local government, as far as the settlement goes, and changed their mind—so my thanks goes to the team for doing that.

The transitional grant was critical to councils, particularly those with social care responsibility. They needed that transitional fund to plan for the future. Together with the undertaking to review what the needs assessment formula will look like as we move from government grant to local resourcing of councils, this, too, is extremely welcome.

For me and for many others in rural authorities, we have won the argument over the costs of providing, in particular, social care services in large, sparse rural areas, and I thank the Minister for that. A lot of work has been done in both Houses to lobby the Government for this settlement and I thank them and the Local Government Association. I also assure the Minister that, as ever, local government will continue to be as efficient a part of government as it is now and will always be there to deliver those important services to the residents we represent.

What is meant by the “most economical” authorities? These are the authorities that will be allowed to make a de minimis charge of £5 on council tax without a referendum, but it is not made clear what the most economical authorities are.

[Baroness Williams of Trafford]

I thank my noble friend for making some very constructive points, particularly about the issues that rural authorities face with things such as the delivery of social care in sparsely populated areas. The rural services delivery grant will be £60.5 million this year and £30 million next year, compared to the provisional settlement. That will be for all councils where 2% is less than £5—whatever is the greater—and will apply to all shire districts.

[Lord Liddle (Lab)]

My Lords, in declaring an interest as a member of Cumbria County Council, perhaps I may associate myself, first, with the remarks of my noble friend Lord Beecham about the very serious threat to the quality of life and basic decency of our society that the cuts in the local government grant represent. This is a horrific situation for all those who care about the public realm. Having said that, my own instinct as a localiser is to move to self-funding, but I have always thought that we needed new and reformed methods of finance and a proper assessment of needs, along with some sort of transfer mechanism to make it possible.

Of course I welcome the increase in the rural services grant, but I point out that the numbers in the Statement that has been circulated show that the big increases are £11.9 million for Surrey, £5.7 million for Kent, £7.7 million for Hertfordshire, £9.3 million for Hampshire and £6.9 million for Essex. This looks like a Home Counties settlement, not one for the whole of England.

My own authority of Cumbria is glad to see that some consideration has been given to the problems of a genuinely stretched local area. However, in a Question in the House a couple of weeks ago, I raised the problem of how funding for the costs of flood recovery is going to be made available. Is what is in the local government settlement all there is going to be, or will some special announcement be made to reflect the hundreds of millions of pounds in costs facing councils in our area, and in the rest of the north, as a result of the floods? Is this it or is there more to come?

[Baroness Williams of Trafford]

My Lords, I wish that the noble Lord had been in the House either last week or the week before, when we were talking about the floods and some of the infrastructure replacement requirements. The noble Lord makes the point that some of the infrastructure repairs in Cumbria are going to be far greater than we had thought, and I said to noble Lords at the time that if there were infrastructure repairs that they thought had been either overlooked or not identified yet, they should get in touch with me and I would speak to my right honourable friend the Secretary of State for Transport. If the noble Lord thinks that the funding assumptions are out of kilter, I ask him to let me know. I look forward to having another conversation with him in due course about that and, perhaps, devolution.

The noble Lord also makes the point that Surrey and so on have had more. I have just been having a look at the figures for poor old Trafford, which has got minus 1.2%, while Manchester has had a £16.8 million increase. We always think we are worst off in our part of the world but Trafford, sitting beside Manchester, has actually done considerably less well. Still, this settlement recognises some of the challenges to those county areas. I hope that the noble Lord will get in touch with me over the flooding issue.

[Lord Porter of Spalding (Con)]

My Lords, I point noble Lords to my registered interests but more particularly, for the purpose of this, to the fact that I am chairman of the cross-party Local Government Association, in which the Conservatives are only 40% of the total voting weight. I need to make it clear that I am a Conservative but am chairman of a cross-party organisation, and our organisation broadly welcomes today’s announcement.

We all knew that the local government settlement was going to be tough, no matter which of the two main parties won the election. We knew before Christmas that it was going to be tougher than we had expected for some councils, and I am pleased that the Government have actually listened to the remarks that we made in the consultation period. The noble Lord, Lord Beecham, on the opposite side of the House, mentioned Lincolnshire and its complaints about the way that the LGA handled its negotiations. Does the Minister think that the way we handled it had something to do with the fact that the Government have listened and found over £400 million of new money to alleviate some of the pressures that we have highlighted?

[Baroness Williams of Trafford]

My noble friend is absolutely right. We have had an extremely constructive process, at the end of which £400 million more has been found to address some of the transitional pressures that local authorities say they have faced, and I pay particular tribute to my noble friend Lord Porter for the part that he has played in it.

[Lord True (Con)]

My Lords, I declare an interest as leader of a London borough that in the provisional settlement faced a 48% grant loss, so of course I am delighted by the measures that have been taken, the finding of new resource and the provision of the transitional grant. I add to those who have paid tribute to my right honourable friend the Secretary of State and indeed my noble friend on the Front Bench; there has been an outstanding willingness to speak and to listen, which has not always been the case in the past. I, too, welcome the chance for a longer discussion in relation to longer-term arrangements. Giving councils until 14 October to respond is a great step forward. I hugely welcome the review of the needs approach, especially, as the Secretary of State said, given that demographic pressures are changing in different parts of the country. I also welcome some chink of opening on planning fees, although I hope that the Minister will be able to confirm that in the consultation it will be possible to look at the full recovery of costs locally as that dialogue goes forward. With many thanks to her and my right honourable friend, I welcome this adjustment.

[Baroness Williams of Trafford]

My Lords, the minute that I got the list of figures, I looked at those for Richmond because I know of the problems and some of the challenges that it faces. That £2.9 million adjustment must have been welcome relief indeed. On the planning fees, obviously the consultation is just beginning but my noble friend has mentioned this to me before and I am looking forward to having a discussion with him during the consultation process.

[Lord Beecham]

My Lords, I apologise to the House; I omitted to mention my local government interests, which are recorded in the register.

[Baroness Williams of Trafford]

I think we know that the noble Lord is interested in local government.

Opticians Act 1989

Monday 8th February 2016 Lords Chamber

Question for Short Debate

19:17

Asked by

[Lord Newby]

To ask Her Majesty’s Government whether they will amend the Opticians Act 1989 to allow certain adjustable-focus eyewear to be sold over the counter as is already the case with reading glasses.

[Lord Newby (LD)]

My Lords, adjustable-focus eyewear are pairs of glasses that allow consumers to adjust the focus of each lens separately. They achieve the desired focus for each eye by turning a dial located at the side of each lens. The quality of definition achieved is extremely good, and to demonstrate this I am wearing a pair of these glasses this evening.

[Noble Lords]

Hear, hear!

[Lord Newby]

They are produced by Adlens, an Oxford-based company. They are sold in some 57 countries worldwide, but the largest markets are Japan, where some 650,000 units have been sold, and the US, where some 500,000 units have been sold, many without a prescription. They are particularly valuable for people whose eyesight varies from day to day—for example, diabetics or those who have had cataract surgery—but they have many other uses, such as emergency substitutes for glasses that have been lost or damaged until permanent replacements are produced, or as a spare pair while travelling. They sell for approximately the same price as a pair of high-end ready-to-wear reading glasses—a few tens of pounds.

The concept of an individual adjusting the power of the lens in glasses until it reaches an optimal level is already the way in which we decide on the strength of the glasses that we get, the only difference being that, if I go to an optician, it is the optician who presents a series of lenses before my eyes and asks, “Which is better, lens one or lens two?”. With these glasses, I physically make the adjustment myself. So we are talking about a product that is quite cheap, of extremely high quality and for which there is an obvious demand. So far—but only so far—so good.

The logical next step for Adlens would be to sell its glasses in pharmacies and supermarkets in the UK in the same way in which reading glasses have now been sold for 27 years. In order for this to happen, an exemption needs to be specified under the Opticians Act 1989 to allow them to be sold without a prescription. Framing such an exemption is relatively straightforward and so, having seen a demonstration of the Adlens glasses, I suggested while in government that an amendment to that effect might be made to what is now the Deregulation Act 2015. I contacted the right honourable Oliver Letwin, the Minister in charge of the Bill. He, in turn, contacted the General Optical Council for its advice. The GOC is the standard setter for the optical sector. Its response was stark. The risks to the public of allowing adjustable eyewear to be sold without prescription was so grave, it believed, that it claimed:

“We do not believe that the proposed changes warrant further consideration”.

The council formed this view without seeking or obtaining any expert evidence whatever.

Undeterred, Adlens sought a meeting with the GOC staff, which took place in June last year. The GOC agreed at the meeting to commission an expert report on the Adlens glasses and Dr Charman of the University of Manchester was duly appointed and reported last October. His conclusions were broadly that the glasses worked well; that the risks were the same as for over-the-counter sales of fixed-focus spectacles with similar powers; and that there was no fundamental reason why Adlens glasses with the same characteristics as reading glasses should not be made available over the counter. However, he also made the point that Adlens needed to rebut the argument that such sales might result in fewer people having a full eye examination where they needed one on health grounds.

The GOC standards committee met on 8 October to consider Dr Charman’s paper. It turned a very balanced and positive assessment into a litany of objections, some of which were, frankly, ludicrous. My favourite was the following:

“It was noted that these products were originally developed for use in the developing world – it was felt that a solution for a developing world problem was not transferable for the UK”.

This statement was made, despite the fact that more than 1 million pairs of the glasses have been sold in Japan and the USA. However, buried among the criticisms, the GOC agreed that,

“if the product were restricted to 0 to +4 D”—

the D is for dioptres—

“(as ‘ready readers’ currently are) the view of the Committee was that this might be acceptable, as it would reflect the parameters of the current legislation”.

The GOC objections have subsequently been endorsed by the Optical Confederation, the trade body for the sector. Its concerns, when boiled down, essentially amount to two. First, if sold over the counter, the product would reduce the number of people who have eye tests and that therefore a number of eye diseases would go undiagnosed. Secondly, if used for driving, they would be unsafe.

On the first objection, the evidence shows that, since over-the-counter reading glasses became available in 1989, the number of eye tests has been on a steadily rising curve and has continued to rise steadily over the past 15 years, despite the growth of online contact lenses and online glasses. The GOC basically believes that restricting access to eyewear will force the public to have their eyes tested more regularly. However, this approach has failed in almost every public health initiative to which it has been applied, whether for the management of hypertension, obesity, diabetes or alcohol abuse. If we want people to have their eyes tested more often, the evidence suggests that the way to do so is by consumer education programmes such as the National Eye Health Education Programme, the Think About Your Eyes campaign and the EyeSmart campaign.

As for the second objection, there is no evidence that the product is unsafe to use while driving. There have been literally zero reported cases of driving accidents in Japan and the USA involving the million-plus consumers who wear variable focus eyewear. Indeed, when this issue was contested in court in Arizona in a case brought last year by the State Board of Dispensing Opticians, evidence submitted by Adlens persuaded the Assistant Attorney-General to support its arguments and the board of opticians to abandon their action. The case was lost simply because the evidence did not support it.

If I were a cynical type, I would think that some of the arguments put forward by the GOC and the Optical Confederation were designed to maintain the current rules in order to require people to go to an optician who did not need to do so. That may be harsh, but throughout my discussions with the industry there seems to be a distinct lack of interest in putting the interests of consumers first. There is certainly no appetite for reform and without a big push from the Government, reform simply will not happen.

The judgment which now needs to be taken boils down to what I think of as the paracetamol test. Paracetamol is a product which can be purchased cheaply over the counter to treat pain in a manner which is effective for the vast majority of its users. It can however, if abused, kill you and, as the instructions helpfully point out, it can cause many other potentially harmful side effects. We tolerate this situation because we believe that, on balance, over-the-counter purchase of paracetamol is hugely beneficial to consumers. There is no evidence whatever that adjustable eyewear can have the same deleterious effects as paracetamol if abused. I therefore believe that they do pass the paracetamol test and that it is in the consumer interest for them to be sold in the same way as reading glasses.

Can the Minister confirm that a decision about the type of amendment to the Opticians Act which I am seeking is at the discretion of the Government and cannot in effect be vetoed by the General Optical Council? Secondly, will the Department of Health now review the matter? Thirdly, subject to their being satisfied that the risks of making the proposed change are greatly outweighed by the disadvantages, will the Government agree to bring forward at an early legislative opportunity the amendment to the Opticians Act which I seek?

19:25

[Lord Faulkner of Worcester (Lab)]

My Lords, I congratulate the noble Lord, Lord Newby, on securing this debate. He has raised a number of interesting and very important points, and I hope that the Minister—if this is how he responds to the debate—will be able to offer some convincing reasons for not acting in the way the noble Lord proposes.

The only interest I have to declare is that I am someone who is very short-sighted. I have worn glasses continuously since the age of seven, apart from a brief and unsatisfactory period in middle age when I tried contact lenses.

Like the noble Lord, Lord Newby, I have visited the Adlens operation in Oxford, and got to know a number of its senior people. He has described very well what the product is, how it works, and how an amendment to the Opticians Act 1984 allowing adjustable-focus glasses to be sold over the counter without a prescription would be of immense value to the millions of people who need to wear spectacles. It would give them the chance to buy a back-up pair and put them in the glove box of the car for emergency use—the noble Lord pointed out that they are safe when driving. People would also regard them as a reassuring presence about the house, perhaps offering different pairs for different tasks, such as reading in bed or working on the computer.

I found the account of the noble Lord, Lord Newby, of how he attempted as a Minister to get the law changed particularly interesting. It seems to me that the arguments used by the General Optical Council in blocking the change and repeated in the briefing it has sent us for this debate are examples of protectionism of the very worst kind. I understand that they are similar to the arguments it employed when it attempted to block the removal of restrictions on the sale of reading glasses in supermarkets and pharmacies nearly 30 years ago.

The GOC is right in stressing the importance of encouraging customers regularly to take eye tests. These tests not only identify the strength of glasses that may be needed to correct sight, but are also an important way of spotting incipient eye diseases such as glaucoma and other life-threatening conditions such as brain tumours and high blood pressure.

The GOC’s case against amending the Opticians Act to allow retail sales of adjustable-focus glasses could have some validity if the number of eye tests carried out following the deregulation of reading glasses in 1989 had fallen. However, as the noble Lord, Lord Newby, has correctly observed, they have been rising steadily. I have no doubt that this would continue to be the case following the change we are debating this evening. What matters is that eye tests are promoted as part of an essential health screening and education programme, not as the manifestation and continuation of a restricted practice which is no longer of much benefit to consumers.

Before I conclude—I am speaking very briefly tonight—I would like to say a word about one particular market in the world where Adlens glasses can be bought over the counter. The noble Lord, Lord Newby, referred to the huge sales in Japan and the United States, and there is also a strong market for them in Mexico and Norway. Its briefing says:

“Adlens has supplied over 1.5 million products to consumers in 57 countries around the world”.

There is a remarkable philanthropic side to the company as well. Alongside the commercial operation is a charity called Vision for a Nation, started in 2009 by one of Adlens’s co-founders, James Chen, whom I met on my visit to the company in Oxford. This is a programme which aims to address the unmet need for affordable glasses in low-income countries.

The first pilot study was in Rwanda, a country where, Mr Chen estimated, up to 1 million of the 11 million population need glasses. Most of them will require standard reading glasses but between 5% and 10% will benefit from the Vision for a Nation adjustable lenses. Over 18,000 have been supplied free to the Rwandan health authorities and the charity is also funding a training programme for nurses to conduct eye tests. I gather that the plan now may be to expand the service to Bhutan. It will make a real difference if these services can become a central component of a nation’s non-communicable disease strategy.

In echoing the call from the noble Lord, Lord Newby, for an amendment to the Opticians Act 1989, I make the additional point that if Adlens were able to develop a successful retail business in the UK, comparable to that in Japan or the United States, not only would British consumers benefit from increased customer choice but the profits generated would allow the company’s marvellous work through its Vision for a Nation charity to be expanded into more third-world countries. I find that a pretty irresistible argument and I hope that the Minister will agree when he replies.

19:31

[Lord Stoneham of Droxford (LD)]

My Lords, I speak in this debate not as a health expert but in my capacity as business spokesman for these Benches and as somebody who is interested in encouraging innovation, improving the export potential of our country and encouraging science-based university innovation centres of excellence. I also spend quite a bit of time discouraging practices which suggest or encourage unfair competition.

To me, this is a restraint of trade issue. As the noble Lord, Lord Faulkner, said, exactly the same arguments were used against the sale of reading glasses in 1989 as are now being made against adjustable-focus glasses. The Minister would do well to read the report at that time as a way of convincing himself that the arguments in this debate should be answered.

Health and regular eye tests are things that I am not expert at discussing. As I said, I am more interested in the competition aspects, but I think that by freeing up the market a little, a bit more competition might increase the number of eye tests, as was shown in the case of the sale of reading glasses.

I am one of those who finds it convenient to go into an optician for regular eye tests, and I use one. I do not use it purely because it is the cheapest way of getting glasses but because there is the convenience of fitting and getting regular maintenance, for which it is good to have a relationship with a local optician. Glasses in this country are about variety, style and fashion, however we might think of them as items for improving our health and eyesight. Until recently I went to one optician for 20 years, mainly because the lady who used to serve me always used to tell me how good I looked in the pair of glasses she was trying to sell me.

It is a competitive market and cost is very important. I accept that opticians have to earn a profit. However, I recently changed my optician. The nice lady had gone. When I went to get my spectacles repaired, I was told that they could not be repaired because they had got bent and there was a danger that they would break. I was assured that I needed a new pair. I went to another optician and got the old pair repaired in five minutes. I subsequently bought a new pair when the lenses needed to be upgraded. We should not hide behind health issues in protecting opticians unless they are really warranted. We should encourage competition and choice.

This is a patented British product and I do not believe that it will be what I call a real blockbuster that puts all our opticians out of business. As I said, fashion, style and brands will still rule as the country becomes more affluent. Despite all the arguments, as we have already heard, the threat of selling reading glasses did not undermine the opticians’ business. However, there will be a market from these glasses among people who want to buy a second or spare pair and among diabetics who need to adjust their lenses regularly. There will also be a demand for sunglasses and so on in the leisure market. I think that there will be a huge market in the third world, where there is no network of opticians and price can be critical. We have heard that 1 million pairs are being sold in the US and Japan. If this company wants to sell these glasses in other markets, how convincing will it be when it has to admit that it cannot sell them in its home market? It must go with its hands tied behind its back when it goes into those sales opportunities. Frankly, the Department for Business, Innovation and Skills and the Department for International Development should be jumping up and down encouraging this product and pioneering further development.

I have several questions for the Minister. First, will he reread the documentation of the 1989 review, when reading glasses was the issue under discussion, and will he perhaps reflect on how similar the arguments are in relation to these glasses? Secondly, does he intend to have discussions with the Department for Business, Innovation and Skills on how we can encourage competition in this area? That would, I believe, lead to even more eye tests being carried out by opticians. Thirdly, will he also engage the Department for International Development to look at the great potential for this product in developing countries?

19:37

[Baroness Walmsley (LD)]

My Lords, first, I apologise to my noble friend Lord Newby for missing the first half-minute of his speech. I am afraid that I was not informed that this debate was to start 15 minutes early; I thought that I was 10 minutes early.

I thank my noble friend for explaining what this debate is all about and for putting the case for looking at this issue again so comprehensively that there is no need for me to repeat it. To me, there are three principles that should apply when considering this matter.

First, the best interests of the patient must come first, so we must ask ourselves whether changing the law would or could do any harm to patients. Secondly, we need to consider whether availability of this new eyewear would deter people from getting a full eye test from a qualified ophthalmologist. Thirdly, would the state of the current law prevent patients receiving any additional benefits that might be available to them through the over-the-counter availability of this new product? We should bear in mind that, when the law went through Parliament, there was no such thing as self-adjustable eyewear, so perhaps it is time to review it.

In considering this matter, we must be impartial to both those already in the optical services business and to those who want to get into it. Could the briefings we have received amount to vested interests? Some noble Lords think so. I am afraid that I think that those who have provided the briefings might have vested interests, although it is perfectly reasonable for them all to make their case and I am sure that they are all providing legitimate information. That is why I ask the Minister whether the Government will set up a completely independent impartial investigation to receive evidence from both sides of the argument and make a truly impartial recommendation, and then will they act on it at the earliest opportunity?

The evidence we have received from the manufacturer Adlens suggests several benefits and no harms. Like the noble Lord, Lord Faulkner of Worcester, I really must congratulate it on its charitable work in Rwanda and other places. It is doing some very important and worthwhile work, which will benefit the economy of that poor country enormously, as well as individual patients. However, it stands to make money in the UK if the law is changed, so we should be aware of that. Mind you, it would probably be a very small amount compared to what companies make in the USA and Japan where these glasses are already allowed to be sold off prescription.

On the other side of the argument is the General Optical Council, the Optical Confederation, the professionals and the retailers who have a financial interest in selling the fixed-prescription spectacles which they prescribe. Of course, they also have a professional duty to put the patient’s eye health first, and I am sure that is their priority.

There would be a very strong argument for refusing to change the law if clear evidence existed that the availability of these adjustable spectacles over the counter deterred people from having a proper eye test—but I have seen no such evidence. We must bear in mind that eye tests are not just done to diagnose and correct vision but also, as the noble Lord, Lord Faulkner of Worcester, pointed out, to screen for eye health and indicators of other types of ill-health. They are very important, which is why we give them free to children and older people.

The fact is that we have been choosing our own vision correction for years. When I go to the optician, I select “red” or “green” and lens 1 or lens 2 all the time. I am selecting my own correction. What, therefore, is the difference between doing that and twiddling a little screw on your own spectacles to get the correction that you need? I accept that these may not be suitable for people with serious astigmatism, but those people probably would not choose them anyway because the quality of vision would not be as good as that from their correct fixed-lens prescription.

Concerns have been expressed about the safety of driving in self-corrected glasses. I was impressed by the study done by the University of Michigan Transportation Research Institute, which showed that there is no statistically significant difference between US drivers wearing prescription glasses and those wearing self-adjusted glasses in their ability to see a hazard ahead. I have seen no evidence to the contrary but, of course, it would be the task of the independent committee that I am calling for to see whether there is any.

As I said earlier, I would be concerned if ownership of these glasses were to deter regular eye examinations, but, again, the evidence I have seen is to the contrary. When over-the-counter reading glasses became available, there was no evidence that this deterred people from getting their eyes tested. Indeed, they need to do so in order to determine what strength to buy from the local chemist. Rather, government agencies and professionals alike believe that the best way to persuade people to look after their eyes and get them tested regularly is by public information and education. A number of these programmes have been mentioned, and they have been around in the UK for years; I am sure Governments would not spend money on them if they did not work.

These new products would have considerable value as a temporary solution for three groups of people: older people may need three different pairs of glasses for different tasks—I know I do—and many find it difficult to afford three pairs; people who have had cataract operations have a period during which their eyesight is settling down and might find these useful then; and new diabetics, whose eyesight may vary while they are working out the right dose of medication to control their blood sugar, may also find these a useful temporary solution. In the last two cases, it is very unlikely that an optometrist would prescribe several pairs of glasses just for a few months. Of course, it is vital that people get their eyes checked regularly, particularly diabetics as there are a number of risks to vision associated with diabetes. However, a pair of these new glasses could be part of their solution.

The fact is that we are already in charge of our own eye health. I recently had to apply for a new driving licence and, as part of the process, had to confirm that I have an appropriate level of vision to drive a car safely. Nobody asked me to get an optician to verify that, although I am in the habit of having regular eye tests and would recommend that everybody do so. In addition, correction prescriptions do not have a finishing date on them, so you can buy contact lenses on the internet using a prescription that is years old if you want to, even though that may no longer be the correct prescription for you. This solution would be a great deal better than that.

I am inclined to allow people to take responsibility for their own eye health, and I thought that a Conservative Government, being in favour of the free market, would be inclined to allow these glasses to be sold without prescription and to give people a choice. However, the cautious thing to do is to set up a truly independent inquiry. I hope the Government will do that, and then the evidence can speak for itself, as can the patients.

19:45

[Lord Hunt of Kings Heath (Lab)]

My Lords, it has been a riveting debate and noble Lords have expressed a very clear view, although the Minister will be aware that we have had written submissions that express very different views, which are potentially bound up with financial interests. So we are all looking forward to the adjudication that the Minister will, I hope, give us in a few minutes.

I start with a point about innovation and adoption, because I know that the Minister is concerned about this. On the face of it, here we have an innovative UK-based company doing very well abroad but not in this country because of this dreadful healthcare issue of slowness to adopt. I know that eyes are precious and, clearly, in the end, a precautionary principle must be applied. However, I worry that, one way or another, the healthcare establishment is putting barriers in the way of what appears to be a really innovative company. I hope the Minister will pick up that argument.

From the documentation, it is clear that the paper by Dr Charman is an important one. The question I put to the Minister is whether he is satisfied that the GOC and its standards committee actually discussed that paper appropriately. I have seen annexe 4 of the paper we have been sent: notes of the standards committee discussion. This does not seem to be a scientific examination of the report by Dr Charman. Rather, it looks like—how can I put it kindly?—a group of prejudices looking for an argument to put across. It comes across as a very paternalistic approach. First of all, it makes the statement that the market for this product in this country was,

“not thought to be significant”.

Of course it is not significant at the moment, because it is not allowed to develop. Having been sent these adjustable spectacles—although I was not brave enough, as the noble Lord, Lord Newby, was, to wear them—I know that they are clearly very easy to use and to adjust.

The second argument, which was raised by the noble Lord, Lord Newby, is about the developing world issue. The third argument, which I find puzzling, is the statement that:

“It was not clear what benefit the product would bring”.

It is patently clear what benefit the product would bring to the public. The final point, and one that really interests me, is point 12:

“The Committee raised the fact that it has been documented in the academic literature that ‘self-adjustment’ by patients is very subjective”.

Well, “subjective” is a word I would use to kindly describe the paper by the standards committee.

The noble Lord knows that one has to be cautious here. The noble Baroness, Lady Walmsley, is right: perhaps a way through is to ask an independent adjudicator to look into this. The situation is clearly unsatisfactory and it does not look as though the GOC response has been rigorous enough.

I hesitate to move on to the issue of regulation, but we did debate the General Dental Council two weeks ago. I have been in correspondence with dentists and the GDC, and it seems to me that they are still in denial about the criticisms made of them by the PSA. On the one hand, we see huge improvement in regulators, and I pay tribute to the GMC and the work that has been done there. But on the other hand, there seem to be question marks about how some of these professional regulators operate. I suggest to the Minister that the PSA, which I have great confidence in, be asked to look at this matter, particularly the governance arrangements within the GOC. That might warrant careful examination.

Finally, is the Minister satisfied that the PSA has enough powers of intervention? From what I have seen in relation to the GDC, I am not entirely sure that it has. This is an important issue in itself, but it also raises questions about regulation and the way it is undertaken. Having read the GOC paper, I have doubts about how rigorously that body approaches its task.

19:50

[The Parliamentary Under-Secretary of State, Department of Health (Lord Prior of Brampton) (Con)]

My Lords, I thank the noble Lord, Lord Newby, for bringing this subject, which is a new one for me, to our attention. I tried on a pair of adjustable-focus glasses a few days ago, and they are easy to use. The noble Lord is wearing some this evening, and although they may not be as fashionable as some pairs of glasses, I can see that they are perfectly serviceable.

It is odd for us on this side of the House—it is certainly odd for me—to find ourselves painted into the position of being against choice, competition and deregulation, which are now being advocated from the Liberal Democrat Benches. I do not normally associate them with that particular role. Instinctively I am a deregulator, and to be honest, many of the arguments that noble Lords have made resonate strongly with me. Clearly there is a huge vested interest at stake. Whether that is being improperly used in this case I do not know—but one can see that there will always be a strong voice for the status quo.

I should also pay tribute to the company for its work in Rwanda, which is clearly very important. Equally impressive, in many ways, is its breaking into the Japanese and American markets—no easy feat for a small private company. I take on board the words of the noble Lord, Lord Hunt, about how often we hear about companies finding it easier to break into overseas markets than into our own market. It is deeply frustrating, when we produce so many highly innovative products such as this one.

As for an independent review, perhaps we can come back to that question later. I rather like the thought, but although the role of the PSA was brought up in the context of the GDC, I am not sure what powers it has in such areas. That may be worth exploring. Unfortunately, however, I am going to disappoint the noble Lord, Lord Newby—but perhaps not wholly. We shall see when we get to the end. I shall put the other side of the argument, if I can—but in doing that I do not want to imply that the arguments we have heard are not powerful: they are. I know that my right honourable friend in the other House, Oliver Letwin, back when the Deregulation Bill was going through, would have instinctively been very positive towards the arguments that noble Lords are making.

As noble Lords are aware, in order to do what the noble Lord asks it would be necessary to amend the Opticians Act to remove requirements relating to the sale and supply of optical appliances. Clearly this is something we would do only after very careful consideration, and if we were confident that the proposal could stand parliamentary scrutiny. So if we were to take this forward at all, an independent review of some kind would be a requirement.

In the UK the sale of optical appliances is governed by the Opticians Act, which requires spectacles and contact lenses to be dispensed to a prescription issued by a registered optometrist or medical practitioner following a sight test. We are probably all aware of the exception that has been made. In response to the noble Lord, Lord Stoneham, I should say at this point that I will reread—or rather, read for the first time—the 1989 review, where similar arguments were put forward against the exception for reading glasses.

The Opticians Act does allow reading spectacles to be sold over the counter to adults with age-related sight loss. However, this exception has very limited criteria. The reading glasses must have the same power in both lenses, the power of the lenses must be in the range between 0 and 4 dioptres, and the glasses must be for reading purposes only. The General Optical Council is responsible for regulating the sale of glasses in the UK.

I am aware that Adlens has been in discussion with the GOC about its proposal that over the counter sale of its adjustable-focus glasses be allowed. As noble Lords know, in considering this issue the GOC sought the views of its standards committee, asking for its views on any benefits that adjustable-focus spectacles might bring, and any adverse effects that these products might have on the public’s health and safety. I am not aware of the extent to which it took into account the Charman report, which the noble Lord, Lord Hunt, mentioned. That is something that we should look into.

The standards committee raised a number of concerns, including concern about the safety of the product and the possibility that the product might not meet legal standards for driving.

[Lord Hunt of Kings Heath]

The point is that although the note we have says that the standards committee was provided with the independent report, it is not clear what it actually did with the report. It does not look as if the committee went through it in detail and considered the arguments—but that might just reflect the way in which the note was taken.

[Lord Prior of Brampton]

We have often been provided with reports, but that does not necessarily mean that we have read them and given them our full attention. I will ask that question.

I was going through the standards committee’s concerns. Another was that individuals may incorrectly self-adjust, causing a danger to the public when driving. Another was that the sale of these products may distract the public from having regular eye examinations. That is an issue that needs consideration. I appreciate that the noble Lord may not be convinced by the arguments put forward by the GOC’s standards committee, but we would be foolish not to take into consideration its professional view—the precautionary view that the noble Lord, Lord Hunt, mentioned. We have to give that due weight.

I understand that one of the original intentions behind the development of these glasses was to bring accessible vision correction to the developing world, particularly to areas where there was little or no affordable eye care. In the UK we are lucky enough to have no barriers to accessing sight tests and optical appliances which correct refractive errors. The NHS provides free sight tests to children, older people, those with or at risk of eye disease, and people on low incomes. In addition, help with the cost of glasses is available to children and people on low incomes.

It is already the case that self-adjustable glasses can be supplied by a registered medical practitioner or optometrist if they would benefit patients in particular circumstances. I do not think that we should downplay the important role of optometrists in carrying out sight tests. Optometrists are healthcare specialists trained to examine the eyes to detect defects of vision, signs of injury and ocular diseases, as well as problems with general health. Anyone who has had a sight test in recent years will know how much more is done these days than would have been done four or five years ago. Optometrists also offer valuable clinical advice, in addition to prescribing glasses and contact lenses.

One of the concerns raised by the standards committee was that members of the public might be discouraged from attending for regular sight tests. I appreciate that noble Lords do not agree with this argument, given that the availability of ready readers has not had such an impact. However, ready readers have a minimal prescription power and are for reading only.

[Lord Stoneham of Droxford]

I reiterate to the Minister why it is so important to read the report about reading glasses. Exactly the same arguments were used then—that they would undermine eye tests—yet exactly the opposite happened.

[Lord Prior of Brampton]

I have made a promise, and that will be among my other reading material. I do not know how long the review is; we shall see.

However, reading glasses are for a very specific, limited purpose, so might not lead people to think that a sight test is no longer necessary. Self-adjustable glasses, on the other hand, are for wider use, and could potentially lead people to think that their vision needs have been met. They may make do with those glasses for longer, and not consider the need for a sight test. In that way, the case might be slightly different from that of reading glasses.

I accept that there is reasonable concern about the potential impact on the take-up of sight tests if these glasses were to be made available over the counter. It is important to be clear that a sight test is not only about checking whether or not you need glasses. As I said earlier, it goes much further than that. A sight test can identify at an early stage diseases such as macular degeneration, glaucoma, diabetic retinopathy and cataracts. Good vision is also particularly important for safety on our roads, both for drivers and pedestrians. So I appreciate the concern raised by the GOC in respect of the safety of drivers using these self-adjustable glasses.

I draw a distinction between the current proposal—which, as I understand it, is for a range of magnification beyond that of ready readers—and magnification restricted to that of ready readers. I am not sure whether or not that makes sense. It makes sense if you read it slowly.

Even if the concerns I have outlined were overcome, it would be very difficult to justify a greater range for the adjustable, and arguably more risky, product than is allowed for ready readers. There is no appetite that I am aware of to extend the exemption applied to ready readers to stronger prescriptions, and similar objections would apply in that they would cease to be simply aids for the limited activity of reading.

However, I note that while the GOC standards committee did not endorse the idea of sale of adjustable glasses restricted to the ready readers range, it commented, as the noble Lord mentioned, that this might be acceptable. I do not know whether those proposing change have had further discussions with the GOC on this point but, if not, it would be sensible to do so before further consideration by the Government. I am not sure whether the noble Lord has had further discussions with the GOC. He might like to say so at the end. This does not mean that the GOC is convinced that this would be a sensible change or that the Government are minded to consult in the near future. I merely highlight that the GOC’s response was nuanced.

Changes to primary legislation are for government, although noble Lords will obviously appreciate that changes will only be made in the light of professional advice, and one of the sources of that advice will be the GOC. The GOC’s report was nuanced and is probably worth following up. I have an instinctive gut feeling of sympathy for the arguments made by the noble Lord but there are genuine objections from the GOC.

20:02

Sitting suspended.

Trade Union Bill

Monday 8th February 2016 Lords Chamber

Committee (1st Day) (Continued)

20:15

Clause 3: Ballots: 40% support requirement in important public services

Amendment 2

Moved by

[Lord Wallace of Saltaire]

2: Clause 3, page 2, line 3, leave out “the majority voting” and insert “at least 35% of those voting”

[Lord Wallace of Saltaire (LD)]

My Lords, Amendments 2 and 9, in my name, have a simple aim: to bring into alignment the standards for democratic legitimacy which the Government apply to themselves, and on which their claim to a democratic mandate rests, and those which they wish to apply to the trade unions.

The Government’s electoral majority rests upon the support of 36.8% of those who voted in the general election last May on a 66% turnout, so representing some 24% of the total electorate, at least of those on the register. For neatness and convenience, I have rounded the figures to 35% and 25%, recognising that the Labour Government of 2005-10 were accepted as legitimate on 35% of the vote.

Amendment 8, in the names of the noble Lords, Lord Collins and Lord Mendelsohn, rounds the figure of the turnout down, to 20%, rather than up, to 25%. Here we have far higher standards set out for the legitimation of ballots by trade unions than are set out by the current constitutional arrangements for legitimating government—50% of those voting and an even higher barrier, 40% of those eligible to vote. No British Government have passed this second hurdle in the past half-century. No Government for more than 60 years have represented more than 50% of the electorate, except of course the coalition Government of 2010-15, considered illegitimate throughout their life by a great many on both the Labour and Conservative Benches.

There is a very serious and constitutional point at stake here. The new Government claim they have a strong democratic mandate. The noble Lord, Lord Dobbs, underlined this in the first debate this evening. On that basis, they are now pressing through a substantial legislative programme, including a number of radical free-market proposals which were successfully resisted under the preceding coalition. This Bill is a mixture of free-market and authoritarian principles. Trade unions are an important part of civil society, balancing the power of employers and investors in the market. The battle to establish the rights of trade unions to combine was a significant part of the development of British democracy in the late 19th and early 20th centuries. I am happy to say the Liberal Government then did a great deal to support that.

Trade unions, like employers and investors, need to be regulated but—again like employers and investors—they are legitimate actors in a market that is rooted in an open and democratic society. Authoritarian free markets, of the sort favoured by some right-wing economists and briefly practised in some South American states, require civil society to be suppressed. But none of us, including those 24% of voters who supported the Conservatives in last year’s election, wants to convert the UK into an authoritarian state.

I ask the Government to recognise the limited and conditional character of their mandate to govern. They require the consent and acceptance of the 75% of UK voters who did not give them their support in last May’s election. The Government hope to govern for a full five years. If after two years they find themselves facing the usual mid-term disillusionment, made deeper by a likely economic recession, while they press ahead with an agenda about which significant parts of the electorate are unhappy, then the discontented will take to the streets and smash windows. We already face a public mood of deep disillusionment with conventional politics. The Government should be careful not to deepen that disillusionment further and provoke public anger.

Many of us will remember the confrontation between the Conservative Government and the trade unions in 1973-74, when the then Prime Minister attempted to assert his constitutional authority and union leaders replied that their total membership was larger than the number who had voted Conservative in the previous general election. The unions are much weaker now, of course, but then so is the Conservative Party—down from the 1 million members it had when Edward Heath was leader to, apparently, 150,000 now. It has far more money, of course, but far fewer members. The number of votes it won in last year’s election, as well as the proportion of the votes cast, was also much lower. To quote the noble Lord, Lord King, we are governed by an active minority against an idle majority.

We all recognise that the Government are opposed to constitutional reform, in particular to electoral reform, which could raise the barrier before an incoming Government could claim a mandate to govern. But, by that token, and recognising the weakness of their mandate, the Government should be cautious about imposing new barriers on union decisions. We know that there is public anger out there about our failures as a political class to impose sufficiently strong regulation on the banking industry, and the absence of prosecutions and punishment for those in the banking industry whose actions triggered the crisis of 2008-09. I meet that anger on the doorstep every time I go out canvassing in Yorkshire. To impose a combination of tougher regulations and higher barriers to legitimate action on trade unions, in contrast to the light touch on bankers and others, will only feed that underlying popular hostility and disillusionment.

I move the amendment, and speak to Amendment 9, in this spirit. The Government should recognise their own position, treat trade union ballots by the same standards as parliamentary ballots and recognise that a Government with a limited mandate must compromise with the institutions of civil society. Trade unions are an important element in our civil society. I beg to move.

[Lord Dykes (Non-Afl)]

My Lords, I will be brief. I congratulate the noble Lord, Lord Wallace of Saltaire, on his speech. I missed only about 20 seconds, when the television screen changed back to the Committee, so I was technically here. I agreed with what he said. I hope that he and others agree that the other disturbing factor in this is the context of a Government supported by a low percentage of voters, and only 24% of the electorate. I do not think that there was a lower figure in recent decades. I may be incorrect, but I am pretty sure that that is right. To invoke the regular incantation that something is a manifesto promise is also flawed if the support from the natural electorate is so puny and minor as to render this an illegitimate exercise for such a controversial piece of legislative text that deliberately makes life more difficult for normative trade union behaviour.

There is an idea that because the manifesto is mentioned in the press in the context of an election campaign, therefore the thinking electorate, or the whole electorate, should be well aware of the proposals in it; but, of course, that is not the reality. Most members of the public, first of all, regard politics as a rather distasteful activity and they leave it at the back of all the important activities they have with their families, their holidays, their education and their children, and they go to politics when they have to, when elections come. Therefore they would not be very conversant with the contents of manifestos anyway. So the manifesto-itis element of these very badly drafted Bills that are coming through—skeleton Bills, often, with too many SIs following them and the rest of the problems—also affects this piece of legislation.

I remember when I was the incumbent Conservative MP—proud to be the most left-wing one, of course—for Harrow, the total number of people who came into our campaign office during the election campaign to ask for a copy of the manifesto ranged, over the seven elections I fought, from 10 to six, with an average of about eight. People just did not pay any attention to the details of manifestos. Any newly elected Government, in this case with a 12-seat majority on the basis of 30%-plus support, are entitled to say, “Well, they should have, shouldn’t they?”, but it is not like that.

Therefore, we must produce intelligent legislation which is balanced and fair and consensually based—particularly, as in this case, with the sensitive subject of the trade unions, which have had a very difficult 15 years as a result of the way politics has moved—and we should be very concerned to make sure legislation does the right thing. Therefore, I hope the Government can respond to these realities by responding to intelligent amendments such as that just proposed by the noble Lord, Lord Wallace of Saltaire.

[Lord King of Bridgwater (Con)]

My Lords, I have great respect for the noble Lord, Lord Wallace, which is always a warning, in this House, that worse is to come. I simply say that I could not believe the speech he made. I would like to think and hope that he got somebody to write it for him, because I thought that the intellectual content was as close to zero as one could get. Of course, I understand, sitting on the Bench he is sitting on, his acute dislike of our present parliamentary system and first past the post, but, of course, that is the situation in which we live.

That is the situation in which noble Lords on the Opposition Benches have stood for office, have won office and have run this country. At times, members of the noble Lord’s party did the same; they formed a coalition because they had enough seats to count under the first past the post system. This, on the other hand, is as if we were to say that no Government were to do anything the least bit controversial because they did not have an overall majority all the time. I am trying to think how many times when I stood for election I ever got 50% of the vote. I think I did on one or two occasions. Against that background, it is as if we were to say to the people who if there is another tube strike will be walking 10 miles to the office, to the people who never make their operation because they cannot get there in time, to the people who never see their loved one who they hear is in a serious situation in hospital but who cannot get there in time, “Sorry, we really cannot do anything which might give more confidence to the Government and to Parliament and recognise your concerns.”

Someone who was an observer from outer space, or in the Gallery here, and who heard the deeply moving speech by the noble Lord, Lord Wallace, brilliantly delivered, as it always is, might ask, “What is he actually talking about?”. Oh, it was just to say that if you are going to have an important vote to bring people out on strike, it is unreasonable to say that at least one in two of the union members should actually vote. Some noble Lords may not have had a chance to look at this amendment. This amendment says that it is outrageous to say that one in two of the union members have to turn up for the vote, irrespective of what they decide to do. The amendment of the noble Lord, Lord Wallace, says that it should go down from 50% to 35%, so that it is one in three.

[Lord McAvoy (Lab)]

Can the noble Lord give us the percentage of the people in the United Kingdom who voted Tory at the election?

[Lord King of Bridgwater]

That is the great fallacy. I have heard the argument about 50%, but that is the point I am addressing: how many people got elected with 50%? The question of a strike is a binary choice. It is not the same as having five or six candidates standing in a by-election or an election. I do not know how many noble Lords have actually stood as candidates for election but a number who are in this Chamber at present have. They will know that if you have a number of candidates, the chances of getting 50% of the vote are unlikely. Are we saying that is a good background against which you would have to go around and say, “Just a minute: we have cleverly worked out that 24% voted for us. Can we find another 3% from some other party and other 10% from somewhere, and then—my goodness—we could make some policy”? That is not the way this country has worked. The answer is that the system we have of first past the post is the basis on which government works.

20:30

Listening to the noble Lord, Lord Wallace, perhaps it would have been more impressive if we were proposing some appalling invasion of people’s privacy and rights—some outrageous intervention. We have already been through the fact that this provision does not infringe the European Convention on Human Rights in this respect. Perhaps I should say that the Government think that this in the interests of all the people. I have mentioned this before and I apologise to the noble Lord for saying it, but what we are really talking about is public sector strikes. Those are the things that really hit people and in which the employer cannot go bust. A lot of the union material makes the point that the good thing about strikes is that strikers always have to recognise that they have some interest in the interests of their employer, because he might go bust. That is absolutely true in the private sector but it is not true in the public sector at all. This is one of the reasons why we have to address the problem. If noble Lords are saying, “Forget that. We will insist on a lower percentage voting. We will stand up”—

[Lord Mendelsohn (Lab)]

My Lords—

[Lord King of Bridgwater]

Perhaps I could just finish the sentence. Are they saying, “We will ignore the interests of all the millions of people who may be badly affected”? The issue about the public sector is the amount of people in monopoly situations. That is why they are in a special position. We will come on to which industries and activities should be covered. This is a very important issue, and I agree that not everything should be covered. But in those areas where the nation and its citizens are most affected—the public sector—we have a duty as a Parliament to protect them.

[Lord Mendelsohn]

Does the noble Lord therefore favour the 50% threshold applying only to the public sector and not to the private sector as well, as it currently does in the legislation? Is he also suggesting that if the Government came forward with a ballot paper that consisted of not just a binary decision but a range of possibilities, whoever got the largest amount, he would accept that that was the judgment of the members of the trade union, so balloted?

[Lord King of Bridgwater]

The answer to the first question is no. The second I will need to think about, as it is far too complicated for me.

[Lord Oates (LD)]

My Lords, I speak in support of my noble friend Lord Wallace of Saltaire. I must say that I followed his argument completely but I am not sure that I followed that of the noble Lord, Lord King of Bridgwater, at all. The noble Lord seemed to make the case that because strikes can be disruptive—we must acknowledge that they can be, particularly in the public sector areas of transport and education, as the Government have argued—and because of the impact on people, that justified the Government’s proposed thresholds. But is the idea that the Government do not impact on people? The Government impact on the lives of millions of people in many areas, not just during the period when a strike may take place. Not long ago, we were discussing the changes to universal credit in the Welfare Reform and Work Bill, which will have a massive impact on some of the most vulnerable people in this country. That is on a mandate of, what, 24%? What we are asking for is a bit of consistency from the Government. Why do they believe that trade unions should be held to a completely different democratic standard than the rest of our democracy operates to?

We should consider carefully this idea of introducing thresholds. It is a major step in the way our democracy operates. In the first place, it second-guesses what the people who do not vote actually mean. It may be that the people who do not vote actually mean they do not want to vote; it does not mean that they wish to vote no. However, under this system, we have the perverse incentive whereby if you wish to oppose strike action you may well be better off not participating in a vote. If you do participate, you may help people over the threshold. As a noble Lord said previously, somebody voting against a strike who tips the vote over the threshold is actually facilitating it taking place. That makes no sense whatever. In a situation where there was a 50% turnout—which would meet the first threshold under the 40% requirement—even if 79% of those voting in that ballot voted in favour, the strike would be illegal. That would have a massive impact on industrial relations.

Thresholds like this are almost without precedent in this country. The only example I came across was the rather ill-fated 1979 Scottish devolution referendum, in which there was a 40% threshold. That was universally regarded as a not entirely successful way to go about things and has never been repeated. It was certainly not something the Government were keen to take on for the European Union referendum. As I have said before, strikes are undoubtedly disruptive, particularly in the public sector, and they should be a last resort. If we vote to leave the European Union, it could massively disrupt all of our lives for ever, but nobody is suggesting a 40% threshold there—for the good reason that inventing thresholds like this simply undermines people’s faith in the system and can create extremely perverse outcomes.

Will the Minister tell the Committee why the Government believe it appropriate to impose such thresholds for a strike, which could cause disruption, but not appropriate in cases such as membership of the European Union? Why should this sort of threshold not be met when the Government are acting as a monopoly supplier of service? For instance, on the benefits system, with what mandate is a party with 24% of the vote savagely attacking the rights of vulnerable working people? There is very little consistency in what the Government are suggesting and I hope they will reconsider it.

[Lord Monks (Lab)]

My Lords, the point I took from the speech made by the noble Lord, Lord Wallace, was less on the arithmetic and how it all added up and more on a warning to the Government not to overreach; not to be too arrogant. In a number of areas there is now a suspicion—I do not think that it is just on this side of the House—that the Government are being too arrogant with their opponents. Whether it is on Short money, voter registration or whatever, there is a sense that they are overreaching. It is not necessarily a matter for the Minister tonight, but I hope that the Government will bear that in mind when they look at their agenda for the Bill as we go into it more. A little bit of humility would come in very handy when they are working out their next moves in a number of areas.

The noble Lord, Lord King, should not always assume that strikes are unpopular. A neighbour of mine, in King’s College Hospital with a heart attack, was astonished when the junior hospital doctors got a round of applause from patients and staff when they walked in after their day off.

We talk a lot about history. In 1974 it was not the trade union members aggregated who made the difference; Edward Heath lost the election on the question, “Who governs the country?” So, funnily enough, strikes can catch a wind at certain times and if the Government really have their ear to the ground they will try to pick them out from the ones that are perhaps less popular. So do not always assume that strikes are turning off the population. Sometimes, they are not.

[Lord King of Bridgwater]

Perhaps the doctors got a round of applause because the patients were so pleased to see that they had come back.

[Lord Balfe (Con)]

It is good occasionally to get up on this side of the House and remember why I am on the Conservative Benches and not on the opposition Benches. This is a clear manifesto commitment. You can throw statistics around for how many people voted for the Government and how many people did this or that. They are different systems. It is clearly written in the manifesto that:

“Industrial action in these essential services would require the support of at least 40 per cent of all those entitled to take part in strike ballots - as well as a majority of those who actually turn out to vote.”

I am impressed with the arithmetic of the noble Lord, Lord Dykes. I am a little puzzled if the number of people coming into his office for a manifesto varied between eight and 10, giving an average of six—he obviously went to a different school to where I learnt my averages. These are different elections. I have no objection to proportional representation. I was a member of the Labour campaign for electoral reform for the better part of 20 years. I voted for the alternative vote system in the referendum because I believe that democracy is strengthened if it is more firmly based than it is at the moment. I am always impressed by the fact that, whenever the Labour Party is in opposition and look as if it is not going to win, it sets up commissions under the noble Lord, Lord Plant, or Robin Cook to look at electoral reform. Then somehow when it gets into government electoral reform gets lost.

This is a separate issue. What majority the Government have is irrelevant to the fact that the Government have a mandate under our constitutional system and a clear entitlement by virtue of the manifesto to introduce this legislation.

[Lord Dykes]

Does the noble Lord agree that the aspiration for sensible governance of any country is for the number of seats in Parliament to equate proportionally to the percentage of votes from the electorate? The closer we get to that, the more we get a natural balance of the genuine result. The only such systems in Europe, of which the noble Lord has great knowledge, are the Irish with the single transferable vote system and Germany with the additional member system. Why does he not support that?

[Lord Balfe]

I think we are straying a little, but I am happy to talk to the noble Lord afterwards about different electoral systems.

Many strikes are unpopular, and sometimes the trade union movement does itself no good. I would imagine that everyone on the opposition Benches is uncomfortable at RMT chief Steve Hedley’s comment:

“I think all the Tories are an absolute disgrace, they should be taken out and shot to be quite frank with you.”

Obviously, no one is going to support statements like that, but they are made and reported with pictures of a union leader with a Kalashnikov in the Evening Standard, and this impacts on people.

I quoted earlier what I call the moderate unions—the 16 unions that issued the brief on the Bill. It does not mention strike ballots once. Over four pages it brings out a good number of other points, including on electronic balloting, check-off, agency workers and the Certification Officer. There is not a single word on ballot thresholds. I suggest that the Government have a clear mandate for this. According to the Mayor of London’s brief, which may or may not be accurate, over half the strikes called by RMT would not be possible under this law. That could well be the makings of a rather popular law.

I counsel noble Lords opposite—including the noble Lord, Lord Wallace—to have a look at the sayings of Mr Mark Serwotka, the head of the Public and Commercial Services Union, who said that this Bill provides an organisational challenge. I draw his attention, too, to the words of a trade union general secretary, who is a friend of mine, who said to me, “Richard, I would never take them out on strike if I only had half the people behind me”. If you are going to have a strike, you need to have a good, solid basis of representation and a good, solid majority behind you. I think that the Government in this instance have a very clear mandate for this change, and I doubt that Labour will repeal it when the party—as it inevitably will—comes into office.

20:45

[Lord Sawyer (Lab)]

As a Member who has led many strikes, I have some experience of what it takes to make one successful. Indeed, to persuade any group of trade union members to take strike action, a trade union leader has to have an outstandingly good case. Throughout my career, and many years as a trade union leader, there were no restrictions or numbers on ballots, but I always had to be clear that, although I might go to a work situation where a small number of members were expressing a point of view, which today might be taken as a ballot, the vast majority of trade union members were behind what the union wanted to do. Trade unions cannot call industrial action without the support of their members. We never needed ballots to tell us that we had support in the past, and we do not need them to tell us now. I understand that times have moved on, and political parties and the wider electorate want some measure about the level of support, but I would not like anybody to be under the impression that trade union leaders can just call members out on strike willy-nilly. That is not the case; it needs a lot of thought and consideration and wide support.

Although this debate is only in its early stages, I am already starting to feel anxious that it is not a Trade Union Bill debate but a kind of RMT debate. It focuses on the actions of one particular union. I remember the late, great Mr Bob Crow was often vilified in the press for being an unpopular trade union leader, but that was not the case after he died, when the management of the business came out in numbers to say what a great trade union leader he had been.

[Lord Balfe]

Can I point out to the noble Lord that people always say nice things about you when you are dead? If they start saying them about you while you are still alive, that is the time to get really worried.

[Lord Sawyer]

That is not a matter that can be proved. Clearly, those of us who know about employer relations in the industry knew that Bob Crow was a widely respected, sensible and realistic trade union negotiator. The problem was that he was very tough—he drove a tough bargain on behalf of his members. Let us not forget, when we debate manifesto commitments and ballot thresholds, that the balance of power at the workplace, setting aside London and the RMT, is massively loaded in favour of the employer. Trade unions throughout their history have needed to work very hard and make big sacrifices to prosecute their case and get any benefits from taking industrial action. That is the kind of point that the noble Lord, Lord Monks, made—it is about getting some kind of balance. I understand the manifesto commitment and I understand where the Government are coming from, but it is balance that we are looking for in this debate. It is a question of what seems to be fair and reasonable, and the two clauses, both the 50% and 40%, seem a bridge too far.

[Baroness Burt of Solihull (LD)]

My Lords, I shall not detain the Committee for too long, but I want to talk about Clause 3 standing part of the Bill. It illustrates the problem of combining a 50% turnout requirement with a 40% of eligible votes being in favour. Can the Minister confirm whether the figure of 40% was in the Conservative manifesto?

We have had all kinds of figures bandied around; we have had 35%, 20% and 25% as suggested rates, but none of these works. We have had the noble and learned Lord, Lord Brown, talking about 499 out of a workforce of 1,000 voting for action but unable to make it legitimate because one person did not vote in favour. And if you had just a 50% turnout, 80% would have to vote in favour for industrial action. It is important to have strong support for action if you are going to inconvenience the public, but I do not believe that this is the way, so my party does not believe that Clause 3 should stand part of the Bill.

[Lord Collins of Highbury (Lab)]

My Lords, the fact that there is a manifesto commitment to both 50% and 40% does not release the Government from the responsibility to explain why and to explain the consequences of their action. The manifesto also says:

“We will protect you from disruptive … action”.

If the strikes do pass the test and there is disruptive action, what are the Government going to propose next? A lot of people in this Chamber believe that this is the first step and not the only step; there may be more to come in order to stop disruptive action.

The purpose of our amendments in this group is to highlight and probe the arbitrary nature of the proposed statutory thresholds for industrial action ballots. The potential impact of these will be to make it very difficult for working people to organise collectively in defence of their jobs, livelihoods and working conditions. As my noble friend Lord Sawyer says, the balance is not overwhelmingly weighted in favour of the workers in most parts of the country in most industries. Unions will find it increasingly difficult to organise lawful industrial action, especially in larger workplaces and those with more dispersed workforces.

The recently published impact assessment estimates that the 50% threshold will reduce the number of work stoppages due to industrial action by 37% each year. The Government have also published initial estimates suggesting that the 40% threshold in important public services—we will obviously come on to the debate in the next group about what those important public services are—would lead to an additional eight percentage points reduction in working days lost to industrial action.

It is also unclear why the Government have determined 40% as a threshold. I know it is in the manifesto; I am not querying that. But nowhere in the impact assessment do the Government look at other percentages as a possibility. They have instead stuck to this figure of 40% as the magic number that will mean that industrial powers are sufficiently curbed, meeting their manifesto commitment to,

“protect you from disruptive … action”.

Can the Minister explain and give us the rational argument as to why the figure is 40%?

I want to spend a bit of time tonight talking about what, in the main, unionised workplaces are like. Unionised workplaces tend to be safer. They are more likely to have enhanced family-friendly policies and to invest in skills and training than non-unionised workplaces. And as the Minister knows extremely well, there are unionised places that are well positioned to innovate and respond to changing economic conditions—she has been part of one of the most successful partnership agreements in the country. They work and they deliver because they are focused on ensuring the success of the enterprise, as the noble Lord, Lord King, said. That is what good unions do.

These thresholds will not assist in that process. Modern trade union workplaces do not occur by magic. Ensuring an equal bargaining power between unions and employers is not easily achieved. The ability of unions to organise lawful industrial action provides essential support for effective negotiations. They are part of a rational process to ensure that both sides understand the consequences of their action. People do not go to strike to destroy the enterprise; it is often to protect it, their jobs and their futures.

The majority of ballots do not lead to action. Balloting members ensures that employers take the views of the workplace seriously and engage in genuine negotiations. It is part of the process of reaching agreement. That is what union organisation is about. This week is heartunions week, celebrating the valuable work unions do to improve pay and working conditions. It is in the interests of employers and employees for disputes to be resolved quickly and amicably.

I fear the Government’s proposals mean that disputes are more likely to become protracted. Unions will take more time in the run-up to ballots to ensure the necessary turnout, diverting time and effort away from finding an amicable settlement. Employers may decide to wait and see whether a union can make the strike threshold before making a revised offer. These thresholds are not working towards decent industrial relations. They also increase the potential for legal challenges, which will escalate tensions between employers and the workforce, again making it difficult to resolve a dispute amicably.

The Government’s case is that the 50% turnout threshold, along with the 40% threshold in important public services, are needed to protect the public from disruption. The noble Lord, Lord King, made that case. In order to be effective, industrial action must cause disruption. However, from the current evidence, it is clear that unions are treating industrial action as a matter of last resort.

The evidence is clear: the statistics published by the ONS confirm that the number of days lost to industrial action per year has fallen dramatically. Since 2010, on average 640,000 days have been lost to industrial action each year compared with 7,213,000 days lost per year in the 1980s. In 2014, there were only 155 stoppages as a result of industrial action, with 55% of the stoppages—85 of them—taking place in the private sector and 45% in the public sector. We hear talk of this being a problem for the public sector; the evidence does not back that up. In an economy with more than 30 million people in employment, that is an extremely low level of industrial action. Most industrial action is short lived. In 2014, 64% of all stoppages lasted only one or two days.

Why do people strike? In 2014, 89% of working days lost were due to disputes about pay and pensions. As I said, in the vast majority of cases where unions ballot for industrial action, disputes are settled without the need for strike. In 2014, there were 550 ballots supporting strike action but only 151 stoppages. I fear that this threshold and this intention to curb industrial action are going to exacerbate the situation and will lead to longer negotiations without the push towards a settlement.

21:00

On the arbitrary threshold of 40%, in Clause 3, for those who have been balloted for strike action in important public sectors, let me be absolutely clear. Along with the noble Baroness from the Liberal Democrats, noble Lords on this side are absolutely opposed to this clause. There is no hiding the objective of it: the Government wish to make it harder for public servants—our healthcare workers, professionals, educators, fire and transport workers—to organise collectively. It will not aid amicable settlements. It will not aid the process of good industrial relations: it will have the opposite effect.

The proposals would have the effect of counting abstentions as no votes, purely in the case of industrial disputes. That is something that the International Labour Organization has condemned as undemocratic. It has illustrated this by referring to a ballot of 1,000 people. At least 500 must have voted, with a majority in favour of least 400. If only 500 voted, the majority must be at least 80%. That is what this proposal will mean. The ILO has said that this obstacle to trade unions carrying out their rightful functions is wrong.

Placing significant restrictions on the ability of those working in key public services to strike removes the level playing field on which constructive negotiations can take place. It means that the ability of employees to use the last resort of strike is severely hampered—something that employers will fully understand—and therefore it severely undermines negotiating power and authority.

The Government’s proposals seem to imply that strikes for public sector workers are somehow routine. That is the other case—that somehow this is happening every day. Strikes in the NHS and schools are indeed disruptive, but they are very rare and increasingly so. According to the ONS, the average number of working days lost to industrial action has fallen year on year; so, again, what is the purpose of this arbitrary figure? To place arbitrary and excessive restrictions on the negotiating position of workers in key public services is both unjustified and undemocratic.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills and Department for Culture, Media and Sport (Baroness Neville-Rolfe) (Con)]

My Lords, the ability of union members to strike is an important part of our industrial relations system. As the noble Baroness, Lady Burt of Solihull, rightly reminded us, today we are also debating the clause stand part. Let me start by explaining that the objective of Clause 3 is to require strike action in important public services, if it has to take place, to secure a stronger democratic mandate. We must consider the interests of the wider public, as well as those of non-striking workers and employers, alongside the rights of union members. It is a sensible and proportionate reform and, as has been said, the thresholds we are talking about are in our manifesto. The impact of strike action is most severe when it takes place in the important public services that people and businesses rely upon every day, particularly services that are effectively monopolies, leaving people with no alternatives if strikes take place. This is particularly unfair when strike action goes ahead without strong support by a unionised workforce. This is a very different situation from my own positive experience—

[Lord Collins of Highbury]

The Minister used the term “monopolies”. Is that true of London bus drivers? Do they have a monopoly? There are alternatives in London. There are also alternatives between buses in London; there is not necessarily just one route. So why London bus drivers?

[Baroness Neville-Rolfe]

I think I used the phrase “effectively monopolies”. The point is that the degree of choice is very limited. Since the noble Lord has mentioned London buses, at the beginning of 2015 London bus drivers commanded the support of just 21% of members but Transport for London reported that 7.5 million journeys were affected by the strikes. People needed to make alternative arrangements for travel to work or to important appointments on those days. To return to another point, I am sure that the drivers did not get a round of applause from the frustrated passengers on those occasions either. I agree that the situation might be different outside London, where the bus routes are more disaggregated.

It cannot be right that strike action that causes such widespread disruption can take place on the basis of the support of a small proportion of union members. I know myself just how difficult it can be to make arrangements when tube staff and school teachers go on strike. That is why we have introduced an additional threshold to apply to important public services. I just do not accept the argument—

[Lord Mendelsohn]

There is a difference between “any” disruption and the situation the Minister talked about earlier, where there is a monopoly, so there is complete disruption. Is she making the case for “any” disruption? Is this lowering the threshold?

[Baroness Neville-Rolfe]

I do not entirely understand the question. I think the thresholds are clear. We are proposing the thresholds and debating them.

[Lord Mendelsohn]

I am happy to clarify. The Minister made the point that where a particular service is a monopoly—that is, where the impact of having a monopoly means the withdrawal of such a service—you are forced into not having a reasonable range of alternatives. “Any” disruption is where there are alternatives, so you can choose other things, but you will be disrupted. She has made the argument for any disruption being a reason to have these thresholds, rather than her original test, which was about monopolies. That distinction between those two levels of disruption is quite significant. Is her case about absolute disruption, where your options are narrowly limited and likely to be restricted, or is it about any disruption?

[Baroness Neville-Rolfe]

I still do not really understand the point. I shall come on to give some examples that may be helpful in explaining the thinking. This part of the Bill is quite straightforward because, as several people have told us, it implements a particular wording in the manifesto. I am trying to explain the background to that.

I cannot accept the argument of the noble Lord, Lord Wallace of Saltaire, although it is very good to have him involved in this debate since we worked together in the coalition. There is no parallel between our recent parliamentary elections or the matters mentioned by the noble Lord, Lord Oates, such as the EU referendum, and the proposed thresholds. In addition to the excellent points made by my noble friends Lord King and Lord Balfe, it is just not a fair comparison. It is right that strong support be required for strike action ballots, because strikes can affect large numbers of the public who do not get a say in the ballot and are dissociated from the relevant trade dispute. In contrast, the public are able to participate in elections and have a democratic say in the outcome. As my noble friend Lord King said, they do not face a binary choice and are choosing between a range of candidates. It follows that the successful candidate may have a smaller share of the overall vote.

I also realise that noble Lords are concerned that the treatment of abstentions, which I think is what the noble Lord, Lord Oates, was getting at, would make the thresholds harder to meet. Our objective is to ensure that strikes can only ever be the result of a clear, positive decision by union members, because the action can go on to cause widespread disruption for the public. Union members are free to abstain from voting, but this is not a positive vote. It is only fair that it does not count towards the threshold.

Recent events show that the threshold can be achieved when union members feel strongly about the issues that are relevant. For example, last year, RMT members were balloted on the night tube, resulting in a turnout of 53% and support of 48%. That means that 91% of voting members supported industrial action, surpassing the thresholds and putting beyond doubt the legitimacy of the ballot mandate.

[Lord Oates]

Can the Minister address a bit further the issue of the perverse impacts of an abstention being stronger than a no vote? In 2014, I think, the Royal College of Midwives balloted for action for the first time in its history. I believe that 82% voted in favour of action and 8% against. However, the turnout was only 49%. Under this Bill, any industrial action taken by the RCM would therefore be illegal. Conversely, if thousands of people had voted against the strike, it would have been legal because they would have met the turnout threshold. That does not make any sense at all. Can the Minister please address that perverse and absurd impact?

[Baroness Neville-Rolfe]

The noble Lord has answered his own question. Our reforms ensure that strike action does not take place on low or unrepresentative turnouts. That is why we have two different thresholds.

[Lord Oates]

Does the Minister seriously think that it would be a sensible situation for the Government to get into if, on a ballot of 82% of people voting in favour, that industrial action became unlawful? Does she think that would be good for industrial relations in this country? Would it help overall relations in this country?

[Baroness Neville-Rolfe]

My Lords, it is always possible to talk about individual examples. In a minute, I will explain some other examples in relation to the amendments that have been tabled. Asking that 50% of eligible members take part in a ballot regarding action which is going to be hugely disruptive to people in all walks of life seems to me to be fair and democratic.

The threshold does not ban strike action. I think that that is accepted. It may stop some strikes—I think I have to accept that—but only those which have not been able to secure a sufficiently strong mandate. It is about restoring a level of democratic accountability to industrial action and it will rebalance the interests of all working people, both union members exercising their right to strike and non-striking members who want to go to work and carry on their normal lives.

We have before us a number of amendments to lower the 40% threshold, and to reduce the requirement for a simple majority of yes votes. Reducing the thresholds would fail to achieve our objective. It would mean that the thresholds have no practical effect, and would not ensure that strike action could only go ahead as the result of a clear, positive decision by union members.

Let me illustrate the point. If the alternative threshold of 25% proposed in Amendment 9 were applied, then only 250 in a ballot of 1,000 need to vote yes in ballots for important public services. This adds nothing to Clause 2, which requires a minimum turnout of 50%, and a simple majority of those who vote to support strike action.

Lowering the threshold even further to 20%, as suggested by Amendment 8, would again make the important public services threshold meaningless. Finally, Amendment 2 would replace the requirement to achieve a simple majority in all ballots with a requirement that only 35% of those voting need to support strike action. If this applies to a ballot of 1,000 where 600 have cast a vote, then only 210 union members would need to vote yes.

I do not believe that members of the public would feel that this restores a level of democratic legitimacy to industrial action ballots. They would gain no comfort in knowing that they cannot get to work or get their children to school because less than a quarter of union members have supported this outcome.

21:15

In response to the question from the noble Lord, Lord Collins of Highbury, about the 40% threshold, in addition to its being in the manifesto, the Government set the threshold at 40% on the recommendation of the CBI, made in 2010, on the basis that this mirrors the rules for statutory union recognition. The CBI continues to support this. Over the summer, we consulted on which services within the named sectors should be subject to the threshold and on how the threshold should operate in practice. We analysed over 200 responses and considered in detail the available evidence of the impact of strike action across all sectors.

We published the Government’s response to the consultation on 21 January and specified precisely those services where we felt there was compelling evidence of the potential impact of strike action on the public. The skeleton regulations included in the Government’s response focus on and limit the application of the threshold to those services where strike action could have the most adverse and significant consequences. To give a few examples, these include firefighters; doctors providing emergency, urgent and critical healthcare; schoolteachers in state-funded institutions; tube and bus drivers; and border officers operating security checks for the exit and entry of people and goods.

To conclude, the 40% threshold will mean that strikes can take place only if they have a strong mandate. It is about ensuring that industrial action has democratic accountability, and it will take proper account of all working people—both union members exercising their right to strike and non-striking workers who want to go to work and carry on with their daily lives. I hope that noble Lords will accept that Clause 3 should stand part of the Bill and I ask the noble Lord to withdraw his amendment.

[Lord Wallace of Saltaire]

My Lords, this has been a very disappointing debate. First, I am struck that all references to strikes have been about London strikes. For the vast majority who live in the rest of the country, life looks a little different. I am very sorry if the people of London are disrupted by Tube strikes, but that does not apply necessarily to the entire country. Secondly, when I go to Yorkshire I come across a profound disillusion with conventional politics among the different sorts of people whom I meet. Incidentally, that disillusion is deepened by the fiasco of the northern powerhouse, which even the Yorkshire Post occasionally now refers to as the “northern poorhouse”. What is now happening with museums rubs in the sense that the Government care about London and the south and not the north. The other day someone remarked to me that as we have a Government with six senior Cabinet Ministers representing Surrey constituencies and none representing any constituencies in Lancashire, Yorkshire, Durham, Northumberland or Cumbria, it is not surprising that they neglect the north altogether.

The noble Lord, Lord King, talked about disruption. Strikes disrupt people’s lives for a few days. What I hear from people in Bradford is that bankers have disrupted the economy for several years and we have all paid for it, yet the Government have no proposals to strengthen controls on the banking industry. Indeed, from what I understand from the Financial Times, they have just refused to renew the post of the current head of the Financial Conduct Authority because he was felt to be a little too tough on the banking industry.

[Lord King of Bridgwater]

My Lords—

[Lord Wallace of Saltaire]

I will listen to the noble Lord in a minute. My message is simply this. This is intended to make life more difficult for unions. It will be read by the large majority of the public who either did not vote or did not vote for the Conservatives as yet again tipping the balance in favour of the well-to-do, the comfortable and the south-east against the majority of people in this country.

I say to the noble Lord, Lord King, and others that I hope that in two years’ time we shall not meet with politics which goes outside Westminster and on to the streets, but I fear that if a Government wish to push through a radical, free-market, right-wing agenda with some clear underlying prejudices against the public sector, for which a great many people—more in the north than in the south—work, we will run into very serious trouble.

[Lord King of Bridgwater]

I did not realise that these were alternatives. When the noble Lord asks what we should do about bankers and some of their activities, it is to suggest that either something is done about the unions or something is done about the bankers. I have some sympathy with his point about the bankers, but I do not regard that as an alternative approach to doing something about the unions.

Let me say this also: there is dissatisfaction with politics. There has been a lot of talk about manifestos. Is not the reality of our democracy that members of parties have a manifesto on which they stand, and they then enact it and act as they feel will carry the maximum public support to give them the best chance of being elected again? I think I am right—the Minister may be able to confirm it—that a wide poll was taken about the proposals on thresholds for unions. I understand that there is wide public support for that proposal. That is sensible governance, and I hope that the noble Lord will agree.

[Lord Wallace of Saltaire]

My Lords, I have not seen the poll so I shall go and discover what the situation is. We have given this a fair wind and I think it is time that I withdraw my amendment. However, I wish to mark that this raises some very large problems about government to do with fairness, how government tries to represent all the citizens of this country, as it does, and the balance of legislation. I think that the Government would be extremely unwise not to bear that in mind in the happy first six months after their victory.

[Lord Balfe]

The noble Lord is a very good example of a sinner who repents. I have happy memories of him standing at the Dispatch Box defending our Government for many years.

[Lord Wallace of Saltaire]

My Lords, I beg leave to withdraw the amendment.

Amendment 2 withdrawn.

Amendment 3

Moved by

[Lord Collins of Highbury]

3: Clause 3, page 2, line 5, after “engaged” insert “solely”

[Lord Collins of Highbury]

My Lords, this debate is on what certain “important public services” mean in terms of not just the 50% turnout but the 40% of those entitled to vote. Important public services are defined as the fire service, transport services, education for children under the age of 17, border security, and the decommissioning and management of radioactive waste. The Bill does not specify within these services who will be covered by the 40% threshold. But as the Minister has just said in response to the other grouping, the Government recently responded to their consultation on balloting thresholds and important public services.

In that response, and the accompanying skeleton regulations, more details are provided on the types of jobs and functions that the Government propose should be covered by this 40% threshold. In the fire service it includes firefighters, firefighter mangers, control centre staff and managers who co-ordinate the response; and in health it includes doctors, nurses and staff employed in ambulance services, A&E, intensive care and high-dependency units. The threshold will also apply to publicly funded services provided by private hospitals. In education it includes teachers in publicly funded schools that teach pupils between the ages of five and 16, and head teachers and academy principals in state-funded education teaching children between the ages of five and 16. In transport it includes, as I mentioned before, staff employed in bus services in London, including drivers and emergency and control staff, and staff employed in passenger rail services, the metro, the Underground and trams, including train drivers, conductors and guards, safety staff, maintenance staff, and signal and engineering staff. In civil air transport it includes those who work in civil air traffic control, including licensed civil air traffic controllers, airport security, port security and border security, including staff employed to implement entry and exit checks. The Government have said that they are still reviewing which functions within the nuclear decommissioning sector should be covered by the 40% threshold. It is unclear when this decision will be made and I hope that the Minister can inform the House exactly when that will be.

I am, of course, pleased that the Minister has put her name to Amendment 6, which removes from the scope of the 40% threshold individuals employed in ancillary activities that support important public services. This means that hundreds of thousands of private sector service workers will no longer be covered by the threshold. Of course we welcome that. However, it does not address the imprecise nature of the proposals. Before they go to a ballot, unions will not know whether the 40% threshold will apply. That will create uncertainty in industrial relations.

Amendment 3 is a probing amendment, intended to seek clarity from the Government about the broad category of “important public services”. We suggest inserting “solely” into new subsection (2B), so that the 40% threshold would apply only to those who are,

“normally engaged solely in … the provision of important public services, or”,

ancillary services. As the provision stands, it is unclear whether individuals who spend only part of their time providing so-called “important public services” are covered by the 40% vote requirement.

Take education, for example. Education unions planning to ballot staff in a school with a sixth form will find it difficult to assess whether staff who teach both pupils under 17 and those in years 12 and 13 are normally engaged in providing important public services. This will be particularly problematic where teachers’ work schedules vary during the academic year. They might do one thing in one term and something else in another. How will unions be able to work out how the 40% will apply? Similarly, it is not clear whether the 40% threshold will apply to a ballot involving lecturers in further education colleges who teach classes in which some of the pupils may be 16.

The skeleton regulations say that the threshold will apply to,

“care services provided by a hospital for illnesses, conditions or injuries which require immediate attention in order to prevent serious injury, serious illness or loss of life”.

It is far from clear whether this will cover¸ for example, medical staff working in orthopaedic wards, radiographers, anaesthetists or surgeons. It is clear that the Government have not thought this measure through closely. It demonstrates a poor understanding not just of the way trade unions operate but of public sector working patterns.

The proposals are inconsistent and incoherent, and vary considerably across sectors. For example, virtually all staff working in the transport sector will be covered by the 40% threshold, whereas in other sectors its scope will be far narrower. I find it difficult to see how the Government can justify restricting the right to strike for staff working in ticket offices at railway stations and on the Underground, for example, when TfL has just decided to close ticket offices because they are not considered to be essential services. That creates incoherent policy application.

The threshold will apply to bus drivers—but only in London. On the previous group of amendments the Minister suggested that that was because, outside London—well, actually I did not quite get her argument. Were there more buses there? From what I hear on the radio, rural areas will be depleted of any bus service. The “strike” affecting bus services in rural areas is being conducted not by the workers, who would love to keep their jobs in those services, but as a consequence of government cuts, which will deny communities the right to a bus service. An essential bus service is being denied by the actions of this Government, elected on 36% of the poll. It is that incoherent, inconsistent policy objective that we object to most.

21:30

Amendments 5 and 10 are probing amendments designed to provide clarification of the Government’s definition of the category of important public services. In Amendment 5 we have used not “important public services” but the ILO definition that should apply to those involved in the provision of “essential public services”. The ILO and human rights advocates, including Amnesty and Liberty, use a definition of essential services which is highly restrictive in cases where some restrictions on the right to freely associate are deemed justified.

With this Bill the Government have taken a decision to deliberately move away from this definition and therefore to deviate from an established consensus on when it is justified to restrict industrial action. I make this point because of the standards set by the ILO. We argue about fair and reasonable societies in the world and make judgments about democratic societies. We do not make judgments about plebiscites and elections being the only means of determining whether a society is fair and reasonable. Civil society and the role of trade unions is vital in making that judgment. Many government leaders claim that their mandate can last for 10 years and they ban strikes and trade unions.

The Government claim that the proposed thresholds are justifiable because they do not introduce a complete ban on the right to strike in important public services. They argue, therefore, that the ILO standards do not apply. The example given by the noble Lord in relation to midwives is a good one: 80% voted in favour of a particular action but, because they fell just short of the 50% threshold, that strike would be deemed illegal.

The Employment Lawyers Association has warned the Government against introducing thresholds for services not covered by the ILO definition of essential services. In response to the BIS consultation on balancing thresholds the ELA warns that, if the provisions in this Bill and any accompanying regulations are not drawn as narrowly as possible, the Government run the risk of a challenge on the basis that the imposition of the raised thresholds infringe Article 11 of the European Convention on Human Rights. Any restrictions on the right to strike must not be greater than necessary to pursue a legitimate aim in a democratic society.

The ILO Committee on the Freedom of Association has also been heavily critical of the Government’s decision to impose an arbitrary definition on the freedom of association. It should not be a source of pride for the Government that, with the imposition of these thresholds, we are bracketed with countries such as Bulgaria, Honduras and Nigeria, all of which have been criticised by the ILO for implementing similar thresholds.

Amendment 10 would clarify that the term applies only to those services the interruption of which would endanger the life, personal safety and health of the population. Again, this is in line with the official International Labour Organization definition of essential services.

We dispute the necessity of the additional requirement of 40% for this category in principle but, if the clause remains in the Bill, there is at least a requirement on the Government to provide Parliament with some clarity over which groups of people this category will apply to and what is the level of importance for which the 40% requirement is deemed necessary.

I fear that, once again, we have a piece of bad legislation—badly written and not thought through—that will be subject to a series of statutory instruments that will seek to clarify matters but will just be an open cheque for the lawyers, who will be fighting over this. It removes the spirit of good industrial relations and puts things firmly in the hands of lawyers. I beg to move.

[Lord Stoneham of Droxford (LD)]

My Lords, it is a very serious issue when you diminish somebody’s right to withdraw their labour. Therefore, it must be very exceptional. Normally it would be good industrial-relations practice, when you are doing this, to offer those employees some protection in return. There is nothing on the agenda today that suggests that, or even that the Government are thinking about it.

There are a number of unintended consequences to all these measures as well. I shall mention two. I always think of the syndrome of the winding-engine men in the coal industry—a key group who used to control who went down and came up in the mine. If you start having thresholds, you will encourage small, strategic groups who will organise to go on strike and can cause massive disruption. I always think that the winding-engine men could be the signal. It could be other groups. That is an unintended consequence.

There is another consequence of this sort of thing, which I thought about in the last debate. Do you remember what the New York governor said about politicians?

“You campaign in poetry. You govern in prose”.

This is what we are doing with industrial relations. We are actually encouraging trade unionists to spend all their time getting the votes over the thresholds so that they can put pressure on their employers. It underestimates the difficulty and the time that trade unionists actually give to trying to minimise disruption. That is what trade union leaders do—they know these disputes are unpopular. That is why there is a trend for one-day disputes rather than longer ones. They are trying to manage this in very difficult circumstances. If you encourage them to have to spend their time campaigning to get the votes over the threshold, they will not be able to control those emotions or get the people back to work.

This is precisely what has happened in the junior hospital doctors dispute. How do you get people back when 76% of them have voted, and 99% are in favour? I said this several weeks ago, and we are no nearer a settlement. This is the sort of unintended consequence that we have.

That is why in Amendment 18 we are saying that the Ministers’ powers must be very restricted here. They cannot just come along as soon as there is a dispute in some area and add that to a list. This will form the worst sort of legislation, and it will have the worst consequences. I do not know where the noble Lord, Lord Leigh, is tonight, but I thought we were going to have amendments in the next group telling us how we are going to widen these groups, so virtually any group in the public sector can be included. I imagine he has been told to go home, unless he is going to come back from the dead and propose these motions tonight. That is precisely the sort of thing we are worried about in this legislation.

This is just the first step. This is the agenda. This is the agenda of this Government: a partisan agenda which will be disruptive of industrial relations in this country and will have completely the opposite consequences to those they are trying to reassure the public they are going to provide for them.

[Lord Balfe]

My Lords, I will ask the Minister a question. I believe we are going to have tremendous difficulties defining,

“education of those aged under 17”.

Not only do you have differences in who the teachers are teaching, but also head teachers can preside over schools of different age spans. Will the Minister give some careful thought, between now and our next looking at the Bill, to how the clause can be better defined? I do not think that it works as it is.

[Baroness Neville-Rolfe]

My Lords, as I have already explained, strike action in services that people rely on every day can trigger a significant amount of disruption. It is particularly unfair when strike action goes ahead without strong support from union members. For example, in 2011 NHS workers were balloted by UNISON for strike action—the noble Lord, Lord Wallace, is not in his place, but this was not a London-focused matter—and, according to reports, only 11% of 250,000 members supported strike action. This is disproportionate to the 1 million patients that the wonderful NHS assists in England every 24 hours, who would have been affected by the action taken.

That is why we introduced a further threshold in Clause 3 to apply to important public services in, as I have said, the fire, health, education, transport, border security and nuclear decommissioning sectors. The Bill limits the threshold in this way because we recognise the particularly serious impact that strike action can have in these areas. The objective of the threshold is not to ban strikes altogether, but to ensure that strike action in important public services can take place only if it obtains a strong democratic mandate.

On Amendment 3 and the questions from the noble Lord, Lord Collins, the Bill has been drafted to take account of the fact that most workers will have a range of roles and responsibilities, which may vary across the year or sometimes even in a single day. For example, London Underground control room staff may spend only part of their time monitoring the network and co-ordinating the response to critical incidents, and the remainder on other responsibilities. They may not engage solely in “important public services”. However, their absence in the event of strike action could severely disrupt the service, as they are critical to ensuring that it runs safely and securely. The existence of the threshold would be ineffective if they were excluded on the basis that they do not spend 100% of their time in the control room, as there are few roles in the modern workplace that engage in only a single activity. To my mind, that would make no sense.

On Amendments 5, 10, 12 and 13, we have used the term “important public services” to describe the services that will be subject to the 40% threshold. The term is intended to capture those services where strike action could have the most significant impact on the wider public. That is why the Bill limits the application of the threshold to six sectors. We consulted over the summer, as was said. In the analysis of the 200 responses, we reviewed the available evidence on the impact of strike action across different public services. We listened to people’s concerns. We were troubled by concerns that the threshold could be applied broadly, despite the Government’s clear intention that it should be limited to those services where the impact of strike action is most significant on the public. We listened and responded. We set out our findings in the skeleton regulations, which were referred to. I shall explain this with one or two examples.

The pressing social need that we are addressing in the health sector is the risk to life, or of injury to the public, in the event of industrial action. We have therefore focused the threshold on only publicly funded emergency, urgent and critical care. This is where reduced service levels can have the most immediate impact on the lives and safety of patients and the public. The noble Lord, Lord Collins, asked about orthopaedics and midwives. If they are normally engaged in the provision of emergency, urgent or critical healthcare services—which sounds like midwives in hospitals—then they will be included in the threshold.

In the fire sector, our aim was, again, to protect the public against the risk to life or of injury. In the light of this, we have focused on firefighting services, including co-ordination of the emergency response, because these are all critical to ensuring that fires are dealt with promptly and effectively in order to protect the public.

21:45

In the education sector, the Government aim to ensure that all children have the right to an education, so we have focused on teachers who teach pupils aged five to 16 in state-funded institutions. That reflects the importance of these years for children’s education and the disproportionate impact on learning that strike action can have. I heard, however, the point made by the noble Lord, Lord Balfe, and I will certainly think about that point before we come back on Report. We have not sought to apply the 40% threshold to private schools or nurseries, because there is no evidence of strike action in these institutions having a major impact on children or their parents.

In the transport sector, our priority is to ensure that large numbers of people can rely on the services they need every day to make important journeys. We have therefore focused on passenger services, because strike action is more likely to have an adverse and immediate impact on people’s ability to go to work, to school, to college and to important appointments. I had the same question about ticket offices, but when I inquired it was explained that employees in ticket offices are disproportionately relied upon by the disabled and elderly, who need help in using public transport.

[Lord Collins of Highbury]

Yet the argument is made that ticket offices are not needed any more; they are closing them and Transport for London is going to propose that a number of stations will not be staffed. I hope that the Government will tell Transport for London that it is damaging people’s confidence in a public service and therefore it must keep the ticket offices there.

[Baroness Neville-Rolfe]

I think we all feel that the plight and the needs of the disabled and elderly are important, but I was trying to explain the logic on this occasion. The fact that people in ticket offices are helping disabled and vulnerable people is actually a big positive.

There was some discussion about why London buses but not rural buses are included. During the recent strike of 2015, TfL achieved a partial service, but this resulted in 7.5 million fewer journeys. Workers on low incomes rely disproportionately on the bus service in London; around 40% of people using buses are on concessionary fares and some 50% of bus passengers have an annual household income below £20,000. In contrast, there is limited evidence of the impact of strike action on local bus services outside London and on the sorts of users who rely on these services.

Finally, in the Border Force we are addressing the significant risks to public safety in the event of disruption to border controls. We have focused on services in respect of the entry and exit of people and goods, as these are central to the carrying out of checks and to preventing illicit commodities, such as unlicensed drugs and munitions, entering the country.

The noble Lord, Lord Collins, asked about progress on nuclear decommissioning and when our findings will be announced. The sector, as he knows, is a complex, heavy-industry sector with interdependencies between the workforces within and between sites. The Government are working to better understand these interdependencies and the implications of forthcoming business changes, and to support workforce reform plans, before bringing forward regulations to apply the threshold in this sector. Any regulations will be subject to the affirmative procedure.

[Lord Oates]

The Minister said that the reason the rules were not being applied to private schools was because there was no evidence of widespread disruption in such schools. Is there evidence of such disruption in the nuclear decommissioning industry? If not, why is it being included?

[Baroness Neville-Rolfe]

I think the arrangements on nuclear decommissioning are still under consideration. I can certainly come back to the noble Lord on the question of past disruption. It is clearly an area where it does seem important that strikes should not be entered into lightly. As I have said, there will be regulations, they will be subject to the affirmative procedure and this is on the list with good reason. The noble Lord will understand that we are looking very carefully at the arrangements and we have not come to a final view. I am sorry that on the question of timing I cannot give a firm answer, but I can say that we will be bringing an affirmative resolution forward.

[Lord Foulkes of Cumnock (Lab)]

But surely all the private schools—or as you call them in England, public schools—are even more important. If the teachers go on strike in them, where are we going to get our Prime Ministers or our Chancellors of the Exchequer from? It would be an absolute disaster for this country if the teachers in those schools, a lot of whom are untrained, did so. The Minister has misrepresented and misunderstood the dangers that we would face.

[Baroness Neville-Rolfe]

I am very sorry to disappoint the noble Lord but there is no evidence of strike action in those institutions having a major impact or, I think, of strike action at all. I am seeking to explain the difficult decisions that we have taken and set out in our consultation paper for the benefit of the House this evening. Perhaps I may continue, as it is getting late.

I believe members of the public would agree that strikes in the crucial services that I have outlined should take place only when there is a reasonable level of support. Restrictions on Article 11 of the European Convention on Human Rights are permitted where they are justified by a legitimate aim and are proportionate. The courts have made it clear that they will respect the margin of appreciation accorded to each national Government to decide on industrial relations policy. I hope I have assured noble Lords that we have thought carefully about where the threshold should apply, and that the specified services are justified.

“Essential services” of course means something very different. They are referred to by some of the reports of the ILO supervisory bodies in respect of services where it may be legitimate in certain situations to limit or prohibit strike action. Amendments 5, 10, 12 and 13 would wrongly align the 40% threshold with the ILO’s interpretation of “essential services”. The threshold is about ensuring that strikes can go ahead if they have a strong democratic mandate; it does not prohibit strikes. The Government have therefore deliberately chosen the term “important public services” to describe the services covered by the 40% threshold.

[Lord Oates]

I am sorry to intervene again but the Minister is simply wrong in this matter. As she mentioned, the ILO labour guidelines as set out in Chapter V define essential services. They talk about not just the prohibition on strikes but the limiting of strikes. It is simply not possible to argue that a 40% threshold is not a limit on the right to strike. The Minister may say that it is a legitimate limit but it is definitely a limit on the right to strike.

[Baroness Neville-Rolfe]

I am afraid that we will have to disagree on that point.

[Lord King of Bridgwater]

The noble Lord, Lord Oates, ought to have listened more carefully to the noble Lord, Lord Pannick, who put this point clearly. It is a question of disproportion and whether it is unreasonable. I am very touched by this debate because the Minister is trying to limit the number of occupations that should be subject to this requirement and the noble Lords, Lord Foulkes and Lord Collins, are pleading for certain other categories to be included as well, which is an extraordinary event.

[Baroness Neville-Rolfe]

My noble friend has kindly made the point that I was about to make about the noble Lord, Lord Pannick. Perhaps I should say finally that we do not want confusion and conflation of the two terms. In any event, the supervisory bodies of the ILO fulfil an informal advisory role and their decisions are not legally binding on the UK.

I turn to Amendment 18, which proposes that the Government will have only one chance to make subordinate legislation on the services to be covered by the 40% threshold, which I think is what the noble Lord, Lord Stoneham, explained. In our skeleton regulations we specified important public services, as I have said, according to the available evidence but we acknowledged that the significance of public services could change in the future. Today’s important services are not the same as those of 50 years ago and they will again be different in 50 years’ time, when the next transformational change—the successor to the internet—has arrived. Moreover, it would not be right for services to remain specified in secondary legislation if reduced service levels and staff absence become less disruptive to the public. Equally, it would not be right if the Government could not capture further public services within the limits set by the Bill, if further evidence was obtained on the impact of strike action in those areas.

My noble friend Lord Leigh does not seem to be here but, to give a curtain raiser, I was not intending to accept the amendment that we were about to discuss next. I hope that is not unparliamentary, but we did discuss this at Second Reading and that amendment, Amendment 4, expands things in a way that is not the Government’s intention.

Finally, Amendment 6 is a good example of the kind of agreement between the Opposition and the Government—in fact, all sides—which is often possible in this House. We initially included ancillary workers because staff who are not on the front line but play a supportive role could be critical to the delivery of important public services. There is a case here, but we have accepted, on reflection, that it would add unwelcome complexity for unions and others involved. We can all agree that the word “ancillary” is open to a number of different interpretations. Having agreed this amendment, the Committee can be assured that only workers who deliver an important public service would be included within the threshold. The regulations would specify, as now proposed, exactly who will be covered. Unions would not have to consider whether there were any additional ancillary workers on top of this. I commend Amendment 6 and hope that the Committee will be able to agree it.

[Lord Collins of Highbury]

I thank the Minister for her response. For the avoidance of doubt, I reassure the noble Lord, Lord King, that I was not, for one moment, suggesting additional categories, but the debate, and the Minister’s response, have illustrated that this legislation is incoherent and inconsistent. Our purpose in Committee today was to highlight that and we will return to these issues later on. In the mean time, I beg to withdraw Amendment 3.

Amendment 3 withdrawn.

Amendments 4 and 5 not moved.

Amendment 6

Moved by

[Lord Mendelsohn]

6: Clause 3, page 2, line 6, leave out from “services” to end of line 8

Amendment 6 agreed.

Amendments 7 to 15 not moved.

Amendment 16

Moved by

[Baroness Morgan of Ely]

16: Clause 3, page 2, line 21, at end insert—
“(2EA) Regulations under subsection (2D) may not specify services that fall within any of the following categories—
(a) health services provided in Wales;(b) education provided in Wales for those aged under 17;(c) fire services in Wales; and(d) transport services in Wales falling within paragraph 10 of Schedule 7 to the Government of Wales Act 2006 (highways and transport).”

[Baroness Morgan of Ely (Lab)]

I thank noble Lords for that lovely welcome. The amendments in this group explore the impacts of the Bill on the devolved Administrations of the United Kingdom. Noble Lords will know that we live in a country which has four distinct legislatures: bodies that are responsible for legislating and administrating in distinct parts of the United Kingdom. The devolved structures and powers of the Administrations in Scotland, England, Wales and Northern Ireland are very different. The one thing common to them is that many public services, including health, education, local government and fire services, are devolved. Many of the services referred to in the Bill relate to public services. Should the Government of the UK be able to legislate in this area, despite the fact that public services are devolved? It is unclear. I warn the Minister that there is a real danger that if the Bill goes through in its current form, it will release a constitutional firestorm which will be much more powerful than anything we have seen today from Storm Imogen.

I am going to concentrate my comments on the issues affecting Wales and I will allow colleagues to pick up on issues relating to the other devolved nations.

22:00

To understand this, we need to look at different models of governance in the United Kingdom. Scotland has a reserved powers model of governance. That means that the Scottish Government are responsible for all issues apart from those reserved for the UK Government such as defence and foreign affairs. In Wales we have a different model called a conferred model of governance. It is more sophisticated and more complicated, and the lines of responsibility are not as clearly demarcated as those of Scotland.

The assumption in the Bill is that employment and employment law are reserved matters across the whole of the United Kingdom. It is right that employment law should continue to rest with the UK Government. If we start to unravel that, we will have a race to the bottom in terms of the minimum wage and health and safety, and that would not be of benefit to the workers of the UK.

In the case of Wales, it is unclear whether measures on public services should be legislated for by Wales or the UK. It follows, therefore, that the Bill and the measures in it should not be unilaterally imposed on public services in Wales. Conventions developed since 1999 in Wales have made it clear that Westminster should not intervene in matters that have been devolved. The Government at this very moment are discussing and developing a new Bill for Wales. The draft Bill, penned by this Conservative Government, states categorically in part 1, article 2 that the Parliament of the United Kingdom will not normally legislate on devolved matters without the consent of the Assembly. The Conservative Government of the United Kingdom are saying that they will not impose issues on Wales.

The UK Government would be acting with high-handed arrogance if they continued to pursue this path of imposing the Trade Union Bill on public service provision in Wales. It is highly likely that they would be acting unconstitutionally. So let us be clear that the Welsh Government and the Assembly will not give the Bill consent. There was a vote on 26 January in which Members from across the political spectrum—apart from the Conservatives, obviously—sent a clear message to the UK Government that the Welsh Government would not give legislative consent to the Bill being imposed on Wales. So in practice the UK Government are on a collision course with the Welsh Government regarding whether they have competence to legislate in this area.

If the Government go ahead and introduce the Bill, the Welsh Government will introduce their own legislation to overturn the measures relating to public services in Wales, especially on the 40% threshold, facility time and banning check-off arrangements. If the UK Government object to the Assembly’s laws, they will have to take the Welsh Government to the Supreme Court to ask for a judgment as to which Government should have power to legislate in this area. So let us be clear: if the Government come forward with this Bill and the Welsh Assembly says, “No, we don’t want this to happen. We will bring in our own law, which overturns this”, the UK Government would have to take the Welsh Government to court. What would happen next? They would go to the Supreme Court. It is not right for us to be writing laws in this place that we know will end up in the Supreme Court. It is for legislatures to decide where power should lie, not courts. I kindly ask the Minister to consider removing the parts of the Bill that relate to public services in the devolved Administration, because that would avoid an expensive and time-consuming constitutional clash.

The Government should note that there is precedence for such a situation—a clash between the UK and Welsh Governments. In the agricultural wages Bill judgment, it was absolutely clear that the Supreme Court came down in favour of the Welsh Government. In that instance, the Welsh Government were keen to introduce a law which would protect the wages of agricultural workers. That was challenged by the UK Government, who claimed that Wales had gone beyond its constitutional brief by acting in an area of employment law, which is not devolved. The Welsh Government argued that this issue related not to employment but to agriculture, which is a devolved area, and the court came down firmly on their side.

The Wales TUC has sought legal guidance on this matter, and its advice suggests that the provisions of this Bill relate to subject matters that are devolved—public services—as well as those that are not: industrial relations and employment. By ignoring the possibility that under the devolution arrangements for Wales, a legislative provision may relate to both devolved and non-devolved subject matter, the UK Government—we should remember that this is legal guidance—have mistakenly concluded that the Bill’s provisions are not within the legislative competence of the Assembly. That is the legal advice they have been given.

Let me be clear that, if the Government continue to impose this measure on public services in Wales, they will get caught up in a constitutional wrangle and spend thousands of pounds of taxpayers’ money pushing something which is not wanted or accepted by politicians and people in Wales, and they are likely to lose in the Supreme Court, if it follows the precedent set by the agricultural wages Bill judgment.

I want to ask the Minister one question tonight. Have the Government received any legal advice on the Bill’s impact on Wales? If so, would she be kind enough to share it with the House tonight? I am hoping that legal advice may give us some hope that the Government might be prepared to listen.

In May this year there will be elections for the devolved legislatures. The Conservative Government have now accepted the reality of the devolution settlement in this country; it should now be respected. It is no secret that the political complexion of the Government of Wales is different from that of the Government of the United Kingdom. The Labour Government in Wales work extremely well with trade unions; they have avoided the strikes that are happening under the UK Government at this moment. We do not have a junior doctors’ strike in Wales; we have made sure that every person in the health service in Wales is paid the living wage—that is a good thing. The Public Service Minister Mr Leighton Andrews has concerns that these proposals will ultimately undermine rather than support the delivery of public services and the economy in Wales. The bodies that run public services in Wales object to this Bill; the chief executive of the Cardiff and Vale University Health Board trust has said that this could lead to unnecessarily challenging industrial relations in future. But, in principle, if the people of Wales want to support measures such as those proposed by the UK Government, and if they want them to affect public services in Wales, they should be allowed to have a vote on that. We have an election in May where that can be put to the people of Wales—if they want that to happen, put it in the Conservative manifesto in Wales, and let us see what happens.

It does not make practical sense to impose this Bill on Wales. Does it make sense for one legislature to impose detailed rules and conditions on another, when it has no idea of the models and the conditions of the existing services? We have been pulling in different directions since 1999. It is time to respect devolution and to understand that it is happening.

Let me give you an example. It is true that for a time, the Government gave additional money to social services in Wales to relieve bed blocking in hospitals. That gave the impression to some that Wales was taking its foot off the pedal in relation to health. Nothing could be further from the truth. Bed blocking is now a much lesser problem in Wales than it is in England, where they are desperately trying to emulate the Welsh approach. But the fact that the Tory Government are constantly attacking the Welsh Government on this issue demonstrates that they have no interest in or understanding of that different approach. Does it make sense for England to be telling Wales how to run its public services when it has no idea about those different structures of delivery?

There will be ample time over the next few days in Committee to discuss the substance of the Bill, and I have tried to avoid that temptation tonight. This debate is about underlining the need to respect the devolution settlement of this country. It is about respecting the democratic institutions of our country and the democratic mandate given by the people at a devolved level who are responsible for the delivery of public services. I hope the Minister will listen to our case and consider carefully whether she is ready and willing to start along a path which will inevitably lead to a constitutional stand-off and the sad and expensive situation in which the courts determine our fate, rather than the elected representatives of the people.

[Baroness Randerson (LD)]

My Lords, I rise to speak to all the amendments in this group, both those in my name and those in the name of my noble friend Lord Purvis.

I was a Minister in the Wales Office when the Assembly’s Agricultural Sector (Wales) Bill started its passage. The purpose of that Bill was the regulation of agricultural wages. At that time, in the Wales Office our advice was simple: this Bill related to employment and industrial relations and was therefore outside the Assembly’s competence. The Welsh Government’s Counsel General argued, however, that it was within competence because it related to the agricultural sector and agriculture is a devolved issue.

In due course, that Bill was referred to the Supreme Court, which decided that it was within the Assembly’s competence because the term “agriculture” meant all aspects and constituent elements of the industry. It accepted that it could also be classified as dealing with employment issues which were non-devolved but the fact that it also related to agriculture brought it within the scope of the Assembly’s power. That is, the Supreme Court took a broad view of devolved competences. In short, given the frequent vagueness of the 2006 Act, the ruling was that, if in doubt, it is to be considered devolved. In that way, the settlement for devolution in Wales turned out to be much broader than the UK Government had assumed it to be and even broader than the Welsh Government had assumed it to be.

I tell this story because it is a very important background to the current situation we have here. It seems to me that the Government have not been listening—either that or they have failed to learn their lesson. Although I might put it rather less emotionally than the noble Baroness, Lady Morgan, I say to the Government that they are getting into very deep water on this one because it is bound to be tested legally. I do not know how much the Government have talked to the Welsh Government, but I cannot find any reference to those conversations. I cannot find any reference to discussions. Certainly, the very bulky impact assessment does not seem to refer to anything connected with the impact on the devolved Governments and on the devolved services in Scotland, Wales or Northern Ireland.

22:15

The Welsh Government believe that the Bill touches on devolved issues. On 26 January, my Liberal Democrat Assembly colleagues and Plaid Cymru Assembly Members voted cross-party against allowing the UK Government to legislate for Wales on the issues in Clauses 3, 12, 13 and 14. Will the Minister say how many discussions have taken place with the Welsh Government and what happened as a result of those discussions? Have amendments of any sort been made to the Bill in order to take into account the concerns of the Welsh Government? That deals with the legal side of this.

I now turn briefly to the practicalities. It is well known that the public sectors in England and Wales have diverged. I might not share the rosy view of the health service in Wales expressed by the noble Baroness, Lady Morgan, but there is no doubt that there has been, and will continue to be, a considerable difference of policy. It is also well known that there is an increasingly strong Welsh identity as well as an increasingly strong Scottish one, for example. We have Welsh trade unions that do not exist in England, and we have Welsh branches of other trade unions that operate more or less on an independent basis. The BMA is a good example. It operates independently with its own policy and in Wales is not in dispute over the health service, unlike the BMA in England. Therefore, if there are separate trade unions and a separate public sector policy, it is logical to have separate arrangements on relations between employers and trade unions, whether it is the Welsh Government or a body within the devolved competence of the Assembly, such as local government in Wales.

I acknowledge that there will be some complexity. People have put to me the practical issues. What about a member of the PCS who first works in the benefits office in Cardiff and then transfers to work for the Welsh Government on Welsh Government devolved issues? That person would quite possibly be working to one set of trade union ballot rules in the first job and another set in the second job. That is the result of devolution. It is a great deal less complex than trying to impose on an unwilling employer and the unwilling employees a set of rules that have been devised for the situation in England, for services provided overwhelmingly in England or an UK basis and not for the way in which services have been and are increasingly provided in Wales. This is what devolution gives you, and you sometimes have to work with the rough edges.

I say to the Government that, in the view of Liberal Democrats, this Bill is an assault on civil liberties. It is yet another attempt by this Government to create effectively a one-party state in terms of weakening the opposition parties and the opportunities for the opposition to speak its case. What is even more important—to the Government, at the very least—is the fact that the Bill is unconstitutional. They will find that they have set themselves a set of obstacles and a barrier that is very difficult to cross, if they do not listen to the concerns expressed here this evening.

[Lord Hain (Lab)]

My Lords, I refer to the register of interests. The amendments tabled by my noble friend Lady Morgan of Ely, the noble Lord, Lord Wigley, the noble Baroness, Lady Randerson, and me reflect the cross-party support in your Lordships’ House that is also evident in the Motion overwhelmingly carried by the Welsh Assembly on 26 January with the backing of 43 out of 60 Assembly Members against 13 Conservatives. The Assembly’s vote was on a legislative consent Motion, a convention of this Parliament that enables devolved Governments to give consent to Westminster to amend legislation relating to areas normally within the devolved Government’s responsibility. After this overwhelming vote, the convention would normally require that the UK Government now amend this Bill to remove legislation that pertains to devolved powers, such as the rules governing public servants in Wales, whether payroll deductions of trade union subscriptions should be made, and so on. Moving the Motion, Public Services Minister Leighton Andrews said:

“The Bill is damaging, divisive and risks undermining public services and the economy. The Welsh Government believes it will lead to a confrontational relationship between employers and workforce. It contrasts sharply with the constructive social partnership approach in Wales, valuing our workforce, supporting public services and encouraging”,

enterprise.

“Overall, we believe the Bill is flawed and should not be pursued”.

He pointed out that:

“In Wales, we have a good record of resolving disputes. There was no junior doctors’ strike in Wales; there was in England. Firefighters took industrial action in England over pensions; they were not doing so in Wales”.

He added that, if the UK Government ignored the Assembly’s wishes, the Welsh Government would seek to overturn the impact in Wales, as they have successfully done on two occasions in the Supreme Court, as we heard from the noble Baroness and my noble friend.

Indeed, Wales’s First Minister, Carwyn Jones, told the Assembly that his Government will fight clauses in this Bill pertaining to Welsh public services if they become law. He said that,

“if it comes to the point where that Bill is passed and its provisions are applied to devolved public services, then we will seek to introduce a Bill in this Chamber to overturn the sections of the Bill that impact in devolved areas. It’s a matter for the UK Government as to whether they then wish to go to the Supreme Court in order to frustrate the will of this democratically elected Assembly”.

Therefore I ask your Lordships to respect the democratic wishes of the Welsh Assembly in backing that same policy by granting Wales’s legislature the right to determine how or if some of the key provisions in this Bill should be applied to public services in Wales. As the First Minister made explicit, if the Bill is enacted without the amendments we have tabled, the Welsh Government will introduce their own legislation to overturn the changes as they affect Wales as soon as possible. This is therefore less an argument about the substance of the relevant clauses in the Bill and more one about the nature of the devolution settlement the UK Parliament has agreed for Wales in the Government of Wales Acts 1998 and 2006, endorsed by subsequent Welsh legislation passed by Parliament, including the Wales Act 2014 proposed and enacted by the last Conservative-led Government.

As my noble friend has done, I draw your Lordships’ attention to the draft Wales Bill now before both Houses of Parliament. Its Clause 2 would place on a statutory footing the constitutional convention that Westminster would not normally legislate,

“with regard to devolved matters”,

without the consent of that devolved legislature. So on the one hand, in the draft Wales Bill, the Government are, commendably, making statutory a convention that has applied since 1999, and on the other hand they are completely undermining it in this Bill. In other words, the Government’s own draft Wales Bill reinforces the point that I am arguing; indeed, it makes that stronger by proposing a statutory requirement as opposed to the current convention that Westminster legislation affecting Wales in matters already devolved to Wales would require a legislative consent Motion from the Welsh Assembly—precisely what we are seeking your Lordships to endorse in respect of this Bill.

My case is not so much about the merits of the issues in the Bill as about the constitutional issues of foisting it upon a Welsh Assembly that has voted exclusively on a legislative consent Motion insisting that it, not our Parliament, should determine the minutiae of public service delivery provisions within Wales. These amendments would apply solely to those public services that are devolved to Wales—education, health, housing and so on. Consequently, should the Government accept these amendments, which I strongly urge, in line with the request by the Welsh Government and adopted by the Assembly a few weeks ago, the Bill would still apply in the private sector in Wales.

We explained all this in person to the Minister, and I thank her for her courtesy and time in permitting us to do so. Regrettably, though, I gather that the lady is not for turning—unless she says otherwise this evening. If I am right, she appears to insist that the 40% threshold for strikes in the Bill was a matter of principle flowing from a manifesto commitment. I leave aside whether the fact that a party commanding just 37% of the vote and a miserly 24% of the registered electorate constitutes a mandate that your Lordships must respect, but I cannot believe that subsidiary details in the Bill concerning payroll deductions, check-off and opt-ins to the political levy are really of the same order as strikes. If the Minister is still uncompromising on the 40% issue, might she consider making all the other relevant provisions of the Bill covered by our amendments subject to consent by the Welsh legislature? I ask her seriously to reflect on that point.

Having served as Secretary of State for Wales for seven years, during which I was responsible for the Government of Wales Act 2006—the basis for the settlement that has operated since—I am extremely concerned at the damaging precedent that the Bill is establishing. The Minister for Public Services, Leighton Andrews, argued in the Welsh Assembly on 14 October on behalf of the Welsh Government:

“The Bill is driven by a flawed view of trade unions as a problem. We see trade unions as a partner. So, this Bill contrasts sharply with our constructive social partnership approach in Wales of valuing the workforce, supporting public services and encouraging enterprise … The benefits of a constructive approach to social partnership can be seen in our good record of resolving disputes … more quickly than in England”.

The Welsh Government’s position on the Bill was set out in a Written Statement to the Assembly on 9 September 2015, which insisted that the Bill relates to devolved responsibilities. In carrying out this House’s long-established duties of scrutiny and revision, your Lordships have consistently and rightly taken a forensic interest in constitutional matters. I submit that key proposals in the Bill encroach upon the responsibilities of the Welsh Government in respect of the administration and delivery of public services in Wales. Provisions in the Bill should therefore not be applied to Wales without the consent of the National Assembly for Wales, and that is the purpose of these amendments.

I want to be clear: adopting these amendments would not necessarily mean passing judgment on the Bill’s provisions as they apply to public services in Wales. If after the coming election, for example, a Conservative-led coalition were to emerge as the new Welsh Government—perhaps unlikely but certainly not impossible, given recent opinion polls—they could choose to accept all the Bill’s provisions as they apply to Welsh public services through a legislative consent Motion. Significant parts of the Bill relate specifically to important public services, which are clearly devolved. The legislative consent memorandum laid in the Assembly by Leighton Andrews prior to the recent vote set out the Welsh Government’s view that the Assembly’s consent would be required for Clauses 3, 12, 13 and 14 of the Bill as they relate to devolved matters. The memorandum explained why the legislative consent Motion was tabled under the Assembly’s Standing Order 29.6 seeking Welsh Assembly Members’ consent to the inclusion of Clauses 3, 12, 13 and 14 in the Bill, and explained that the Welsh Government’s view is that consent should not be given. On 26 January, as I have mentioned, the Assembly overwhelmingly endorsed the Government’s position.

22:30

This is therefore a dispute between two Governments and also now between two legislatures, unless your Lordships endorse the amendments and the UK Government accept our verdict and the dispute ends.

I drew your Lordships’ attention on Second Reading to the Supreme Court’s judgment in 2015 and will not repeat it. However, it is crucial and I submit that much of the same argument applies to the Bill in so far as it covers areas devolved to Wales. It is therefore not acceptable for the UK Government to impose it on Wales without the agreement of its Assembly.

Policy on how best to support and protect the effective delivery of public services such as health, education, fire and housing is for the Welsh Government and the National Assembly for Wales, including the way public sector bodies in such devolved services work with trade unions to ensure the effective delivery of services to the public.

Since 1997, there has been increasing divergence in the approach to the delivery of public services between England and Wales. In Wales, for example, cancer treatment and social care is much better than in England, although waiting times for urgent operations such as hip replacements are worse. The terms of the devolution settlement preclude the UK Government from imposing English structures and approaches to different public service delivery models in Wales, especially when its Assembly has expressly opposed that in a cross-party Motion.

Surely it cannot be acceptable for the UK Government, who have no responsibility for and no direct knowledge of policy priorities and devolved service delivery models in Wales, to specify how much union facility time devolved public sector employers should allow; or whether ending the check-off system in the Welsh public sector will be disruptive, harming the viability of trade unions, which under devolution have been constructive partners in delivering public services of all kinds in Wales, where they are viewed as stabilising good industrial relations.

The Sewel convention provides that the UK Government may not legislate for devolved matters without the consent of the devolved legislature affected. I therefore ask your Lordships to accept in Committee and later on Report, if necessary in a vote, that the Government’s current intention to impose the Bill on Wales’s devolved public services is seriously mistaken and unacceptable. It is also damaging to harmonious intergovernmental and interlegislature relationships in the United Kingdom, at a time when the Scottish Government’s separatist stance endangers our union.

The Minister can avoid such an unnecessary conflict and inevitable reference to the Supreme Court by showing some empathy for and understanding of the views of Wales in adopting the amendments, or at least coming back with her own on Report which would achieve the same objective.

Finally, I underline this point so that your Lordships are crystal clear about the impact of the amendments. They do not go to the case for or against the Government’s proposals in the Bill. They go to the right of Wales through its elected Assembly and accountable Government to run and organise the minute detail of the public services for which this Parliament has, under devolution, granted them exclusive responsibility.

On 18 January 2016, the Welsh Public Services Minister, Leighton Andrews, wrote to Nick Boles, Minister of State for Skills, noting that the Lords Committee stage:

“provides you with the ideal opportunity to reconsider your position, acknowledge the relevance of the Supreme Court’s judgment and act to exclude the devolved Welsh public services from the provisions of the Bill by accepting these amendments”.

Mr Andrews argued:

“It is clear to us that the Bill is not ‘concerned exclusively with non-devolved matters’ but intrudes on the delivery of the devolved public services for which Wales has the right to develop its own approach”.

Can the Minister also comment on the leaked letter from Nick Boles, the Minister of State, which has come into the public realm today? It admits that legal advice sought from First Treasury Counsel:

“has confirmed that we have … a very weak case in relation to Wales”.

If, as I pointed out earlier, the people of Wales elect a Conservative-led Assembly and Welsh Government, they would doubtless endorse all the provisions of the Bill. After all, Welsh Conservative Assembly Members voted to endorse it just a few weeks ago.

These amendments would enable choices to be made within and by Wales for matters long devolved by Westminster. I trust and hope that this important constitutional principle will be upheld by your Lordships in revising the Bill through these amendments.

[Lord Foulkes of Cumnock]

My Lords—

[Lord Wigley (PC)]

My Lords, I have put my name to this amendment.

[Lord Foulkes of Cumnock]

I have put my name to four amendments.

[Lord Balfe]

We have not had a speaker from this side yet.

[The Earl of Courtown (Con)]

My Lords, shall we hear from my noble friend Lord Balfe?

[Lord Balfe]

I shall be brief. I begin where the noble Lord, Lord Hain, ended, which is with the leaked letter. The points put by the noble Baroness, Lady Morgan, were extremely well made. There are clearly a whole number of issues within the Bill. If we are to believe the leaked letter, which I probably do, and as we are not going to vote tonight, I hope that the Minister will look very carefully at all these amendments with a view to coming back and assuring the House that, if we asked to sustain our opposition to them, she has firm advice from the Attorney-General that that will stand up in court. I am not afraid of our occasionally going to the Supreme Court to clarify matters—I think it is probably necessary in a devolution settlement—but we should be on firm ground. If we do go to the Supreme Court, we should have a recommendation from the Attorney-General that he is quite satisfied that legally we are in the right in what we do.

When it comes to things such as deductions of contributions at source, about which at another opportunity I shall make some very clear points, if devolution means anything, surely it does not mean that we are going to ask Cardiff hospital, for example, to stop deducting the subscriptions of their union members if that is done at no cost to public funds and is seen as beneficial to industrial relations in Wales. What does devolution mean if simple things like that cannot happen? Maybe they cannot happen but, if that is the case, I hope that the Minister will be prepared to publish and share with us the views of our Attorney-General as to why this is a sound clause.

[Lord Foulkes of Cumnock]

My Lords—

[The Earl of Courtown]

My Lords, I think that it is the turn of the noble Lord, Lord Wigley, whose name is added to the amendment.

[Lord Foulkes of Cumnock]

What about Scotland?

[Lord Wigley]

What about Scotland, indeed? I will not trouble the Committee by going down that avenue. First, I apologise for the fact that, although I was in the House at the time of the Second Reading, I was unable to take part in the debate. However, I read the report of the bits that I was not in the Chamber for. I was particularly impressed by the contributions of the noble Baroness, Lady Morgan of Ely, and the noble Lord, Lord Hain, which are relevant to our debate tonight.

I have always been a strong advocate of free, unfettered trade unions having an essential role in the checks and balances within any free economy. From my previous life in industry—particularly my time as financial controller at Hoover in Merthyr Tydfil—I know the importance of having strong, well-led trade unions. It is in the interests of the owners, the management and the workforce alike that trade unions are facilitated and not undermined in undertaking that essential role.

I support Amendment 16 standing in my name and those of the noble Baronesses, Lady Morgan of Ely and Lady Randerson, and the noble Lord, Lord Hain. It excludes important services in Wales from the provisions of the 1992 Act—specifically health and school-age education, which are entirely devolved functions. Other amendments, which no doubt the noble Lord, Lord Foulkes, will speak to in a few moments, address a wider sphere, but they are all relevant to the central proposition that it is totally unacceptable for the UK Government to create a legislative framework for devolved services which will lead to a totally unnecessary poisoning of industrial relations in Wales.

We have a long and honourable tradition of trade unions in Wales. We recognise the essential need for trade unions to stand up for the rights of their members, and in recent years the workforce of the public services in Wales has not been involved in any spurious or politically motivated strike action. Because of our tradition of partnership working, we have avoided strikes. And, as so many contributors tonight have mentioned, it is not in Wales that the junior doctors have been on strike.

So if it is not broken, why on earth are the Government imposing this legislation on Wales without any discussion whatsoever? Not only is the legislation being imposed on Wales, it is being done in a manner that totally ignores the agreed framework set up as part of the devolution settlement to deal with such issues. As was emphasised by the former Presiding Officer of the National Assembly, the noble Lord, Lord Elis-Thomas, the UK Government are riding roughshod over established agreements. As he said in the debate in the Assembly a couple of weeks ago on this very issue,

“the terms set out in devolution guidance note 9, paragraph 11, have not been adhered to by the UK Government in this case … there has not been proper consultation, either through the Wales Office or directly with Welsh Government”.

This amounts not only to a cavalier disregard of the right of the Welsh Government to be involved in discussions on policy that impacts on their ability to deliver devolved services for which they are held responsible, but also ignores the working practices that have been set up by Westminster, as has been emphasised tonight.

A similar lack of consultation has been witnessed in Scotland. The Minister replying to that allegation in the House of Commons on 14 September merely assessed that consultation was,

“open to every stakeholder in the United Kingdom, including those in Scotland”.—[Official Report, Commons, 14/9/15; col. 771.]

What an appallingly arrogant attitude towards an elected Government and what a glaring example of the lack of respect towards other elected public representatives.

The Government would have been very well advised if they had consulted the Welsh Government before going down this path. Had they done so, they would have realised that, because this Bill, if enacted, will have a direct impact on the way the Welsh Government undertake their statutory responsibility for devolved services, a legislative consent order will need to be passed by the National Assembly for Clauses 3, 12, 13 and 14 to be applicable in Wales. Two weeks ago, as has been mentioned, such an order was in fact tabled in the National Assembly and voted down by 43 votes to 13.

If the Government are so arrogant or, if I may say so, so stupid as to take this Bill forward in its present form, unamended, clearly, the issue will again end up in the courts, which is not where these things should be resolved. To avoid such an outcome, the Welsh Government have asked the UK Government to amend this Bill to exclude Wales and Welsh public services from its provisions. The Labour Government in Cardiff are fully supported by Plaid Cymru and the Liberal Democrats in the Assembly in this matter. Indeed, it has been reported in the press that Conservative AMs are extremely unhappy at having been put in this position. The words quoted in the press were that they are “in despair”. One can well understand that; although out of misplaced loyalty, I suggest, they supported their Westminster counterparts when it came to a vote.

I appeal to the Minister to undertake, between now and Report, to meet representatives of the political parties in Wales, particularly Welsh Ministers, and to bring forward reasonable amendments to avoid the consequences of these disastrous provisions.

22:45

[Lord Foulkes of Cumnock]

My Lords, we have heard four powerful and eloquent pleas from Wales. I hope it is now possible just to say a few words on behalf of the quiet, unassuming people of Scotland. To be serious, this is a matter that people in Scotland, and particularly the Parliament and Government of Scotland, feel equally as strongly about—if not more strongly—as the Parliament and Government of Wales. I am therefore concerned that the House of Lords—and I say this knowing that the Government Chief Whip is here—is dealing with this at 10.45 pm. This is a matter of great importance. It is a very serious matter. It is a matter which more Members of the House should be participating in. It is a pity that it was not dealt with at a more suitable time.

The Minister said early on—I have sat through an awful lot of her speeches—that she was in listening mode. I have yet to see evidence of that, but let us give her the benefit of the doubt and assume that she is. There could not be an issue on which it is more important for her to be in listening mode than this one. The fact that neither she nor her colleagues have had discussions with the Governments and Parliaments of Wales, Scotland and Northern Ireland on these issues is lamentable. It does not indicate that the Government are willing to listen.

As far back as November 2015 in Holyrood, they voted by 104 votes to 14 to oppose this Bill. All the parties except the Conservative Party—every one of them, and the independents too—opposed it. They discussed it again in Holyrood on 26 January, the same day that the Welsh Assembly discussed it. Again, the opinion was overwhelming: only one spokesperson, the Conservative spokesperson, defended the Bill—rather inadequately, but we are used to that. Powerful arguments were made against it.

I do not often do this, but I shall now quote Roseanna Cunningham, the Cabinet Secretary for Fair Work, Skills and Training—a member of the SNP. On this occasion she made an excellent, powerful speech against the Bill, and in favour of the Holyrood motion. Unusually, she also paid tribute to the House of Lords—we do not often hear that from the SNP—because we had been able to ask the Government to think again. Other tributes to the House of Lords were also made in that debate. That is something that we should acknowledge.

Roseanna Cunningham is not a Labour person; she is an SNP member, but she said that she had explained,

“the Scottish Government’s view that trade unions are a force for good in modern society; that unionised workplaces have more engaged staff, a higher level of staff training and a progressive approach to staff wellbeing; that unions help employers to create the safe, humane and productive working conditions that head off industrial disputes and build better businesses; that any legislation that undermines the value and contribution that trade unions can make is a ‘thoroughly bad idea’; and that the bill is nothing more than an ideological attack on unions, with no evidence to underpin it”.

That is a powerful argument, which we on the Labour, Liberal Democrat and Plaid Cymru Benches here have been putting here, and our arguments are echoed by the SNP in Scotland.

The Devolution (Further Powers) Committee took evidence on the Bill from STUC, from employers and from a whole range of local government people. It said that there was no support for ballot thresholds, or for a cap on facility time or check-off provisions—there was no evidence to support the Bill. The committee went through the kind of exercise that we have not gone through here: it looked at the Bill in detail, and expressed concern at the lack of consultation with public sector employees in Scotland. It also pointed out that—as was also mentioned in the Holyrood debate—the Scottish Government as an employer has had check-off for years, and the costs are so minimal that the unions have not needed to be charged. Yet the Scottish Government are now being forced to act against their own will and experience. It is outrageous that this Government are forcing the Scottish Government to act in that way.

Roseanna Cunningham and the Scottish Parliament went on to say that they wanted Scotland removed from the Bill. That is their main aim, and that is what the Welsh Assembly said as well. But at the very minimum—I put this forward as a hint or suggestion for the Minister—they wanted regulation-making powers relating to facility time and check-off to be conferred on Scottish Ministers. That, at least, would be a compromise. It would not be the ideal situation, but if such regulation-making powers were conferred on Scottish and Welsh Ministers, that would be a move in the right direction.

Incidentally, during the debate, Bruce Crawford, who chaired the committee that looked at this issue, pointed out that even Tories in local government—the noble Lord, Lord Balfe, is here to show this—do not like aspects of the Bill. He pointed out that a Tory councillor in East Dumbartonshire, Billy Hendry, was concerned about the provisions of the Bill, saying that there was no evidence to support it and that it was an “unnecessary and unjustified imposition”.

Bruce Crawford went on to say that the Bill should be amended in the House of Lords—again an acknowledgement of the role of the House of Lords from an SNP member which I was encouraged to hear. We are making progress on this. It is wonderful. We will have them in here soon, so that Dafydd will have friends—he has friends now but he will also have associates. Bruce Crawford said that,

“the bill should be amended in … the House of Lords so that it does not apply to Scotland”;

and that such amendments should be,

“by any means available to it”,

encouraging us to press and push as hard as possible.

In one of the most powerful speeches in the debate in Holyrood on 26 January, Patricia Ferguson—a good friend of mine, a Labour Member of the Scottish Parliament and a former Minister in the Scottish Government—referred to the amendments to which I and my noble friends Lady Morgan and Lord Hain and the noble Lord, Lord Purvis—who is not in his place—have put our names. She asked for the support of the House of Lords. She said—this is good—that if we do not see any movement from the Government then the Scottish Parliament, the Welsh Assembly and the Northern Irish Assembly should get together on an all-party basis and come down in a protest to No. 10 Downing Street and put strong, powerful pressure on this Conservative Government. If we do not get some movement then the constitutional firestorm to which my noble friend Lady Morgan of Ely predicted will come about.

I hope the Minister will pass these message back to her colleagues, to Mr Boles, to the Secretary of State and to the Prime Minister that this provision must be amended, otherwise there will be an outrage the like of which she has never seen before.

[Lord McAvoy]

My Lords, I have some class acts to follow from this side of the Committee on the case that has been put for the amendments, which I support, but I want to touch on the fact that we are debating the future of Scotland and Wales at eight minutes to 11 at night. We agreed extra time for this debate because we are responsible and co-operative—I am one of the most co-operative Front Benchers here—but half of the contributions of the noble Lords, Lord King and Lord Balfe, out of the time that we were good enough to give the Government, were spent attacking the Labour Party, the trade unions and our role and place in society. Again, that is testament to the vindictive nature of the Government’s legislation. I think it was Winston Churchill who said that no temporary political alliance in government should disadvantage its political opponents. That is what is happening in this Government, both in the Short money and through other legislation against the trade unions. We are here discussing the future of Scotland and Wales at seven minutes to 11. That message will not be lost in Scotland and Wales. It is further evidence that this Government are badly damaging the unionist cause.

This legislation is politically pernicious: it flies in the face of what we know about effective industrial relations policies and undermines the devolution settlement. It is the latter that I want to focus on today. In my brief contribution, I want to concentrate my attention on the constitutional implications that this Bill will have in Scotland. The amendments would exclude the Scottish Government and, indeed, the other devolved Administrations across the UK from certain elements of the Bill, ensuring that the Government’s commitment to the devolved Administrations is kept and upholding the settlement which they claim to support.

We suggest that the devolved Administrations should not be subject to specific clauses in the Bill: Clause 3, which introduces the 40% support requirement for industrial action in certain public services; Clause 10, which provides requirements for opting-in to trade union political funds by public sector employees who work in sectors or provide services that are devolved; the requirements on publication and the provision for facility time in Clauses 12 and 13; and Clause 14, which introduces the ban on check-off arrangements.

Check-off arrangements have worked successfully throughout this country for many, many years. The noble Lord, Lord Wigley, mentioned working in the Hoover factory in Merthyr Tydfil. I worked in the Hoover factory in Cambuslang. In both factories, there were quite satisfactory check-off arrangements, and they worked for years. The employer, for the most part, was an enlightened employer and co-operated fully.

Taken together, our proposals would have the effect of mitigating the elements of the Bill which placed obstructions on the Scottish Parliament’s ability to decide how best to engage with staff and trade unions when delivering devolved services. One of the most blatant ways the Government are doing this is by limiting the amount of facility time trade union workplace representatives can spend representing members of the public sector—the result being that trade unions would be prevented from representing their members’ interests by negotiating improvements on pay and conditions, raising safety standards, promoting access to skills and training and accompanying individuals to grievance and disciplinary hearings. All these and a good employer-employee relationship benefit everyone.

Moreover, in Scotland it will also impact health bodies, as union representatives sit on health boards. Not only would this cut across the face of the devolution settlement, it would also hinder constructive employment relations which contribute to the level of the delivery of quality public services.

Furthermore, as drafted, this legislation enables the Secretary of State to make regulations to redefine “important public services”. Leaving aside for a moment the fact that broadening the definition of essential services, recognised in international law, raises the serious prospect of legal challenge—as has been mentioned by many noble Lords—I point out that many public services are devolved issues. This is, therefore, a clear example of the UK Government overstepping the mark.

The amendments would also protect against the democratic deficit that would be created by the enactment of this Bill. At present, secondary legislation to restrict or repeal trade unionists’ rights could be used, thereby preventing an opportunity to amend or even debate the legislation. While this Government seem to hold the process of consultation and engagement in contempt, we have a firm belief that this is an essential way of getting not only the best legislation but also the highest standards in our public services.

These amendments are just one mechanism we are using to make our defence against this Bill. From the outset, we have been clear that we will leave no stone unturned, and that includes support for lodging a legislative consent Motion in the Scottish Parliament. Your Lordships will know that such a Motion was filed with the Presiding Officer of the Scottish Parliament by James Kelly, a Member of the Scottish Parliament for my own constituency of Rutherglen. He tried tenaciously and courageously to get the legislation consent Motion. He is a doughty fighter for trade union rights and representing the people, and he was ejected from the Chamber. There is a lot of feeling over this.

Given the very clear and legitimate grounds for proceeding in this manner, we are bitterly disappointed that this application was denied. We believe that, due to the detriment that this Bill will have on the Scottish Government’s ability to carry out its devolved responsibilities, we are legally justified in pursuing this course of action. My colleagues in the Scottish Parliament have written to Stewart Stevenson, convener of the Standards, Procedures and Public Appointments Committee, to urgently request a change in the standing orders. This would ensure that,

“If a Bill under consideration in the UK Parliament does not identify a requirement for a Legislative Consent Motion, a member (including a member of the Scottish Government) may lodge a motion seeking the Parliament’s consent to treat the Bill as a ‘relevant Bill’”,

in relation to an LCM. Last month, Labour tabled the necessary Motion, backed by Green and independent MSPs, and will continue to press for this change.

Let there be no doubt: we will fight this tooth and nail, not just in Westminster, Holyrood and Cardiff, but at grass-roots level. Labour-controlled Scottish local authorities have led the way by passing motions of non-compliance with restrictions to facilities time and abrogation of the check-off. Among those councils that declare an interest is the council area where I stay, where my brother, Edward McAvoy is council leader. I make that plain. He has done a brilliant job. He is my big brother by the way; I am scared of him.

Our commitment to standing up for the rights of workers and trade unions across the UK is unwavering. The Bill is nothing more than a Conservative Party political tool that will, in the same breath, undermine effective industrial relations and have a corrosive impact on the entire devolution settlement. Curtailing the powers of the devolved Administrations to act in the interest of the people who have elected them is utterly shameful. I call on the Minister to heed the many warnings and pieces of advice she has received today and take a moment to consider with her colleagues the scale of the constitutional precedent the Bill will set. We have made very clear our views on what we regard as the motivation for the Bill, but, as we have also attempted to set out, our frustration and concern also relate to the Government’s disregard for the very foundations of the devolution settlement of the United Kingdom. To rectify this, I beg and urge the Government to accept the amendments.

23:00

[Baroness Neville-Rolfe]

My Lords, I thank noble Lords for the debate and note the passion that has been expressed. I am particularly grateful to the noble Baroness, Lady Morgan of Ely, and to the noble Lord, Lord Hain, for the useful meeting we had last week and for the trouble that they took in taking me through how they see the impact of this Bill applying to devolved public services and public bodies in Wales. I thank the noble Baroness for explaining the legislative consent Motion debate in the Welsh Assembly that took place two weeks ago, for giving her views of the implications this evening, and for reminding us of the forthcoming elections in Wales, where, last year, this party made good progress. I thank the noble Lord, Lord McAvoy, for doing the same service this evening for Scotland.

The Bill will ensure that strike action can go ahead only with a strong and recent mandate from union members. It will increase protections for non-striking workers against intimidation, and increase transparency for union members and taxpayers. It will create an appropriate regulatory environment for unions. It is clear that the benefits this will bring to the wider public should apply consistently across the whole of Britain.

Employment and industrial relations law are clearly reserved matters, as has been said, under the devolution settlements with Scotland and not conferred in Wales. The noble Baroness, Lady Morgan, referred to the Supreme Court judgment in the Agricultural Sector (Wales) Bill, where the court held that the case relates to multiple subjects and thus fell within the competence of the Welsh Assembly. The Supreme Court ruling concerned a completely different situation, where the devolved subject of agriculture was specifically in play. By contrast, this Bill has nothing to do with the regulation of public services. It is squarely concerned with industrial relations and how trade unions are regulated.

The issue of competence is a fact-specific question that can be answered only by careful analysis of the statutory and factual context. In another Supreme Court case in the area of deciding the competence of the Welsh Government—re recovery of medical costs—the Supreme Court followed the same approach as in the agricultural sector case, but came to a completely different conclusion. It decided that the area in play was not devolved.

It would be unworkable to have different employment laws applying in the different jurisdictions in Great Britain. This was recently considered by the Smith commission for Scotland, and it concluded that employment and industrial relations law should remain reserved.

The noble Baroness, Lady Morgan, asked about legal advice. As noble Lords would expect, the Government have taken legal advice on the measures in the Bill relating to a number of areas. The Government do not, as she probably knows, disclose such advice; nor do we comment on leaked documents. The Government are committed, in implementing the Trade Union Bill, to fairly balance the right to strike with the rights of millions of people to go about their normal lives. Having said that, it will come as no surprise to noble Lords that I am always keen to explore areas of potential agreement, but the measures before us do reflect our manifesto and were supported by a clear majority in the elected Chamber.

The noble Lord, Lord Hain, said that he was less interested in the substance of the Bill than in the constitutional issues. As it is late, I will not go through the amendments clause by clause—although I can respond if that is wanted. I just point out that many employers will have staff across some or all of these regions. Business leaders have rightly raised concerns that this could create administrative complexities and could result in differential treatment of different groups of employees. This is not a matter of minute detail. The Government’s objective is to drive productivity and growth across the United Kingdom. These amendments could generate a lot of confusion and additional costs for both employers and unions and make it more complex for businesses to expand into other regions.

The Trade Union Bill is not the right forum for pushing forward the frontiers of the devolution settlements. Employment and industrial relations are reserved matters and the Bill, which deals with employment and industrial relations law, should respect that.

[Lord Foulkes of Cumnock]

Before the Minister closes the debate, she has not dealt with my suggestion, which comes from the Scottish Executive, that, at the very least, regulation-making powers for check-off and facility time might be given to Scottish and Welsh Ministers. That does not take away our powers here in the United Kingdom Parliament over employment law. We are still making the law; all that we are saying is that these regulation-making powers for those two areas should be given to Scottish and Welsh Ministers. If the Minister really is in listening mode, she does not need to agree to that today; all she needs to say is that she will look at it, discuss it with her colleagues and come back on Report.

[Baroness Neville-Rolfe]

My Lords, in the tradition of this House, I do not want to close the debate without saying that we are open to further discussion. We are, of course, open to discussing implementation of the Trade Union Bill in Wales and Scotland. To answer, as far as I can, the questions from the noble Baroness, Lady Randerson, and the noble Lord, Lord Wigley, my colleague Nick Boles spoke only last week to Roseanna Cunningham, Cabinet Secretary for Fair Work in the Scottish Government, and to Leighton Andrews, Minister for Public Services in the Welsh Government; both “stars” who have already featured in this evening’s debate. Of course, discussions are still going on in the context of the Scotland Bill, which is being scrutinised by a Committee of this House, and the draft Wales Bill, which the Government published in October. They are also part of a complex picture and need to be taken into account.

My Lords, it is late, we have discussed this at length and I ask noble Lords to withdraw their amendments.

[Baroness Morgan of Ely]

I thank the Minister and noble Lords who have contributed to this debate. I am sure the Minister has felt the pressure and intensity that Members of this House feel about this issue, particularly the devolution settlement, and why that is the issue we have focused on tonight. We have tried carefully not to wander into the area of the substance of the debate; this is really about the constitutional settlement of the United Kingdom. It would have been irresponsible of us in this place not to have drawn the Government’s attention to the fact that they are writing a law here which will be sent to the Supreme Court. That is irresponsible law-making. It is our job to make sure that people understand that that is what will happen if this is pushed through in its current form.

It is really worth underlining two other Bills going through the House at the moment, which the Minister was right to draw attention to: a Scotland Bill and a draft Wales Bill. Both directly contradict what is happening here. I urge the Government to think very carefully about consistency and respect for the devolution settlement, and to make sure that there is an understanding that legislative consent motions should be respected and agreed to.

I also ask the Minister to think carefully when she suggests that this is not relevant because it is employment law. We would argue that it is not simply about employment law but goes much further than that. It is about public services and the right of the devolved institutions to deliver public services in the way that they choose. Will the Minister think very carefully about how we proceed? Please will she look at the legal advice? I am sure she will not want to go down a route which will take us to the Supreme Court. I hope that she will listen to the passion expressed here tonight. We look in particular for her to think carefully about check-off and facility time, and to think again about accepting the amendments we have put forward tonight, but I beg leave to withdraw the amendment in my name.

Amendment 16 withdrawn.

Amendments 17 to 20 not moved.

Clause 3 agreed.

Amendment 21 not moved.

Amendment 22

Tabled by

[Lord Balfe]

22: After Clause 3, insert the following new Clause—
“Ballots: electronic votingBallots: electronic voting
(1) The 1992 Act is amended as follows.
(2) In section 230(2) (conduct of ballot), after “must” insert “either be registered to vote by way of an electronic ballot, or”.
(3) At the end of section 230(2A)(b) insert “, or
(c) it will be convenient for him to vote by way of an electronic ballot while on the ship or while at a place where the ship is.”(4) In subsection 230(2B)(a) for “and” substitute “or”.
(5) In subsection 230(2B)(a), after “is,” insert “or be registered to vote while on the ship, or while at a place where the ship is, by way of an electronic ballot,”.
(6) After section 230 insert—
“230A Ballots: electronic voting
(1) A trade union may use electronic voting for the purpose of a ballot under section 226 of this Act, subject to the agreement of the Certification Officer.
(2) The electronic voting system must be—
(a) designed by an organisation which is independent from the trade union, and (b) approved by the Electoral Commission.””

[Lord Balfe]

I am a bit lost, as I thought that we had gone past that section. Anyway, the amendment is not moved.

House resumed.

House adjourned at 11.12 pm.