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Nusrat Ghani (Wealden) (Con)
Karen Lumley (Redditch) (Con)
The Lord Chancellor and Secretary of State for Justice (Elizabeth Truss)
Last month, we launched the White Paper “Prison Safety and Reform” and we are already implementing measures to track all drugs, drones and phones. This major overhaul of the prison system will include the recruitment of an extra 2,500 front-line officers. Our reforms will empower governors to make the changes that they need.
Nusrat Ghani
I warmly welcome the Government’s decision to invest £555 million to recruit 2,500 extra guards, and I hope that Lewes prison in East Sussex, where staff had to deal with a serious incident involving threats of violence a month ago, will benefit from that. The Home Affairs Committee, of which I am a member, released a report on psychoactive substances and their increased availability in prisons. Given the aggressive and violent behaviour that they cause, what is the Secretary of State doing to clamp down on drugs of all types available in prisons?
Elizabeth Truss
My hon. Friend is absolutely right about psychoactive substances. They have been a serious issue in our prison system. That is why we have developed tests, which we have rolled out across the prison estate, to detect these substances and why we have trained up 300 sniffer dogs.
Karen Lumley
The suicide rates at HMP Hewell in Redditch are unacceptably high. May I invite my right hon. Friend to update the House on what the Government are doing to ensure the safety of prisoners and to reduce suicide rates in our prisons?
Elizabeth Truss
First, may I welcome my hon. Friend back to the House? It is great to see her back on our Benches looking so fit and well.
Elizabeth Truss
Indeed. Finally, I can agree with a comment from the Opposition.
My hon. Friend is right to highlight the issue of self-harm and suicides in our prison. The rates are too high, which is why we are taking steps to increase the number of prison officers. We will have a dedicated officer for every six prisoners and they will be responsible for those prisoners’ welfare and for helping them to turn their lives around so that they do not go back to reoffending.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
The suicide rate in our prisons is the highest it has ever been in 25 years. It is absolutely shameful. Just the other week, the Health Secretary appeared before the Health Committee and admitted that he has never visited a prison mental health service. Will the Secretary of State tell us whether she has visited one, and if not, why not and when will she?
Elizabeth Truss
The hon. Lady is absolutely right that mental health is a real issue in our prisons. I recently had a meeting with the Health Secretary on how we can improve mental health services. We are enabling governors to co-commission those health services. I was recently at HMP Lincoln discussing mental health services with the governor. Such services are available only from Monday to Friday, and he wants them to be available all week round, and we will enable that to happen.
Mr David Hanson (Delyn) (Lab)
In part due to increased attacks on prison officers, more than 200,000 days were lost through ill health by prison officers in the past 12 months. Will the Secretary of State update the House on what the figure lost through sick days is as of now, and what steps she will take to reduce that figure?
Elizabeth Truss
I thank the right hon. Gentleman for his question. There is an issue with sick days. The the Under-Secretary of State for Justice, my hon. Friend the Member for East Surrey (Mr Gyimah), who is responsible for prisons and probation holds a daily meeting in which he goes through the levels of sickness at each prison and works with the governors on what we can do. One thing we are doing is strengthening the frontline to ensure that we have more officers available for support.
Robert Neill (Bromley and Chislehurst) (Con)
I am glad that the Secretary of State recognises the importance of the number of officers, and I congratulate her on the extra moneys available. Does she agree that in potentially violent situations one of the most important factors is the availability of experienced officers who have the knowledge and the personal relationships with inmates to calm them down? Can she give us more detail about what is being done to deal with the current very high levels of wastage of experienced officers?
Elizabeth Truss
I completely agree with my hon. Friend, and the evidence backs him up that having experienced officers is vital. We have a higher proportion of experienced officers in 2016 than we did in 2010; more than 80% of our prison officers have five or more years of experience. I am absolutely determined to keep those officers in the service. Two weeks ago, we launched a fast-track programme to help people already in the service to progress in their careers. We are also offering retention payments, particularly in hard-to-recruit areas, because we certainly need to keep those very important staff on board.
Yasmin Qureshi (Bolton South East) (Lab)
In every one of Her Majesty’s inspector’s reports on closed male facilities published during the Secretary of State’s time in post—reports on Bedford, Chelmsford, Hindley, Onley, Risley, Swaleside and Winchester, and the youth facilities at Isis and Wetherby—outcomes of the test of prison safety deemed them to be either poor or not sufficiently good. When can we expect a positive report on prison safety in closed male prisons?
Elizabeth Truss
The hon. Lady is right that current levels of violence in our prisons are not acceptable. That is why we launched the prison safety and reform White Paper, with measures to deal with drugs, drones and phones, as well as to bolster the number of front-line staff. We are also working directly with governors to help them to deal with issues that might trigger incidents in their prisons while we build up that front-line capability. I announced in October that we are recruiting an extra 400 staff in 10 of the most challenging prisons; we have already given job offers to 280 people, so we are making progress.
Yasmin Qureshi
The Ministry states in the White Paper that it will trial the inclusion of prison co-ordinates in no-fly zones to prevent banned items from being dropped into prisons. How will that work in practice and what is being done now to reduce demand for banned items in prisons?
Elizabeth Truss
The Under-Secretary of State for Justice, my hon. Friend the Member for East Surrey is working with drone manufacturers and leading a cross-Government taskforce to get in place the technology needed to do that. We are also employing solutions such as installing extra netting. Last week I was at HMP Pentonville, which now has patrol dogs whose barking helps to deter drones. We are using all sorts of solutions to deal with contraband entering our prisons.
James Duddridge (Rochford and Southend East) (Con)
Rehman Chishti (Gillingham and Rainham) (Con)
The Parliamentary Under-Secretary of State for Justice (Dr Phillip Lee)
A key aspect of our prison reform programme will be to address offender mental health and improve outcomes for prisoners. We are introducing co-commissioning, which will make sure that governors are focused on and accountable for those outcomes, alongside health commissioners. I know the Secretary of State has discussed the matter with the Health Secretary and it is a high priority for both of them.
James Duddridge
Last year, I spent more than a month in a small room, unable to leave. I lost track of where I was. I became tearful over the slightest of issues. I felt that I could not breathe. I was not incarcerated in prison; I was in hospital following a physical illness, but the experience made me reflect on how easy it is to develop a mental health issue when confined in a small space and lacking orientation. With that in mind, what assessment has the Department made of people developing mental problems in prison, rather than going in with such problems, and what can be done to reduce that?
Dr Lee
I am glad to see my hon. Friend looking so well, following such a significant illness.
Prisoners are entitled to the same levels of care as those living in the community, but there are specific measures in place for their care. All prisoners have a health assessment on arrival, all prison officers receive training to help them to recognise mental health issues, and all prisons have on-site primary healthcare teams who can provide mental health care, refer to counselling, or refer for a further psychiatric assessment for serious mental illness.
Rehman Chishti
A recent report by the prisons and probation ombudsman found that 70% of those who committed suicide had a mental health issue. What steps will the Government take specifically to tackle this problem?
Dr Lee
Every death in custody is a tragedy. We are committed to reducing the number of self-inflicted deaths. We have reviewed the case assessment care in custody and teamwork process for prisoners assessed as being at risk and we are piloting revised safer custody training in response. All prison officers, both new and experienced, receive training to help offenders with mental health issues.
Keith Vaz (Leicester East) (Lab)
Statistics show that 50% of those who are in prison suffer from personality disorders. Does the Minister agree that it is important to assess such issues when people enter the criminal justice system—even at the stage of the custody suite—rather than after their incarceration?
Karl Turner (Kingston upon Hull East) (Lab)
My hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) asked the Secretary of State when she had last visited a prison’s mental health service. Suicide in prisons is at a 25-year high. It is utterly disgusting that neither the Health Secretary nor the Secretary of State for Justice has visited prisons to see what is going on. What is happening?
Dr Lee
As I have said, each of those suicides is a tragedy. The Government are fully aware of that, and I am aware that the Secretary of State for Health will be visiting a prison. I was at Peterborough prison last week discussing mental health provision there, and I visited the mother and baby unit at the same time. I am under no illusions about the challenges involved in addressing the problem. We are fully aware of the problem and I intend to make further statements on the subject because the mental health of prisoners is such a key problem.
Sir Simon Burns (Chelmsford) (Con)
However important it is to improve and enhance mental health care in our prisons, little will be achieved without continuity of care once prisoners leave prison. What is the Department doing, with the health service, to ensure that continuity of care is provided for prisoners from day one when they leave prison?
Dr Lee
I thank my right hon. Friend for his question which, as ever, is a wise one. Yes, continuity of care before, during and after prison is key, not just for the mental health of prisoners, but for their physical health too. We have ongoing discussions with the Department of Health on the matter, and my intention is to make the continuity of records and the continuity of care as a consequence much better in the future.
Tom Elliott (Fermanagh and South Tyrone) (UUP)
Does the Minister accept that many prisoners with mental health issues would be better served and facilitated outside the prison regime? If so, what alternatives are being looked at?
Dr Lee
Of course, the hon. Gentleman is right. However, prison can be an opportunity to address mental health problems that have not previously been diagnosed and properly treated, so being in prison may be an opportunity for someone to receive proper care, which is ultimately what I am about.
Maria Caulfield (Lewes) (Con)
The Parliamentary Under-Secretary of State for Justice (Mr Sam Gyimah)
As outlined in the prison safety and reform White Paper, we will introduce a prisoner apprenticeship pathway that will offer prisoners opportunities that count towards the completion of a formal apprenticeship on release. This scheme is being developed as part of our offender employment strategy which will be published in the new year.
Maria Caulfield
Can the Minister update me on progress in introducing apprenticeships in HMP Lewes?
Mr Gyimah
HMP Lewes is exactly the kind of local prison that will benefit from the new prison apprenticeship pathway. I anticipate that the prison will also benefit from the new Prison Service apprenticeship scheme that we are launching in 2017, which will help recruit members to the Prison Service by widening the number of entry points into the service.
Rob Marris (Wolverhampton South West) (Lab)
Mr Gyimah
The hon. Gentleman asks a very important question. At the moment, roughly 50% of prisoners are illiterate as far as English and maths are concerned. Our prison safety and reform White Paper proposes that we test prisoners’ literacy on entry and on exit so that we can measure the distance travelled and progress made in prison.
Mr Philip Hollobone (Kettering) (Con)
Which prison has the best record for training prisoners for gainful employment once they leave, and how might that best practice be rolled out across the prison estate?
Mr Gyimah
My hon. Friend asks a very important question. Across the Prison Service there are patches of good work aimed at employment post-release. We want to create a system to measure that, and to identify and rank prisons according to how well they do in that respect. That is precisely what our White Paper does. Employment post-release is one of the outcome measures against which governors will be judged once we proceed with reform.
Kate Green (Stretford and Urmston) (Lab)
Work experience outside prison can also enhance a prisoner’s employment opportunities on release, so what guidance is the Minister giving prisons—not just reform prisons, but governors of all prisons—in relation to release on temporary licence?
Mr Gyimah
Release on temporary licence has a huge role to play in helping prisoners to gain employment in the wider world. I have been speaking with Timpson’s, for example, which employs a lot of ex-offenders, and that is how they are trialled before release. We are looking at that to ensure that the guidance that governors receive allows them to do more with release on temporary licence, specifically in relation to employment opportunities.
Victoria Prentis (Banbury) (Con)
The Lord Chancellor and Secretary of State for Justice (Elizabeth Truss)
We will turn around offenders’ lives only if governors have the levers they need over education, work and health in prison. That is why our reforms devolve power over budgets and services to governors.
Victoria Prentis
Procurement is a complicated business. What guidance and training are governors being given to ensure that they can complete the procurement process properly, be that for the provision of mental health services or even the recruitment of the dogs that bark at drones?
Elizabeth Truss
It sounds like my hon. Friend is asking for some of those patrol dogs at her local prison, HMP Bullingdon, which I am delighted to say will be one of the 30 prisons that will be recruiting locally to build up a local cadre of staff, starting next January. The answer is that we will be setting up a What Works network to help governors gain the expertise they need to take those decisions and make those things happen locally.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Government Front Benchers seem to be doing a bit of sleepwalking this morning. I know that it is nearly Christmas, but can I ask them to wake up to the dangers of empowering governors too much? When the former Select Committee that I chaired looked at prison education all those years ago, we found that one real danger was that a very good system of education and training in a prison could suddenly be wiped out by a new governor who wanted nothing to do with it. We need common standards across all prisons. Is that not right?
Elizabeth Truss
I thank the hon. Gentleman for his question. We are being very specific about what we are asking governors to achieve in raising education standards, getting prisoners into apprenticeships and work, and improving health standards. We are specifying the what, but giving governors much more freedom over the how, because they are the people with the expertise. The officers on the landing are the ones who talk to the prisoners, and they need that freedom to be able to turn people’s lives around.
Craig Tracey (North Warwickshire) (Con)
The Parliamentary Under-Secretary of State for Justice (Mr Sam Gyimah)
The Government yesterday issued a consultation paper following a review of driving offences and penalties. The consultation focuses on the driving offences that result in death or serious injury and proposes that the courts should be able to impose a life sentence, or longer determinate sentences, in the most serious cases.
Craig Tracey
I welcome the consultation. Does the Minister agree that it presents the perfect opportunity to close a loophole whereby in the event of a pedestrian being hit by a driver under the influence of alcohol or drugs, as happened to my constituent Sean Morley, who was tragically killed as a result, the maximum sentence available for failing to stop and report is just six months, leaving no incentive for the driver to stay around? In Sean’s case, the Crown Prosecution Service and the judge had only the charge of failing to stop available to them, not death by dangerous driving.
Mr Gyimah
The case to which my hon. Friend refers is truly horrific, and I extend my personal sympathies to Sean Morley’s family. Nothing can compensate for the loss of a loved one by a killer driver who drives irresponsibly. I encourage the family to contribute to the consultation so that we can take their points on board.
Greg Mulholland (Leeds North West) (LD)
Campaigners and families are delighted that the Government have now announced this review, and I pay tribute to all of them, and to all hon. Members on both sides of the House who contributed to the cross-party manifesto in 2014. The direction of travel is clearly welcome, but I just ask that consideration is given to getting rid of the charge of careless driving, because at the moment some of the most dangerous sorts of reckless, criminal driving are called careless, and that is wrong.
Mr Gyimah
The hon. Gentleman makes an important point. I congratulate him on his long-standing campaign on the issue. We looked very carefully at the distinction between careless and dangerous driving, which he wants us to get rid of, but we came to the view that a sense of culpability needs to be reflected in the decisions that the courts come to. For example, someone could be momentarily distracted by their children crying in the backseat and—God forbid—something bad then happens. That is very different from someone involved in speed racing. That is why we have chosen to keep that distinction.
Mark Pawsey (Rugby) (Con)
My constituents George and Giulietta Galli-Atkinson set up the Livia awards in memory of their daughter. She was killed by a driver who mounted the pavement, but who was found guilty of causing death by dangerous driving and received only a fine. My constituents have campaigned for over 20 years for tougher sentences. How might that be achieved as a consequence of the Minister’s consultation?
Mr Gyimah
We are proposing a new life sentence as a maximum penalty for those convicted of dangerous driving. As a consequence, we are giving the courts the tools they need to make the punishment fit the crime, and that is testimony to the campaign my hon. Friend’s constituents have been running for years.
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
I welcome the consultation on this matter, but I seek some clarity from the Minister on the distinction between careless and dangerous driving. The consultation makes it clear that the Government do not propose any changes but seek instead to explain and address misconceptions about the law. How exactly does the Department intend to ensure greater consistency across the UK in applying this law?
David Warburton (Somerton and Frome) (Con)
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
The Parliamentary Under-Secretary of State for Justice (Mr Sam Gyimah)
As part of our reforms, we are going to set clear standards on the outcomes we expect each prison governor to achieve on drug rehabilitation, education and other drivers of rehabilitation.
David Warburton
I thank the Minister for that. Given that 42% of adult prisoners in England and Wales were permanently excluded from school, does he agree that it is only through education that the cycle of reoffending can be stopped? What more can be done to ensure that this message properly resonates across the prison estate?
Mr Gyimah
My hon. Friend makes an important point: education is one of the key ways in which we can help to break the cycle of reoffending—when the offender, obviously, is willing. One of the things we have done to speed up this process is to transfer the education budget from the Department for Education to the Ministry of Justice. That budget will be delegated to governors so that they can organise education that suits individual prisoners’ needs.
Stephen Metcalfe
I am pleased to hear about the steps that have been taken to improve drug rehabilitation and education. Could I suggest that prisoners close to release are also given careers advice and experience mock interviews to aid their search for work on release?
Mr Gyimah
Again, that is an important point. If someone has spent quite a lot of time inside, it is highly likely that they will be unused to the world of work and certainly to interviews. One of the things we are doing is having Department for Work and Pensions work coaches work with prison governors as part of the regime. Their job is to help to prepare prisoners, alongside rehabilitation companies, for life after release.
Mrs Theresa Villiers (Chipping Barnet) (Con)
Mr Gyimah
My right hon. Friend raises a point around conviction and time spent. Obviously, there is the Ban the Box campaign, which we are supporters of, that encourages employers to look beyond these things, certainly when it comes to employing ex-offenders. I would be happy to speak with my right hon. Friend directly about the case of her constituent.
Mr Alan Mak (Havant) (Con)
Rosie Cooper (West Lancashire) (Lab)
The Parliamentary Under-Secretary of State for Justice (Mr Sam Gyimah)
We take the safety of prisoners in our jails extremely seriously. It is of paramount importance that they are kept safe and given the opportunity to reform.
Rosie Cooper
At the Justice Committee last week, the prisons Minister said in reply to a question regarding the recent escape from Her Majesty’s Prison Pentonville, that the frequency of cell searches was determined locally by the governor. Does he remain satisfied that the coalition decision to end daily cell searches was right, or does he think they might have prevented this escape and limited the use of mobile phones, drugs and weapons?
Mr Gyimah
Cell searches are carried out on an intelligence-led basis at establishment level. In addition, we are investing £3 million on a regional and national intelligence network so that we can identify where phones, for example, are being smuggled in to aid criminal activities in our prisons and deal with such situations appropriately.
Andrew Selous (South West Bedfordshire) (Con)
Our prison chaplains deal with all these issues daily and are almost universally well thought of, so will the Minister tell the House what steps he is taking, first, to recruit the full number of chaplains, and secondly, to make sure that they have the time to do the important work they are there to do?
Danny Kinahan (South Antrim) (UUP)
Is the Secretary of State for Justice aware of the situation at HMP Maghaberry, where three prisoners have tragically taken their own lives, and will she and her team use all their influence on the Northern Ireland Executive and the Northern Ireland Justice Minister to make sure that this is dealt with immediately?
Mr Gyimah
As my hon. Friend the Parliamentary Under-Secretary of State for Justice said, every death in prison is a tragic one. Such people are in the care of the state, and we have to make sure that we take good care of them in that respect. I am willing to look in more detail at the situation that the hon. Gentleman has outlined.
Philip Davies (Shipley) (Con)
As I have mentioned on a number of occasions, there is no real incentive for prisoners to behave themselves in prison because of the law introduced by the previous Labour Government that prisoners have to be released halfway through their sentence irrespective of how badly they behave or whether they are still a danger to the public. I am still waiting for the Government to give an explanation of why they think this law should still be on the statute book, and I have yet to receive a satisfactory response. Will the Minister now give us the reason why, by law, prisoners should be released halfway through their sentence irrespective of how badly they behave or whether they are still a danger to the public?
Mr Gyimah
My hon. Friend raised this issue at the Select Committee last week, and I will give him the same answer I gave then. When prisoners are released, even at the halfway point, they remain on licence, and if there is a breach of the licence, they are recalled to prison. That remains the case.
Sir Kevin Barron (Rother Valley) (Lab)
The Lord Chancellor and Secretary of State for Justice (Elizabeth Truss)
A core part of our prison safety and reform plan is the recruitment of an additional 2,500 prison officers. In 10 of our most challenging prisons, we have already started a recruitment programme, and we have made 280 job offers.
Sir Kevin Barron
We have nearly 7,000 fewer prison officers in our prisons than in 2010. The Government have announced an increase in the prisons budget of £100 million to recruit or re-recruit an extra 2,500 officers. Is it any wonder that the service is in a mess?
Elizabeth Truss
In our “Prison Safety and Reform” White Paper, we make it very clear that it is important to have a skilled force of officers. That is why we are investing £100 million, which will enable us to make sure that one officer is responsible for six prisoners. Through our work, we have shown that that is effective in keeping a prison safe, and in being able to turn around the lives of offenders.
Gordon Henderson (Sittingbourne and Sheppey) (Con)
I have three prisons in my constituency. Combined, they have one of the largest concentrations of prisoners in the country. The prison officers in Sheppey’s prisons are fantastic people—dedicated, hard working and highly responsible—but Sheppey’s prisons are seriously understaffed. Because of our location in the south-east of England, it is difficult to recruit officers, given the number of other jobs available to them. What reassurance can my right hon. Friend give my prison officers that steps will be taken to solve the problem of recruitment on Sheppey?
Elizabeth Truss
I agree with my hon. Friend that prison officers do a fantastic job. When I visit prisons up and down the country, I meet officers and see the great work they do, their dedication to the job and why they have gone into it. There are staff recruitment issues in about a quarter of our prisons because there is high demand for employees, particularly in the south-east of England. That is why we are enabling governors to offer market supplements of up to £4,000 to recruit officers, and retention payments of up to £3,000 to keep those officers on board.
John Cryer (Leyton and Wanstead) (Lab)
It is not just the cut of 7,000 prison officers, which my right hon. Friend the Member for Rother Valley (Sir Kevin Barron) talked about; another 7,000 non-officer grades are also being cut. That is a total cut of 14,000 staff—2,000 is a drop in the ocean. That is why people are getting hurt and killed in Britain’s prisons. When will the Secretary of State return staffing to pre-2010 levels, which is needed to ensure safety in prisons?
Elizabeth Truss
The important point is that the staffing that we are putting into our prisons is evidence-based and enables us to operate with a ratio of one officer for every six prisoners. That is what works.
Christina Rees (Neath) (Lab/Co-op)
In a Westminster Hall debate last week, the prisons Minister confirmed that it is his intention for each prisoner to have a dedicated prison officer, who will be responsible for six inmates. He called it the new offender management model and the new staffing model. Will the Secretary of State explain whether that is based on current staffing levels or whether it is an aspiration for the future? What are the details of the new models?
Elizabeth Truss
That is what we will operate when we get up to the full complement of having the additional 2,500 officers. We have already started with 10 of the most challenging prisons. Of the 400 prison officers we are seeking to recruit, we have offered jobs to 280. It will take time to build up the prison officer workforce. That is why we are launching a new apprenticeship scheme, a new fast-track scheme for graduates, and a scheme to recruit former armed forces personnel. We will not achieve this overnight, but it is important to build up the workforce to improve safety and reform in our prisons.
Christina Rees
The prisons Minister also told the Justice Committee last week that, in order to recruit an extra 2,500 prison officers by 2018, the Ministry of Justice would have to recruit a total of 8,000 officers, due to the staff leaving rate. Michael Spurr said that the leaving rate after just the first year as a prison officer is 13.5%. How does the Secretary of State plan to retain the new staff who are leaving and the prison officers that she plans to recruit in future? Will she spend whatever it takes to get a grip on the crisis?
Elizabeth Truss
As I said, we are investing £100 million in recruiting the additional 2,500 officers. We are launching a new apprenticeship scheme, a new graduate scheme and a scheme to recruit people from the armed services. We are improving career progression in the Prison Service to ensure that our experienced officers get the opportunities that they deserve. In the 25% of prisons in which we struggle to recruit in London and the south-east, we are offering additional payments. We are doing everything we can to build up that strength because it is important to delivering safe and reformed prisons.
John Nicolson (East Dunbartonshire) (SNP)
The Minister for Courts and Justice (Sir Oliver Heald)
As is well known, we shall set out our proposals for a Bill of Rights in due course, and we shall of course consult fully on those proposals.
John Nicolson
In the light of the United Nations Committee on the Rights of Persons with Disabilities finding that cuts to benefits meet the threshold for human rights violations, instead of replacing the Human Rights Act, should not the Secretary of State focus on ensuring the protection of rights to which the Government are already committed?
Sir Oliver Heald
The UK Government and this country do not need lectures about our human rights record. Our country has a proud tradition that goes back 800 years of pioneering human rights and spreading our values around the world. We do not need any lessons.
Mr Julian Brazier (Canterbury) (Con)
Does my right hon. and learned Friend agree that not only is it a good idea to make the change, but that we were members of the European convention on human rights for a whole generation before we put human rights legislation into British law, and that the clear understanding needs to be that British courts, informed by legislation from this Parliament, make the decisions?
Sir Oliver Heald
Of course it was Winston Churchill in his famous speech in Place Kléber in Strasbourg who pointed out the importance of fundamental human rights after the second world war, and British lawyers played a very important part in framing the European convention on human rights. Having said that, it is right to consider what that should be in the modern context, and whether we need a British jurisprudence over those rights. That is what we are doing.
Deidre Brock (Edinburgh North and Leith) (SNP)
Sir Oliver Heald
Of course we respect human rights and the rights that are within the convention. No country has a better record of abiding by those decisions than this country. Having said that, there is a need to look critically at the Human Rights Act and how it operates, which is what we will do.
Mr David Nuttall (Bury North) (Con)
Does the Minister agree that the example of countries such as New Zealand, Canada and Australia prove that a country does not have to be a member of the European convention on human rights to have an excellent human rights record?
Sir Oliver Heald
My hon. Friend’s point is that those countries have the common-law tradition that was founded in this country by our judges and our Parliament. The fact that it is expressed differently in Canada and countries of that sort does not mean that it does not have the same root. We in this country should be proud of that.
Liz McInnes (Heywood and Middleton) (Lab)
The Lord Chancellor and Secretary of State for Justice (Elizabeth Truss)
The independence of the judiciary is the cornerstone of the rule of law, vital to our constitution and freedoms. As Lord Chancellor I frequently make this clear, both in private and in public.
Liz McInnes
After the press attacks on the judiciary, it took the Justice Secretary nearly 48 hours to release a statement. The former Lord Chief Justice Lord Judge said of that statement that he thought it was
“a little too late—and quite a lot too little”.
Does she agree with Lord Judge, and if so will she take the opportunity to apologise?
Elizabeth Truss
It is not the job of the Government or the Lord Chancellor to police headlines. The process is working absolutely as it should. People have a right to bring a case to court. The Government have the right to defend our position in the court. The judiciary is independent and impartial, and the press can scrutinise the process within the law.
Michael Fabricant (Lichfield) (Con)
I agree with my right hon. Friend. As we sit here today in this Parliament, just across Parliament Square the Supreme Court is sitting with 11 Supreme Court justices. Does she not agree—and does this whole House not agree—that the integrity of the Supreme Court and the justices should not be impugned?
Elizabeth Truss
I completely agree with my hon. Friend. As I said last month, the Supreme Court justices are people of great integrity and impartiality.
Joanna Cherry (Edinburgh South West) (SNP)
In response to the constitutional change brought about by devolution, the renowned international jurist, the late Professor Sir Neil MacCormick, stressed the importance of the principles that justified judicial independence and the concept of the separation of powers. As the United Kingdom once more faces major constitutional change after the EU referendum, will the Justice Secretary join me in reaffirming the importance of those principles?
Elizabeth Truss
I absolutely will. The independence of the judiciary is a vital part of our free society, as is our free press. Both those things are important. We have seen over the last months that we have a robust independent judiciary and a robust free press, which I look forward to discussing with the hon. and learned Lady very soon.
Joanna Cherry
In recent years, it has become commonplace for some Conservative Members to deprecate the judges of the European Court of Justice and the European Court of Human Rights simply for doing their job. Does the Lord Chancellor agree that such scant respect for the rule of law has encouraged a climate in which a major tabloid, which I believe some people call a newspaper, thinks it is appropriate to describe justices of our own Supreme Court as “enemies of the people”?
Elizabeth Truss
I have been very clear that the independence of the judiciary is a vital part of our rule of law. As my right hon. and learned Friend the Minister for Courts and Justice has just said, it is important for the UK that British courts make those decisions, and that is precisely what we are going to achieve.
Richard Burgon (Leeds East) (Lab)
Yesterday, the President of the Supreme Court, Lord Neuberger, said at the beginning of the article 50 appeal:
“This appeal is concerned with legal issues, and, as judges, our duty is to consider those issues impartially, and to decide the case, according to law. That is what we shall do.”
Does the Lord Chancellor agree that if she had done her duty and spoken out at the time to defend the judiciary, those words would not have been necessary?
Elizabeth Truss
As I said earlier, I frequently make it clear that the independence of the judiciary is a vital part of our constitution and our freedoms. I also think that it is absolutely right that the President of the Supreme Court, who has absolute integrity and impartiality, should make that case as well.
Andrew Bingham (High Peak) (Con)
The Minister for Courts and Justice (Sir Oliver Heald)
We are committed to helping vulnerable witnesses to give their very best evidence. A range of measures exist to help to reduce the anxiety of giving evidence, including video-link evidence away from the courtroom, and, within the court, giving evidence behind a screen.
Andrew Bingham
Following the closure of my local court in Buxton, witnesses will have to travel from my High Peak constituency to the nearest court. Can my right hon. and learned Friend provide further assurance that there will be protection for witnesses not only in the court, but when they are travelling to it?
Sir Oliver Heald
Yes, I can do that. When a witness needs protection, the police assess what is required to keep them safe. Witness care officers also help to ensure that the witness has any help that they need to attend court.
John Glen (Salisbury) (Con)
The Lord Chancellor and Secretary of State for Justice (Elizabeth Truss)
The prison and courts reform Bill will, for the first time, set out in legislation that the reform of offenders is a key purpose of prison. Prison is not just about housing offenders until release. Everyone involved in prisons, from officers to headquarters, will be focused on turning prisoners’ lives around.
John Glen
Will the Lord Chancellor think about the pathway back to independent crime-free living and the use of organisations such as the Amber Foundation, which do a lot to look after people before they have developed the life skills to live independently and free from crime?
Elizabeth Truss
I congratulate the Amber Foundation on its work, particularly in turning around the lives of young people. We will shortly issue our response to Charlie Taylor’s review on how we will improve the youth justice system to do just that.
Mr Andrew Turner (Isle of Wight) (Con)
Elizabeth Truss
Making our prisons safer places is my No. 1 priority. That is why we are dealing with drugs, drones and phones, and it is why we are investing in additional prison staff across the estate.
Kevin Hollinrake (Thirsk and Malton) (Con)
The Minister for Courts and Justice (Sir Oliver Heald)
We are preparing legislation to create the new legal status of “guardian of the property and affairs of a missing person”. We will introduce it as parliamentary time allows.
Kevin Hollinrake
I hope to introduce a ten-minute rule Bill on guardianship that would help relatives and friends to manage the affairs of missing people. In memory of Claudia Lawrence, my constituents’ daughter who went missing seven long years ago, will the Government offer that Bill their full support? Will they also be willing to honour her memory by referring to it, whenever possible, as Claudia’s Bill?
Sir Oliver Heald
That is good news, and I wish my hon. Friend well with his Bill. I understand why he wants to refer to it as Claudia’s law. I would like to extend my sympathies, as I am sure the whole House would, to Peter and Joan Lawrence. The Government will formally announce their position on Second Reading, but we are keen for this matter to be tackled.
David Rutley (Macclesfield) (Con)
The Lord Chancellor and Secretary of State for Justice (Elizabeth Truss)
Our probation officers do a vital job—it is one that I value highly—in turning offenders’ lives around, and the prisons and probation Minister is conducting a comprehensive review of the probation system that is focused on improving the quality of our probation services. As with our plans for prisons, we want a simpler, clearer system, with specific outcome measures such as getting offenders off drugs, improving educational standards, and getting offenders into apprenticeships and work. We also want closer working with the Prison Service. We will set out our more detailed plans after our review is completed in April.
David Rutley
Guide dog owners are too often turned away by taxis, despite that being illegal, and research has shown that when offenders are prosecuted, they can be fined less than £200. Will my right hon. Friend review the situation and find ways to increase the penalties to ensure that such discrimination is better addressed?
Elizabeth Truss
It is appalling that some taxi drivers refuse to take assistance dogs. That is an offence under the Equality Act 2010, and it can result in a fine of £1,000. I know that the Department for Transport is looking at improving training for drivers, and at the role that taxi licensing can play in eradicating this discrimination.
Richard Burgon (Leeds East) (Lab)
Given the Government’s climbdown on their outrageous plan for immigration and asylum tribunal fees, and if they really believe in access to justice, is it not about time they listened to opposition to their unaffordable employment tribunal fees and their small claims limit changes, which hit injured people on lower incomes, and to the urgent demands that they finally begin a review into their savage legal aid cuts?
Elizabeth Truss
We have already announced a review of the Legal Aid, Sentencing and Punishment of Offenders Act 2012—we will shortly be announcing the timetable—but we need a system that is both open and affordable, which is exactly what the Government are delivering.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
Elizabeth Truss
I absolutely agree with my hon. Friend. We can be incredibly proud of our independent judiciary, which is the cornerstone of the rule of law and supports our commerce and trade, and we also have a robust free press, which is vital to ensuring a free society.
Imran Hussain (Bradford East) (Lab)
The Minister for Courts and Justice (Sir Oliver Heald)
There is a difference: Government Members think it only fair that those who can afford to should make a contribution to a service that costs hard-working taxpayers £66 million a year. We are reviewing the situation—we are doing a careful job, because this is an important issue—and we will publish the outcome in due course.
David Warburton (Somerton and Frome) (Con)
Elizabeth Truss
I completely agree with my hon. Friend about this vital means of reducing reoffending. We will be launching a new employment strategy next year in partnership with employers, and prisoners can take up apprenticeships in and out of prison so that we create the link between prison and the outside world. Most importantly, we are matching jobs that are available on the outside with the training and work that prisoners do on the inside so that there is a pathway to employment.
Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)
Sir Oliver Heald
It is important that the Scottish Parliament and Government liaise with the UK Parliament and Government about Brexit, and that is happening, as the hon. Gentleman knows. ECRIS is an important system, but the Government are not announcing their Brexit negotiating position at this stage.
Lucy Allan (Telford) (Con)
Sir Oliver Heald
My hon. Friend’s question is about a very important point. In the same period, the time taken to complete a case has halved, and the Family Justice Board, which I co-chair, is investigating the reasons for the increase in cases and whether it is temporary. I agree that there are some vital issues here, such as helping women not to lose successive children to care. My hon. Friend might have heard about the Pause project, which is doing promising work in this area, and I would be happy to have a meeting with her to discuss the issue further.
Diana Johnson (Kingston upon Hull North) (Lab)
Three Secretaries of State—for Justice, for Health, and for Communities and Local Government—believe that parents in Hull should have an independent inquiry to find out what happened to their babies’ ashes. Does the Secretary of State fully understand the disappointment of those parents that she will not stand up for justice for them by establishing an independent inquiry to find out what happened to those ashes?
The Parliamentary Under-Secretary of State for Justice (Dr Phillip Lee)
I am sympathetic to the hon. Lady’s concerns and I offer my sympathy again to her constituents. We are supportive of local historical investigations, but we do not plan to order an historical inquiry in Hull or elsewhere. Hull has made significant improvements, including by putting in place measures to improve practices across, and communication between, the cremation authority, local funeral directors and NHS trusts.
Mrs Sheryll Murray (South East Cornwall) (Con)
Dr Lee
We are working to ensure that we take proper account of the specific needs of women at every stage of the criminal justice system so that they receive the support that they need to make positive changes in their lives. We want to see fewer women offending and reoffending, and we will set out our strategy for how we manage female offenders in 2017.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
May I give the Secretary of State another opportunity to answer my question? She told the House that she has had meetings to discuss the record levels of suicide in our prisons. Has she actually visited a prison mental health service—and if not, why not?
Elizabeth Truss
I have visited a number of prisons where I have discussed mental health services. I have already answered the hon. Lady’s question.
Stephen Hammond (Wimbledon) (Con)
Sir Oliver Heald
We are a modern global centre for legal services and dispute resolution, and English law is the international law of choice. Our legal services sector contributes £26 billion to the UK economy. We have the best legal system in the world, and our modernisation programme will maintain that situation. I will be championing, as will the Secretary of State and the whole team, our legal services sector as a key part of post-Brexit global Britain.
Greg Mulholland (Leeds North West) (LD)
The family of Richard Davies of Yeadon are dismayed that the man found guilty of his manslaughter is being considered for a move to an open prison a year before the family was told that that would be considered and after spending only a year in prison. Is that justice?
The Parliamentary Under-Secretary of State for Justice (Mr Sam Gyimah)
There is obviously a careful risk assessment before people are moved into open prison. I am not aware of the specific facts of the case that the hon. Gentleman has outlined, but I will be happy to meet him to discuss it.
Lucy Frazer (South East Cambridgeshire) (Con)
The hon. Member for Leeds East (Richard Burgon) said that he thought that Lord Neuberger had mentioned that he would decide the case in accordance with the law on the basis of something that the Secretary of State had or had not said. Does the Secretary of State agree with me that Lord Neuberger said that he was deciding the matter on the basis of the law because that is his duty, and because it was stated that the matter would be decided on law, not politics, in paragraph 8 of the High Court judgment?
Elizabeth Truss
My hon. and learned Friend is absolutely right about Lord Neuberger’s role—[Interruption.] It is pronounced “Newberger”; I have had frequent conversations with him. It is important that the judiciary itself states the case, too.
Kate Green (Stretford and Urmston) (Lab)
Prisoners serving IPP—imprisonment for public protection—sentences have remained in custody long beyond their tariff and long after the coalition Government abolished such sentences. I understand that a dedicated Ministry of Justice unit is looking into the position of IPP prisoners. Will the Secretary of State tell us exactly what it is doing?
Elizabeth Truss
I have met a number of IPP prisoners who are anxious to hear more about the progress that they will make through the system. The unit is ensuring that there are sufficient parole hearings and that sufficient courses are being taken, and getting people to a stage at which they are ready for release. However, it is always important for us to focus on public protection, and we make sure that we only release people who do not pose a huge risk.
Iain Stewart (Milton Keynes South) (Con)
Woodhill prison in my constituency has had more suicides than any other prison this year. Will my right hon. Friend assure me that she is working urgently with the governor to address the situation?
Elizabeth Truss
I can assure my hon. Friend that we are working urgently with the governor to address the situation, as well as addressing the overall issue of the number of suicides in our prisons, which is far too high.
Rushanara Ali (Bethnal Green and Bow) (Lab)
Reoffending rates among young offenders remain stubbornly high. Earlier this year, the Association of Youth Offending Team Managers said that there had been a record cut in funding for youth offending teams. What is the Secretary of State doing to address that?
Elizabeth Truss
The hon. Lady will not have to wait long before we release the Charlie Taylor report and the Government’s response, which will explain how we will improve outcomes in youth justice.
Chris Philp (Croydon South) (Con)
In February this year, 21-year-old Croydon resident George Beresford was knocked over and killed by a drink-driver. Because the police and the Crown Prosecution Service were unable to prove that the drink-driver was also driving carelessly, he received only a relatively short driving ban, rather than a custodial sentence. I thank the Under-Secretary of State for Justice, my hon. Friend the Member for East Surrey (Mr Gyimah), for agreeing to meet the family this afternoon, but does he agree that the case should be considered as part of the consultation on driving offences, and that when a drink-driver kills someone, a custodial sentence is appropriate irrespective of whether careless driving can be proven?
Mr Gyimah
Our consultation proposals make it very clear that when a driver has consumed drugs or alcohol and then kills someone, and if there is sufficient evidence to charge that driver with careless or dangerous driving, he or she could face a life sentence. Obviously it is for the Crown Prosecution Service to prosecute on the basis of the evidence, and it is for the courts to hand down the relevant sentence. I look forward to discussing the details of that specific case with the Beresfords later this afternoon.
Anne McLaughlin (Glasgow North East) (SNP)
A constituent of mine who has pleural plaques is raising an action against his former employers, of whom there are many because of the nature of his work. His claim is subject to a time bar and must be submitted by the end of the year. However, he cannot obtain a list of his employers because Her Majesty’s Revenue and Customs says that that will take 321 days. I am sure that he would appreciate it if the Secretary of State asked the Treasury to make an exception.
Suella Fernandes (Fareham) (Con)
On her first day in office, the Prime Minister said:
“If you are black you are treated more harshly by the criminal justice system than if you are white.”
I am pleased to be working with the right hon. Member for Tottenham (Mr Lammy) on a review of the treatment of, and outcomes for, black, Asian and minority ethnic individuals in the criminal justice system. What steps will the Secretary of State take to act on the emerging findings, which show that, in respect of arrests and charging, such people are disproportionately affected?
Elizabeth Truss
I am delighted that my hon. Friend has joined that review, to which I am sure that she will make a major contribution. Clearly there are issues throughout the criminal justice system that we need to examine, but I am certainly keen to see more diversity throughout our legal services industry and our judiciary, and we are working very hard on that.
Rob Marris (Wolverhampton South West) (Lab)
Education budgets are being devolved to prison governors. Will each of those budgets be ring-fenced for education spending purposes?
Mr Speaker
Well! A one-word answer. Absolutely magnificent. I very much doubt that we shall hear a one-word question, but we can always ask the Chair of the Justice Committee, who is himself an accomplished lawyer. There is a hint there. I call Mr Robert Neill.
Robert Neill (Bromley and Chislehurst) (Con)
Given the Government’s welcome development of a corruption prevention strategy for our prisons, will the Minister look personally at the allegations of systemic corruption raised by BuzzFeed News today on the basis that this presents a serious risk of undermining our prison system?
Elizabeth Truss
I completely agree with my hon. Friend. While the vast majority of prison officers are hard-working and dedicated, there is a small minority that is an issue. We acknowledge that in the White Paper, and we are reporting early next year on our corruption strategy. We are also considering options for a prison-specific offence of corruption to crack down on that scourge.
Nusrat Ghani (Wealden) (Con)
I have previously raised my concerns with the Lord Chancellor about the rise of gangs promoting extremist ideology within prisons. Will she update the House on how her Department is cracking down on extremist behaviour?
Elizabeth Truss
My hon. Friend is right about our concerns. We launched our response to the Acheson review in the summer. I am pleased to say that all prison officers are currently being trained—and will be by the end of the year—in tackling extremism, but I would be very pleased to have a meeting with her to discuss what further measures we can take to deal with this issue.
Philip Davies
Thank you very much, Mr Speaker.
When the previous Labour Government changed the law so that prisoners had to be released halfway through their sentence irrespective of how badly they behaved or if they were still a risk to the public, the then Conservative Opposition were apoplectic and voted against the change. Do the Government think that the then Conservative party was wrong to oppose that change in the law?
Rail Infrastructure (Train Operating Companies)
(7 years, 4 months ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
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Andy McDonald (Middlesbrough) (Lab)
(Urgent Question): To ask the Secretary of State for Transport if he will make a statement on the Government’s plans for train operating companies to take responsibility for track and infrastructure from Network Rail.
The Secretary of State for Transport (Chris Grayling)
The hon. Gentleman has clearly misunderstood our plans, so let me explain them to him.
This morning I laid a written statement in both Libraries of this House setting out my vision for reforming the railways in a way that puts passengers at the heart. This is about providing better and more reliable journeys for passengers.
Britain’s railways are crucial to our economic future, and we have seen very substantial growth in passenger numbers since privatisation, but this growth brings challenges and the impact of disruption can be immediate, significant and wide-ranging. So our railways need to adapt and change in order to be able to cope with this huge expansion in the number of passengers. We are spending very large amounts of money trying to tackle the challenge, with new and longer trains, more capacity being introduced across the country, and big projects like Crossrail and small projects that make a difference locally.
Earlier this year, Nicola Shaw recommended that Network Rail should devolve responsibility to the route level. I support the principles of the Shaw report, and I support Network Rail’s reform programme, but there is more to do.
I therefore intend to press ahead with Sir Roy McNulty’s recommendations on how to make the railways run better and more cost-effectively. I will do this initially at an operational level. In order for all those involved to be incentivised to deliver the best possible service for the passenger, I expect the new franchises, starting with Southeastern and East Midlands, to have integrated operating teams between train services and infrastructure, working together in the interests of the passenger. I will also be inviting Transport for London and Kent County Council to be more closely involved in developing the next Southeastern franchise by embedding their own representatives in the team that develops, designs and monitors that franchise.
We will continue to develop the model for greater alignment of track and train as further franchises are renewed, including the option of joint ventures. In the meantime, my Department is also publishing an update to the rail franchising schedule, which I am placing in the Libraries of this House.
I also want to bring new skills to the challenge of upgrading our railways. I will begin by looking at the reopening of the link from Oxford to Cambridge. I am going to establish East West Rail as a new and separate organisation, to accelerate the permissions needed to reopen the route, and to secure private sector involvement to design, build and operate the route as an integrated organisation. This East West Rail organisation will be established early in the new year and chaired by the former chief executive of Chiltern Railways, Rob Brighouse.
These reforms will set the railway on a firmer footing for the future. We can, and will, make sure our rail network plays its part in making this country a country that works for everyone. I will bring forward in due course a new strategy for our railways with more detail on what I am setting out today.
Andy McDonald
Private companies will only engage with the Secretary of State’s plans if they believe that they will be able to extract yet further value from Britain’s railways at the expense of taxpayers and commuters. Not only does this mean poor value for the public, but it also risks compromising safety. The last time the Tories privatised the rail tracks it resulted in a series of fatal accidents, which led to the creation of Network Rail in the first place. Now the Secretary of State wants to start us on a slippery slope back to the bad old days of Railtrack, with profit-chasing companies being entrusted with the safety-critical role of being responsible for our rail infrastructure. Has he not learned the lessons of Railtrack, or is he simply choosing to ignore them? Why does he expect things to be different this time?
Will the Secretary of State explain how his planned “integrated operating teams” will be different from the “deep alliances” between Network Rail and South West Trains, which were abandoned, and from the similar arrangement between Network Rail and ScotRail, which is performing abysmally? Will the same system of regulation apply in his new landscape? What discussions has he had with the Office of Rail Regulation about this? What costings have been done for this programme? Has a cost-benefit analysis been carried out? It is time for our railways to be run under public ownership, in the public interest, as an integrated national asset in public hands, with affordable fares for all and with long-term investment in the railway network. Sadly, today’s announcement will take us further away from that than ever before, but an incoming Labour Government will redress that as a matter of urgency.
Chris Grayling
Fortunately, there is not an imminent Labour Government. The trouble is that Labour Members want to turn the clock back to the days of British Rail and of the unions having beer and sandwiches at No. 10. We want to modernise the railways and make them work better. This is not about privatisation. I am not privatising Network Rail. I am creating teams on the ground with the same incentives to work together in the interests of the passenger. An essential part of that —the bit the hon. Gentleman has not spotted—is that the Shaw recommendations on route devolution, which will give real power to local teams to make decisions about their routes without always referring to the centre, will make it possible for those alliances to work much better than they have in the past. We know that where there have been alliances, they have made something of a difference, but they could do so much more.
This is not rocket science. If the trains are being run from over here and the tracks from over there, when things go wrong we get two separate teams waving contracts at each other rather than working together. Of course our railways do not maximise their potential. This is about forging teamwork on the ground to respond to challenges, to plan better and to deliver a better service to passengers. That is what we should all be aspiring to. Moving the deckchairs around, renationalising the railways and taking away hundreds of millions of pounds a year of investment in new trains from the private sector would take our railways backwards and make the travelling public worse off. This is a sign that, as always, the Labour party has not made it into the modern world.
Mrs Theresa Villiers (Chipping Barnet) (Con)
I warmly welcome efforts to create greater integration between those who run the tracks and those who run the trains, but will my right hon. Friend acknowledge that a one-size-fits-all model would not be the right one, because certain lines are so heavily used by diverse operators that such a degree of integration would be difficult to achieve?
Chris Grayling
That is absolutely right. It is very straightforward in areas where there is complete synchronisation between the Network Rail routes and the train operators, such as on the west coast main line, which has multiple operators. We also have to be careful to protect the interests of freight operators and open access operators. I am not planning to change the fundamental regulatory structure, but by forging teams together by letting franchises and structuring Network Rail in a way that allows them to integrate, we will be able to deliver better day-to-day performance and a more reliable railway over the vast majority of our network.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
The Secretary of State is right to acknowledge the problems with our rail network, but he should not remedy them through further privatisation. There is higher passenger satisfaction and reliability in Scotland than on any other network in the UK, but Scotland could do better. Will he agree to devolve power over Network Rail to the Scottish Parliament?
Chris Grayling
The hon. Gentleman has just described progress in Scotland, but the point that he has missed is that Scotland is the one place where we have a working alliance of the kind I am talking about. What he is describing is a step on the road to the model that I want to create across the railway, which he says builds passenger satisfaction. That is why this is the right thing to do. It is not about privatisation; it is about teamwork to deliver a better service for the passenger.
Stephen Hammond (Wimbledon) (Con)
Although Network Rail does many things well, it is often cumbersome and unresponsive to the customer. Will my right hon. Friend confirm that the purpose of his virtual operating companies is to bring scale benefits in cost and service to the customer?
Chris Grayling
My hon. Friend, who has great experience in such matters, is absolutely right. Right now, the incentives for team members in Network Rail are different from those in train operators. The incentive across the entire railway network should be to do a better job for the customer. Part of that process will involve aligning incentives so that everyone has the right motivation to deliver for the people who matter: the customers.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
A joined-up approach could bring benefits and has been called for on many occasions by, among others, the Transport Committee. How will safety be protected in the specific model that the Transport Secretary now advocates? Could it be the beginning of a highly expensive fragmentation of the system?
Chris Grayling
The opposite is the case. This is not about fragmentation; it is about joining up. As the hon. Lady will know, we have various teams on the ground across our railways, some looking after the track and some looking after the trains. Sometimes they work together well, but sometimes they do not. By creating a structure that shapes teams on the ground, which involves decentralisation within Network Rail of the kind recommended by Nicola Shaw and the sort of partnerships that Sir Roy McNulty recommended, we will reach a place, about which the hon. Lady has talked in the past, where we have a more joined-up railway that does a better job for the customer.
Sir Roger Gale (North Thanet) (Con)
I congratulate my right hon. Friend on taking an initiative that could and should have been taken about 20 years ago. I am delighted that my constituents travelling from east Kent will be among the first to benefit from better co-operation between Network Rail and the train operating company. Will he indicate whether funding will be available for the Kent coast line to be brought at least into the 20th century and preferably into the 21st century?
Chris Grayling
Following the new Southeastern franchise bids, I hope and expect to see the kind of benefit that we have seen on the East Anglian rail network, where every single train is due to be replaced as part of the new franchise. That is the sort of progress that makes a real difference to passengers, and I want to see that kind of improvement across the network, including on Southeastern. As the two sides of the railway work closer together, the ability to deliver small, incremental improvements quickly becomes better and more readily available, and we can then improve services.
Mr Dennis Skinner (Bolsover) (Lab)
This is a Minister who has a bit of form. In a previous job, he wrecked the prison system. He now has the job at Transport and is about to cause havoc there as well.
Chris Grayling
Let me surprise the hon. Gentleman by saying that I am the Minister who decided not to privatise the Prison Service, a decision which was described in my office by the Prison Officers Association as a victory. I hate to disabuse him, but I am not an inveterate privatiser; I am an inveterate improver of services.
Sir Paul Beresford (Mole Valley) (Con)
I thank my right hon. Friend for his encouraging response to the urgent question. A number of operators work with Network Rail in both our constituencies and not only has the number of complaints dropped dramatically but, more importantly, there has been a positive response to requests for service changes from the constituents.
Chris Grayling
That is right. Two rail routes run through my constituency. One is run by South West Trains and one by Southern. We understand the issues on the Southern network, but I recently went to a public meeting on the edge of my constituency about the service provided by South West Trains and found an audience broadly full of praise for the operator. There have been a bumpy few weeks this autumn and some things have gone wrong with the infrastructure on the network, but there are many decent people on our railways who have been there for a long time, working hard for passengers, and we must always recognise that.
Derek Twigg (Halton) (Lab)
Some of the main causes of delays and problems on the network include failures of signals, points and trains. Will the Secretary of State explain in specifics what will be different under his proposals from what currently happens?
Chris Grayling
Let me give the hon. Gentleman a specific example. About 10 days ago, there was a quite bad signal failure at lunchtime on the South West Trains network. I caught the train home during the evening peak, by which time the service was pretty much back to normal. It is a joined-up route that has the nearest thing to an alliance on the network, and the two sides work hard together to deliver improvements quickly when something goes wrong. That is an example of the benefits of joined-up working, as opposed to having to wait several hours for the two teams to decide how to do things together.
Oliver Dowden (Hertsmere) (Con)
I welcome the move towards greater integration with operating teams. Does the Secretary of State share my hope that that might stop the buck-passing between train operating companies and Network Rail, which many of my constituents north of the river on the Thameslink line have suffered daily and to which I drew his attention yesterday?
Chris Grayling
My hon. Friend is absolutely right about that. I make no pretence: there are some genuine problems on our railways at the moment. Those are mostly problems of intensive use and dramatic increases in passenger numbers, beyond anything envisaged even 10 years ago. So we have to deliver change and improvement, which comes partly through capacity improvements—a lot of money is being spent on the Thameslink route. It also comes through better performance on a day-to-day basis. I will never be afraid to hold rail companies’ feet to the fire if they do not deliver, but we also need to recognise that many of the problems arise on the infrastructure, and getting the two to work together to deliver real solutions to those problems has to be the right way forward.
Caroline Lucas (Brighton, Pavilion) (Green)
The Secretary of State has said that he wants less contracting complexity and more localised decision making, but giving more power over infrastructure to private train operating companies will create a new and uneven layer of contracting in the industry. How can he be confident that this will not lead to a return of the subcontracting culture, which was a major factor in the avoidable rail tragedies at Hatfield and Potters Bar?
Chris Grayling
I do not think the hon. Lady has been listening to me. I am not talking about creating complex new contracting structures; I am talking about teamwork on the ground. Where we have started this—the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) made the point about the situation in Scotland—it has made a difference. We need to deepen and strengthen these alliances, and create much stronger teamwork on the front line. That is what will make a difference.
Helen Whately (Faversham and Mid Kent) (Con)
I, too, welcome this announcement, including the proposal to involve Kent County Council more in the renewal of the Southeastern franchise. Day in, day out, rail commuters in my constituency have to cope with delays, to the extent that one constituent has even asked the managing director of Southeastern to write to his boss to explain why he is late each day. Will the Secretary of State therefore say more about how his proposals will enable my constituents to get to work on time?
Chris Grayling
I know that there has been disruption in the Kent area in the past couple of years because of the improvements at London Bridge, and there are lessons to be learned from the way they have been carried out to make sure that we minimise disruption in the future. We need big investments that will create extra capacity, but they have to be done in a way that causes as little damage as possible to ongoing services. I want the new franchise to deliver the best possible improvements to services in Kent and London, which is one reason why I reached the view that the design of the franchise has to be a three-way partnership between my Department, Transport for London and Kent, because this multifaceted franchise has to work for everyone.
Diana Johnson (Kingston upon Hull North) (Lab)
In east Yorkshire did we not have a plan for joined-up thinking, using a train operator called First Hull Trains to improve services for local people by electrifying the line to Hull? Was not that joined-up thinking abandoned by the Government just a few weeks ago?
Chris Grayling
What actually happened was that before the point of being able to take a decision on electrification on the Hull line, Hull Trains and TransPennine ordered bi-mode trains that deliver the service improvements without any additional investment in unnecessary infrastructure. That means we can spend more money around the network to improve services. People in Hull should be pleased, because they are about to get smart new trains that will really improve services.
Jason McCartney (Colne Valley) (Con)
We would all welcome more integrated teams working on behalf of passengers on our railways. Will the Secretary of State explain how this will work for my local passengers on the trans-Pennine route, bearing in mind that the Northern franchise runs out in 2025 and the TransPennine Express franchise runs out in 2023?
Chris Grayling
The central focus is likely to be the Northern franchise, and indeed that was Nicola Shaw’s recommendation. A large part of the rail network is relatively easy to deliver in this way, but in some parts where there are multiple operators we need to look carefully at how best to do it. The integrity and the spread of the Northern franchise is probably the foundation for the strongest alliance in that area.
Alison McGovern (Wirral South) (Lab)
The Secretary of State has mentioned South West Trains and how some of this integration is already in place in our network. So either we are talking about that, in which case this is not really a change, or this is the predecessor to a privatisation which will go badly—which is it?
Chris Grayling
It could just be that we have had some tentative steps in this direction that have shown early signs of promise and that we think we should pursue much more seriously—it could just be that.
James Cleverly (Braintree) (Con)
Commuters on the Braintree to Liverpool Street line suffer cancellations and delays far too regularly. I welcome the commitment to new rolling stock under the new franchise, but does my right hon. Friend agree that the bringing together of the TOCs and Network Rail will mean that there can be no excuses, be they about rolling stock, signalling or points, to further delay the commuters in my constituency?
Chris Grayling
I agree; what the public want is to know that someone is in charge. The aim of all this is to ensure that someone is in charge. Things will go wrong and there will be problems—that is unavoidable in a congested rail system—but we all want to know that there is a joined-up team trying to solve them. Of course, I hope that the new trains on my hon. Friend’s network, once they arrive and have bedded in, will deliver much better reliability than the existing ones.
Mr Clive Betts (Sheffield South East) (Lab)
Will this new arrangement have any impact on future investment decisions? I note that the east midlands franchise is to be one of the first considered for this new arrangement, so how does that impact on possible electrification there? A scheme was committed to and then paused, and then unpaused and recommitted to. Now it appears to be neither paused nor committed to. Will the Secretary of State explain the impact on that of these arrangements?
Chris Grayling
There is no impact; as I have said in the House before, we are proceeding with the next stage of electrification to Corby. We are looking at how we deliver service improvements to Sheffield by 2020, with improved journey times, faster tracks and the remodelling of key places such as Derby station, and I am looking actively at how we provide the best train fleet for the future.
Iain Stewart (Milton Keynes South) (Con)
I have been campaigning for the reopening of the east-west rail line for many years, so may I thank my right hon. Friend for this early Christmas present? Will he assure me that the new body will work closely with the National Infrastructure Commission on unlocking the economic potential of the Oxford to Cambridge corridor through Milton Keynes? Do we have an updated likely date for the opening of the line?
Chris Grayling
We will work with the National Infrastructure Commission, and we will also work closely with the local authorities that have been involved in helping to develop the project. I will not give my hon. Friend a date, but I would say that one reason for doing this is that I want to accelerate the process. I look at the pipeline of projects that Network Rail has, and I do not want this project to disappear into the middle of the next decade; I want us to start real improvement works quickly. We have money from the autumn statement to start some of that work around the intersection with HS2, but I just want to make this project happen quickly. We have to demonstrate sometimes in this country that we can get on with things.
Albert Owen (Ynys Môn) (Lab)
My constituency and the north Wales line are covered by two major franchises, Wales and borders, and west coast; by two Governments, the Welsh Government and the UK Government; and by Network Rail. In future, under the Secretary of State’s plans, who would be responsible for safety? Has he spoken to the Welsh Government about that?
Chris Grayling
Today’s announcement is predominantly about England, because, as the hon. Gentleman knows, the Welsh Government are taking the lead in designing the franchise. I know that they have sympathy with this view, because they are pathfinders at the moment in securing bids from integrated consortiums for the proposed Cardiff metro service, but I will discuss this with the Welsh Government, as I have regular conversations with them. I hope that they may want to build on some of the things we are seeking to do in England.
Robert Neill (Bromley and Chislehurst) (Con)
The Secretary of State’s decision to reintegrate train and track, where appropriate, is sensible. Does he accept, however, that my constituents will regard his failure to remove the London metro services from the wholly discredited Southeastern franchise as a complete cop-out and failure, and that it makes sense at all, as far as rail users in my constituency or I am concerned?
Chris Grayling
I know that my hon. Friend feels passionately about this, but I do not agree with him. We will have the opportunity, between London, my Department and Kent, to design an improved franchise for the future. What I had to decide was whether the benefits set out in the Mayor’s business plan, which did not involve increases in capacity on my hon. Friend’s local routes into London, and the incremental improvements that Transport for London claimed it might be able to deliver were really worth putting his railway line through the biggest restructuring since the 1920s. My judgment is that we can achieve the benefits that TfL is arguing for through partnership, rather than through massive reorganisation, and that is my aim.
Tom Brake (Carshalton and Wallington) (LD)
What evaluation has there been of the time and cost benefits of doing the Oxford to Cambridge line in the way that the Secretary of State proposes, as opposed to having Network Rail do it? Does he envisage other projects being run in this way? If this is about looking for different ways of doing things, will he consider allowing the public sector to bid for train franchises?
Chris Grayling
As the right hon. Gentleman will be aware from the autumn statement, the Oxford-Cambridge corridor is a much broader project than just a railway line. It is seen as a key development corridor by the Treasury and the National Infrastructure Commission. We also need to look at the construction of improved road links between the two, so it is much more complicated than simply saying, “It’s a railway line.” However, we need to build a model that secures developer contributions on the route. It is good for our rail sector to have a bit of contestability. The assumption that Network Rail should always do everything does not give us any benchmarks to judge whether someone else can do it better. I want to use this as an opportunity, in a way that does not affect the rest of the network, to test the way that we are doing things, and to see whether we can do them quicker and better.
Nusrat Ghani (Wealden) (Con)
Passengers in my constituency just want a better service—one that matches the train timetable—and this is something that I have raised with the Secretary of State on a number of occasions. I agree that both track and train teams need to work together to focus on delivering a better service, especially on the Upfield line. What improvements will my constituents see with this new initiative?
Chris Grayling
One thing I asked Chris Gibb to do around the Southern route was to start to create the kind of partnership that I have described today. My early experience on this route—and the early experience of the Under-Secretary of State for Transport, my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard)—was that Network Rail and the train operator were not working closely together and not addressing problems together. Sadly, the real challenge in the constituency of my hon. Friend the Member for Wealden (Nusrat Ghani) is the ongoing industrial action, which is utterly pointless. No one is losing their job, and no one is losing any money; this is all about adopting new technologies and ways of working that are already custom and practice on the same routes. The action is a tragedy, and it is unacceptable. I again call on the unions to go back to work.
Ms Karen Buck (Westminster North) (Lab)
When Transport for London took over London Overground, it went from being the worst performing rail line in the country to the best performing rail line. That was why the Government signed an agreement with TfL and the London government in March for TfL to take over Southeastern when the franchise expires in 2018. What exactly has happened to make the Government break their promise to Londoners?
Chris Grayling
I looked very carefully at this matter. The hon. Lady needs to understand the difference between London Overground and the rest of the suburban routes. London Overground has provided a good service, which is run by Arriva—part of the German railways—and was co-run initially by MTR, the Hong Kong metro system. It is a franchise operator, like the rest. Having read the Mayor’s business case carefully, and having considered the level of change required to split the franchise in half—it would be the biggest operating change on this railway since the 1920s—and the potential disruption to passengers over a period of time, I thought, rightly or wrongly, that we could deliver the service improvement that TfL was talking about by forging a partnership. Crucially, we would involve Kent, because this is not a London issue; as this railway runs from London to the south coast, we cannot think of the railway system just in terms of London. Very many passengers and representatives in this House from further afield would take a very different view from her on what will work for the railway line.
Michael Fabricant (Lichfield) (Con)
May I welcome the Secretary of State’s pragmatic approach to this problem? We on the Conservative Benches believe in devolution and in providing different solutions depending on the circumstances. The west coast main line is working at almost 100% capacity. Will he explain to my constituents how London Midland, Virgin and Network Rail on the west coast main line will work better together through his proposals?
Chris Grayling
There are two issues here. Clearly, there is logic, for the midlands and the north, in having a really joined-up relationship between Network Rail and the local train operator. Of course there will be services, such as Virgin’s west coast main line and the CrossCountry service, that cross boundaries. We must preserve the existing regulatory framework so that those services are not affected by this. My hon. Friend talked about devolution; what I am talking about for London is exactly the same model that we have adopted for transport in the north and the midlands of partnership and of shaping franchises. Local designer franchises have played a big part in the north in delivering what is genuinely thought to be a great new franchise structure that will bring real improvements for people across the north of England.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Just a couple of weeks after the autumn statement, which was supposed to herald new investment in infrastructure, the new Secretary of State has given the game away with today’s announcement that the new rail line between Oxford and Cambridge will be built with private investment, so his true colours are shining through. Let me take him back to his comments about the success of ScotRail Alliance and ask him this: if it is working so well now, would it not work even better if we removed more interfaces and fully devolved Network Rail in Scotland to the Scottish Government?
Chris Grayling
The hon. Gentleman talks about investment and true colours. My view is this: the public sector is already putting a vast amount of investment into the railways. I support that, and I will get as much investment as I possibly can for our transport system, but there is no harm in also trying to do more by supplementing that with private finance. That may be an ideological division between us, but I cannot see how our transport system loses by having some private finance alongside the huge amounts of public finance already going into the sector.
Suella Fernandes (Fareham) (Con)
Network Rail recently carried out upgrades worth £3 million on the line running through Fareham in my constituency. Does the Secretary of State agree that this announcement will mean a greater focus on passengers? There are still so many commuters from Fareham who struggle because of the troubles with Southern rail. A more joined-up and co-ordinated approach will be a step in the right direction towards ensuring that commuters have better journeys to work.
Chris Grayling
Three things need to happen to deal with the issues on Southern. The first is that we need much more joined-up working. Secondly, we will have to put more money into the Southern infrastructure, which is clearly under great stress. It is a very intensively used railway, and not enough has been spent on it over the years. Above all, we just need to get the workforce back to work. The bizarre thing is that the 10-coach train that I often take to Victoria in the morning has a driver and no guard, and it has been like that for years. Why on earth are the drivers and the guards on Southern putting the passengers through such enormous distress when no one is in danger of losing their job? It is shocking. I would like to hear one word of condemnation from the Labour party. Do we ever hear any condemnation of its union paymasters? The answer is no, not for a moment.
Heidi Alexander (Lewisham East) (Lab)
When Zac Goldsmith was standing as the Conservative candidate for Mayor of London, the Department for Transport was all for the idea of devolving responsibility for letting Southeastern’s franchise to TfL, but now that he has gone, the promise seems to have gone as well. Why are the Government jettisoning the practical improvements that could have been associated with devolution in favour of this political experiment?
Chris Grayling
The hon. Lady talks about political experiments; a political experiment would be implementing a business plan that I did not judge delivered substantial improvements to passengers, and that involved the biggest shake-up of the railways in the south-east since the 1920s. That is a risk that we do not need to take. We can deliver improvements through partnership, but we must remember that that partnership is not just about London; it is about Kent. It is a partnership that involves passengers on different parts of the routes. We need to design a franchise structure that delivers improvements for everyone.
Mr Philip Hollobone (Kettering) (Con)
Passengers on the diesel-operated East Midlands Trains franchise from London to Kettering, who already experience some of the most expensive fares per mile in the country, often have delays to their service, not because of anything that East Midlands Trains has done, but because of Network Rail problems with the overhead lines coming out of St Pancras for the Thameslink service. That often happens at Luton and Bedford as well. Will the Secretary of State ensure that East Midlands Trains, Thameslink trains and Network Rail are among the first to set up these joint operating arrangements, because that would be greatly welcomed by my Kettering constituents?
Chris Grayling
My hon. Friend is absolutely right, and that will be the case; that is one of the franchises that is coming up to be let. Big improvements are needed on that route. One of the other things that is unsatisfactory about the service for his constituents in Kettering is that in the mornings, they have to pile on to crammed inter-city trains from much further north in the east midlands. What we aim to deliver by 2020 is a better inter-city service and, for the first time, a proper dedicated commuter service to people from Corby, Kettering, Wellingborough and further south.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
From what I can gather, integration is at the heart of what the Secretary of State is endeavouring to achieve. With that in mind, now that the UK Government are devolving responsibilities for the Welsh franchise to Wales, is it not logical to devolve responsibility for the Welsh network?
Chris Grayling
I need to correct the hon. Gentleman on that: we are not devolving responsibility for the whole Welsh franchise as he describes; we are doing so in part. I have said to the Welsh Government that I am happy with their taking control of the Welsh valleys lines, with a view to developing the metro system that they hope to put into service, but the Welsh franchise is not purely Welsh; it runs through large parts of England as well. We cannot have a situation where we, the Government in Westminster, give up control over services in England to the Welsh Government without checks and balances. That is not going to happen.
Henry Smith (Crawley) (Con)
I welcome my right hon. Friend’s announcement today of greater alignment between track and train operators. It seems that in the past fortnight or so Southern and Thameslink passengers have suffered a lot of broken rail reports—almost more reports in that period than in the last year. How can the new model help to address that situation?
Chris Grayling
The incidence of broken rails is a worrying coincidence, to put it mildly. I am concerned about the number of infrastructure breakdowns in recent weeks. Passengers blame the train company, but often—recently, more often than not—it is an infrastructure problem. That route is suffering intensely from low-level industrial action on non-strike days, and effectively a work to rule has been in force on different parts of that railway for months, which is adding to the intense pressure. I wish the unions would just accept that their members are not losing as a result of the change. They have more job security and better pay than a lot of people in the south-east, and they should get back to work and do the job they need to do for their passengers.
Andy Slaughter (Hammersmith) (Lab)
The travelling public support devolution, as do a number of Conservative MPs, council leaders and Assembly Members, and indeed as the Conservative Government did when they signed the joint prospectus with the previous Mayor of London. Is it not just a narrow, petty, political point that the right hon. Gentleman does not want to devolve to a Labour Mayor, who would provide more frequent trains, fewer delays and cancellations, more staff at stations and frozen fares?
Chris Grayling
This is the problem with the proposition. The hon. Gentleman says that more frequent trains would be provided, but the Mayor’s business plan did not provide more frequent trains. It provided no extra capacity in peak hours into the stations that serve the Southeastern route, and it would have involved the biggest reorganisation of those routes since the 1920s. My judgment is that, as it does not deliver the more frequent trains the hon. Gentleman describes, we should design the franchise through partnership, rather than upheaval.
Jeremy Quin (Horsham) (Con)
As the Secretary of State is well aware, there are appalling problems on Southern rail, which have been going on for a significant period and made worse by the apparent inability of Network Rail and Govia Thameslink Railway to work together. May I welcome his work with Chris Gibb and his pragmatic approach both to that and to the unions?
Chris Grayling
I appreciate my hon. Friend’s comments. One of the breakdowns last week was caused by a piece of equipment being left behind from engineering work being done to sort out the problems in the Balcombe tunnel, which contribute to the unreliability on that network. Some of the money I announced in September is now being spent operationally on the ground. It is frustrating when it has an unfortunate accidental wrong effect.
Nick Smith (Blaenau Gwent) (Lab)
Can the Secretary of State tell us when the electrification work between Cardiff and Swansea will be finished?
Chris Grayling
As I have said to the hon. Gentleman before, I make no bones about my unhappiness with the progress of Great Western electrification, which has not been anything like what I had hoped for. My policy right now is to deliver for him the new trains and improved journey times that will result from where we have got to so far, and where we hope we will get to soon in the electrification programme. He knows that what will make the biggest different to Swansea is fast new trains to London.
Nigel Mills (Amber Valley) (Con)
What are the implications of the proposed partnership on the east midlands franchise for smaller capital schemes such as the one for level access at Alfreton station, which was scandalously delayed by Network Rail last week?
Chris Grayling
My hon. Friend will know that where more enlightened train operators have invested and made improvements, it has paid dividends for them—Chiltern Railways is the obvious example. I hope that with more autonomy for the Network Rail team on the ground and autonomy for the private sector operators, they will look together at small schemes that will make a real difference to passengers and can be afforded within local budgets.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
Proposals to devolve rail services in London were championed by the Secretary of State’s predecessor, were underpinned by a solid business case, had cross-party support inside and outside London and, most important, were incredibly popular among passengers in London and Kent, who suffer daily at the hands of Southeastern and its unreliable and overcrowded services. Does the Secretary of State accept that his decision to take the proposal off the table today will be seen by those passengers as a betrayal of the hopes and expectations that were raised earlier this year by the Government?
Chris Grayling
No, I do not accept that. As I keep saying, the business plan submitted by the Mayor did not deliver extra capacity. I have invited Transport for London and Kent County Council to work alongside us on designing a franchise that maximises performance, takes advantage of any best practice we can learn from, and works for London and for Kent. Both are important.
Tom Pursglove (Corby) (Con)
People in Corby and east Northamptonshire are delighted with the Government’s commitment to electrification of the midland main line and pleased with the track upgrades in recent weeks. As part of the reletting of the franchise, they would like more trains running northbound and southbound through Corby. What benefit does my right hon. Friend envisage this greater co-operation having, in terms of responding most effectively to local concern and demand?
Chris Grayling
We know that often on the railways, as on the roads, it is the small things that make a real difference. I hope that with decentralisation of Network Rail into a route-based structure, the autonomous local managing directors who have their own budgets will be much better placed to apply small amounts of money to small schemes that make a material difference to passengers. I believe that the approach we propose will make that more likely. There is a real opportunity for the east midlands to be early beneficiaries of this approach.
Madam Deputy Speaker (Mrs Eleanor Laing)
The prize for patience and perseverance goes to Ian Lucas.
Ian C. Lucas (Wrexham) (Lab)
Thank you, Madam Deputy Speaker.
Transport for London and Merseyrail are successful vertically integrated train companies. Why, if we want more integration, do we not apply their successful model, which attracts public and private investment, to the rest of our railway network?
Chris Grayling
I hate to disabuse the hon. Gentleman, but Merseyrail is not a vertically integrated train operator. Indeed, I have discussed with Merseyrail whether it wants to take control of its tracks, and so far it has been indicated to me, at least by the Mayor of Liverpool, that he does not particularly want to. I would be happy if Merseyrail took control of its tracks. It has long had the opportunity to become an integrated train operator, but right now, it is not.
Casey Report
(7 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text
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Mr Clive Betts (Sheffield South East) (Lab)
(Urgent Question): To ask the Secretary of State for Communities and Local Government if he will make a statement on the Government’s initial reaction to the recommendations in the Casey report and indicate what process the Government will now adopt for detailed consideration of its proposals and their implementation.
The Secretary of State for Communities and Local Government (Sajid Javid)
In July 2015, the Government asked Dame Louise Casey to conduct an independent review of opportunity and integration in the UK. Her report was published yesterday. Once again, I thank Dame Louise for her thorough and diligent work over the past 18 months. Many of her findings ring true to me personally. I have seen for myself the enormous contribution that immigrants and their families make to British life, all without giving up their unique cultural identities, but I have also seen with my own eyes the other side of the equation. For too long, too many people in this country have been living parallel lives, refusing to integrate and failing to embrace the shared values that make Britain great; and for too long, too many politicians in this country have refused to deal with the problem, ducking the issue for fear of being called a racist and failing the very people they are supposed to help. I will not allow that to continue.
We in public life have a moral responsibility to deal with the situation, and Dame Louise’s report is a crucial step in that process. I am studying her findings closely. The report touches on the work of a number of Departments, so I will discuss it with colleagues across Government more widely. In spring, we will come to the House with our plans for tackling these issues, so that we can continue to build a country that works for everyone.
Mr Betts
I had the pleasure of hosting Louise Casey on a visit to Sheffield, where she identified both the scale and the speed of substantial Slovak Roma migration to the city, which is a significant challenge. She identified that even in Sheffield, which has a history of good community relations, those communities very often live side by side, with very little interaction, let alone any integration. Will the Secretary of State indicate his response to the detailed recommendations of the report, particularly a key recommendation for the creation of a new programme to improve community cohesion, with area-based plans and projects? Does he recognise that such a programme will need targeted funds, rather like the impact funds that the Government abolished?
Does the Secretary of State agree with Louise Casey that speaking English is key to integration? Will he agree to reverse the cuts that have been made to the funds available for courses teaching English as a second language? Does he have a view on the recommendations to promote British values in all communities, especially the values of tolerance and respect for others, which support equality on grounds of sex, sexuality, race and religion?
Given that many of the recommendations are challenging and some may be controversial, will the Secretary of State have a programme to consult elected councils and the different communities in the areas most impacted by the recommendations? Finally, after discussions with Government colleagues, will the right hon. Gentleman come back to this House with an action plan, and maybe even come to the Communities and Local Government Committee to discuss it with us as well?
Sajid Javid
First, I thank the hon. Gentleman for his warm words about the report and his welcome for it. I know that this is an issue in which he has personally taken an interest for many years, and I look forward to speaking to him as the Chair of the Select Committee about the report. He will know that this is an independent report, not a statement of Government policy. Naturally, the Government will want to take the right length of time to look at each of the report’s findings and the recommendations that Dame Louise has made.
The hon. Gentleman asked about a number of the recommendations. Let me respond to some of those, without prejudging our response to the report in spring next year. He asked about the area-based plan—a more place-based view. Taking account of local circumstances is just common sense, something the Government already do with their integration and cohesion programmes, but I would like to see how we could make more of that. The hon. Gentleman asked about making resources available. Of course, we will make sure that any recommendation that the Government accept and decide to take forward is suitably resourced.
The hon. Gentleman asked about the importance of English. One of the central recommendations of the report is to make sure that every community in Britain can speak English. I remember, when I was about eight or nine years old, going with my mother when she had to visit the GP and acting as an interpreter for her. Many years later I am pleased to say that she learned English and now speaks it very well. It has transformed her life. It is great news for British society when more and more people who are going to settle here can speak English. I know from personal experience the difference that can make. That is why I am pleased that the Government already spend more than £100 million a year to help people to learn English if it is a foreign language for them. We always have to see what more we can do.
The hon. Gentleman also asked about promoting British values. He is right to stress that, and the report touches on it in a number of areas. He talked particularly about the importance of tolerance and respect, and I am sure he will agree that respect works both ways—respect of all communities for each other, including of immigrant communities for the dominant Christian culture in this country, which is sometimes lacking. We have to make sure that we are promoting British values in every sensible way that we can. We will be looking closely at the report and reporting back on its findings in the spring.
Mrs Maria Miller (Basingstoke) (Con)
I welcome Louise Casey’s review. It echoes a number of the findings in a recent Women and Equalities Committee report on the challenges that many Muslim people face in getting work in this country. In her report she sets out the fact that women in some communities face a double barrier of gender and religion preventing them from accessing even basic rights as British residents. How are the Secretary of State and the Government ensuring that every person in this country is afforded the protection of the Equality Act 2010 and of their rights under the law of this country?
Sajid Javid
My right hon. Friend is right to raise the issue. She speaks with great experience and has done a lot to promote equality in this country through her work as a Minister and on the Back Benches. She speaks of the double barrier faced by some women. The report talks about the challenges facing Muslim women in particular. More needs to be done in that regard, not just directly by Government; it is a challenge also to Muslim communities, and particularly to some Muslim men, as to how they treat Muslim women. These findings are extremely important. We should take them seriously and see what more we can do.
Teresa Pearce (Erith and Thamesmead) (Lab)
I thank the Chair of the Communities and Local Government Committee for asking this important urgent question. For too long as a country we have ignored these complex issues for fear of being seen as racist or as attacking cultural attitudes. Sadly, this approach has left a vacuum that has been exploited by those who exist to promote hatred. It is time that we recognised the problems and opportunities highlighted in the Casey report and addressed them in a realistic and mature way.
One of the issues that was highlighted by the Chair of the Select Committee was the ability to speak English. One of the most concerning aspects of the report is how women in some communities are denied equal rights and opportunities. We are constantly urging people who suffer sexual abuse or violence to speak out, but they cannot speak out if they cannot speak English. If they cannot speak English, they cannot even ring 999. Yet the Casey report found that the Department for Communities and Local Government spent more on promoting the Cornish language between 2011 and 2013 than it did on promoting English. Does the Secretary of State now believe that ESOL classes should not have been scrapped? In the light of this report and of his own experience as a young man, will he commit to reinstating ESOL?
The report highlights the fact that communities have been left behind. It is not acceptable to blame the people living in those communities for that, when many of the projects recommended in the report that would empower marginalised women, promote social mixing and tackle barriers to employment for the most socially isolated groups have been scrapped over the past six years as a result of devastating cuts to local government. Does the Secretary of State recognise that cuts to local government funding have contributed to these problems, and will he push for fairer funding in the coming spending review?
Does the right hon. Gentleman agree with the Muslim Council of Britain that although any initiatives that facilitate better integration of all Britons should be welcomed, taken as a whole the report could be perceived as a missed opportunity to emphasise that integration requires the active participation of all Britons?
The report looked at education, recommending strong safeguards for children not in mainstream education. Will the Secretary of State outline what is being done by his Department and other Departments to make sure that those children are safeguarded?
Sajid Javid
I am pleased that the hon. Lady agrees that many of the issues raised in the report have been ignored for too long by too many politicians on both sides of the House. It is good that there is general agreement on that. By taking the report as an important first step, we can start to deal together with some of the issues.
The hon. Lady asked about English language. I am a little disappointed that having started by saying that we should take a mature approach, she then made the point about the Cornish language. If she had looked more closely, she would have seen that it was an entirely misleading headline. She spoke about spending on languages by my Department, so I will tell her the facts. In the past six years the Department has spent £780,000 on the Cornish language, but in the past five years it has spent £11 million on community-based English language programmes. On top of that, the rest of the Government has spent hundreds of millions of pounds on supporting English. If we are to have a proper debate, the hon. Lady would be well advised to stick to the facts and use them in the debate.
The hon. Lady asked whether there will be fairer funding for local government. She should know that there is currently a local government fairer funding review, which will report early next year. On the Muslim Council of Britain and some of its early comments on the report, it is important to highlight that I certainly want to speak with all groups, including the Muslim Council of Britain and many others, that want to comment on the report and make suggestions on how we can take integration and cohesion forward.
The hon. Lady also asked about safeguarding, particularly of young Muslims who might be vulnerable in some way. She will know that the Prevent programme is exactly that: a safeguarding programme. That is something I hope the whole House can support.
Sir Desmond Swayne (New Forest West) (Con)
Can sharia be a voluntary choice for women lacking in English in closed communities?
Sajid Javid
My right hon. Friend raises an important issue that came up in the report. It is worth reminding the House that sharia councils are not courts in England and Wales; they cannot legally enforce any decisions and they must, of course, operate within the national law. However, the report has highlighted some legitimate issues. That is why I am pleased that the Government have already started a full, independent review of sharia law in England and Wales, and I look forward to reading its conclusions.
Alison Thewliss (Glasgow Central) (SNP)
Dame Louise’s extensive report comes at an interesting time, with Brexit exacerbating hate crime and Government and tabloid rhetoric ramping up. I am particularly thankful that at least in Scotland we have political leadership at all levels, whether that be the First Minister, Nicola Sturgeon, who has made welcome those new Scots who have chosen Scotland and given us the tremendous honour of making Scotland their home; Glasgow City Council, which put above its front door a banner proclaiming that refugees are welcome; or the range of community initiatives across the country, such as Refuweegee, which fosters integration. The challenges of migration—[Interruption.]
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. Why is there so much noise in the Chamber when the hon. Lady is speaking from the Front Bench? She must be listened to.
Alison Thewliss
The challenges of migration are highlighted in the review, but again and again this Tory Government have been found lacking, and in some cases they are the cause. Ending austerity is the best thing this Government could do to tackle social exclusion and promote integration. Will the Secretary of State challenge the toxic rhetoric that pits groups in our society against each another? Will he look to Scotland to see how the strategies that we are implementing are providing opportunities for people to share experiences? Will he reverse the damaging cuts to ESOL, which other Members have mentioned, and will he refuse to accept the offensive suggestion that we require an integration oath?
Sajid Javid
It is a shame that the hon. Lady has to be so party political about this matter. When she can act in a more mature fashion, and when she and the Scottish National party have something useful to say, I will respond.
Dr Julian Lewis (New Forest East) (Con)
Has the Secretary of State had the opportunity to listen to two important radio programmes on the Deobandis—they are still available on the internet—that were broadcast by the BBC a year or so ago? They shine an important light on some of the problems that affect us. Will he join me in welcoming the section of the report on the Prevent strategy, and Louise Casey’s statement that the public servants delivering it
“should be proud and unapologetic about the important work they do to keep us safe”?
Sajid Javid
I have not listened to those radio programmes on the plight of the Deobandis, but I am well aware of the issues faced by that community. My right hon. Friend is right to highlight it in the House. The report is a reminder of all the communities that we can help through Government action. I am pleased to hear of his support for the Prevent programme. He has been a supporter of it for a while, and that is because he knows that it works.
Melanie Onn (Great Grimsby) (Lab)
The Secretary of State has referred to the Prevent strategy. In relation to children who are home schooled, can he please explain how that operates and how success is measured?
Sajid Javid
Home schooling, as the hon. Lady will know, is an important and valuable option that we offer in this country. My hon. Friend the Minister for School Standards is here and has heard her question, and I am sure that he will respond.
Bob Blackman (Harrow East) (Con)
I welcome the report, but one of my concerns is that it contains no reflections on the future of faith schools, and therefore the integration of young people across faiths, which I hope we will look at in particular. Can we take urgent action on one of the recommendations, which is that children who are withdrawn from school and educated at home might not receive the sort of education that we would like them to receive? Those children are at risk right now and we need to take urgent action.
Sajid Javid
My hon. Friend makes an important point. We are looking at unregistered settings, and once that review is complete it will help us deal with the kinds of issues he is concerned about. He talked more generally about faith schools, which are a hugely important part of our education system. They provide variety, but so many people choose them because, by and large, they are excellent schools. Many of them do a great job of promoting integration. One of my brothers, as a Muslim, went to a Roman Catholic school, and it taught him a lot about British society and British values. I think that we should find good practice and see what we can do to promote it.
Fiona Mactaggart (Slough) (Lab)
Louise Casey is right to call out misogyny as one of the ways in which women from minority ethnic communities are socially excluded—not an issue that some of us have ever ignored—but will the Secretary of State talk to the Home Secretary about the misogynist practices of the Home Office? First of all, it excludes wives who come from overseas from accessing free ESOL for the first two years they are here. Secondly, what about those women in Britain who have been exploited by husbands cheating their way into Britain on a marriage ticket? The Home Office refuses to tell the wives, who are British citizens, what has happened to their husbands, and it refuses to collaborate with those women in reporting their husbands and removing them when it should do.
Sajid Javid
Unfortunately, I do not recognise much of what the right hon. Lady is talking about. Again, she would do well to stick to the facts. For example, she talks about helping women to learn English when they come to Britain. As hon. Members have mentioned, English is hugely important for integration, which is why the Government have put in place a requirement that anyone wishing to settle permanently in this country must first be able to speak English.
Suella Fernandes (Fareham) (Con)
The report states:
“Too many public institutions, national and local, state and non-state, have gone so far to accommodate diversity and freedom of expression that they have ignored or even condoned regressive, divisive and harmful cultural and religious practices, for fear of being branded racist or Islamophobic.”
Does the Secretary of State agree that there is now a great opportunity for the Government to take the lead in forging a common, modern British identity that new arrivals must sign up to if integration is really going to work?
Sajid Javid
My hon. Friend is absolutely correct. As I said at the start—I am pleased to hear that she agrees—politicians, collectively, have for too long ignored this issue and there has been a fear of being branded racist, and clearly that is unacceptable. This is an excellent opportunity for us to build on.
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)
Integration, of course, is a two-way process, and it can be assisted by central Government but has to be delivered at a local level. May I suggest to the Secretary of State that something he could do to respond to the Casey report would be to give the regional mayors in the west midlands the power to administer the training levy? They are best placed to know what kinds of employment opportunities and integration projects for better training and education should be applied.
Sajid Javid
The right hon. Lady is absolutely right about the importance of having local flexibility and control over many integration programmes. She might be aware of the Near Neighbours programme, which has thousands of projects all run locally, often involving voluntary groups and local authorities, which I think is a good example of that. She has made a suggestion and I have listened carefully.
David T. C. Davies (Monmouth) (Con)
The Minister will be aware that the last two Muslims to be murdered in hate crimes were murdered not by Brexit supporters but by other Muslims. Does that not show the importance of implementing this report and demanding that all communities sign up to gay rights, women’s rights and the right to interpret religion in any way one wishes?
Sajid Javid
My hon. Friend highlights the importance of promoting British values and making sure that they are accepted by all communities in Britain. That includes tolerance, freedom of speech, freedom of religion, respect for democracy and so many other things. The more we can do to make sure that every community embraces those, the better off we will all be.
Keith Vaz (Leicester East) (Lab)
I do not recognise the description of the Muslim community that is painted in this report in respect of my home city of Leicester, where 20% are of Muslim origin and 50% are from the ethnic minority communities. The Secretary of State and I have been to many dinners and other events for the ethnic minority communities, and he will know that what those communities want more than anything else is to belong, to integrate and to be ambitious for their children. In which country of the world can the son of a bus driver be a Secretary of State in the Cabinet and be talked about as a potential Prime Minister? In which country of the world can four Muslim women be sitting in Parliament today representing all their constituents? While accepting what the report says, let us also be positive about the huge contribution that the ethnic minority communities have made, which has made this country great.
Sajid Javid
The right hon. Gentleman is absolutely right to highlight the massive and positive contribution that immigrants through the decades have made to our great country and how they have made our country stronger still. He referred specifically to Muslim communities, including in his own constituency, and I think he will recognise that a lot of the issues and challenges affect a minority of the Muslim community. I think—well, I know, factually—that many members of the Muslim community recognise that there are problems and challenges that are particular to their own community, and they, as much as the right hon. Gentleman, myself and others in the House, want to deal with that.
Philip Davies (Shipley) (Con)
In Bradford, we have issues of segregation and integration in our communities. I very much welcome the report and what the Secretary of State has said today. Could I invite him to come along to Bradford sometime next year to see what the Government can do to help local communities with their desire for more community cohesion and integration? In the meantime, can he be very firm with local authorities to stop them translating documents into lots of different languages and insist that those documents are all in English only?
Sajid Javid
My hon. Friend highlights some of the challenges, particularly in his own constituency, of segregation and lack of integration, but I know that he will also be one of the first to accept that different communities have helped his constituency in so many ways and brought so much for people to celebrate. I will be more than happy to come to Bradford to look at both issues with him.
Naz Shah (Bradford West) (Lab)
While I second the invitation to Bradford from my colleague, the hon. Member for Shipley (Philip Davies), I do not second the other half of his question. How will the Minister address the structural inequalities affecting Muslim communities, and especially Muslim women, which frustrate their aspiration of progressive engagement with society?
Sajid Javid
The hon. Lady will know that a number of programmes are already in place. Since 2011-12, the Government have spent £60 million on integration and cohesion programmes, including teaching the English language to isolated communities, with many of those involved being women. However, we always have to see what more we can do, and there are some suggestions in this report. It would be wrong of me not to study them carefully and not to look at which ones to take forward and implement, and I look forward to doing that. If the hon. Lady has particular suggestions once she has looked at the report in detail, I would be happy to listen to them.
Tom Pursglove (Corby) (Con)
Sport does so much to break down barriers, bring people together and help promote British values in our society on an organic basis, so although we have a proud record on this in this country, will the Secretary of State see what more can be done, working across Government, to help boost sporting participation, particularly among young people?
Sajid Javid
My hon. Friend makes a very important point. When I was Culture Secretary, the Department for Culture, Media and Sport sponsored a number of programmes, particularly in cricket and football, that involved a number of young Asian men, and that did help with community integration and cohesion. He is right to raise the issue again, and we should be looking across the board to see how every Government Department can help.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
I fear that the Secretary of State’s fine words mask little-England identity politics. Can he assure me, as a south- east Londoner representing the most Welsh-speaking constituency for Plaid Cymru, that British values do not equate to a British state-imposed identity, and can he commit to bringing forward a strategy addressing poverty, inequality and inter-community respect?
Sajid Javid
I think the hon. Lady knows full well what British values mean, and they mean values for every part of the United Kingdom.
Nusrat Ghani (Wealden) (Con)
I agree with the Secretary of State that, for too long, we have had a soft-headed attitude towards integration, which has led to segregated communities up and down this country. I know that he has already been asked about faith schools, but could he spend some more time looking at the report, because I share its concern that faith schools further isolate young children? Does he agree that the report deserves a serious and determined response?
Sajid Javid
First, I thank my hon. Friend for the work she has already done to campaign on so many of the issues raised in this report, and I look forward to speaking to her in detail about the report and considering the recommendations. She raised the issue of faith schools, which, as she knows, is mentioned in the report. It is something that we want to look at carefully, and it is certainly something I will be discussing with my colleagues in Government.
Tracy Brabin (Batley and Spen) (Lab)
Young Muslim women I have met in my constituency at the al-Hikmah centre and at Batley Girls’ High School are engaging and whip-smart. They are held back not by lack of integration but by lack of opportunity. Will the Secretary of State therefore look particularly closely at the recommendation to provide additional funding for area-based plans to empower marginalised women and promote social mobility?
Sajid Javid
First, the hon. Lady is right to raise the issue of opportunity—the report is about opportunity and integration. We always have to look across Government to see what more we can do to promote opportunities for all communities, including young Muslim women. The hon. Lady described young Muslim women she has met, who sound absolutely fantastic and model citizens, but I think she will recognise that there are also young Muslim women who are being held back—sometimes by members of their own family or members of their own community. For example, as we have seen in this report, and as I have seen from bitter experience over a long time, women have been held back because they have been asked to go out with chaperones, because they are told to dress in a certain way, or because they are told that they cannot take certain jobs or that they should not go to university or pursue higher education. We want to make sure we tackle those issues as well, and I know the hon. Lady agrees with that.
Rishi Sunak (Richmond (Yorks)) (Con)
Does my right hon. Friend agree that, while Britain should always remain a tolerant and diverse nation, it is also important that new communities feel an obligation to integrate and embrace a common British identity, and that we should never use the excuse of multiculturalism to tolerate practices that are clearly not in accordance with British laws, values and customs?
Sajid Javid
I could not agree more with my hon. Friend. I think we all realise—the report highlights this—that mistakes were made in the past. We could collectively, as politicians, have done a much better job in helping to settle and integrate new arrivals and new communities in Britain, and we should now learn from that. Looking forward, there are some interesting suggestions in the report about how we can do that, and I will be taking them very seriously.
John Howell (Henley) (Con)
I remember that when language classes were provided for immigrant women in Oxford, the same women went to the same classes year after year without showing any improvement in their ability to speak English. Does the report not point to the fact that it is a question not of throwing money at this, but of making language tuition effective?
Sajid Javid
I agree with my hon. Friend. We must make sure that the money we—the taxpayer—are currently spending on helping people to learn English is spent effectively, which is about making sure the programmes currently in place are effective. We must make sure that any new initiatives that we come up with as we plough through the report are effective in tackling that problem.
Mike Gapes (Ilford South) (Lab/Co-op)
The report quite rightly highlights the good work of organisations such as Tell MAMA and the Community Security Trust, and it also draws attention to the upsurge of violence against people from Poland and elsewhere in recent months. Will the Secretary of State have urgent discussions with his Home Office colleagues about how to reduce the impact of the poisonous ideologies that come from other countries and cause tensions and even deaths, as we saw in Glasgow, in this country?
Sajid Javid
The hon. Gentleman mentioned two organisations—Tell MAMA and the CST—that are very effective and valuable, and the Government are proud to support them in the work they do. There are many other such organisations. That highlights the fact that dealing with these issues requires lots of groups and stakeholders, including voluntary organisations, to come together.
The hon. Gentleman asked me to meet the Home Secretary. I assure him that I regularly discuss these issues with the Home Secretary; we have a mutual interest in them. He may be interested to know that very recently—just two or three weeks ago—the Home Secretary and I jointly chaired a hate crime action panel, to which we invited a number of groups, including the two he mentioned, to discuss what more we can do.
Thangam Debbonaire (Bristol West) (Lab)
I have read the Casey review, which considers many important aspects of integration. The Refugee Council has called for a comprehensive refugee integration strategy, and that is echoed in what we on the all-party group on refugees, which I chair, are finding in our public “Refugees Welcome” inquiry. Refugees have told us that they want to learn English, to work and to integrate, so will the Government support the expansion of the Syrian resettlement programme to create a comprehensive refugee integration strategy?
Sajid Javid
The hon. Lady is right to raise the importance of making sure that refugees are integrated quickly and properly, and of providing the resources for that. She will know that a number of programmes are in place to do just that. If she believes that there is more that can be done, I am happy to learn more from her.
Mr Peter Bone (Wellingborough) (Con)
I congratulate the hon. Member for Sheffield South East (Mr Betts) on securing this very important urgent question, but I think we could sometimes be a little bit more positive about this. In Wellingborough, we have an integrated multicultural community, and we have had it for a very long time. We have Muslim, Hindu, Sikh and Christian—both Labour and Conservative—councillors and candidates, and we have temples, mosques and churches. I wonder whether someone from the Secretary of State’s Department might at some point come down to see how this can work well, rather than for us always to concentrate just on where it is going wrong.
Sajid Javid
I think that is a very good idea. Again, my hon. Friend highlights something that we should never forget: we are talking about the challenges and how to deal with them, but so many immigrants who, through the ages, have come to this great country have made a huge contribution to our country and made us so much stronger.
Shabana Mahmood (Birmingham, Ladywood) (Lab)
I welcome all efforts to improve integration in the UK—this is not the first study to find problems in this area—but I am concerned that there is no real understanding in the report of the simple truth that integration is a two-way street and should definitely not be used, as it so often is, as a stick with which to beat the minority communities of Britain. Given that, will the Minister consider what work can be done to understand, as Casey does not, the drivers of isolation? Alongside asking our minority communities to do more, how can we encourage our majority community to play their part too, so that integration can be truly a success for our country?
Sajid Javid
I know the hon. Lady feels passionately about these issues. She has thought a lot about them, and I think she will have some good suggestions. I am always very happy to speak to her about this. However, I think it is a bit unfair to Dame Louise Casey to say that she does not recognise that this is a two-way street. Dame Louise has come up with some specific recommendations, and I think we should take them seriously. She recognises—I have discussed this with her in the past, and it is reflected in the report—that there is a role for everyone in all communities to play.
Richard Fuller (Bedford) (Con)
As Bedford has been home to people of many national origins for many decades, we can see, as the report shows, that some communities follow intergenerational dispersion, with children and grandchildren living away from their grandparents, and that others follow intergenerational proximity, with children and grandchildren living next door to their grandparents. May I draw the Secretary of State’s attention to recommendation 10 on the use of housing policy to encourage dispersion, and will he consider the possibility of using planning policy to encourage the dispersion of places of worship?
Sajid Javid
I listened carefully to what my hon. Friend has said. I know from visiting his constituency with him a number of times that he takes these issues very seriously, and that he is able to look at these issues in his constituency and to suggest certain ideas. I will certainly look carefully at recommendation 10.
Rushanara Ali (Bethnal Green and Bow) (Lab)
First, I want to echo the remark made by my hon. Friend the Member for Birmingham, Ladywood (Shabana Mahmood) about integration being a two-way process. I want to highlight that the previous Labour Government set up the forced marriage unit and the community cohesion unit—I was involved in establishing both units—which did excellent work in tackling underlying causes, particularly in relation to human rights violations. I urge the Secretary of State to make sure that we provide service providers with the resources to address those issues.
Secondly, on discrimination, ethnic minority graduates are twice as likely as others to be unemployed, as are white working-class graduates. I therefore urge the Secretary of State to prioritise addressing the underlying problems and barriers to equality.
Finally, I want to draw attention to social integration. I have as many challenges in my constituency in encouraging middle-class newcomers to integrate with the settled communities, which are predominately ethnic minority communities, as I do the other way around. We all have a part to play, and if we can connect those communities together through projects, mentoring and engagement, we can genuinely have a two-way process and a practical way to integrate people, rather than stigmatising certain communities—in the case of this report, the Muslim community.
Sajid Javid
Again, I know that the hon. Lady speaks from experience. To take her last point first, I know that she has done a lot when it comes to projects and community work and I have seen first hand how transformative they can be. She is right to raise the issue of work opportunities, and the Government take that seriously. I chair—I did so in my former role of Business Secretary, and I continue to do so—an intergovernmental taskforce on opportunities for black and minority ethnic people, particularly young people. We are looking across Government to see what more can be done.
The hon. Lady also raised the issue of tackling female genital mutilation, forced marriage and other serious crimes of that nature. I think she will agree with me that the Government have taken them seriously. The previous Government did so, and this Government have built on their work. In fact, much of the good work done in recent times was done by the Prime Minister when she was Home Secretary.
Mr Philip Hollobone (Kettering) (Con)
May I tell my right hon. Friend that this is his moment? His personal family experience and his sharp intellect mean that he is the right man in the right place at the right time. Dame Louise Casey tackles head-on the problems faced by thousands of Muslim women in this country, many of whom do not speak English, suffer misogyny and domestic violence at home, are oppressed by sharia law and have had their life chances diminished. Will he assure the House that he will not duck the challenge to seize the recommendations in the report and to restore full human rights to this very large cohort of oppressed women?
Sajid Javid
I can absolutely assure my hon. Friend that I will not duck the issues and the Government will not duck them. As I said at the start of the urgent question, they have been ignored by too many politicians for far too long, and that is not going to happen.
Tom Brake (Carshalton and Wallington) (LD)
The Secretary of State will know about concerns that Prevent is undermining efforts to integrate the Muslim community. Will he set out what support the Department is giving to community-led initiatives to identify and prevent radicalisation?
Sajid Javid
The Prevent programme plays a valuable role. That is accepted by not only the Government, the police, the Crown Prosecution Service and others, but many local authorities and community leaders. However, I recognise that certain people have a confidence problem with Prevent. We need always to look to see what more we can do to turn that around. Having more people involved in the community locally is one way to do that.
Jason McCartney (Colne Valley) (Con)
May I say how much I welcome the presence of the Minister for School Standards on the Front Bench? One of the best examples of community cohesion and togetherness is Moor End Academy, which Ofsted rated excellent. I attended its presentation evening last Thursday. That school has 31 different first languages and it is producing wonderful young people. Will the Secretary of State join me in praising the leadership at the school and, of course, the pupils and parents for everything they do?
Sajid Javid
Moor End Academy sounds fantastic. It sounds like we can learn more from its approach, and I look forward to doing that.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
Like other colleagues, I have concerns about integration in my community. That is by no means to say that things are bad, but I have certainly seen things that could get much better, and it is a two-way street. However, I ask the Secretary of State in good faith, where are the resources to do this? Where are the resources to run youth clubs to bring young people together? Where are the resources for the sports projects? Whenever something goes badly wrong, a huge amount of resource is always made available in the aftermath. We need some of that to go in before problems occur.
Sajid Javid
First, the report is independent. That means that, although there are several recommendations, we need to go through them carefully to see which ones we can take forward and build on. When I report back by spring, if extra resource is required, we will certainly ensure that it is available.
Diana Johnson (Kingston upon Hull North) (Lab)
Obviously, the review was into opportunity and integration, and the report highlighted the persistent disadvantage of white working-class children on free school meals who underperform at school. When the Government produce their report in the spring, will they address that issue as well?
Sajid Javid
First, the Department for Education is taking several actions to address that problem, which the hon. Lady is right to raise. She will know that the Prime Minister has also launched a race disparity audit, which looks at all public service across government. I am chairing that process alongside the Minister for the Cabinet Office. That work has just begun, but we are also trying to ascertain how public services are provided and what the outcomes are for all communities, including white working-class boys. We are trying to learn from that information how we can improve and what more we can do.
Madam Deputy Speaker (Mrs Eleanor Laing)
The hon. Lady who gets the last word—Chi Onwurah.
Chi Onwurah
Thank you, Madam Deputy Speaker. It is absolutely right to highlight the important role that we all must play in building strong, resilient, integrated and cohesive communities. It is Newcastle’s diverse and united communities that make it such a great city. However, will the Secretary of State also recognise that the toxic combination of scapegoating refugees and migrants for cuts to public services, Muslims for terrorism, minorities for segregation and the white working class for xenophobia builds barriers to integration? Will he take steps to address such attitudes, wherever he may find them?
Sajid Javid
Yes, I will. The hon. Lady is right to highlight Newcastle. It is a fantastic city, and one of the reasons for that is its diverse communities and the contribution that they all make to that great city. She is also right to say that there should be no scapegoating. We should be focused on and driven by the facts. The report is full of that, and I look forward to ploughing through it and seeing what more we can do.
Point of Order
(7 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text
Alison Thewliss (Glasgow Central) (SNP)
On a point of order, Madam Deputy Speaker. I am not sure if you can say whether this was properly in order, but I asked the Secretary of State for Communities and Local Government four legitimate questions during the urgent question, and he refused to answer any of them until I was—I do not know—more serious, or perhaps in a Unionist party. How might I resolve that issue?
Madam Deputy Speaker (Mrs Eleanor Laing)
I thank the hon. Lady for raising her point of order. Indeed, I heard her ask the questions, and I heard the Secretary of State’s reply. I have to say that the Secretary of State is at liberty to give whatever reply he wishes, as long as he does so in an orderly and polite manner, which of course he did. The hon. Lady is also at liberty to ask her questions in other ways—at Question Time, by requesting an Adjournment debate, by tabling other questions to the Secretary of State and by raising her issues again. The answer is not a matter for the Chair; I am satisfied that the right hon. Gentleman was orderly in the way in which he answered the hon. Lady.
Mr Peter Bone (Wellingborough) (Con)
Further to that point of order, Madam Deputy Speaker. The hon. Member for Glasgow Central (Alison Thewliss) said that she asked the Secretary of State four questions. Could you give advice, because I thought that Members were allowed to ask only one question during an urgent question?
Madam Deputy Speaker
I am delighted to give the hon. Gentleman that advice. He is allowed to ask only one question, but the hon. Lady is here this afternoon in her capacity as the spokesman for the Scottish National party. In that capacity, she may ask as many questions as she likes, as long as it takes her only one minute to do so.
Children of Armed Services Personnel (Schools Admission)
Tuesday 6th December 2016
(7 years, 4 months ago)
Commons ChamberRead Full debate Children of Armed Services Personnel (Schools Admission) Bill 2016-17 View all Children of Armed Services Personnel (Schools Admission) Bill 2016-17 Debates Read Hansard Text
A Ten Minute Rule Bill is a First Reading of a Private Members Bill, but with the sponsor permitted to make a ten minute speech outlining the reasons for the proposed legislation.
There is little chance of the Bill proceeding further unless there is unanimous consent for the Bill or the Government elects to support the Bill directly.
For more information see: Ten Minute Bills
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mrs Anne-Marie Trevelyan (Berwick-upon-Tweed) (Con)
I beg to move,
That leave be given to bring in a Bill to make provision for the children of serving members of the armed forces to have a right of high priority admission to schools outside the normal admission rounds; and for connected purposes.
It is an honour to present my first ten-minute rule Bill, which is on schools admissions for the children of our armed forces personnel, today, on the feast day of St Nicholas, patron saint of children and sailors. I am bringing this Bill to the House on behalf of tens of thousands of military children across our nation whose lives are challenged, year in, year out, by having to change schools as their parents, who are serving the nation in our armed forces, are moved from role to role around the country and abroad.
St Nicholas is the guardian of children, and I hope very much that we in this House, and the Minister listening today, will agree that we have a collective duty to all those children born to military families to do everything in our power to reduce the educational disadvantages that these school moves create, by ensuring that when they do need to take place, often at very short notice, we have done absolutely everything we can to make the transition as stress-free as possible for parents and child.
This issue was first brought to my attention earlier this year, when a serving Army officer contacted me in my capacity as the chairman of the all-party parliamentary group on the armed forces covenant. I take the greatest pleasure and responsibility in holding this role, and I am now privy to the anxieties of many, many military families as they try to keep stable family lives for their kids within the uniquely challenging framework that is being a serving soldier, sailor, airman or airwoman. I am honoured to be able to champion their needs and concerns in the House, as they have no voice of their own as a result of their service. My ten-minute rule Bill highlights just one such concern, which I believe we can, and must, sort out for them.
The Army officer I mentioned was being posted some 200 miles from his existing job, with seven weeks’ notice. Setting aside the other challenges of finding a suitable house near the new base, thereby gaining a postal address from which to organise all other domestic matters, the family had but a few weeks to research local schools and try to get a place for their child. That child is a little boy; let us call him James. James, at the grand old age of six, has lived in four different houses in totally different parts of England, and has been to three different educational establishments already. That means making new friends three times over by the age of six—no mean feat. With all the family support in the world, and parking for a moment the fact that his dad could be sent on deployment at any time, this little boy is being asked to develop levels of resilience that few of us would expect of our own children.
Not only did James’s parents have only a very few weeks to find the right school, fill in the forms and wait for a reply, which happened over the summer holidays, but they were initially told that their choice—the school closest to their proposed new home, which children from neighbouring houses on the base also attended, thereby giving James understanding and supportive new friends—was not possible. The local authority stated that
“whilst James is a Service child there is no right of entry and an admissions authority is within its rights to refuse admission.”
That struck me not only as extremely stressful for the parents and child, but as going wholly against the armed forces covenant.
On the basis that perhaps a few localised schools were struggling with large numbers of service children arriving all at once, I asked a number of colleagues to ascertain from their local authorities how many of their schools had children in receipt of the service pupil premium, and in what proportions. The results were truly unexpected; they showed, across the board, that there are a very few service children in a very large proportion of any local authority’s schools, regardless of whether they are close to a military base or not. In Northumberland, we have two military bases—RAF Boulmer in my constituency, and Albemarle barracks in the constituency of my hon. Friend the Member for Hexham (Guy Opperman). In fact, service children are to be found in only very small numbers, often in ones and twos, in 63% of Northumberland’s 174 schools. In another authority that has more military bases than my own county, the proportion of schools with service pupils is 76%, but only six schools have more than 30 such children in their cohort. A single child arriving or leaving at any point during the academic year would therefore clearly not have a major impact on numbers.
Another distressing part of trying to sort out a place for young James at the parents’ new school of choice was that the local authority stated that it would accept him on to the waiting list, but would not inform the family of whether there was a confirmed place until the first day of term, stating that
“all this relies on there being no further applications for a year 1 place from someone who may fulfil criteria on the Admissions policy ahead of James”.
The family were hopeful that a place would be available, but they could not rely on it, or introduce James to other children whom he might end up in a class with, because the authority refused to give them any certainty. That is not what I would call meeting our commitment to serving personnel and their children.
I am pleased to inform the House that young James’s place was eventually confirmed a week before school started, thanks to the intervention and advocacy of the family’s new MP, but not thanks to any admissions code that would commit councils to providing a firm place for each serving family’s child. I have since learned of many children in similar and worse situations. For instance, a family with two children were offered places in different schools, and the parent does not drive. The proposal was that the child going into reception would just have to be late to school and miss an hour at the end of the day, so that the elder child could be collected on foot. Another child having to move at very short notice was offered a place at a failing school. The mother asked me:
“why is it that Army kids have to endure the worst schools, alongside all the others pressures they experience?”
I now know of several service pupils, some with special needs, who had no school place to go to at all in September.
The present school admissions system is structured towards two admissions per academic year, meaning that any child seeking admission outwith that framework must simply hope that the school they prefer has capacity. That is all well and good, but military families do not have the luxury of timing their moves within school admission timetables. By not taking into account military families’ unique and challenging situations, councils are failing to live up to the commitment they pledged to uphold when they signed the community covenant. Some local authorities think about how to apply their commitment in practical terms, and many do so very well, but others have not moved beyond good intentions. In fact, I know of one local authority that informed a military family battling with school admissions that the armed forces covenant does not apply to it.
Our education system is already geared to acknowledge that some children face exceptional and difficult circumstances, and that they will need priority when it comes to admissions to help to offset the difficulties that they have already faced. That is why looked-after children have top priority when it comes to admissions. The Bill seeks to recognise that military children face significant upheaval and educational disadvantages through no fault of their own, and that they too should have high priority for admissions in light of that. The Bill would have the secondary effect of easing the pressure on military families, who are often faced with short-notice moves and must then work out how to transport their children to schools miles from base because they face disadvantage in the schools admissions system.
Too often, it seems that local authorities push back against the armed forces covenant, despite having signed up to it, leaving families frustrated and deeply anxious, and having to fight appeals, which are sometimes lost, as they also try to change location and military role at very short notice. The schools admissions code is not robust enough to ensure that wherever and whenever a military family has to move, they will find the right schools for their children. We are not doing in practice what we talk about when we say we believe in, and are committed to, the covenant.
I never want to have to hear this again from a serving member of our armed forces who is trying to find a school for their child:
“This just shouldn’t be this hard; I can’t bear putting my boy or myself through this stress every 2 years, so I’m going to leave as soon I am able, even though I love my job”.
At a time when we need to retain as many of our highly trained and committed personnel as possible, allowing barriers such as this to make us risk losing them is unacceptable.
My wonderful grandmother used to say to me when I railed at things that seemed wrong with the world that, while it might not be possible to feed 1,000 starving children, it is almost always possible to feed one. We cannot immediately resolve the plight of those children trapped in Mosul. We cannot be sure that we can give a continuing education to every child in a camp who is displaced from their Syrian home, or ensure that every child is protected from malaria, but I am certain that, with a simple change in the law, we can change the code for school admissions, so that every single British military child can be guaranteed a place at the right school for him and his family’s unique needs, regardless of the time of year when they apply for a place, or to which school they apply, and in whichever year group they land. Young James and the 40,000 other military children whose parents put their lives on the line for our safety and freedom around the world deserve nothing less.
Question put and agreed to.
Ordered,
That Mrs Anne-Marie Trevelyan, Danny Kinahan, Tom Tugendhat, Ruth Smeeth, Mrs Madeleine Moon, Kit Malthouse, Sir Gerald Howarth, Mrs Flick Drummond, Mr James Gray, Tom Blenkinsop, Wes Streeting and Calum Kerr present the Bill.
Mrs Anne-Marie Trevelyan accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 20 January, and to be printed (Bill 109).
Health Service Medical Supplies (Costs) Bill
Tuesday 6th December 2016
(7 years, 4 months ago)
Commons ChamberRead Full debate Health Service Medical Supplies (Costs) Act 2017 View all Health Service Medical Supplies (Costs) Act 2017 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 6 December 2016 - (6 Dec 2016)
Justin Madders (Ellesmere Port and Neston) (Lab)
I beg to move, That the clause be read a Second time.
Madam Deputy Speaker (Mrs Eleanor Laing)
With this it will be convenient to consider:
Amendment 8, in clause 1, page 1, line 14, at end insert—
“(2A) In exercising functions in relation to the controls on the costs of health service medicines, the Secretary of State must ensure that any payments made by manufacturers or suppliers to whom the scheme relates calculated by reference to sales or estimated sales of medicines are utilised solely for the purpose of reimbursing the NHS for expenditure on medicines and medical supplies.”
This amendment would confirm that the Secretary of State has a duty to reinvest rebates in improving access to new and innovative medicines and treatments.
Amendment 9, in clause 5, page 4, line 5, at end insert—
“(7) Before making regulations under Clause 5 the Secretary of State must conduct a consultation on the potential effect of this clause on the maintenance of quality of those medical supplies, and seek representations from manufacturers, suppliers and distributors of medical supplies as part of the consultation.”
Government amendments 1 to 6.
Amendment 10, in clause 6, page 7, line 11, at end insert—
“(1A) Information provided by virtue of section 264A must be disclosed by the Secretary of State to persons listed in subsection (1)(a) to (i) at that person’s request.”
Government amendment 7.
Justin Madders
I rise to speak to new clause 1, which stands in my name; to amendment 8, which is in the name of my hon. Friend the Member for Burnley (Julie Cooper); and to the other amendments in the group. The Opposition do not oppose the Bill. Our proposals are a constructive attempt to help the Government to achieve their stated aims, and to close the growing gap between the UK’s record on developing new drugs and the ability of NHS patients to access them.
New clause 1 would put a duty on the Secretary of State to commission a review within six months of the Act coming into force, focusing on its impact on the pricing and availability of drugs and medical supplies; on research and development; and on the NHS’s legal duty to promote innovation. The pharmaceutical industry in this country employs more than 70,000 people, in predominantly high-skilled and well-paid jobs—just the sort of jobs Members on both sides of the House would want to encourage and see more of.
This country’s record in the pharmaceutical sector has been one of our great success stories, but we cannot take that success for granted, particularly because investment decisions are often taken by parent companies in other parts of the world. There is considerable unease in the sector about the relatively low take-up of new and innovative medicines by the NHS compared with that in comparable nations, and about the ongoing uncertainty surrounding the future of the European Medicines Agency. A number of major companies have based themselves here because of the EMA, and the worry is that they might wish to follow it if it relocates following Brexit.
The impact assessment for the Bill states, as we might expect, that there will be an impact on the revenue of the pharmaceutical sector, and that it could lead to a reduction in investment in research and development and consequent losses for the UK economy estimated at £l million per annum.
While we fully agree with what the Government seek to achieve with the Bill, we are mindful of the storm clouds on the horizon. We therefore believe that prudence requires that such a review takes place within a reasonable timeframe to ensure there are no unintended consequences and that we can remain confident that the pharmaceutical sector in this country will continue to be at the forefront. We face competition not only in Europe but from emerging nations such as Brazil and China. We also need to ensure that the NHS does not trail in the take-up of the new drugs. Worryingly, the Office of Health Economics studied 14 high-income countries and found that the UK ranked ninth out of those14 across all medicines studied.
Successive studies have demonstrated relatively low take-up of new medicines in the UK compared with other countries. That is bad for patients and bad for our pharmaceutical industry. The Bill therefore needs to achieve a balance. We need to ensure the best possible patient access to medication at the fairest price, but we also need to encourage the pharmaceutical industry to invest in research and development.
Keith Vaz (Leicester East) (Lab)
I am intervening in my capacity as chair of the all-party group on diabetes. The diabetes drugs bill is enormous: it runs into hundreds of millions of pounds. I accept what my hon. Friend says—that we need to ensure that pharmaceutical companies are able to invest in the provision of new drugs for diabetes—but there are other choices, such as those relating to lifestyle. Does he agree that they need to be investigated while we look for new drugs?
Justin Madders
I thank my right hon. Friend for his question. Indeed, if I had known he was in the Chamber, I would probably have anticipated it. He is absolutely right to raise the issue of diabetes drugs and the need for more measures to improve prevention. I attended the launch of the all-party group’s report last week, at which there were a number of interesting initiatives. The “diabetes village” is an interesting concept, which in the long term will hopefully reduce the cost of diabetes treatment for the NHS.
The review would look at the impact of the Bill on the pricing and availability of medicines and other medical supplies. We would gently point out to the Minister that two years ago, when the previous voluntary agreement was introduced, the Government said that it would
“provide an unprecedented level of certainty on almost all the NHS branded medicines bill.”
Evidently that has not come to pass. The review would enable us to identify any issues at an early stage and take the appropriate action. I know that the Government were not willing to commit to such a review in Committee. The Minister referred us to a clause in the draft regulations, referring to a review one year on from the introduction of the regulations. However, that is simply not the same thing as looking at the impact of the legislation in its totality. The way the regulations are currently drafted means that there is more than a little of the Minister being able to mark his own homework, so to speak. The draft regulations talk about the review in a much narrower sense: enabling the Minister to set out the objectives intended to be achieved by the regulations in the report itself rather than at this point, and only specifically mentioning whether those objectives could be achieved with less regulation.
Rob Marris (Wolverhampton South West) (Lab)
Does my hon. Friend find it strange that the regulations that might be made pursuant to the Act—the Government have helpfully given us a draft—talk about a review being carried out? Paragraph 14(2) states that the report must in particular
“set out the objectives intended to be achieved by these Regulations”.
Would one not expect those objectives to be set out before the regulations were made? Are the Government not putting the cart before the horse?
Justin Madders
My hon. Friend is absolutely right. That is why there is anxiety that we may end up with a self-fulfilling prophecy with these reviews. No doubt the Minister can address that when he replies.
There is nothing to assess the potential impact of the Bill and the regulations on research and development investment, nothing on the potential impact on innovation, and nothing on the availability of medicines and other medical supplies. We believe our anxieties in these areas are well founded, so I hope the Minister will reconsider his stance on this proposal, or at least provide us with some reassurance that these areas of concern will be carefully monitored.
Amendment 8 would to compel the Government to reinvest the rebate from the pharmaceutical sector for the purpose of improving access to new and innovative medicines and treatments. On Second Reading, the Secretary of State confirmed that £1.24 billion had so far been returned to the Department of Health through and it is anticipated that the sum to be received annually will increase when the Bill is enacted.
Although numerous questions have been asked throughout the passage of the Bill, we have still not been able to pin down the Government on exactly where this money has gone, other than into the general pot. It is our fear that this new money, which could have delivered a step-change in access to treatments to the benefit of patients and the life sciences sector, will instead be simply added to the baseline, with every £1 from the pharmaceutical sector meaning £1 less coming from the Treasury. Given the often heated exchanges across the Dispatch Box about the true sums being put into the NHS, it would aid transparency if it were made clear that this money was being put in over and above Government funding and was ring-fenced for a specific use. In Scotland, rebates are already ring-fenced and reinvested to provide new treatments and medicines. Nothing that the Minister has said has dissuaded us from believing that that is the correct approach.
According to James Barrow from the Cystic Fibrosis Trust, using the rebate in this way provides both the access and transparency that are lacking in the rest of the UK. He cites the example of the medicine Kalydeco, which increases the lung capacity of people with cystic fibrosis by up to 10%. It has meant that some patients who were previously housebound are now able to run up to 5 km. Patients in England are unable to access this drug, whereas patients across comparable nations in Europe and in Scotland can benefit from its transformative effect. He points out:
“There is no comparable fund in England. Having the new medicines fund in Scotland provides a much greater chance for patients to be able to access these medicines. We just don’t see a clear pathway in England for how patients can access these medicines.”
There are many other similar examples.
The NHS is our proudest national achievement, but it is to our shame that people in England are deprived of vital drugs and treatments on the basis of financial, rather than clinical, judgments. In Committee, the Minister suggested that the fluctuations in income could have adverse consequences, but we understood the purpose of the Bill was to deliver certainty. In any event, ring-fencing does not preclude additional resourcing if required. For all those reasons, I hope the Government will give serious consideration to this proposal.
Turning finally to the remaining amendments, we welcome the further improvements tabled by the Secretary of State in relation to the devolved Administrations. However, questions perhaps have to be asked about the consultation process if such changes are being introduced by the Government at such a late stage. Perhaps this will be reflected on when it comes to future legislation.
We welcome the amendments to clauses 5 and 6 tabled by the Scottish National party. In particular, we welcome the call for a consultation on the potential impact of controls on other medical supplies. Those provisions were notably lacking from the initial consultation, so there is still considerable anxiety within the sector about how the controls will be used. I understand that this is a matter for future regulations, but it is less than satisfactory for the Government to ask us for powers before telling us how they will be used. We would say this is another reason for us to seriously consider setting out now the kind of review envisaged by new clause 1.
Keith Vaz
I will not detain the House for long. I know that that normally means the start of a very long speech, but I will be very brief. I declare an interest as the chair of the all-party group on diabetes and as a type 2 diabetic.
I welcome the proposals put forward by my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) from the Labour Front Bench. I hope the Government accept them. They are reasonable proposals that are designed to look at the impact of the Act and ensure it achieves what it hopes to achieve. That is not always the case with legislation.
There is a lot of agreement on the Bill, and the Minister should be commended for how he has introduced it. The reason for the Bill is the ever-rising cost of drugs to the national health service. We know of the work done by The Times in particular. It is always a battle for diabetics, especially when we meet in informal circumstances, as happened last week when the new report of the all-party group was launched by the Secretary of State for Health. I think the Minister was due to come—I may have gone before he arrived. [Interruption.] He is nodding. [Interruption.] No, he didn’t come. I am sorry, Madam Deputy Speaker. I know you do not like Members tempting sedentary interventions. But certainly the presence of the Secretary of State and departmental officials was very helpful to the all-party group.
Mark Tami (Alyn and Deeside) (Lab)
Does my right hon. Friend agree that we have to educate people and make them aware of what can happen, particularly given the rising obesity levels?
Keith Vaz
My hon. Friend is absolutely right. We both serve on the Administration Committee, and whenever banqueting is raised, we all highlight the need to make sure that the food MPs get, especially in the Tea Room, is compatible with decreasing obesity and calorie levels. You will know, Madam Deputy Speaker, when you have your cup of tea, that on offer are Club biscuits and Victoria sponges and all these other things. I am not saying that all this comes within subsection (1)(c) or that it could be regarded as a question of innovation; I am simply saying that innovation is not just about new technology.
None the less, there is incredible new technology around as far as diabetes is concerned, as I saw for myself last week. People no longer need to do the finger prick test. The HbA1C test can be bought at the local chemist. It costs slightly more than a finger prick test, which is obviously free for diabetics, but it allows us to test our diabetes without having to fast, and it gives a three-month reading. Moreover, there are now machines that clamp to the side of one’s arm and which, when a mobile phone is put to them, will give a glucose reading. These incredible innovations show why the new clause is worth accepting. It has been carefully thought out by my hon. Friend the Member for Ellesmere Port and Neston, who is doing an amazingly important job on the Front Bench on these matters.
The new clause would benefit the taxpayer. Innovation is very important as far as an illness such as diabetes is concerned, but, as I said, the solution is not just about the technological revolution; it is also about lifestyle changes. I notice that the SNP spokesperson, the hon. Member for Central Ayrshire (Dr Whitford), is here. Scotland is highly advanced in terms of diabetes monitoring. One can get diabetes statistics centrally in Scotland, whereas here we cannot get them even if we write to our local clinical commissioning groups. That is why new legislation of this kind, designed to bring down the cost of drugs to the taxpayer, is very important, and why I support subsection (1)(c) and the review.
Finally, in respect of research and development, as mentioned in subsection (1)(b) of the new clause, pharmaceutical companies make an enormous amount of money—they are some of the biggest companies in the world—and we need to encourage them to plough back a good proportion of their profits into research and development. The Steno centre in Denmark only exists because of money from Novo Nordisk, one of the biggest diabetes drugs companies in the world. A person can go to the Steno centre, and in the first room they can have their blood taken by a diabetes nurse; in the next room, they can have their feet looked at by a podiatrist who is an expert in diabetes; in the next room, they can have their eyes tested—those of us with diabetes have eye problems; in the next, they can have their consultation with a GP; and if necessary, they can see a consultant. That is what I meant when I talked about the diabetes village. It comes from the concept of the Steno centre. At the moment, as a diabetic I have to go to different centres and hospitals to see my GP and others. In one case, I had to carry my own blood—
Keith Vaz
In a little test tube! I carried my own blood to the laboratory, because it was the quickest way I could get a reading. Incidentally, from the look of him, my hon. Friend carries his blood very well. We want this innovation and research and development. The drugs companies should be able to plough back profits within the industry, and in the long run this innovation will make a great deal of difference.
When I went to New York for a meeting on Yemen, I stopped in at the diabetes centre of the Mount Sinai Hospital, and was told about the incredible innovation in diabetes in the US. I also went to see Mayor Bill de Blasio’s diabetes team. As Members will know, New York cut the level of sugar in soft drinks, as we are doing now, but the centre of its diabetes initiative is the lifestyle coach, not the GP.
As we look at these provisions, we see every opportunity for a cogent and coherent review that will particularly help—this is my main argument today—those with diabetes, but also others with similar problems connected with their illnesses. I urge the Minister, who I know has been extremely reasonable on this Bill, to look seriously at the new clause. If he cannot accept new clause 1 itself, will he at the very least give an undertaking from the Dispatch Box that the points embodied in it will be reported back to Parliament in a few months’ time?
Dr Philippa Whitford (Central Ayrshire) (SNP)
Like the shadow Health Minister, we will not obstruct the Bill, because we support the basic aim to control prices in order to achieve a good return to the NHS from the drugs that it uses.
We also support in principle new clause 1. Six months might be a little early technically to bring things together, and there should not be just a single report because we will only see change over time. To look at the success of these actions, we need to see a price being controlled, and to spot when prices are sliding out of control. I would therefore suggest looking at the data and information on an annual basis and perhaps laying it before Parliament to show that the Bill’s aim is being achieved and that the concerns of the official Opposition are being allayed.
We support amendment 8 because it advocates the same approach that we have in Scotland. While the Cancer Drugs Fund in England is welcome and has clearly helped many patients, it is limited in the sense that if people do not have cancer they cannot access the medicines fund. That means that people with rare diseases are left somewhat abandoned. Frankly, if it were left solely to NHS England, those people would be left in the desert. It is important that significant money will be released, and the provision could gain support from the pharmaceutical industry if it sees that the money it is returning is enabling innovative medicines to come to the NHS earlier. Sometimes when we compare certain illnesses such as cancer, we find that the gap is in relation to people with more advanced diseases struggling to access the newest medicines. If the amendment helps to address that, we would support it.
The Scottish Medicines Consortium was reformed in 2014, and Scotland has now moved up from passing 53% of all applications to 77%, with a further review going ahead at the moment to see how to improve this further. The aim is not to avoid using drugs; the aim is to access them at a decent price. If the pharmaceutical industry is returning money to the NHS, it should enable earlier access.
Amendment 9 was tabled by SNP Members and we put it before the Public Bill Committee. It deals with clause 5, which extends a power that in fact already existed but was never used—to control the price of medical services and medical supplies as well as drugs. I am slightly disappointed that we did not manage to get this amendment adopted, so I raise again the issue of quality control and ask the Government to consult on it.
I know I spoke extensively in Committee about surgical gloves, but they provide a good example in that the range of quality is vast, and if poor quality gloves are used, there is likely to be extra cost to the NHS either when gloves have to be changed two or three times within one operation or more subtly if a surgeon is exposed to blood at the end of an operation from a tiny pinhole that was not visible. The same point applies to gowns and drapes. Taking off a gown that is meant to be protective and discovering that you are soaked to the skin in blood is a pretty unpleasant experience, and it obviously increases the risk to staff. The idea that surgeons are not exposed to diseases such as HIV or hepatitis B and C is naive. I knew colleagues over my career who suffered from those conditions, which they caught from patients. There is clearly a responsibility to staff and to patients to avoid any possibility of cross-contamination. I mentioned in Committee, too, some fairly cheap items such as gauze swabs, because if they are shedding threads, it can lead to intra-abdominal infection—something that we do not want. This amendment is about consultation and looking further at the mechanism.
Rob Marris
As hon. Members know, overall I welcome the Bill, which is broadly a socialist Bill. It reinforces price controls and profit controls on big pharma, when appropriate. I always like to encourage the Conservative party, sadly now in government, to come a little further down the socialist road. They claim to be the workers’ party, and that is good.
New clause 1, tabled and moved by my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders), is central to what we should be talking about in many spheres of public life—namely, evidence-based policy. All too often in this House—this applies to Governments of both colours—policy appears to be made on a political whim.
I remember in, I think, 2008 the then Leader of the House, the right hon. Member for Blackburn, Jack Straw, writing certainly to Labour MPs asking what we wanted in the Queen’s Speech that year—[Interruption.] We were in government, but perhaps he should have written to the right hon. Member for Chelmsford (Sir Simon Burns). I replied, because I believe in evidence-based policy, that in that year’s Queen Speech I wanted not a single piece of legislation. I said that after 10 years of a Labour Government, I wanted Parliament to spend a year on scrutiny, looking at the legislation that we had introduced over that period to see what had worked and what had not worked.
To my astonishment, the Leader of the House did not accept that proposal, as those who were Members then will recall, and we had another full legislative programme. Let me add, as an aside—if you will grant me a small bit of latitude, Madam Deputy Speaker—that by the end of the Labour Government I had stopped voting on crime Bills because we had had so many. Some of them—this may have happened under the previous Conservative Government—repealed parts of earlier crime Bills introduced by a Labour Government which had never been brought into force. That was extraordinary.
I urge the Minister to recognise that evidence-based policy making is encouraged by new clause 1. I hope that, in the context of innovation, which was so eloquently addressed by my right hon. Friend the Member for Leicester East (Keith Vaz), he will say a little about the way in which the National Institute for Health and Care Excellence operates.
As the Minister may know, there is an issue involving cystic fibrosis and the drug Orkambi, which NICE turned down owing to a lack of sufficient data. I understand that, because it is NICE’s job to weigh the evidence, such as it may be. The drug is registered for use in this country, but it is not available on the NHS. Since NICE decided that the cost-benefit analysis did not stack up, some long-term data from the United States, which I understand to be robust, has been made available. I gather, although I may be wrong, that NICE has not yet reviewed its decision on Orkamb, although the evidence from the United States suggests that in certain cases it can be extremely effective in treating cystic fibrosis. I hope that when we are discussing processes, innovation, efficiency and policy-based decision making, the Minister will say a little, not necessarily about Orkambi itself, but about the process whereby NICE might, in the light of new evidence, promptly—I stress the word “promptly”—review its decisions.
Dr Philippa Whitford
There is an additional issue. Drugs or treatments are being passed by NICE but not actually introduced. Either they are rationed and limited to a certain number of patients a month, as is the case with hepatitis C drugs, or the decisions are being left to clinical commissioning groups, which means that we are enshrining postcode prescribing instead of getting rid of it.
Rob Marris
I entirely agree with the hon. Lady, who, as ever, speaks with authority on these issues. I am a bit of a centraliser, because I do not like postcode lotteries. We will already have that in a cross-border sense—between England and Wales, Scotland and Northern Ireland—but it is a great deal worse when just some CCGs in England are making a drug available when it has been signed off by NICE as safe for use but it is not mandatorily available, and not every patient for whom it is medically appropriate can obtain it from every CCG. That sort of postcode lottery undermines the “national” part of the national health service, which is regrettable.
Amendment 8, tabled by my hon. Friend the Member for Burnley (Julie Cooper), would ring-fence savings made through the provisions of this Bill and earlier legislation so that the money thereby saved, or paid into the pot by a pharmaceutical company, can be retained for expenditure on medicines and medical supplies. I hope the Government will support that. All too often we hear that Governments do not like ring-fencing, and I understand why: it fetters their discretion. Earlier this afternoon, however, I asked the Secretary of State for Justice whether the education budgets devolved to prison governors would be ring-fenced, because I feared that a prison governor who was under other budgetary pressures might not spend the money on education and prison education would not improve as it needs to. I was greeted with a very welcome one-word answer, which was “Yes.” I hope that, in a slightly different context, the Minister can give the same assurance this afternoon, because this is an excellent amendment which clarifies a slight gap in the Bill.
As for amendment 9, about which the hon. Member for Central Ayrshire (Dr Whitford) spoke so eloquently, efficiency is of course important, but so is quality. I do not know whether the old saying “Penny wise and pound foolish” is used in Scotland—she is nodding—but it certainly is in my part of the west midlands. We have seen that time and time again with privatisations. When services are privatised they go to the lowest bidder, and what do we find? Either the service is not up to scratch, or, all too often—I think this happened when Circle ran Hinchinbrooke hospital—the companies go bust because they find that it is not as easy as they thought it would be to make a profit out of, in this case, the health service. That may happen to other suppliers as well. Quality matters, and the national health service is not a commercial organisation.
Sir Simon Burns (Chelmsford) (Con)
I am listening carefully to what the hon. Gentleman is saying about Hinchinbrooke hospital. Might I suggest, tactfully, that he go and look at that hospital? Patients in Huntingdon would say that the hospital had vastly improved, but because of the conditions, it was not possible to make a financial success of it. The company did not go bust; it decided to withdraw. However, in the view of the patients who used it, the quality of the care provided by what had been a failing hospital had vastly improved. Moreover, the trade unions agreed to the deal that was done to put Circle there.
Rob Marris
I am grateful to the right hon. Gentleman for making my point for me. This is about quality; it is not just about price. That company got its price wrong. It said that it could provide a quality for a certain price, and it did provide the quality but not for that price, and it jacked the contract in.
Sir Simon Burns
I think that what the hon. Gentleman said at the beginning of his comments on Hinchinbrooke —we will know for certain when we see the Official Report tomorrow—showed that he was using that example inaccurately to make a point about privatisation. He said that privatisation caused quality to go down, but that in this case the company had gone bust. He was wrong on both counts.
Rob Marris
The right hon. Gentleman may well be correct on that specific point, and I fully accept that. There is in privatisations, however, a nexus between quality and price, and very often—although not always—the companies that promise a quality at a certain price are unable to deliver it. They cannot deliver the quality of service, and/or they cannot do so at the price at which they promised to do so. He can correct me on this if he wishes, but we see that time and again when rail franchisees come back to the Government and say, “We promised a certain level of service for a certain price. We cannot do it: we need a bigger bung.”
Mr Stewart Jackson (Peterborough) (Con)
I think that the hon. Gentleman may have stumbled into a quagmire in referring to Hinchinbrooke. The Public Accounts Committee, of which, as he may know, I was a member for four and a half years, found that pricing was not the significant issue that led to the end of the franchise of the private provider Circle. The significant issues involved the wider healthcare economy, and the failure of the strategic health authority to discharge its duties in respect of clinical business for the hospital.
Rob Marris
The hon. Gentleman has considerably more knowledge than I have. I have talked about evidence-based policy making, and I am entirely prepared to accept the evidence that he presents. However, the company could not make a go of it, although I accept that that may not have been the company’s fault,
Amendments 1 to 5 come as a package. Amendment 3, which is a substantive amendment, refers to a
“person who provides primary medical services”.
I hope that the Minister can talk us through that, in the light of a trend that is starting in some parts of England and is most advanced—if I may make a value judgment—in Salford, where the GPs who provide primary services are directly employed by the hospital trust. So the hospital trust is no longer just secondary or even tertiary; it is primary. I just wanted to unpick the wording to make sure that that development of service delivery in England has been taken into account and that the amendments do not assume that the existing silos between primary and secondary continue, because that development has now arisen in Wolverhampton, which I represent. There are three GP practices in Wolverhampton that are piloting their staff being employed by the excellent Royal Wolverhampton NHS Trust. I say it is excellent because it is one of the 15% of hospital trusts in England that does not have a deficit, and I think part of that is related to the fact that it has only £15 million of private finance initiative. But that is another debate that I will not get into now.
Mr Jim Cunningham (Coventry South) (Lab)
My hon. Friend’s analysis of medical supplies is very interesting. I would have thought that pharmaceuticals, for example, would be classified as medical supplies, given that they have always been a contentious area of negotiations over costs. I am surprised that they are not included in the definition.
Rob Marris
Medical supplies in this part of the Bill seem to be to do with physical equipment. But, again, what is equipment? We can refer to the definitions, which state:
‘medical supplies’ includes surgical, dental and optical materials and equipment”.
Drugs are dealt with elsewhere in the legislation.
I think the Minister has got the point, but I will repeat it very briefly. He is seeking clarification for the Wales legislation through amendment 7 when I understood him to say that he did not think such clarification was needed for the same definition contained in the legislation pertaining to England. I would like him to explain that apparent anomaly. If it is not an anomaly, perhaps he could tell the House that he is going to clarify the definition as it relates to England in the later stages of this Bill.
The Minister of State, Department of Health (Mr Philip Dunne)
I rise to speak to the new clause, the Government amendments and all other amendments tabled on Report. I want to start by expressing my gratitude to the Opposition Front-Bench spokesmen, who both confirmed their intent to continue in the spirit of constructive dialogue we have had thus far in our consideration of the Bill. I am pleased that they support the Bill’s objectives, and I will seek to respond to their amendments.
Hon. Members will recall that we debated at length in Committee the issue raised in new clause 1. I want to take this opportunity to provide some additional reassurance that this is an important issue for the Government. We have already included in the illustrative regulations for both the statutory scheme, in regulation 32, and the information regulations, in regulation 14, an annual review of the regulations and a requirement to publish our report of each review. These annual reviews go further than the specific single review proposed by the hon. Member for Ellesmere Port and Neston (Justin Madders) in new clause 1, the effect of which would require the Government to only undertake a single review within six months of the Act coming into force.
We accept that reporting is an important principle. However, setting out the requirements in primary legislation is too restrictive. We believe that the proposed single review within the first six months of the Act coming into force would provide an insufficient timeframe in which to assess the impact of the provisions, whereas the annual reviews we have set out in the illustrative regulations in effect place a duty on the Government to review both the statutory scheme and the information regulations to ensure their effectiveness, and to do so every year. Of course these provisions will be subject to consultation as part of the wider consultation on the regulations.
Over time we expect that both the statutory scheme and the information requirements will be amended through their respective regulations to reflect changing circumstances. It is essential that the review and reporting arrangements are able to be similarly flexible so that they remain appropriate to the schemes in operation.
The hon. Member for Ellesmere Port and Neston asked whether objectives should be set out before the regulations come into force. As I have said, the Government will consult on regulations before they come into force. The objectives of the regulations will be explored in the consultation and set out in the Government response to that consultation. I hope that addresses his point.
The illustrative regulations require an annual review to set out the objectives of the scheme, assess the extent to which they have been achieved, and assess whether they remain appropriate. These requirements will be tested through the consultation on the regulations, and we will of course take account of those views.
Rob Marris
First, I say again that I am very grateful to the Government for publishing the illustrative draft regulations to help us debate the Bill. Let us consider the provision of information in connection with the draft health service products regulations 2017. Regulation 14(2)(a) states that the report must in particular
“set out the objectives intended to be achieved by these Regulations”,
and then regulation 14(2)(b) says it must
“assess the extent to which these objectives are achieved.”
It seems a bit odd to say that in one review we are going to set out the objective and then decide whether the objective has been achieved or not. That seems, temporally, to be a bit wrong.
Mr Dunne
As I have indicated, we intend to undertake these reviews every year. It will probably be impossible to assess in the first review whether the objectives have been achieved—there might be some ability to assess it—but in subsequent iterations we will be able to look back and see how well they have been achieved.
I notice that the right hon. Member for Leicester East (Keith Vaz) is heading for the exit—[Interruption.] He has now resumed his seat. This is not specifically the right point in my speech to pick up on the points he has raised, but I would like to respond to his characteristically constructive contribution on the subject of diabetes. He is the chair of the all-party group on diabetes, and he might recall that I used to be the vice-chair of that group, as I have family members with type 1 and type 2 diabetes. I have considerable sympathy with the points that he made about the importance of adequate advice for individuals who might be unaware that they have diabetes. He also talked about the importance of adopting innovation through NHS treatment of the condition. We share that objective, and nothing in the Bill will do anything other than to continue to encourage innovation. I will be making further remarks, perhaps when the right hon. Gentleman is not with us, on the subject of innovation, but I just wanted him to be aware that I had taken his points on board. He might be disappointed by my conclusion on the specific amendment, but I shall go on to explain how his point is being addressed in other ways.
Returning to new clause 1 and the question of regulations, I wish to make a further point. Much of the information provided to the Secretary of State will be commercially confidential. We touched on this in Committee. I am sure that suppliers have every confidence that the Government will maintain that confidentiality in anything we publish, but it is important to reinforce the principle. This means that there is a limit to the level of detail we are able to publish, and I am sure that the hon. Member for Ellesmere Port and Neston will appreciate the commercial sensitivity reasons involved. Any information we do publish will be at a consolidated level, protecting suppliers’ confidentiality but allowing the Secretary of State to be clear on the basis of the conclusions of his review. We will of course be able to use supporting information to evidence our conclusions.
Turning to the detail of the new clause, its requirements reflect the duties placed on the Secretary of State in the Bill, but I must be clear that the content of such a report should not be restricted and must be able to address the key issues arising during the year that may affect the operation of the schemes. The other significant element of the new clause, which I have touched on in response to the right hon. Member for Leicester East, was discussed at length in Committee. This was the question of whether it would be appropriate for such a report to address matters relating to the NHS duty to promote innovation.
The Government’s position is clear that it is not appropriate to link the measures in the Bill, which relate purely to the cost of medicines and medical supplies, to the NHS duty to promote innovation. Promoting innovation is a high priority not only for the Government and the NHS but for many other stakeholders. Promotion of innovation quite properly requires action across many different fronts, and it would not be possible to quantify the contribution of the schemes in the Bill to that endeavour in any meaningful way. The NHS is already doing great work to promote innovation, and I would like to draw hon. Members’ attention to the latest data from the innovation scorecard, a quarterly data publication showing the uptake of innovative drugs and medical technologies following NICE approval in England. This is now a nationally published statistic.
The hon. Member for Wolverhampton South West (Rob Marris) asked specifically about this in his remarks. I can tell him that the latest publication, on 12 October this year, shows that the rate of uptake for 85 medicines recommended by NICE is increasing, that 77% of those medicines had positive growth uptake between March 2015 and March 2016, and that 54% of the 85 medicines had a growth uptake greater than 10%. These data are made available on a quarterly basis, and hon. Members can follow their progress through the official national statistics.
The Government are taking broader action to secure the UK’s future as an attractive place for the life sciences sector, particularly in the light of the EU referendum and the consequent Brexit. We are clear in our commitment to the life sciences, and to building a long-term partnership with industry. The hon. Member for Wolverhampton South West also asked me to address the question of the NICE process and whether this takes evidence into account. He also asked about the process for the subsequent review of previous decisions. This is a continuous process. It does not happen for every drug all the time, but there is a routine procedure under which, on the basis of new evidence, NICE will look again at a decision and decide whether to uphold or amend it. That procedure could allow drugs that had previously not been approved to become approved on the basis of new evidence, and NICE will look at evidence from wherever it comes. I hope that that reassures the hon. Gentleman.
Dr Whitford
It is a new medicines and rare diseases fund, and it includes orphan, ultra-orphan and end of life, but it is not only about end of life.
Mr Dunne
No, it is not only for end of life, but also for rare diseases. That was my understanding, but I stand corrected. However, my main point is that it should be for clinicians to decide what is spent across the range of activity. If money is ring-fenced into a specific fund for new medicines, that might not always be the right clinical decision.
Dr Whitford
Does the Minister accept that it is a slightly bizarre public relations thing to have a medicines fund that is only for cancer, ruling out people with other life-threatening illnesses? That is the case here in England.
Mr Dunne
The new cancer drugs fund was set up specifically to provide funds to deal with one of the most common causes of mortality in the country, and was a priority of the previous Government; I will not go into the reasons for that.
Returning to amendment 8, it was suggested that what happens to the receipts is not clear, but all income generated by the voluntary and statutory schemes is reinvested in the NHS. Estimates of income from the pharmaceutical payment regulation scheme are part of the baseline used in the Department’s spending review model. The model was used to calculate the funding increase that the NHS sought at the time of the 2015 spending review, and it helped to secure the £10 billion of real-terms funding over the course of this Parliament. The income from the voluntary and statutory schemes can and does fluctuate; that is the biggest problem with ring-fencing, which could bring risks in this area. For example, the annual income from the PPRS has varied between £310 million and £839 million in a full financial year in England, so there is the potential for the income that it generates to vary widely, which could disadvantage patients by making treatment dependent on income from a pricing scheme with unsteady income generation.
Rob Marris
I understand where the Minister is going with that, but I want to caution him. He spoke earlier about flexibility—my word, not his—and his example was that a clinical commissioning group or a medical body might want to spend some of this money on staffing. Owing to the fluctuation to which he refers, however, spending funds on staffing is probably not a good idea.
Mr Dunne
I am grateful to the hon. Gentleman for his advice, but I am afraid that I do not think it is relevant to my point about the fluctuation in income coming from the scheme. It is relevant in relation to whether NICE or politicians make such decisions. They need to be made by clinicians.
Dr Whitford
I thank the Minister for kindly giving way. The cancer drugs fund has a budget of some £350 million, so if he is saying that the money that can be retrieved varies from £300 million to over £800 million, that would allow for the expansion of a new medicines fund.
Mr Dunne
It might if the move was always in the same direction. My concern is that the amount could decline between one year and the next; it may not always go up—certainly not up in a straight line.
Separately from the Bill, the Government are taking action to secure the UK’s future as an attractive place for the life sciences sector and to support faster patient access to medical innovations. I have already touched on the recently published accelerated access review, which sets out ways to increase the speed at which 21st-century innovations in medicines, medical technologies and digital products get to NHS patients and their families. The review’s recommendations included bringing together organisations from across the system in an accelerated access partnership, and creating a strategic commercial unit within NHS England that can work with industry to develop commercial access arrangements. We are considering those recommendations with partners and will respond in due course.
NHS England and NICE are jointly consulting on several proposed changes to NICE standard technology appraisals and highly specialised technology appraisals, including around speeding up the appraisal process. The Department of Health continues to work closely with NHS England and other stakeholders to improve uptake of new medicines. A key element of that is the innovation scorecard that I have already referenced. With those comments about our concerns about what is proposed in amendment 8, I ask the hon. Member for Burnley (Julie Cooper) not to press her amendment.
Turning to amendment 9, tabled by the hon. Member for Central Ayrshire, the Government recognise that section 260 of the National Health Service Act 2006 does not explicitly state that the Government are obliged to consult industry. However, I am aware that the Act does explicitly state that there is an obligation on the Government to consult when it comes to controlling the cost of medicines. A similar amendment was tabled by the hon. Lady in Committee. I want to reiterate that I am happy to consider with her how we could best introduce a general requirement to consult industry in section 260. Indeed, my officials have been in discussions with her, and I am grateful for her time and constructive comments.
I note the hon. Lady’s reference to the effect of any pricing controls for medical supplies on maintaining the quality of those supplies. I assure her that the Government would take into account all relevant factors, including any concerns raised by industry about the quality of medical supplies, when making and consulting on any price controls for medical supplies. The Government would not however be in favour of putting one of those many factors in the Bill.
The Medicines and Healthcare Products Regulatory Agency is responsible for the safety, efficacy and quality of medical supplies, and the Bill will not change that. The MHRA has assured me that any use of the price control powers in the Bill would not affect any of the quality or safety requirements that must be met before medical supplies can be placed on the market.
The hon. Lady referred to the procurement system in Scotland; I assure her that the Government are committed to improving procurement across the NHS. She will be well aware of the Carter report, which concluded that there is considerable variation in the value that trusts extract from their expenditure on goods and medical supplies. NHS Supply Chain is working hard to deliver procurement efficiencies, to meet recommendations to increase price transparency, to lower costs, and to reduce the number of products and suppliers used across the NHS to deliver economies of scale. The hon. Lady referred to 600,000 products, but it has had success in reducing the range in the catalogue down to 315,000 to help NHS organisations purchase products more efficiently. It continues to work to reduce that number. I am aware of similar work in Scotland. In England, we are using the Carter review to deliver that.
While I understand the intent behind the hon. Lady’s amendment, I am not fully convinced that, as drafted, it would have the desired effect. If she will continue to work with me and my officials, the Government would be happy to consider, while the Bill is in the other place, how we could best introduce the requirement to consult into section 260. On that basis, I invite her not to press her amendment for now.
Mr Dunne
I am afraid that I must press on to cover the Government amendments.
Government amendments 1 to 5 address a possible loophole in the Bill. Clause 6 amends the National Health Service Act 2006 to give the Secretary of State the power to make regulations to obtain information from any UK producer that is not an excepted person. A “UK producer” is defined in the Bill as anyone involved in the manufacture, distribution or supply of health service medicines, medical supplies and other related products required for the purposes of the health services in the United Kingdom. An “excepted person” is defined in the Bill as any person providing pharmacy or GP services for the health services in Scotland, Wales and Northern Ireland. The purpose of these provisions was to reflect the agreement with the devolved Administrations that, for devolved purposes, they would collect information from pharmacies and GP practices in their nation. However, there may be circumstances in which a company supplies products in the devolved Administrations and also in England, and could claim that the provision, as drafted, would allow it to become an excepted person, because it was operating in the devolved Administrations. That is clearly not the intent of the Bill, so we have proposed these amendments to address this loophole.
Government amendment 6 is a minor consequential amendment that was unintentionally omitted when the Government tabled amendments in Committee. The amendment relates to clause 6, which provides the Secretary of State with the power to disclose information to the list of bodies set out in proposed new section 264B. The amendment clarifies that the list of people to whom the Secretary of State can disclose information includes those persons providing services to the Regional Business Services Organisation in Northern Ireland; it had previously been omitted. I hope that hon. Members will accept these amendments.
Mr Dunne
I would like to conclude this point for the hon. Lady, as I hope it will satisfy her. Her concern is about how the Government will behave in response to requests from devolved Administrations; we recognise that we need to give reassurance to the devolved Administrations that, in the light of the constructive conversations we have already had with them, they will have full access to all relevant data that the Government collect. We are quite happy to do that. We have indicated that we will enter into a memorandum of understanding, which will be discussed and agreed with the devolved Administrations. Those discussions will cover whether they have automatic access to this information—in real time, or in some other format—and whether that is done through giving them direct access to the systems, or by forwarding the data that we collect, immediately on request. We need to get into the detail of that in discussion on the memorandum of understanding, rather than committing that to the Bill at this stage. On that basis, I hope that the hon. Lady will not press her amendment to a vote.
Dr Whitford
I welcome the Minister’s comments, and I am happy not to press the amendment if we can reach the point of a clear memorandum of understanding. I just point out that all my amendment does is to say that the groups listed by the Bill should be able to ask for data on request; it does not add anyone else. I understand that my attempt at the amendment in Committee included groups that it should not have, but that has been corrected. This amendment does not spread confidential information any more widely.
Mr Dunne
I am grateful to the hon. Lady for that clarification. I think this is best addressed through a memorandum of understanding, rather than in primary legislation, in case we need to adjust the memorandum in subsequent years.
Finally, I wish to address Government amendment 7, which provides a definition of “equipment”. The hon. Member for Wolverhampton South West took us through the drafting on the definition of “medical supplies”. The amendment gives a definition of “equipment” in the National Health Service (Wales) Act 2006 to ensure consistency with the National Health Service Act 2006. “Equipment” is defined as including
“any machinery, apparatus or appliance, whether fixed or not, and any vehicle”.
When taken in tandem with the common definition of “medical supplies”, the definition is broad enough to capture any medical supplies on the market, from bandages to MRI scanners. The point of distinction was not so much the definition of “medical supplies” as the definition of “equipment”, which is a subset of the medical supplies definition. I hope, therefore, that hon. Members will accept the amendment.
I have spoken at length on these amendments. I hope I have made my position clear, that Opposition Members will not press their amendments to a vote, and that the House will accept the Government amendments.
Justin Madders
I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
Clause 6
Provision of information to Secretary of State and disclosure
Amendments made: 1, page 4, line 12, leave out from “products,” to end of line 13.
This amendment is linked to amendments 2 to 5. It is directly consequential on amendment 4.
Amendment 2, page 4, line 17, at end insert—
“(subject to subsection (6A)).”
This amendment is linked to amendments 1 and 3 to 5. It flags that the provision made by section 264A(2)(a) and (b) of the National Health Service Act 2006 is subject to the provision made by amendment 3.
Amendment 3, page 5, line 47, at end insert—
“(6A) Regulations under this section may not do any of the following—
(a) require any person who provides primary medical services under Part 4 of the National Health Service (Wales) Act 2006, or any person who provides pharmaceutical services under Part 7 of that Act, to record, keep or provide information relating to any Welsh health service products which are supplied by the person in providing the services in question;
(b) require any person who provides primary medical services under section 2C(1) of the 1978 Act, or any person who provides pharmaceutical care services under section 2CA(1) of that Act, to record, keep or provide information relating to any Scottish health service products which are supplied by the person in providing the services in question;
(c) require any person who provides primary medical services or pharmaceutical services under Part 2 or 6 of the Health and Personal Social Services (Northern Ireland) Order 1972 (S.I. 1972/1265 (N.I. 14)) to record, keep or provide information relating to Northern Ireland health service products which are supplied by the person in providing the services in question.”
This amendment is linked to amendments 1, 2, 4 and 5. It ensures that regulations under section 264A of the National Health Service Act 2006 may not require the persons specified to record, keep or provide the information specified.
Amendment 4, page 6, leave out lines 3 to 15.
This amendment is linked to amendments 1 to 3 and 5. It is consequential on the new provision made by amendment 3.
Amendment 5, page 6, line 36, leave out “(8)(d)” and insert “(6A)(b)”.
This amendment is linked to amendments 1 to 4. It is a consequential amendment.
Amendment 6, page 7, line 8, leave out “(h)” and insert “(i)”.—(Mr Dunne.)
This amendment makes a change which is consequential on the amendments made in Committee. The effect is to allow the Secretary of State to disclose information to a person who provides services to the Regional Business Services Organisation in Northern Ireland.
Clause 7
Provision of information to Welsh Ministers and disclosure
Amendment made: 7, page 9, line 38, at end insert—
“(and for this purpose ‘equipment’ includes any machinery, apparatus or appliance, whether fixed or not, and any vehicle).”— (Mr Dunne.)
This amendment provides a definition of “equipment“ for the purposes of the definition of “medical supplies” in section 201A(8) of the National Health Service (Wales) Act 2006.
Third Reading
Mr Dunne
I beg to move, That the Bill be now read a Third time.
As we have already discussed today, it has been a pleasure to take this short, albeit technical, Bill through the House with such a wide degree of consensus from all participating parties.
We have had a very constructive debate. Points have been raised by hon. Members from both sides of the House through amendments and in debate, and we have sought to take them on board. We will look to take some of them forward as the Bill moves to the other place.
I thank Opposition Members for their contributions. They include the hon. Members for Ellesmere Port and Neston (Justin Madders), for Burnley (Julie Cooper), who is just about in her place, and for Central Ayrshire (Dr Whitford), who leads for the Scottish National party. We have had some strong contributions from Back Benchers, including the hon. Member for Wolverhampton South West (Rob Marris), who served on the Committee in his usual diligent fashion, and the right hon. Member for Leicester East (Keith Vaz). We have also had contributions from Government Members. In particular, I thank my hon. Friends the Members for Peterborough (Mr Jackson) and for Torbay (Kevin Foster), who was active in Committee. I also thank my Parliamentary Private Secretary, my hon. Friend the Member for Halesowen and Rowley Regis (James Morris), and the Whips on both sides of the House.
More than £15.2 billion has been spent on medicines in the most recent full year—an increase of nearly 20% since 2010-11 and of over 7% since last year. The purpose of the Bill is to close loopholes to ensure that the NHS secures as much value for money as it can from this very significant spending on pharmaceutical and medical products. We are looking to clarify and modernise provisions to control the cost of national health service medicines and to ensure that sales and purchase information can be appropriately collected and disclosed.
Briefly, the Bill puts it beyond doubt that the Secretary of State can require companies in the statutory scheme to make payments to control the cost of NHS medicines. That is expected to save the health service across the UK some £90 million a year.
Secondly, the Bill would enable the Secretary of State to require companies to reduce the price of an unbranded generic medicine, or to impose other controls on that company’s unbranded generic medicine, even if the company is in the voluntary scheme—currently the 2014 pharmaceutical price regulation scheme—for its branded medicines.
Members will recall the examples raised on Second Reading and in Committee of companies charging the NHS unreasonably high prices for unbranded generic medicines. Without competition, companies have raised prices totally unreasonably—in the most extreme case by as much as 12,000%. Companies can do that because we rely on competition to keep prices of unbranded generic medicines down. Although that generally works well, the Government need the tools to be able to address the situation in which a small number of companies are exploiting the NHS, patients and the taxpayer by raising prices when there is no competition.
Thirdly, the Bill enables the Secretary of State to make regulations to obtain information on sales and purchases of health service products from all parts of the supply chain, from manufacturer to pharmacy, for defined purposes. These purposes are reimbursement of community pharmacies and GPs, determining the value for money that the supply chain or products provide, and schemes to control the costs or prices of medicines. By bringing these requirements together, the Bill streamlines and clarifies all the relevant requirements currently in place, providing a statutory footing for them all. This includes the existing statutory requirements already in the NHS Act 2006, and those agreements that currently have a voluntary basis only.
In Committee, the Government tabled a number of important amendments to reflect the views and requests of the devolved Administrations on how they want to apply the information power in their territories. We tabled the amendments following constructive discussions that resulted in agreement that the UK Government will collect information from wholesalers and manufacturers for the whole of the UK. It would not make sense for each nation to collect its own information from wholesalers and manufacturers, which would lead to duplication of effort and unnecessarily increase costs across the system.
We have also agreed that each nation will collect information from its own pharmacies and GPs. The devolved Administrations will have full access to all the information that the Government collect. I have committed to develop a memorandum of understanding to underpin these arrangements, and my officials are working closely on that with officials in the devolved Administrations.
To ensure that the Bill makes the Government’s intentions absolutely clear, we tabled a small number of minor and technical amendments on Report to close a potential loophole that would have enabled some companies not to provide us with any information if they also provided pharmacy or GP services to the devolved health services.
This is a relatively small Bill, technical in nature, which has received considerable support from across the House, for which I am extremely grateful. The Bill will help to secure better value for money for the NHS from its spending on medicines, while ensuring that the decisions made by the Government are based on more accurate and robust information.
I thank you, Madam Deputy Speaker, for presiding over today’s debates. I also thank the members of the Panel of Chairs, especially my hon. Friend and neighbour, the Member for Telford—
Mr Dunne
I stand corrected—my hon. Friend the Member for The Wrekin (Mark Pritchard), under whose chairmanship I served for the first time. Finally, I thank the parliamentary Clerks and counsel, Hansard and the Doorkeepers for helping us to bring the Bill to its conclusion today.
Justin Madders
As the Minister said, the Bill is designed to enable the NHS better to control the cost of medicines and medical supplies and to close some of the loopholes in the system that have been the subject of blatant abuses in recent years. In seeking to achieve those aims, the Government have our support.
I wish to place on the record our appreciation for the amiable way the Minister dealt with our probing of the Bill. Although he has not accepted our amendments, he has explained why not in a reasonable and constructive manner. I would also like to record my appreciation of the work of the members of the Bill Committee, including my hon. Friend the Member for Burnley (Julie Cooper), who ably assisted me in tabling and speaking to Opposition amendments, and the hon. Member for Central Ayrshire (Dr Whitford), who spoke on behalf of the Scottish National party. Particular thanks go to my hon. Friend the Member for Wolverhampton South West (Rob Marris), who has been engaged and informed in equal measure throughout the Bill’s passage through this House.
Expenditure on medicines accounts for a significant and growing proportion of the NHS budget, standing at £15.2 billion in England in 2015-16, which is an increase of more than 20% since 2010-11. That reflects the incredible advances that continue to be made in the development of new and innovative medicines, often by our own life sciences industry here in the UK. Although we welcome and celebrate those developments, it is clear that taxpayers and patients have not always been well served by the market. It is important that we do all we can to secure value for money for the NHS, especially in the current financial context following six years of historic underinvestment by normal standards.
When the most recent five-year pharmaceutical price regulation scheme was agreed in early 2014, the Government said it would provide unprecedented certainty, but as we know and as was reported in February by the then Life Sciences Minister, the hon. Member for Mid Norfolk (George Freeman), estimated incomes in the UK from PPRS payments for 2016-17 were £647 million—a considerable reduction on the £800 million received in 2015, particularly at a time when the overall drugs bill has been increasing apace. Those figures and the fact that we are debating this Bill show that the original scheme has not gone entirely to plan.
There is much in the Bill to be welcomed. We certainly want an end to the playing of the system that has been going on. We hope that the Bill will finally put an end to such antics and deliver a mechanism that ensures consistency in appropriate circumstances. We support the rationale behind aligning the statutory and voluntary schemes, which will create a more level playing field between companies and offer a much better chance of delivering greater savings and value for money to the taxpayer.
We support measures to tackle the small number of cases where we have seen companies disgracefully exploiting loopholes in the regulations to hike the price of medicines, sometimes by more than 10,000%. As we know, the investigation undertaken by The Times in the summer found that the price of medicines was inflated by £262 million a year as a result of this practice. That continues to impact on patients, often those with rarer conditions.
An example is Keveyis, a drug that has been found to be extremely effective in treating some of the symptoms of muscular dystrophy. Until 2012 it was relatively inexpensive, costing around £100 a box per patient. Unfortunately, it was discontinued by its previous manufacturer. Recently Taro Pharmaceuticals obtained the rights under orphan drug status and is now manufacturing it once again. However, its forecast price in the EU is approximately £35,000 per patient per year, despite the fact that no new research and development costs have been incurred by the company. It is therefore very difficult to see what justification there can be for such a significant price increase. Because of the rise in price, the NHS in England is refusing to provide reimbursement for the drug, which means that patients lose out. It is this deliberate manipulation of the system that we want to see dealt with and we hope that this Bill will once and for all put an end to such scandalous practices.
Although we support the broad aims of the Bill, we have had a number of concerns, some of which we have touched on already, about what is perhaps missing from the Bill and about the Government’s policies more widely on access to medicines and treatments. Despite this country’s world-leading pharmaceutical sector, which we are all rightly proud of, successive studies have demonstrated how there is a relatively low take-up of new medicines by the UK compared with other high-income countries. Members across the House will no doubt have received many pieces of correspondence from constituents concerned about the lack of availability of medicines that they or their relatives are trying to obtain. We also see clinical commissioning groups rationing medicines and treatments in ways that would previously have seemed unthinkable.
If we are to create a level playing field for drugs companies, we should be trying to do the same for patients as well. One measure that we have proposed to tackle this issue is to ring-fence future rebates from the sector and invest them in improving access to medicines and treatments. We know that £1.24 billion of new money has been returned through the rebate since it was established. Surely there can be no more logical use for this money than to tackle the gulf between the UK’s record on developing new drugs and patients’ ability to access them.
We know that the Government were not willing to back our amendments, but I urge the Minister to look again at how a similar measure has worked in Scotland. As we heard in the debate today, there seems to be some difference of opinion about that. The hon. Member for Central Ayrshire spoke strongly in support of it.
We note that a number of amendments tabled by the Government during the passage of the Bill mean that the devolved Administrations are subject to the same arrangements, although it was pointed out in Committee that there appear to be no equivalent arrangements for the devolution of health in Greater Manchester. I recall that when the Minister responded to my questions on this point, he suggested that ring-fencing the appropriate amount of the rebate for Greater Manchester might lead to chaos, as its allocation from NHS England already includes an element of income from the rebate. I think the Minister underestimates his ability to resolve the issue and overestimates the difficulty that would ensue.
The annual health budget negotiated for Greater Manchester is about £6 billion, around half the Scottish budget and around a billion pounds less than the Welsh budget, so the size of the budget is not the issue. What is an issue, though, is transparency and consistency. I do not expect any late change of heart from the Minister, but we will be watching future developments in English devolution and the accompanying budgets with interest.
The other aspect about which we have concerns is how these proposals will impact upon the future of the pharmaceutical industry in the UK, in a climate where there is already considerable anxiety in the sector about the future of the European Medicines Agency as a result of Brexit. Clearly, we will be keeping a close eye on both the operation of the scheme and the general health of the sector, particularly in terms of future investment in research and development.
To conclude, we support the broad aims of this Bill and the Government’s aim of better controlling the costs of medicines. However, we should be doing more to tackle the present situation to prevent patients from missing out on innovative treatments, particularly when we compare our record to that of countries with similar wealth. We hope that the scope of the annual review envisaged in the draft regulations is sufficiently broad to enable us to judge the Bill’s effectiveness on this issue and on the others that we have raised, and we look forward to considering the Government’s response once the consultation on the draft regulations has been completed.
As the Minister said, this is a small Bill, but the sums at stake are large. We hope to see a positive outcome for the NHS as a whole. Thank you, Madam Deputy Speaker, for chairing our proceedings today. I thank the Members who served on the Bill Committee, the Chairs and all the staff and civil servants who successfully led the Bill’s passage through the House.
Dr Philippa Whitford
I will open my remarks with thanks, because this is the first Bill that I have helped to take through the House, and I am therefore very grateful to you, Madam Deputy Speaker, the Chairs of the Public Bill Committee and all the staff who have worked on this, particularly those in the procedural hub; as a newbie, being able to go and ask them what happens next has been immensely helpful.
Obviously, we welcome the basic premise of the Bill, particularly clauses 1 to 4, which give the Secretary of State the power to control the price of drugs and avoid the excesses we have seen recently, as was highlighted in the article in The Times, particularly by those companies that are in the voluntary scheme but also produce generics, and therefore the price of those generics is not controlled. There are also those companies that have picked up drugs that have orphan status—they are no longer produced by anyone else—and basically robbed the NHS by increasing the price by many thousand per cent. That is just unacceptable.
When we accept relatively high prices for new drugs, we often excuse that on the basis of research and development. We need to realise that not all research and development is done by big pharmaceutical companies; they often collect drugs by buying small, spin-out companies from universities. With regard to generic or repurposed off-patent drugs, the R and D is usually done by clinicians within the NHS, or by academics in university departments. Companies have admitted in the past that they do not always price drugs in relation to their R and D costs; they sometimes do so simply by what they think the market will bear. We must not always allow them the excuse that they are spending huge amounts on R and D, because that is simply not always the case.
I tabled two new clauses in Committee. Now that the Secretary of State will have this power, I hope that the two issues raised by my new clauses will be dealt with. One is the issue of specials, which are simply hand-made preparations, usually an ointment for dermatological use. I arranged for the briefing from the British Association of Dermatologists, which highlighted companies that had a Scottish price list and an English price list, to be sent to the Minister. I therefore hope that those powers will be used. In Scotland it is done by using an NHS producer who makes the drug and therefore keeps the price down, rather than simply paying a pharmaceutical company or a pharmacy company, because the pharmacy with which the patient is dealing might have a mother or sister company and they are simply taking a very high price from them.
The other issue, which was raised last November, is that of repurposed off-patent drugs. As the shadow Minister explained at the time, an off-patent drug may be picked up by a new company and used for its new purpose, such as simvastatin for multiple sclerosis, but with the merest tweak it could be put out as if it is a new drug, and suddenly at a price that people cannot access. That also touches on the hierarchy whereby doctors must prescribe a licensed version before an unlicensed one. If a licensed drug came on the market that was actually just a version of an off-patent drug, doctors would be under pressure to prescribe it.
I understand that work has gone ahead since last year’s Bill, but I exhort the Minister, and through him the Secretary of State, to ensure that the powers given by this Bill are used in all these circumstances to ensure that prices are controlled. Otherwise, what happens is not a matter of expenditure to the NHS on its own, but usually that CCGs will not allow these drugs to be accessed, which is what is happening in the case of specials. We now have the powers. We welcome that, but hope that they will be used.
Rob Marris
I propose, Madam Deputy Speaker, not to take the remaining three hours. Earlier, when the Minister would not take an intervention, he seemed to think there was a rush on time. My reading of the Order Paper is that we have another three hours for the Bill, but I will not take that long.
I want to put the Bill in context, because this is a socialist Bill. It builds on the Labour Government’s National Health Service Act 2006, which applied to England. Looking around, Madam Deputy Speaker, I think you and I may be the only Members present who voted for the 2006 Act—that was obviously before you were in your esteemed position. In putting the current Bill in context, it is worth reviewing what it is building on.
The 2006 Act made reference to the voluntary schemes for price control that existed then. The current voluntary scheme, of course, is the 2014 pharmaceutical price regulation scheme—the PPRS. Those voluntary schemes were to do with limiting the profits of pharmaceutical companies. Now, I stress to the House that the Labour party and I are not opposed to pharmaceutical companies per se; they do fantastic research, and there are probably millions of people alive now who would not otherwise have been alive, because of the research and development done by pharmaceutical companies—many of them, happily, based, or having major operations, in the United Kingdom. The companies are very welcome here, but they have to play by the rules, and so do those that buy up off-patent drugs, horse around with them and put up their prices by hundreds and hundreds of per cent. Sometimes, it is a minority of private equity companies that are doing that, and they are not welcome here.
Pharmaceutical companies must act responsibly, and they may need statutory encouragement to do so. The 2006 Act started the process of statutory encouragement with a statutory scheme, which enabled Her Majesty’s Government, in appropriate cases, to limit prices and the profits of pharmaceutical companies—that is why I say this is a socialist scheme. Before those on the Government Benches get all aerated about this, let me say that the Labour party and I do not wish to nationalise or control the prices in every corner store in the country—not at all—but there are certain big operations where market intervention is helpful and is needed when there is market failure. It was perceived—rightly—by the Labour Government that there was some market failure, and they needed some stern measures to sort it out.
The Bill builds on that work from 10 years ago because, as adverted to by the Labour Front-Bench spokesperson, my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders), some medicine supply companies—again, a minority—were, frankly, taking the mickey. They were leaving the voluntary scheme in favour of the statutory scheme because that was more advantageous to them. I understand why they would do that—they wished to maximise their profits—but they must act in a responsible way, and if they will not do so as a result of being urged to show corporate social responsibility, which some of them will not, we need statutory measures, and that is what the Bill puts in place. One of the things the Bill does is to address the issue of companies leaving the voluntary scheme to go into the statutory scheme because it is a better deal. The Bill resets the schemes, as it were, to make sure that a company is not encouraged to do that, because there is not that comparative advantage.
The Bill also makes provision for a new power to enable the Secretary of State for Health to require a company in the voluntary scheme to pay sums due under that scheme. Even though it is a voluntary scheme, the Bill will give the Secretary of State the power to pursue non-payers through the courts. I regard that as progressive legislation. For those companies that are not acting responsibly—that are taking the mickey, as I characterised it—that is a good thing. This Government have come down the socialist path to agree with such market intervention.
The Government have also come down the Labour party path in wanting to marshal information so that we can treat these companies equally and fairly, and so that they treat the society in which they operate—refracted principally through their supply of medicines to the NHS—equitably and fairly. Under the Bill, the Secretary of State will have the power to make regulations for the marshalling of information, building on the work done in the NHS Act 10 years ago.
That is important, but on the context of the Bill, I would like to tempt Health Ministers a little further down the socialist path. The Minister described it in his opening remarks as a technical Bill, which it broadly is. However, it also has an ideological or philosophical aspect, which I have tried to set it out, because it is broadly a socialist Bill. One of the things it seeks to do is to save money for the NHS and to raise money for the NHS through clawbacks on overpriced medicines or medical supplies because the NHS—this is the context of the Bill, which is not purely technical—is in serious financial difficulty. The Minister referred to the extra £10 billion of funding for the NHS over the lifetime of this Parliament, but even the Health Committee does not accept that calculation. It is a sleight of hand.
Part of that sleight of hand relates to what is being done on social care, which is leading to a growing problem of delayed discharges. Social care is not being properly funded in this country, and the precept that councils in England are allowed to charge is in effect a mandatory charge because the Government calculate the revenue support grant and all such local government things on the assumption that councils will raise the precept. That is having an effect on the NHS because of delayed discharges.
In the context of the crisis in social care, although the extra funding it will provide for the NHS is welcome, the Bill comes nowhere near addressing the underfunding of the NHS. In the financial terms of what it will raise or save for the NHS, the Bill—in relation to what the NHS needs and, coupled to that, what councils in England need for social care—is a drop in the ocean. The Bill will encourage a certain level of efficiency in the production, purchase and procurement of medicines and medical supplies. All of us in the House would sign up to the concept of efficient procurement. We might sometimes have different definitions of what does and does not constitute efficient procurement, but procurement is central to the Bill.
Although the NHS can, like any massive organisation, almost always act more efficiently—I hope the Bill will encourage the NHS to do so—we must bear it in mind that, in international comparisons, the NHS is one of the most efficient organisations in healthcare delivery in the world. If we look at healthcare delivery in the United States of America, for example, we can see that it spends, as a proportion of GDP, as much on public health as the United Kingdom. However, because its public health system is not run efficiently, as it is all fragmented, the USA spends the same proportion of GDP again on private health—
Madam Deputy Speaker (Natascha Engel)
Order. May I remind the hon. Gentleman that the Bill is quite specific and that this is a Third Reading debate? He is venturing into areas that are not specifically in the Bill, and he may wish to come back to what is in the Bill.
Rob Marris
I am grateful to you for your guidance, Madam Deputy Speaker. As I have said, I am putting the Bill in the context of the NHS and its effect in addressing the much deeper problems of the NHS. I was simply adverting to some of those deeper problems, but I take your guidance.
I repeat to Ministers that the Government have come some way, as the Bill demonstrates, down a socialist path for the delivery of healthcare, and I encourage them to come back with another Bill, building on this one, to abandon privatisations and let us have a public NHS.
Question put and agreed to.
Bill accordingly read the Third time and passed.
Business without Debate
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Delegated Legislation
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Rail Services: Southend
(7 years, 4 months ago)
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Sir David Amess (Southend West) (Con)
Christmas has come early for me, with our reaching the Adjournment debate earlier than usual. However, I say to my hon. Friend the Minister, with good heart, that there is no point in having an Adjournment debate and exchanging 15 minutes of words each unless there is a positive outcome, which is what I expect. There could be no finer Christmas present for my constituents than improving the very disappointing train service that c2c and Abellio Greater Anglia offer.
There is some irony to the debate because I had an Adjournment debate on the same subject at the beginning of the year and again, the business ended rather earlier than expected. On that occasion, the Minister and I were caught out, but we certainly have not been caught out this time.
My hon. Friend the Minister was elected to the House in 2010, so he has not had the opportunity of listening to me talking about the railway service that my constituents enjoy or suffer. He is dependent on the briefing that his officials give him, and they are dependent on the briefing that the people who run the services give them. That shows how things have changed in this place.
Once upon a time—the violins come out—the democratically elected Member of Parliament raised an issue, the Minister was concerned about all he had heard and he could do something about it. He could actually make a difference. In 2016, it does not feel like that. The way in which power has increasingly seeped away from this place is disappointing. Doubtless the Minister will shock me at the end of the debate and I will leave here happy, with him guaranteeing to have a good word with the deliverers of the two rail services and saying that things will improve.
When I was Member of Parliament for Basildon—the violins come out again—I called for the privatisation of the Fenchurch Street line. I am not an MP who talks about rail services hypothetically. I am a commuter and have been for many years. I was a commuter before I became a Member of Parliament, and my wife and I remember standing on crowded platforms, our hearts in our mouths, as the train stopped, the carriage doors opened and people fell out because there was such a crush. We would think, “Oh crikey, we can’t get on the next train. We’re going to be late for work. What will our bosses think of all this?”
Our train services have improved, and I pay tribute to my predecessor, the late Lord Channon, and the late Lord Parkinson. Both those former colleagues, when they were Secretaries of State, were responsible for much of the improvement of the tube and railway services that we take for granted. However, if they were alive today, they would be very disappointed to see what has happened to the c2c line.
I do not blame the women and men who work for the two train companies. They do a wonderful job under difficult circumstances. However, I blame the management and the senior management, particularly of National Express. They tried to shut me up earlier this year because I was trying to get an improvement in the services. I absolutely blame them and will not stop raising these matters in the House of Commons until there is a dramatic improvement in services.
All those years ago, when the things we did in the House were reported, I had an argument on live TV with the then chairman of British Rail. I can remember coming back from the broadcast and being applauded by colleagues in the Division Lobby because they thought it was good that a local MP had taken the national rail service to task. Everything changed. We used to be called the misery line. The line was privatised and we became the happy line. It was completely transformed and the constituents I represented at the time were pleased with the improved services.
Since 1997, I have been the Member of Parliament for Southend West but I use the same railway line. The stations that serve the area I represent are Westcliff, Chalkwell, Leigh-on-Sea and Prittlewell, which is served by Abellio Greater Anglia. I am very pleased to see in their places my hon. Friends the Members for Rochford and Southend East (James Duddridge), for Thurrock (Jackie Doyle-Price) and for Fylde (Mark Menzies)—it is always good to have his support. I could go on to mention other colleagues. My right hon. Friend the Member for Rayleigh and Wickford (Mr Francois) is not in his place but would also support me.
Mark Menzies (Fylde) (Con)
I am here in my capacity as a member of the Transport Committee. My hon. Friend has raised this matter on many occasions, and I want to share what he says in this Adjournment debate with members of the Committee and see whether we can look at it and help him.
Sir David Amess
I am flattered and honoured. I had forgotten that my hon. Friend is a member of the Transport Committee. It is very good news that he might raise this matter with the Chair and the Committee.
This time last year I was looking forward to Christmas. The gentleman running the line contacted me and my colleagues to say that, although there would be some changes, it was all good news, and that the wonderful service would be even better. On 13 December 2015, the timetable changed. We were told that, as a result, there would be improved passenger experiences, which is definitely not the case judging by my inbox, and increased reliability, but a constituent has said that it is
“rarer to have a day without issues than a day with”.
We were promised quicker commutes and more seat availability, but another constituent has written to say that people are already standing by the time the train arrives at Westcliff. I am not criticising the constituents of my hon. Friend the Member for Rochford and Southend East who get on at Thorpe Bay and the other stations—they are more than entitled to do so—but by the time the trains reach Westcliff where I get on, they are already packed.
We were also told that, if the changed timetable failed, we would more than likely return to the old one, but that has obviously not happened. Within days of those initial changes in December 2015, my mailbox and inbox were piling up with complaints, so I did not have as happy a Christmas as I had anticipated.
Constituents showed the extent of their upset by protesting at a famous, or infamous, rally. People do not often have rallies on platforms, but we had one on the platform at Fenchurch Street station on 14 January 2016.
In April 2016, following the public rally in the railway station, the wonderful Essex radio broadcaster Dave Monk interviewed Mr Drury, the gentleman responsible for running the line. Mr Drury said that he was
“Going to reduce the number of trains and use those carriages to lengthen the other trains, so we’ve got longer trains.”
The logic of how that would please my constituents is a little confusing, but that is what he said. In response to people saying that they did not want four-coach trains, he said that there were going to be longer trains, but there were not going to be so many. But they did not want fewer trains! He was told that he was not meeting an increased demand if he increased the length of trains but decreased the number of trains running. Daily correspondence has continued. The misery line has returned, at least for my constituents.
There was then an exchange between me and the then chairman of the Conservative party. I received a letter from the then chairman in which it was suggested that he had received a complaint from the chairman of National Express, the gentleman in overall charge of c2c. He had written to the party chairman, asking him whether he was aware that one of his colleagues was making life difficult, in a rather disagreeable fashion, by complaining about the c2c service. Now, that is not acceptable. It is gutless. If anyone has a beef, let them meet the MP eyeball to eyeball. Do not go behind their back. Did the chap think that the chairman of the Conservative party was going to tell me off? If he had, he would have got it all guns blazing! That well and truly backfired, and I am never, ever going to forget what that gentleman did. It undermined my role, and the role of all MPs, in representing constituents’ views.
I will now read out a selection of letters I have received about the service:
“They appear to have cancellations, delays and faults virtually every day now, which is extremely frustrating given their previous excellent performance.”
The next one is a letter to c2c:
“I have written to you before, expressing unhappiness about when things go wrong. Passengers are pretty much left to fend for themselves. There seems to be no information at Barking and it is exhausting to keep swapping platforms”—
it is quite a journey to get to the other platform—
“for services that then do not run or have left by the time you get there. You apologised for the inconvenience and stated that this would be looked into and improved—this clearly has not happened.”
Even today, I received an email alerting me to the fact that there was disruption on the line. The next letter states:
“I am also starting to tire of all the apologies made to the travelling public. Like many others, I would prefer to see real change and proper information given to customers, rather than the current mantra which seems to imply ‘we can do as we like as long as we say sorry’. My feeling is this is not acceptable given my fare is now well over £3,000 per annum, my second largest bill only to my mortgage.”
It is a lot of money. Here is another one:
“This morning, I checked their website at 6.45am to see if the service was ok. It was. The 7.02 am fast train from Chalkwell was on time. I walked to the station to discover the 7.02 was cancelled. No reason given. I asked c2c on Twitter what happened. Was told it was under investigation. Despite repeated requests for an answer via Twitter, I’ve been ignored and have not received an answer. I will not accept being ignored by them.”
Jolly good show.
The next one reads:
“I shouldn’t have to leave home earlier and get on a slower train but pay more money for the benefit.”
I absolutely agree. Another constituent said that her fare was over £3,000 a year, which again is a lot of money for a poor service. The next one reads:
“The only thing we get from c2c is: don’t worry, more carriages are coming. Carriages are not the answer. The problem is the shambolic timetable.”
The problem is indeed the timetable, which I was told would be good news for constituents. The next one reads:
“I now refuse to take my kids to London on the trains because of the poor state (especially toilets if they are working), but more because I am worried for their safety in such awful conditions.”
The final one reads:
“Still major problems, no end in sight even with new carriages. When will C2C put passengers before the profits of cramming people in to hop between barking and West Ham?”
I hope that my hon. Friend the Minister, with the briefing from his wonderful officials, is not going to say, “It will all be fixed because we are going to have new all-singing, all-dancing carriages and more trains”, because that will not fix the problems. Indeed, the design of the new carriages is totally unacceptable. It can only have been done by somebody who does not commute.
There are some very interesting statistics on the performance of the line. From autumn 2015 to January 2016, according to the c2c website, there was a 20% increase in the number of passengers departing from Fenchurch Street in the evening. Surely this is largely due to people using the train as a replacement for the tube between Barking and West Ham. In the same period, there was a 5% increase in the morning at the busiest point. In January 2017, c2c will introduce 24 new carriages along with the new timetable, which promises four more fast services each morning and evening, which will cut journey times by up to six minutes, and a 6% increase in the number of seats.
Nevertheless, the new timetable—yet another new timetable—starting on 9 January 2017 still has most of the trains stopping at Barking and West Ham, which is where a lot of the severe overcrowding occurs, particularly at evening peak time. This is because people can use the c2c line as opposed to the tube to get between Barking and West Ham, which is rather unfair because they are paying the Transport for London tube prices, not the price that c2c customers have to pay. Does c2c receive a financial incentive from TfL to stop at east London stations?
The following figures are calculated on the basis of all trains arriving at Fenchurch Street between 7 o’clock and 9 o’clock and do not count trains that go via “the loop”, which is the wonderful little journey through the constituency of my hon. Friend the Member for Thurrock. It is not that my constituents and those of my hon. Friend the Member for Rochford and Southend East do not want to go via Tilbury or Stanford-le-Hope, and all these other places; it is just that it delays the journey quite a bit.
In 2015, leaving Westcliff between those hours, there were 16 trains and a total of 144 carriages. Under the 2017 timetable—this is the crunch—Westcliff will be served by 13 trains with a total of 136 carriages. That is eight fewer carriages. We are being fed absolute rubbish, and it is insulting to my intelligence and that of my constituents. The figures are exactly the same for Chalkwell. Those with the longest commute—the first six stations on the line—are the worst off. There is an increase in the number of carriages at Leigh—144 in 2015 compared with 152 in 2017—which is great for the residents getting off at Leigh, but reducing the earlier stations will only lead to a bottleneck for commuters. On Friday, c2c also announced a fare increase. That is not its fault—it is in line with Government policy—but still it has rather upset my constituents.
Turning to the Abellio Greater Anglia service, a station that serves commuters from my constituency was upgraded, which is well and good, but my goodness, the line is dire beyond belief. I am not sure whether my hon. Friend was the Minister when the franchise was renewed, but there was a £150 million investment to upgrade the network, which was good. I understand that an agreement was reached with c2c for ticket acceptance between the two lines for 2017 during relevant engineering works, the details of which will be published on the website shortly. Abellio is in negotiations with c2c about ticket acceptance over the festive period, too. However, a constituent wrote to me complaining that
“The trains are out of date”—
they certainly are—and “overpriced”, compared with other services. She said:
“I am shocked that this franchise has been given the contract again to run this shocking service.”
I have met the management of Abellio Greater Anglia, and given the others bidding for the line, Abellio was probably the best of those offering to run it. Given that it had also been given money to upgrade services, I thought, “Let’s go with it,” but my constituent says:
“The impact this is having on my personal life is so detrimental that I have put my house on the market, so that I can move to another address…after commuting on the Southend Victoria train line for 20 years, I realise how terrible the service is and I cannot contemplate having to endure this nightmare commute anymore!”
That takes me back all those years to before I became an MP, when my wife and I would stand there, hearts in our mouths, when the doors opened, and could not get on the train. It is still a dreadful service.
My constituent goes on to say:
“Nearly every day there is an issue and at weekends no trains at all. Now we understand that although there is no service over the Christmas period they will not allow season tickets to be used on c2c line”.
That certainly needs to be sorted out. She asks:
“Why would commuters want to take trains to Billericay, buses to Newbury Park”—
both nice places—
“and tube to London, this surely cannot be classed as an alternative service?...The fares on our line are much higher”
than on other services. She says:
“the rolling stock is ridiculously out of date yet they are again given the contract for our region. I am hoping that my complaint is one of many that you are receiving and that something will happen to improve the misery commuters pay over £3,000 a year to face every day.”
Jamie Burles, the excellent managing director of Abellio Greater Anglia, said at the press launch last month, on the subject of corporate responsibility, that
“it is a mark of a good business of how quickly we put things right”.
On proposed maintenance work that will cause disruption on the Southend Victoria to London Liverpool Street line, he admitted that there would be
“a tiny bit of pain for a very long gain”,
and that there would be “step change service improvement” to the line, which will have multimillion-pound investment. Judging by some of the complaints that I have received, however, if this “tiny bit of pain” means changes to the timetabling, frequency and capacity of trains, just as we experienced on c2c, Abellio will be held accountable for its reputation by me and my colleagues.
I hope that this railway company will get behind Southend becoming the alternative city of culture next year. If it wants to curry favour with local residents and local MPs, it might consider that it would be wonderful if, when we start our celebrations as the alternative city of culture on 1 January, it sponsored and helped with a few events.
I hope that I will not have to seek another Adjournment debate to raise the same subject next year. I fully understand that the Minister may still be reading his way into the brief, and I am not sure how familiar he is with this line, so I do not expect him to wave a magic wand. However, if he is not able to cover all the points that I have raised, perhaps I, and others, could have a meeting with him and his officials in the new year.
In spite of everything, I wish the staff of c2c, Abellio Greater Anglia, and everyone else, a very happy Christmas and a great new year.
James Duddridge (Rochford and Southend East) (Con)
I am sure that constituents reading the report of this debate will not fully appreciate the fact that most junior Members of Parliament have only half an hour in which to debate issues of constituency interest. It is a great testament to my parliamentary neighbour that he has secured a three-and-a-half-hour debate, not just once, but twice.
It is also good to see that my hon. Friend the Member for Thurrock (Jackie Doyle-Price) is present. I recall that when I was a Whip, one of the most frustrating things was not being able to ask questions or make speeches. I know that my hon. Friend will be making a beeline for the Minister afterwards and delivering her speech to him in person, bending his ear on all things Thurrock in respect of the c2c service. If I were to give the House a foretaste of that speech in three words, they would be “more rolling stock”—so I think the Minister is forewarned.
I thank my hon. Friend the Member for Southend West (Sir David Amess) for allowing me to join in the debate. Both c2c and Abellio lines pass through his constituency, but both of them terminate in mine. We certainly do not want to see a return to the misery line. I am slightly more “glass half full” than my hon. Friend, but as he has made clear, our constituency experiences are different.
During the initial timetable consultation I met Julian Drury, and raised concerns from the outset. Once things began to go wrong, I looked back at the letter that I had sent him following our conversation, and was quite shocked by the clarity and strength of my language and how assertive I had been in saying that they would go wrong. I would have wished to be proved wrong myself, but, alas, I was not.
I wanted a reversion to the faster trains that had taken my constituents to London, and I adopted terminology similar to that which had been used by the campaigners for faster trains on the line between Norwich and London. I was asking for all trains from Shoeburyness to London to travel that distance in less than 60 minutes, which I think is a critical point. Train journeys from Shoeburyness can take about an hour and 10 minutes. The company has listened, and some trains manage 59 minutes, but it would be very useful if, over the years, we could reach a point at which they all took less than 59 minutes.
The Department could be helpful in this regard. c2c has some of the highest punctuality rates, but—it may seem rather odd for me to say this—I think that we should give it permission to be less punctual. If on four days out of five we arrived two minutes later than advertised, it would be good if, on the other days, we arrived five minutes earlier than we currently do. That would particularly benefit constituents in Shoeburyness, at the extremity of the line. A friend of mine used to run the line at night from Shoeburyness all the way to Fenchurch Street in only 32 minutes. Admittedly there were no other trains on the line, and admittedly they did not stop at any of the stations, let alone all of them, but his point was that it was possible to pick up time along the line so that the journey would always take less than 59 minutes.
The new timetable precipitated other problems. Everyone was coming back from the Christmas holiday, and the changes in London had clearly not been thought through. I think my hon. Friend the Member for Thurrock will point out to the Minister later that Transport for London made a number of representations, with quite a narrow focus, for people travelling between Barking and West Ham, to the disadvantage of our constituents in Southend, Thurrock and Rochford.
Following the problems, a meeting was held in my constituency offices by c2c and Shana Doherty, who had organised a petition, to discuss what could be done to rectify some of the problems. There has been incremental change. I think a full reversion to the old timetable would be wrong; as I have said, I want to speed up some trains, rather than simply revert to the old timetable. Some of the rolling stock will help, although I agree with my hon. Friend the Member for Southend West that the design is not perfect. I travelled on one of those trains, not since they have been used during rush hour, but on a special trip with local people to see what they were like, just before they were introduced, and some things were obviously wrong. There were big sections for luggage, as if we were travelling to Heathrow or Gatwick, for instance, whereas it is quite rare to see someone coming down the line with large items of luggage. I made that point and was told that those areas could have been got rid of and an extra two seats put in, but that would have required quite a big change, whereas there were these standard trains that could be bought, which were new, but had that format. It was easier to get them in quickly. It seems somewhat incongruous to have that sort of luggage space, however.
Some people further down the line have been critical of the removal of the three-seat rows. They see that as a kind of metro-isation of the service, which I oppose. I must admit that as a slightly larger person, I am rather sympathetic to the case for two-seat rows. Some 10 years ago, my doctor said I was borderline obese, which, although actually true, I thought was a little unfair, but I have noticed that even much smaller people prefer to stand than sit three abreast, which is socially uncomfortable. The rules on seat-sizing could be changed further by the Department. However, for my constituents, the configuration of the new rolling stock certainly is a benefit.
I fully appreciate that my hon. Friend the Member for Southend West has had many problems with c2c and in his dialogue with it, and finds the correspondence with the chairman slightly troubling and wrong-footed. From my point of view, Julian Drury has actually been quite good, and is one of the better representatives of big business working with the community. I cannot explain the difference in experience; perhaps it is in part due to the fact that my constituents get on the services earlier and do not have quite the same problems. Indeed, I have not had the experience that my hon. Friend has had of the problems in Basildon and the misery line and so on.
The Abellio service was shocking, and on the face of it, it was an incredible surprise that someone running such a shocking service got reappointed. In reality, Abellio’s hands were very much tied by the investment it could put in under the old contract, and it was quite clever in making sure that the tendering document required everyone to step up; as a result, we could not get anyone coming in to run the rubbish stock. To be frank, I felt that my suit needed to be dry-cleaned if I sat on the seats, yet the service is more expensive than c2c. That is because, again, there is a legislative problem in the way Departments have handled these things over the past two decades; the misery line, as it was, was cheaper to take into account the fact that it was pretty crap. Now it is the happy line, but fare increases have been proportionate across all tracks. Fares have all gone up at the same rate, and the differential from when it was not the happy line has been coded in.
We can make changes. The announcements in the urgent question earlier today on rail and track reunification will greatly help the rail services in Southend, particularly the c2c line, as 80% of it is used only by c2c. There are other parts of the country where that would be less useful, however.
I want to mention a third train line in my constituency. My hon. Friend the Member for Southend West looks confused, but he forgets that there is a train on the pier. The pier train line is subject to exactly the same rules and regulations as the other train lines, and it is difficult for the local council to get in the right expertise to run that line. I gently probed Julian Drury and Rob Tinlin, the chief executive of Southend Borough Council, who has done an excellent job over the past 10 years in Southend and, sadly, is due to leave. I asked them whether c2c could take over that 1.3-mile train service, because it has the expertise to do so. Furthermore, I suggested that we introduce through-ticketing, so that people could come from London to Southend Central, and then, after a short walk, get to the end of the pier. That would encourage them to spend more money there, it would be a nice publicity stunt, and it would bring in the expertise of a professional railway firm—particularly if there was rail and track reunification—and its greater understanding of track issues. It would then be running more pleasure down to the end of Southend pier.
Julian Drury is, in my view, rather better than my hon. Friend thinks he is, and we both agree that Rob Tinlin is fantastic. Having raised this issue with them a few years ago, I rather hoped that it would come back as a council or c2c idea. Sadly, that has not happened, and in this debate I would like to nudge them a little bit further in that direction.
The Parliamentary Under-Secretary of State for Transport (Paul Maynard)
It is a pleasure to be called here once again to respond to my hon. Friend the Member for Southend West (Sir David Amess), who, in his customary style, has regaled us with tales of what is occurring on rail services to Southend. He invited me to shock him in my response to his speech. Perhaps a “shock and awe” strategy is not precisely what his railway line needs, but I urge him never to stop campaigning on behalf of his constituents. To me, he is the Duracell bunny of Members of Parliament in this regard. Ever since I was elected, he seems to have chaired all my Westminster Hall debates, and he has never been less than enthusiastic every step of the way. So if he chooses to raise an issue, far be it from me say that there is no issue at all.
If I can beg my hon. Friend’s indulgence, I will—if I dare—start by being slightly positive about his railway line. As he might be aware, c2c is actually one of the best performing franchises in the UK, second only to Merseyrail, and it conceded first place only recently. As of 12 November, the percentage of trains arriving at their destination within five minutes of their booked time—also known as their public performance measure—was 95%. As many hon. Members have rightly pointed out, this stands in stark contrast to the late 1990s when the line was known as the misery line. Going back to autumn 2000, passenger satisfaction was as low as 63%, but it now stands at 81%, although that represents a small decline from the high of 89% that it achieved in the previous national rail passenger survey. However, I expect c2c to have improved on that in the autumn national rail passenger survey that will shortly be announced. When I say that I expect that, I mean that I want the outcome to be achieved.
We have come a fair way since those days. The necessary infrastructure work and replacement rolling stock have helped to deliver one of the better performing commuter railways in the UK, with over 24 million passenger journeys a year. As recently as 2015, c2c won the passenger operator of the year award at a prestigious industry awards ceremony. Its customer-interfacing app, c2c Live, won the innovation award for passenger experience at the 2015 Railway Industry Innovation Awards. So we can find some good things to say about c2c’s performance.
However, as my hon. Friend is aware, c2c’s performance has begun to suffer once again, especially in the last couple of months. A significant factor has been an unprecedented number and length of temporary speed restrictions imposed by Network Rail due to the London clay in the area expanding in response to the change in the weather. This opens up small voids underneath the track and, for safety reasons, trains are therefore required to reduce their speed in those areas. In order to address these and other challenges, c2c has intensified its engagement with Network Rail. The company recognises that other issues, such as fleet reliability, are well within its control, and it is working with its suppliers to address them urgently. Today, for example, a lorry has unfortunately struck a bridge between Southend East and Thorpe Bay, which has meant that c2c will need to make adjustments to its evening timetable while emergency inspections are carried out on the damage to the infrastructure. I, and no doubt my hon. Friend the Member for Southend West, will be keeping a close eye on the progress of that work.
I turn now to the issue in hand and the December 2015 timetable. More and more people are using our railways. Passenger journeys on the rail network have more than doubled since rail privatisation, and the picture is no different for c2c. The number of passengers travelling into London on c2c morning peak services has risen by 15% since 2010. c2c has had to listen to stakeholders up and down the route to understand what they want, which is more services, better connectivity with the three inner-London stations and, as my hon. Friend the Member for Rochford and Southend East (James Duddridge) pointed out, faster services. That is why c2c proposed the first significant change to its timetable for nearly a decade. The change was designed to deliver 1,400 more seats and space for 3,000 more passengers into London in the morning peak and 20% more services on the network. Passengers in the constituency of my hon. Friend the Member for Southend West, and along the whole route, have undoubtedly benefited. The number of seats arriving into Fenchurch Street between 8 am and 9 am from Westcliff and from Chalkwell increased by 12% and from Leigh-on-Sea by 53%. The increase in capacity at those stations is more than the increase in morning peak demand.
The attractiveness of the new timetable brought more passengers than forecast to south Essex stations in the morning peak. In other words, it almost became a victim of its own success with an increase of 9.3% when compared with autumn 2015. That inevitably had similar effects during the evening peak of people leaving London to return to south Essex. All that was further exacerbated by the obligation to stop 95% of trains at Limehouse, West Ham and Barking. This greater connectivity for long-distance commuters was welcomed by key stakeholders on the route. However, the new service pattern provided a faster journey than the District line between the stations, and therein lies the rub. That prompted passengers who previously used the tube to use c2c services, especially those requiring Barking. That led to overcrowding, not least in the evening peak. It was a genuine cause for concern, as my hon. Friend rightly identified at the time.
As a consequence of my hon. Friend’s observations and those of other campaigns, c2c took some action to reduce overcrowding. For example, in response to my hon. Friend’s specific concerns, I understand that the 7.18 am from Shoeburyness into Fenchurch Street, which travels fast along the entire route, was lengthened from eight carriages to 12, providing more space for passengers. c2c also used its excellent, and unique, on-board automatic passenger counting system to fine tune the timetable yet further. Other changes reduced from four to just two the number of services departing with people standing during the morning peak from the three stations serving my hon. Friend’s constituency. Those two services are fast, and services either side have seats available. Understandably, my hon. Friend’s constituents are choosing to travel on those direct services as a result of the fast journeys into London. c2c also increased the number of seats from Fenchurch Street by 1,000 between 5 pm and 6 pm and removed the Barking stops. As a result, eight services leaving Fenchurch Street in the evening peak do not stop at Barking.
Following the positive changes made to hone the timetable in January, c2c also made use of the timetable change date in May 2016 to further improve services for passengers. Primarily, this involved reducing Barking stops on a further five services in the evening peak, with the effect of reducing the number of services leaving Fenchurch Street in the evening peak with passengers standing from 31 to 24. Clearly, 24 remains too many, but that does demonstrate that progress is being made. This is because the removal of these stops further reduced the attractiveness of the c2c service compared with the District line, thus reducing overcrowding for c2c’s evening commuters. c2c plans to make further changes in January 2017. Specifically, it will start a train from Laindon at 7.31 am, as requested by the Laindon user group, and, for the reasons I stated earlier, further stops are to be withdrawn in the evening peak at Barking.
My hon. Friend also mentioned some issues relating to the Abellio franchise and concerns his constituents might have had. I draw to his attention, as my hon. Friend the Member for Rochford and Southend East did, the fact that the new Abellio Greater Anglia franchise is one of the most ambitious ever embarked upon by this Department. With £1.4 billion of investment, I am sure that travellers across that network will welcome the fact that we will be replacing every piece of rolling stock on that franchise. That can only be good news for people, not just in East Anglia, but those at Bombardier, in Derby, who will be making the carriages. By 2021, there will be more than 32,000 more seats on services arriving at Liverpool Street in the morning peak. There will be an extra train per hour, in addition to the existing three, between Liverpool Street and Southend Victoria, with two new fast peak journeys in each direction between the two. That comes in addition to the major station enhancement that my hon. Friend the Member for Southend West referred to, so there is good news also in the Abellio franchise.
My hon. Friend is, however, right to point out the need to continue to improve rolling stock across the network as a whole. Twenty-four new carriages are being phased into service across the network by the end of December and they will provide 13,000 extra seats at peak times every week. From October 2019, a further 12 carriages will be introduced, meaning that by the end of that year the new franchise will have introduced a total of 36 additional vehicles into service on the route.
My hon. Friend the Member for Rochford and Southend East rightly mentioned issues relating to accessibility and departmental rules on rolling stock. We have a looming deadline of 31 December 2019 to ensure that every rail carriage on our network meets the regulations on persons with reduced mobility. That is an unmovable target and we have to abide by it. I also point out, because this was alluded to, that this is an enclosed network between London and Southend, which makes it ripe for a number of attempts to improve the service, not just in terms of bringing train and track together, as the Secretary of State has announced today, but in terms of investigating whether we can progress with digital signalling on this part of the network. Members will have noted that in the autumn statement it was set out that the Treasury will be investing £450 million to roll out digital signalling across the network in the coming years. All that is good news, and I echo the hope that if c2c can manage to run a railway from London and Shoeburyness, it can offer some practical help on a 1.5 mile stretch down a pier. Our piers are very important to our coastal towns, as I well know, so I hope that c2c will hear this debate and think about the practical support it can offer on that.
Let me go back to being positive about c2c—I ask my hon. Friend the Member for Southend West to forgive me for that—as it is leading the way on compensation. Since February, c2c has provided automatic compensation of 3p per minute for registered smartcard customers when their train is delayed by between two and 29 minutes, which is over and above what we are committed to as a Government nationally under Delay Repay 15. Indeed, the standard delay repay bandwidth of 30 minutes-plus has already been automated and there will be further automation for those with smartcards when we move to Delay Repay 15. My officials are shortly to commence engagement with c2c to agree the timescales for implementation. That is an important way of putting the interests of passengers first. Nobody wants to see delays on the network, but when they do occur, it is important not only that we make that compensation available, but that we make it as easy as possible for passengers to claim.
I noted the concerns that were raised regarding passenger information during disruption. It is a frequent bugbear that I also hear from rail users. They say that, while they are having breakfast at home, they look at their mobile, their iPad or social media to check that their usual train will be leaving on time and that all is going according to plan. Their smartphone tells them that the train is good to go and that it is on time. They arrive at the station only to find that the train was cancelled hours ago. There is a fundamental disconnect between the social media information being put out and the information that is available at stations. It is a matter that Transport Focus, the passenger watchdog, is looking at very closely. I have asked it to accelerate work on that so that all train operating companies, particularly in commuter areas, ensure that, when information is available, it is put out on every channel at the same time and that there is no discrepancy between one source of information and another. In industry parlance, we speak of a single source of truth. That is what customers need as well.
In conclusion, c2c is delivering more seats, more services and an improved journey experience for its passengers. I urge it to continue to engage with key stakeholders, including local Members of Parliament, and to make the necessary changes to address the overcrowding that arises from the fact that its current timetable is attractive to customers. There is an absolute commitment on the part of both the operator and the Department to ensure that the passenger is at the forefront of decision making with regard to these changes.
I am more than happy to meet my hon. Friend the Member for Southend West and I extend that invitation to MPs on the entire line of route, most of whom are gathered in the Chamber today. I will if I may invite Julian Drury along as well. We can then have a very informed debate on how to improve one of our better performing commuter networks to make it perform even better.
Question put and agreed to.
Draft Road Traffic Offenders Act 1998 (Penalty Points) (Amendment) Order 2016
(7 years, 4 months ago)
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The Parliamentary Under-Secretary of State for Transport (Andrew Jones)
I beg to move,
That the Committee has considered the draft Road Traffic Offenders Act 1988 (Penalty Points) (Amendment) Order 2016.
The order is being made to improve road safety by increasing the number of penalty points imposed when a driver is caught using a handheld mobile phone or similar device while driving. When the Government published the road safety statement in December 2015, we re-emphasised the manifesto commitment to make British roads even safer in the future to
“reduce the number of cyclists and other road users killed or injured on our roads every year.”
One priority identified in that statement was to take tough action against people who use mobile phones while on the road. We therefore launched a public consultation on increasing the penalty for handheld mobile phone use while driving. The consultation ran from January to March 2016. We received well over 4,000 responses, which were overwhelmingly in favour; 94% supported an increase. In fact, a significant number urged us to go further than we proposed and introduce even harsher penalties for the offence. We have listened, and this order increases the number of penalty points endorsed on the driving record of someone who commits the offence from three to six, and we will shortly lay before Parliament a further order, to increase the fixed penalty for the offence from £100 to £200.
Let me explain why we are doing this. Handheld mobile phone use while driving is very dangerous. It was a contributory factor in 22 fatal collisions in 2015. Each one of those is a needless tragedy, and we must bring the numbers down. As road safety Minister, I regularly meet families who have lost loved ones in road collisions, and those are some of the most difficult experiences that I have had as a Minister. The families are understandably very upset and angry that they have lost a loved one, and in this particular case there is a degree of anger because someone has been killed because of something that could easily have been prevented.
As well as the personal tragedies for the families involved, there is a cost to our emergency services and the national health service in dealing with the aftermath of fatal and other collisions. Moreover, the number of incidents in which mobile phone use is a contributory factor is, we think, under-reported. The Royal Automobile Club motoring report published in September 2016 suggests that increasing numbers of drivers are using a handheld mobile phone while at the wheel.
Bob Blackman (Harrow East) (Con)
I completely support the principle of the order, but the key issue is enforcement. Clearly, with the number of people using handheld mobile devices on the rise, the most important thing with the current penalties is apprehending those who use their mobile phones and place other drivers and road users at risk.
Andrew Jones
I certainly agree that enforcement is part of it. I will come on to that, but I am grateful to my hon. Friend for articulating his support for the order.
According to the 2016 RAC report, 31% of motorists said that they had used a handheld phone behind the wheel, compared with just 8% in 2014. The number of drivers who said that they had sent a message or posted on social media rose from 7% to 19%, and 14% said that they had taken a photograph or made a video while driving. In 2014, the Department commissioned roadside observational studies, which showed that about 1.6% of drivers are using a handheld mobile phone at any given moment.
Driving ability is clearly impaired if someone is using a handheld mobile phone. Studies show that that potentially impairs driving more than being above the drink-drive limit. The Royal Society for the Prevention of Accidents has calculated that a driver is four times more likely to crash when using a mobile phone. The police regard using a handheld mobile phone as one of the “fatal four” causes of accidents, along with speeding, drink or drug-driving and not wearing a seatbelt.
In the light of all the evidence, it is clear that change is needed. The increase in the number of penalty points that a driver committing this offence will receive means that drivers need only commit two mobile phone offences, accruing 12 points, before facing the possibility of being disqualified by the courts. In addition, one of the intended consequences of the order is that novice drivers who have passed their test in the past two years face revocation of their licence if they commit a single mobile phone offence. Under the Road Traffic (New Drivers) Act 1995, novice drivers can only accrue six points, rather than the usual 12, before they face disqualification. To regain their licence they must reapply for a provisional driving licence and pass a further theory and practical driving test.
The majority of novice drivers are young people below the age of 25, and evidence suggests that young drivers are the group most likely to use a handheld mobile phone while driving. Younger drivers are disproportionality represented in the number of fatalities and serious injuries on our roads. Given the risk that they pose, there is a need for a strong deterrent to tackle their offending behaviour. It is therefore proportionate that the consequence of a single mobile phone offence may be disqualification. We aim to achieve behavioural change in the group. If we do not make more progress with them, we will not be making more progress in improving overall road safety.
The drivers of heavy goods vehicles and passenger service vehicles who commit the offence continue to face the possibility of the traffic commissioners, who regulate HGV and PSV operators, using their powers to review and suspend the driver’s vocational licence entitlement to drive the vehicles. Given the greater impact that such large vehicles have in accidents, I believe that measure to be proportionate.
As well as increasing the penalties for using a handheld mobile phone while driving, if the Committee approves the order we will launch a new hard-hitting THINK! educational campaign to coincide with the changes. The aim of the campaign is to alert drivers to the new regulations and raise awareness of the dangers of using a handheld mobile phone. The long-term aim is to change behaviour and make using a handheld mobile phone while driving as socially unacceptable as drink-driving.
I expect colleagues to be engaged in the issue and to ask questions about enforcement. Making progress in road safety comes from a mixture of three ingredients: engineering, whether that is roads or the vehicle; education, which includes the THINK! campaign and initiatives that we are taking to improve the driving test so that people are better prepared when they get behind the wheel; and enforcement.
Enforcement is not something that we are considering with the order, which makes a straightforward amendment to move an offence from three to six points, but it matters. There is no single, simple causal link between enforcement and the number of fatalities on our roads. My hon. Friend the Member for Harrow East may be interested to learn that I have looked at some of the data. In 2011, 120,000 fixed penalty notices were given and 22 people lost their life in a road collision in which mobile phone use was implicated. In 2013, 50,000 fixed penalty notices were given and 22 people lost their life. Last year, 16,700 fixed penalty notices were given and 22 people lost their life. I agree that enforcement matters, but to suggest that there was a direct, simple cause is simply wrong. Having said that, this issue is significant. Local police forces and police and crime commissioners can set priorities on their enforcement activity. I hope to work with police and crime commissioners to emphasise the importance that the Government attach to the issue as they set their priorities locally.
Today, mobile phones are commonplace. We all live on our smartphones. People only have to attend a debate in the House of Commons to see how many people look at their mobile phone on an hourly basis. We must get to the point where all drivers take responsibility for their actions. It may seem harmless to reply to a text while driving, or to answer a call or use an app, but the truth is that these actions can kill and cause untold misery to others. We all have a part to play in ensuring that our family and friends do not use their handheld mobile phones while driving. The order increases the penalty points from three to six and is part of a suite of actions that the Government are taking to improve road safety.
We have some of the safest roads in the world. We are working to make them safer still and to ensure that fewer families have to face the devastation of losing a loved one.
Sir Eric Pickles (Brentwood and Ongar) (Con)
Will my hon. Friend clarify whether there is a difference where somebody is using their mobile phone for sat-nav? Would that fall into this category? How would that be regarded? Do Members looking at their phone for sat-nav face the provisions of the order?
Andrew Jones
No, such use would not be included in the provisions. Sat-navs can be an aid to driving, as can other things on screen, which would be reasonable to use. We are increasing the use of sat-navs in driving tests so that people become more familiar with them and their use without compromising the safety of the driving, so they are not involved in these provisions at all.
John Penrose (Weston-super-Mare) (Con)
The Minister is being very generous in the dying moments of his remarks. Further to the question from my right hon. Friend the Member for Brentwood and Ongar, will the Minister clarify whether someone using a mobile phone with a hands-free device would be caught in general by the measures that he is introducing today? For example, if they are stationary at a traffic light and they elected to dial somebody not on hands free but using the screen of their mobile phone and then moved off while speaking on a hands-free device, would that be caught by the measures he is proposing?
Andrew Jones
In our legal system, the bottom line is that it is not illegal to use hands-free or Bluetooth kits; however, such equipment may also distract people. Good practice would be to pull off the road and make sure that one is entirely secure before using a mobile phone, using an app or sending a text or whatever. It is safer not to use any mobile phone while driving or riding.
Bob Blackman
I thank my hon. Friend for giving way again and I crave his indulgence. Is there not a responsibility on car manufacturers to introduce as standard a hands-free capability so that drivers could use a hands-free mobile phone while driving without breaking the law?
Andrew Jones
Generally, technology in vehicles makes vehicles easier to use and the cost of digital technology is falling rapidly. Whether that should be made mandatory is a separate question, but the amount of kit available in our cars helps us. As I have mentioned, one of the three Es is engineering, which makes the vehicle experience much safer and more pleasurable for all of us.
Pat Glass (North West Durham) (Lab)
It is a pleasure to serve under your chairmanship, Mr Stringer. I had written a speech for this morning, but I do not think my voice will last to the end of it. I therefore intend to cut to the chase and just ask a few questions.
We do not intend to oppose the order. We support both the Government’s intention and the way in which they have consulted on the order. I have a number of questions. First, why six penalty points as opposed to an outright ban? The Minister was very eloquent in telling us about the number of fatal accidents in which a handheld mobile device has been a contributory factor. This is becoming an increasing, almost endemic problem on our roads. Every time we take the car out on the weekend, we usually see somebody doing something silly and then see that they are using a mobile phone. It is also fast becoming the biggest single killer on our roads.
The Department’s own figures show that it is now more dangerous than drink-driving, yet the penalty for drink-driving is an outright ban. Why the difference? Why is there no consistency?
If this is about changing behaviour it would be helpful to know why the Minister thinks that six penalty points are going to change behaviour. I remind the Committee that back in 1967, when I was just a child, the Labour Transport Secretary, Barbara Castle, introduced the drink-driving laws; it was precisely about changing behaviour. Drink-driving was endemic on our roads and it was felt that penalty points were not going to change behaviour, whereas an all-out ban would. It was a question of enforcement: when people saw individuals they knew losing their licence, it started to change their behaviour.
Why have the Government not considered an outright ban? I notice that the Ministry of Justice is currently consulting on changing the penalty for death by dangerous driving where a handheld device is involved from 14 years to life. Given that the difference between someone using a mobile phone having a near-miss and actually killing somebody is largely about luck and the surrounding circumstances, there appears to be very little consistency. Why six penalty points and not an outright ban?
The second question is on monitoring and targets. What targets will the Department for Transport have in place and what monitoring will it be carrying out to ensure that this is actually working, so that if it is not working, we can come back and look at it again?
Sir Eric Pickles
It is a great pleasure, Mr Stringer, to serve under your chairmanship. I want some clarification, because we have a duty, when considering such things, to make sure that we do not create circumstances by which a citizen inadvertently breaks the law under a road traffic Act. I entirely support the idea of increasing the penalty points, but we need a degree of clarity as to when a mobile phone can and cannot be used. The situation with a telephone call is pretty clear: if the device is handheld and not played out through Bluetooth or a speaker, clearly it will be caught and nobody, I suspect, has any problem with that. However, I do not know about you, Mr Stringer, but when I am using my mobile phone, a telephone call is a bit of a rarity—it is texts and that kind of thing. There are all kinds of functions that exist.
I spoke about satellite navigation on the mobile phone. If a mobile phone is on the dashboard, or held in place with one of these stickers on the windscreen, I understand from the Minister that that is perfectly acceptable: it is being used for satellite navigation. However, if somebody is watching iTunes or is using Facebook or Snapchat, I do not think that that is entirely satisfactory—it is quite a dangerous thing to do. How will a diligent police officer be able to ascertain whether a person is engaged in sensible navigation, trying to be courteous to other road users, or is keeping up with Michael Bublé or Beyoncé, or talking to a close friend or a pet at home? How will they ascertain the difference between those two? That is my worry.
The hon. Member for North West Durham—I hope that she recovers quickly—made a very good point about targeting. How many targets will we have? It will be awfully tempting for police officers not to look at actual phone use and simply nab people with these things on their dashboard, so will the Minister clarify that?
Alan Brown (Kilmarnock and Loudoun) (SNP)
It is a pleasure to serve under your chairmanship, Mr Stringer. We in the Scottish National party also support these measures. The hon. Member for North West Durham asked a valid question about why it was six points. Work has been done on trying to identify how many people use mobile phones and there have also been consultations, but has there been any work on behavioural analysis and whether the measures will make an impact? The Minister spoke at length about the fact that novice drivers are the younger drivers most likely to use mobile phones and most likely to be at risk of losing their licence, so hopefully the measures will be effective. However, in terms of campaigning, how do we get the message through to those young people? They are generally the ones who are not party to the usual radio campaigns or television and newspaper advertising. If we are going to educate them and try to change their behaviour, we need to find a way to communicate effectively.
Drive-driving was mentioned as a comparator, but I think drink-driving is another elephant in the room, given that England, Wales and Northern Ireland still have the joint highest allowable alcohol levels. Is the UK Government going to look at that? On the previous questions about citizens getting caught up and inadvertently becoming victims, I do not think we should tie ourselves in knots. We should go ahead with the legislation rather than worry about somebody who might get caught. If they are using a mobile phone as a satnav system, they certainly should not be touching it or operating it, in which case they should be caught under the legislation.
Andrew Jones
There have been interesting and important questions from the Committee. I will tackle the drink-driving one first, which offers a clue as to how we can make progress on road safety. The first year for which we have detailed information on road fatalities in which alcohol was a factor was 1979, when 1,650 people lost their life. That number went down to 240 in 2014, the last year for which we have full data available. That reduction has been down to a mixture of enforcement and education, but especially peer pressure. It is now socially unacceptable to drink and drive, although there is a hard core of people still engaged in it.
We have seen social change in the world of drink-driving and I want to see such change in the world of handheld mobile phone usage while driving. There is a direct read-across in terms of social peer pressure. We are not seeking to make any changes to the limits because I do not want to criminalise the people who might go out and have a glass of wine with their Sunday lunch. I do not think that that is how we will make more progress on this issue. Other countries may have lower drink-drive limits, but they do not have better road safety records.
Alan Brown
I do not want to get bogged down in this, but the Minister’s argument is nonsense. That argument was put forward in the Scottish Parliament. It was said that the police would end up criminalising the wee old lady who goes out and has a gin and tonic and that the police should be doing other things. Drink-driving convictions in Scotland are down by more than 7% since the drink-driving limits were lowered, so the effect has been beneficial.
Andrew Jones
I was not suggesting that the police would target older women having a glass of wine. I simply do not want to criminalise them, and I do not want to stop the police focusing on those who are not in the 50 mg to 80 mg per 100 ml of blood category. The people who drink-drive are way over the limit. Those are the people we should be targeting. Just over 2% of road fatalities in which alcohol is a factor are from that band of 50mg to 80mg per 100 ml. We can make changes there too, but it only affects just over 2%. Our real target should be people who are way, way over that limit.
I was asked about targets. We do not have any road safety targets and I am not planning to introduce them, because I do not need a target to tell me that road safety is important. I have a fairly relaxed approach about other bodies setting targets for themselves, as Highways England has done, but there will be no national targets coming out from the Department.
Monitoring will certainly be important. I look at all the quarterly statistics, and every time a statistical review is released by the Department I monitor it extremely carefully. We have been able to make good progress because we are targeting the specific issues rather than making sweeping road safety statements and comments. We have now reached the point where 1,770 people are still losing their life on our roads, but the broad-brush approach that has made such progress over the years will not make us progress in future. Instead, it should be about targeted messages at the groups who are still causing problems.
Why six points, rather than 12, three or four? We have had to take a view on what a proportionate sentence is. This is a significant change: a driver who commits two offences could lose a licence. We have had to take a judgment call on what will affect behaviour change and be proportionate, and we think that six points, rather than three or four, will achieve that—two offences and you are out.
Pat Glass
I understand the issue with targets: if targets are put in place, people work to them and things start to leak out in other areas. However, did the Department for Transport and the Minister consider an all-out ban? He must have some figures in his head. If there is one fewer death or serious accident, is that considered enough? At what point will he look again at something more serious, such as an all-out ban?
Andrew Jones
The hon. Lady tempts me into targets in a very gentle way. I review all the data. Is any progress good? Certainly, but I want to see more progress. That is why this measure is part of a suite of actions. It was one ingredient in our road safety statement. I am conscious that we are focusing on one thing today, but it should be viewed in the context of an overall package of measures to improve safety on our roads.
I will not be bringing back targets; I do not think they are necessary. We do not have a target that says, “You as road safety Minister must bring forward a plan.” I brought forward a plan because I thought it was the right thing to do. That plan is populated with ideas that are the right thing to do to make a difference. I am not planning to reintroduce targets.
On clarity, my right hon. Friend the Member for Brentwood and Ongar raised some difficulties. I am amused at the thought of people watching Beyoncé and Bublé, but he is right: we have seen some shocking cases in which people have been busy watching programmes that they have downloaded on tablets or whatever. That is clearly wrong; it is dangerous. We want people’s minds to be on the road and their hands on the wheel. That is broadly what we should be doing and it is what the highway code says. I will have another look at the highway code in the light of my right hon. Friend’s comments, but there is absolutely no doubt that if there are concerns about safety, people simply should not be doing it. It comes down to individuals taking responsibility for it. The rules are clear.
Sir Eric Pickles
I make it absolutely clear that someone who is watching a video should be prosecuted. My worry is that an ordinary citizen who uses Google, Apple Maps or Waze on their mobile phone might find themselves inadvertently breaking the law when they think they are doing something perfectly legal. I do not expect the Minister to reply now, but the police have offered guidance suggesting ways in which people can use their mobile phone for navigation and other ways that they cannot. We need clarity on that. I do not expect a comprehensive report now, but I would like him to look at it.
Andrew Jones
I take on board my right hon. Friend’s comments, and I will always keep a watchful eye on all technological progress and what it can do to cause a distraction or to offer opportunities for road safety. He says that it is hard for the police and, yes, it is, particularly if people are using hands-free. What is the difference between using hands-free and singing along to the radio? How can a policeman tell? It is difficult. Of course, the police are able to take action if they see drivers who are not in proper control of their vehicle. That is an offence, as is careless or inconsiderate driving. The police are able to take action on those and other offences.
The last question was specifically about how to get messages across to younger drivers who may not necessarily be consumers of mainstream media. The answer is that, alongside all other communication campaigns, we have to get the right message to the right audience using the right creatives and the right media. In this particular case, I suggest that digital media are the way ahead. For example, in the Christmas drink-driving campaign, which launched last week, we are using digital advertising, Facebook, Twitter, Spotify and others. It is about getting the message to the right audience via the media with which they are engaged. Digital media will reach the right audience.
I hope I have answered colleagues’ questions. I thank colleagues and right hon. and hon. Members for their comments and questions. This order is a necessary part of our package of measures to improve safety on our roads and streets. We owe it to those who have been killed or injured in accidents caused by people behaving in a selfish and irresponsible way by using their handheld mobile phone while driving. I hope the Committee will approve the order.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Road Traffic Offenders Act 1988 (Penalty Points) (Amendment) Order 2016.
Draft Immigration Act 2014 (Current Accounts) (Excluded Accounts and Notification Requirements) Regulations 2016
(7 years, 4 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Committee divided: - Ayes: 9 / Noes: 5 - Question accordingly agreed to.
The Economic Secretary to the Treasury (Simon Kirby)
I beg to move,
That the Committee has considered the draft Immigration Act 2014 (Current Accounts) (Excluded Accounts and Notification Requirements) Regulations 2016.
It is a great pleasure to serve under your chairmanship, Mr Nuttall. Effective immigration controls require responsibility to be shared. Recognising that shared responsibility, the Immigration Act 2014 took action to limit the services available to known illegal migrants. That included prohibiting firms from opening current accounts for a disqualified person—an illegal migrant liable for removal or deportation who the Home Secretary considers should be denied access to a current account.
The Immigration Act 2016 builds on those measures, targeting already open accounts that were either opened before the 2014 Act came into force or opened legally by a person who later became disqualified because of a change in their immigration status. The 2016 Act requires firms to check details of their current account holders against the details of disqualified persons provided to them via CIFAS, a specified anti-fraud organisation. They are then required to report the results of the checks to the Home Office and, if instructed by the Home Office, to close accounts or prevent continued access to them.
The 2016 Act delegated power to the Treasury—hence my appearance here today—to make regulations that detail how the regime should work. This negative statutory instrument should be read alongside the Immigration Act 2014 (Current Accounts) (Compliance &c) Regulations 2016, which were made on 7 November. It prescribes that firms carry out quarterly immigration checks, and it sets out the Home Office’s response to notifications from firms, and a requirement for firms to inform the Home Office of steps they have taken to comply with the duty to close accounts.
I will now take each of the three main areas of the statutory instrument in turn. The first is the types of account on which firms must make immigration checks. The 2016 Act requires firms to make checks on current accounts and the statutory instrument specifies that not all current accounts are within scope of that requirement. Firms are not required to extend checks to all existing current accounts. They are required to conduct checks on existing personal current accounts only, and not on corporate or business accounts. That reflects the Government’s ongoing view that current accounts are the gateway product to other financial services and a settled life in the UK. It also takes into account existing prohibitions, which are in the 2014 Act, meaning that a disqualified person cannot evade the legislation by closing a current account and opening a business account as a sole trader or a charity.
At this point, I should confirm that the Government’s intention in relation to the term “current account” has not changed from that outlined in the debates on the 2014 regulations. My colleague, the previous Economic Secretary, set out that intention on 10 November 2014.
On notifications, if a firm makes an immigration check on a personal current account and finds a match, the bank is required to notify the Home Office using a secure Home Office portal. The statutory instrument requires firms to provide certain information in that notification, including details of any other accounts that the firm holds for the disqualified person and the balances held in them. Information about regular payments into accounts above a threshold of £200 has been included in the requirements, to allow the Home Office to identify patterns of payments that might constitute evidence of illegal working. The requirement to provide information is limited to what firms hold and can retrieve; it does not require further investigation of data not held. The Home Office will then confirm the match, based on its data, and instruct the firm on the next steps. Depending on the information provided, and the details of the disqualified person’s case, the Home Office may apply to court for a freezing order, or notify the firm that it is under a duty to close any accounts it holds for that person. The Committee might be interested to know that the Home Office is preparing a code of practice on freezing orders, which will be laid in Parliament in advance of implementation.
When a firm is notified of its duty to close accounts, the 2016 Act allows it to delay closure for a reasonable period to recover debt or to manage the effect on third parties. Firms will also be able to comply with the duty without closing an account, if they are able to take steps to prevent the account from being operated by the disqualified person. Firms are required to provide the Home Office with information about the steps they have taken to comply with the duty. Finally, the instrument enables the Financial Conduct Authority—the FCA—to monitor and enforce firms’ compliance. That mirrors the FCA’s existing role for the purposes of the 2014 Act.
The regulations come into force on 30 October 2017, with firms making their first check in the first quarter of 2018. I take this opportunity to thank firms for their constructive engagement with my officials regarding the regulations and I hope that members of the Committee will agree that they strike an appropriate balance. On the one hand, they create requirements on firms that are appropriately targeted and proportionate and, on the other, they achieve the policy intention of preventing continued access to banking services, and encourage those here illegally to leave the UK or to regularise their stay. I commend the statutory instrument to the Committee.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
I thank you for calling me, Mr Nuttall, and I thank the Minister for his opening speech.
The Government have said that it is their intention to create what the Prime Minister herself has called “a hostile environment”. A whole package of measures, many of which came into force on 1 December 2016, deny undocumented migrants in the UK basic rights. When I see footage of desperate people loading their children into dinghies in the Mediterranean or paying traffickers thousands of pounds to risk death by being loaded into lorries in conditions worse than those faced by cattle, I am not sure we will ever create an environment more hostile than the one those people seek to leave. But what measures such as these can succeed in doing—undoubtedly very successfully—is to further debase the language, the discourse and the tone we use to talk about migration.
Having access to a bank account is a fundamental part of modern living, but the hostile environment includes prohibiting banks from opening current accounts for migrants who fail to pass an immigration check. Banks will be forced to check current accounts against migrant databases and notify the Home Office if checks confirm that an account holder no longer has permission to remain in the UK. That could lead to the freezing or closure of bank accounts and have huge consequences for people who might not be able to provide evidence of their leave to remain, potentially through no fault of their own. It will also leave vulnerable migrants at the mercy of banks that might have little understanding of how the immigration system works.
The regulations prescribe on accounts that are excluded by the current regulations, including those opened by migrants before the 2014 Act came into force in December of that year, as the Minister explained. People who had leave to remain at some point and legitimately saved up funds for their future will be particularly affected.
The Opposition therefore oppose the measures because we oppose the rhetoric of hostility and its practical side effects. We do not accept the scapegoating of migrants as a smokescreen for the Government’s austerity programme. If the NHS, social care and other public services are under strain—they certainly are in my constituency—it is because of the policies pursued by the Government and we should never forget or ignore the huge contribution of migrants to making those public services work.
Colleagues will be aware that serious concerns have been expressed about the effect the measures could have on individuals and communities. They are part of a worrying extension of powers that will further reduce the rights of all citizens and fly against the core British values of fairness, compassion and decency. The explicitly hard-line approach risks making the UK a more hostile environment for everyone, and in particular for all migrants and black and minority ethnic communities. There is a danger that bank workers, in fear of breaching the regulations, will end up making the wrong decisions, making judgments on ethnicity, surname and/or nationality that will disproportionately affect some groups. It has already been confirmed that several hundred people wrongly had their driving licences revoked by parallel measures. How many people will wrongly have their bank accounts frozen by this order? It will not be none.
Making it harder for people to get access to a bank account may also ultimately put people in danger. It will drive them further into the underworld in which they have no choice about whom they deal with, and what they have to do to gain the essentials of life. I do not want that for people who have the right to live here; nor do I want it for people who do not have that right. I do not want to compel anyone into that desperation.
The fact this Government have chosen to parade phrases like “hostile environment” embodies a dangerous and irresponsible opportunism. If they raise the temperature, create a certain political climate and appear to be licensing discrimination, that will have consequences which will be paid for by some of the most vulnerable people in our society.
Is immigration to the UK too high? In my view, it is. There have to be reasonable limits on immigration in any society. But these measures will make no difference to that. The Prime Minister has had six years as Home Secretary doing exactly this sort of gesture politics, yet immigration has hit record highs. We will see reductions in immigration only when we acknowledge that skills shortages at home will always drive immigration, and when we address the severe inequality found just beyond our borders.
As for a hostile environment, we are already a country where an MP can be been murdered while doing their job by someone who perversely has come to believe that his actions are the work of a patriot. The Government are not making a hostile environment, but they are making a toxic one. I therefore oppose the order and intend to divide the Committee.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
Like the hon. Member for Stalybridge and Hyde, we oppose the Government’s stated policy of creating a hostile environment. The related set of policies is dangerous and probably counterproductive to the Government’s aims. There is no evidence that the policies will be effective in the way that Government hope they will be. Instead, it will probably cause trouble for everyone, because we cannot seal off illegal migrants from those who are here with leave. Everyone will experience that hostility. This policy will probably force irregular migrants even further underground making enforcement harder. It also presumes that information on immigration status passed from the Home Office to third parties is correct, but it is often not, for a variety of reasons.
If any aspect of the whole hostile environment policy has some sort of logic to it, perhaps on paper this measure has. However, like too much UK immigration policy, it is pursued and rolled out without any proper assessment of the evidence of its effectiveness or, indeed, the downsides that the existing policy has brought about.
The hon. Member for Stalybridge and Hyde raised questions about the numbers of people who might be involved. Earlier this year, the chief inspector of borders and immigration noted that the data being shared with banks and building societies about new account openings might not
“be updated with relevant information, e.g. a voluntary return or a lodged appeal, until some months after the event, and that data was often entered in the wrong place,”
often as comment-free text. He continued:
“the list was not always accurate, with both omissions and individuals wrongly included as ‘disqualified persons’ who had departed, or had succeeded in an appeal or had regularised their immigration status and were not in the UK with valid leave”.
An inspection of 169 cases on the database showed that 17—10%—should not have been there: nine had leave to remain, six had applications for outstanding leave to be extended and two had an outstanding appeal. We need to remember that the list contains details of about 200,000 people, so we could be talking about some 20,000 innocent people being affected.
On the other hand, there is no systematic data about whether this policy improves border control in any way. The Home Office gives us its warm intentions that the policy will lead to people leaving. However, there is no evidence of Home Office follow-up or use of the information it receives on data matches and there is no evidence that the policy persuades people to leave voluntarily either. Before rolling out the scheme, we surely we need to see improvements in that regard.
The fact that we are revisiting the policy suggests that there are difficulties. The 2016 Act is there to fill the loopholes left by the 2014 Act, but these regulations suggest that we have to roll back from legislation that was passed just a few months ago. These regulations leave lots of questions unanswered. The Minister went some way in his statement, which I welcome, to explain exactly why we need to exclude certain accounts from the scope of the regulations. Essentially, it is to rule them into line with previous regulations. The explanatory memorandum states that the new exclusions mean
“that firms are not required to make a check on all current accounts, for example corporate or business accounts. This approach is intended to be targeted and proportionate and to take into account the existing prohibitions in the 2014 Act.”
I would like to hear a bit more about the thinking behind that. I would like to know how many checks are envisaged to occur and, if the 10% error rate is applied, how many thousands of innocent people will be caught up in this? If innocent people are caught up in this, what sort of compensation will there be for those mistakes?
In conclusion, I remain sceptical. We too reject the approach the Government take in attempting to create a hostile environment. More importantly, we need evidence of what the regulations will do and the steps the Government will take to resolve some of the already outstanding issues.
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
It is a pleasure to see you presiding over our considerations this morning, Mr Nuttall. I apologise to the Minister if he has already covered this point but I will be brief. My concern reinforces that articulated by the two shadow spokespersons.
Over many years, I have seen constituents failed by the asylum system. They have been declared illegal but subsequently identified errors in the paperwork made by the Home Office, the immigration authorities or the tribunal. I assume that under these regulations they would be regarded as illegals. Numerous constituents, on a rehearing or appeal, have subsequently demonstrated that they are entitled to be in this country and ought not to have been classified as illegal in the first instance. However, because they are illegal they are ruled not to have access to any state funds or benefits. They live on charity from family and friends, churches and local mosques. I fear that the regulations, robbing those few who do have some bank funds and accounts, could exacerbate the situation and make more people destitute, particularly those who can ultimately demonstrate that they have a right to be here.
To echo my hon. Friend the Member for Stalybridge and Hyde, this looks like a sledgehammer to crack a nut. I will support my Front-Bench colleagues in any Division they call, unless the Minister can reassure us that more people who are entitled to be here but were initially ruled illegal will not be thrown into greater destitution through not being able to work until their case is solved and not being entitled to access benefits while what little funds they may be able to call on are frozen.
Alison Thewliss (Glasgow Central) (SNP)
I had not intended to speak but I want to talk briefly about some of my constituents. As the hon. Member for Poplar and Limehouse mentioned, they might have a very difficult progress through the immigration and asylum process—I have many constituents who face that. They will use what funds they have, in the bank accounts they are able to access, to pay for lawyers. If they cannot pay for legal advice when needed that will make their case all the more difficult. I wonder whether that is the Government’s intention: to make it more difficult for people in those circumstances to get the help that they are entitled to and fully deserve.
I have another concern. If a person uses a bank account to pay for accommodation, they will not be able to do so without that account. So many things are now online; people will be expected to pay their bills online. I am concerned that they will not able to do that via a bank account any more while they await the outcome of the asylum process. As my hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East mentioned, mistakes can be made in that process. Like other hon. Members, I have experienced many instances of the Home Office being incompetent during the process while people are awaiting information. That again makes it all the more difficult for them.
I am also concerned about families with dependent children. A child might need funds for clothes and food and this bank account might be the holding account for those things. People might be getting help from somebody, with that help going into that account. If the person does not have access to the account, the Home Office will force that family into destitution because they will have no means of supporting themselves. Again, perhaps that is the Government’s intention, but it is a pretty wicked intention to force families out while they might have a legitimate claim to be here and while they are going through a very complex and arduous asylum and immigration process.
I know from my caseload that this can take some time; you can go through multiple appeals and various different levels of appeal. New grounds can be brought as well. That process is complex and difficult and while all of this is going on, with the threat of losing the limited funds they have, the fact that the rug could be pulled out from under them while they might have a legitimate claim to be here and are going through that very difficult process concerns me greatly.
I ask the Government to provide more evidence of why this is necessary, and to demonstrate that they will not stigmatise particular groups unfairly. It would be good to see how the equality of the system will be ensured. If people are losing out, as my hon Friend mentioned, because of administrative errors or delays or something else, and all of a sudden they find they do not have a bank account either, there has to be some comeback from the Government to these people to apologise and make right.
Gordon Henderson (Sittingbourne and Sheppey) (Con)
Like the hon. Member for Glasgow Central, I was not going to speak in this debate—I rarely do on these occasions—but the more I hear, the more frustrated I get. Do these people live on a different planet from me? Or is it because I live in Kent and we are at the coalface as regards illegal immigration in this country?
Having read the regulations, it seems to me to be quite clear that this relates only to people who do not have a right to be in our country. The more we make it easier for people who do not have a right to live in our country to live here by giving them bank accounts and such like, the more we will be encouraging even more people to come to Dover and come into this country as illegal immigrants. I will certainly be supporting the Government on this occasion.
Dr Sarah Wollaston (Totnes) (Con)
Further to the point made by the hon. Member for Glasgow Central, I want to ask the Government about the position of families with dependent children. I can think of a family in my own constituency who have a severely disabled child and are awaiting the outcome of an appeal. As it happens, they are already heavily dependent on the generosity of others. To throw such families into a position where they would not be able to continue to support that child would be very regrettable and I do not feel I could support the Government unless there was a reassurance that individual circumstances would be taken into account, particularly where there were dependent children who, through no fault of their own, would be left utterly destitute.
The Chair
Did anyone else want to speak? Minister? No—sorry, Mr Shapps, I did not see you standing.
Grant Shapps (Welwyn Hatfield) (Con)
I, too, had not intended to speak in this debate, which is why I only slightly half-indicated my intention to do so. Having been inspired by others who have, however, I thought it would be worth adding a couple of comments.
I thought that the Opposition Front-Bench spokesman made an excellent speech, which was both passionate and powerful. Unfortunately, it did not address the key issue in this piece of delegated legislation, which is about people who no longer have the right to be in this country. I was on the Home Affairs Cabinet Committee when this idea was first circulated and discussed. At the time, we were specifically trying to target people who had repeatedly been refused access or leave to remain and yet were still in this country. The reason I thought the speech was so powerful, if rather misled in terms of the target of what we are actually discussing today, is that we have all sat in our constituency surgeries—have we not—and had cases that are heartbreaking. A constituent came in on Friday who has had many years of struggling to get through the system. Heartbreaking though that case was, that person has been refused leave to remain and is here illegally. They have now established so many roots in this country that one could not do anything but have enormous sympathy for their situation and, indeed, as the constituency MP, look desperately for ways to help and assist.
If I search in my soul and ask myself about that case, I realise that the British state has let that individual down more than anybody else. Over the years, we have given every possible indication that that person will have the right to remain in this country while at the same time holding their legal case at bay. That right has included, for example, the ability to access bank accounts and do other things that normalise their situation, to give them roots that make them so established that, when the final legal decision that they can no longer remain here is properly made—in a way that everyone in this place would agree with—that decision is absolutely heartbreaking. So, we need to act in accordance with some kind of process that does not lead people to assume that eventually it will all work out when in fact they have no statutory right to be here.
To my colleagues on the Opposition Front Bench, I say that to talk about Syria and then immediately pivot to talking about people in this country and paint the Government as heartless is to ignore £2.3 billion spent trying to help people in Syria. That was brushed over as if it did not exist, then the subject pivoted to this particular piece of delegated legislation, which, as the hon. Member for Stalybridge and Hyde knows, covers one particular aspect of people establishing roots in this country in a way that, in the end, makes it harder not just for this country but for them to sever those links.
I understand many of the concerns that have been raised—and I hope the Minister will address some of them in his response—but there is a wider responsibility to people in this country. That includes looking after the law as it stands, making sure people can be removed when their applications have failed and ensuring that they do not end up in a position where the idea of their citizenship has been so enshrined, including with things like their bank accounts, that is it almost impossible for them to leave.
Simon Kirby
It has been clear this morning that Members have considered this important issue in full, and clearly there are differences of opinion. I thank members of the Committee for their points—I will do my best to respond to many of them. The hon. Member for Stalybridge and Hyde mentioned rhetoric about migrants, scapegoating of migrants, and the rights of all citizens. I want to state clearly that the UK is very much open for business: it is globally facing and outward-looking and I am sure that will continue—it is one of our great strengths.
The hon. Gentleman asked about vulnerable disqualified people. Let me be clear: those with outstanding asylum applications or appeals with not be affected, nor will those who have been granted leave to be here. That is a very important point. He asked about the accuracy of data. I can assure him that the data are subject to rigorous checks at the Home Office before they are shared with anyone. It is also important to say that this will not affect anyone’s ability, within the usual rules and with the usual checks and balances, to open a bank account. There will be no de-risking by the banks. This is a quarterly exercise, a matching exercise, and it is targeted at a group of people who have no right to remain in this country.
The hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East also asked about data quality. I have said that the data are subject to rigorous checks. The current account is reported to the Home Office only if there is a clear data match. The Home Office will then carry out a secondary check, and if an individual still thinks there has been a mistake, they can contact the Home Office for remedy.
The hon. Member for Poplar and Limehouse also mentioned data quality. It is always important to get these things right, and not to make mistakes. The Home Office is developing a data quality strategy intended to improve data quality. It is also important to know that this is not about stealing people’s money. Money will be returned to the account holder in the normal manner if the balance is in credit, in line with standard bank account practice.
The hon. Member for Glasgow Central raised the possibility of families being forced out of their homes. Disqualified people are known illegal migrants who are liable for removal or deportation. They have exhausted all appeal rights, and the Home Secretary must consider that they should be denied access to banking services. Such people have no right to be in the UK. I will come to the important point made about that by my hon. Friend the Member for Totnes.
The hon. Member for Glasgow Central also asked about living expenses. If an account is simply closed, any credit balance can be returned to the account holder as usual, in line with individual banks’ terms and conditions. If an account is frozen, it will be unfrozen when the illegal migrant leaves the UK, subject to any action related to the proceeds of crime. The purpose of the provisions is to make it difficult to live a settled life in the UK in order to encourage voluntary departure, not to confiscate assets. It is not about taking money away from people.
My hon. Friend the Member for Totnes raised the concept of discretion. The Home Office can exercise discretion about who should be permitted to hold an account. It is intended that that discretion should be used in exceptional circumstances—it is possible that her case might be one of them—to avoid unduly harsh consequences for vulnerable people who face a genuine obstacle to leaving the UK.
I am not sure that I have persuaded anyone to change their mind, but this is an important issue. This balanced measure is a small part of a huge tool kit of measures and encouragements, on the other side of the coin, that I have not mentioned.
Dr Wollaston
I thank the Minister for his reassurance. He says that “exceptional circumstances” will refer to vulnerable people who face an obstacle to leaving the UK. Can he clarify that that could include exceptional circumstances involving child dependants?
Simon Kirby
My understanding is that the Home Office can consider any exceptional circumstances. If I have heard correctly, my hon. Friend’s case involved an appeal. Someone appealing a decision would not be subject to this legislation in the first case. I reiterate that only those people who have no right to remain and who have exhausted all the avenues available to them will be subject to it.
Jim Fitzpatrick
My point is that I have had a number of constituents over the years who have exhausted, or apparently exhausted, those avenues and been declared illegal, who have then found—to pick up on the comment made by the right hon. Member for Welwyn Hatfield—another route to challenge the decision. Sometimes they are straightforwardly delaying until such time as they can succeed; in some instances, they are not delaying, and genuinely new evidence has come to light, or an error has been identified.
The period between being declared illegal and winning that particular point of law or correcting data that the Home Office has got wrong can be years. What the Minister is saying is that during the course of those years, they will not be able to access what little money they might have in a bank account, and will rely on the charity of friends and family, churches, food banks and mosques. To reply to the point made by the hon. Member for Sittingbourne and Sheppey, we are on this planet; we just disagree with the points that he is putting forward.
Simon Kirby
The hon. Gentleman raises a valuable point. My understanding is that if that were the case, the Home Office would be open to argument. The instrument is a small piece of legislation in a wide range of tools. I feel obliged to mention the £140 million announced at the Conservative party conference for a controlling migration fund specifically designed to ease the pressures on public services in areas of high immigration.
My hon. Friend the Member for Sittingbourne and Sheppey raised an alternative perspective. It is about getting the balance right and providing the welcome that the UK is famous for—not putting up barriers, being outward-facing and globally-looking—while, at the same time, providing a degree of fairness when it comes to people who should not remain in this country.
Stuart C. McDonald
This is a genuine question. The only other issue I have with the proposed regulations is the intention to exclude a whole series of accounts from the operation of the rules, including accounts used by an individual
“for the purposes of a trade, business or profession.”
All the Minister said in that regard was that the measures are in line with earlier regulations, but I still do not quite understand the rationale for that. If that happens, surely we will be going after—for want of a better expression—the little people, whereas people with business accounts and so on are being excluded from the force of the rules altogether. I would appreciate some explanation of the rationale for that.
Simon Kirby
I need to be clear on this. The rationale and scope of the legislation is personal current accounts because that is felt to be the area where the legislation can have the most effect. Businesses of all sizes are unaffected. Businesses are only mentioned should someone have a current account that falls foul of the matching process, when the banks are obliged to provide all the information about the other accounts that that individual may hold. However, it does not stop any business accounts—large or small. [Official Report, Vol 618, 6 December 2016; c. 1-2MC.]
I have done my best to provide assurances on the many points made by Committee members. I know that we all share a desire for a targeted and proportionate system. I am confident that the statutory instrument represents a balanced and sensible approach to continued access to banking services by disqualified persons. I hope that hon. Members support the regulations.
Question put.
Commonwealth Development Corporation Bill (First sitting)
Tuesday 6th December 2016
(7 years, 4 months ago)
Public Bill CommitteesRead Full debate Commonwealth Development Corporation Act 2017 View all Commonwealth Development Corporation Act 2017 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 6 December 2016 - (6 Dec 2016)
The Chair
This is quite an unusual procedure for those who are not used to it. We are now sitting in public and our proceedings are being broadcast. Before we begin, I have a number of preliminary announcements. Please make sure that mobile phones are switched off or to silent. Tea and coffee are not allowed; please help yourself to water. We will first consider the programme motion. In accordance with my normal practice, we will start with the shadow Secretary of State, and then we will listen to whoever indicates that they wish to speak. We do not need to allocate questions. Is everybody happy with that? Yes? Excellent. We will then consider a motion to enable the reporting of written evidence for publication. In view of the time available, I hope that we can take these matters formally without debate.
Resolved,
That—
(1) the Committee shall (in addition to its first meeting at 9.25 am on Tuesday 6 December) meet—
(a) at 2.00 pm on Tuesday 6 December;
(b) at 11.30 am on Thursday 8 December;
(2) the Committee shall hear oral evidence in accordance with the following Table:
Date | Time | Witness |
|---|---|---|
Tuesday 6 December | Until no later than 10.30 am | Department for International Development; CDC Group plc |
Tuesday 6 December | Until no later than 11.25 am | National Audit Office; War on Want; Oxfam; Sir Paul Collier, Blavatnik School of Government, University of Oxford |
(3) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 1.00 pm on Thursday 8 December.—(Rory Stewart.)
The Chair
I can announce that the deadline for amendments to be considered for line by line Committee sittings has passed. I hope everyone got them in on time.
Resolved,
That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(Rory Stewart.)
Examination of witnesses
Diana Noble, Graham Wrigley, Rory Stewart and David Kennedy gave evidence.
The Chair
Do any members of the Committee wish to make declarations of interest? No? Good. We will now hear oral evidence from the Minister and from the chair and chief executive of the CDC. Before calling the first member to ask a question, I would like to remind all members that questions should be limited to matters within the scope of the Bill, and we must stick to the timings in the programme motion agreed by the Committee. We have until 10.30 am for this session. Could the witnesses introduce themselves for the record?
Diana Noble: I am Diana Noble and I am the Chief Executive of CDC.
Graham Wrigley: I am Graham Wrigley and I am the chairman of CDC.
Rory Stewart: I am Rory Stewart and I am the Minister of State, Department for International Development.
David Kennedy: I am David Kennedy and I am the director general for economic development at DFID.
Kate Osamor (Edmonton) (Lab/Co-op)
Good morning. CDC’s operational policy published in March 2014 on the payment of taxes and the use of offshore financial centres dictates that CDC would invest through a jurisdiction that is not successfully participating in the Global Forum only in exceptional cases. What would be the exceptional cases in which it would use these jurisdictions?
Diana Noble: Let me first say that CDC’s use of OFCs has nothing to do with secrecy or reducing tax. We take pride in the payment of corporation tax by our portfolio companies in the countries where we invest— it is one of our development indicators. We use OFCs for two important reasons. One is for legal certainty; the other is to pool capital in neutral places. Let me explain both of those. CDC’s mission is to invest and grow businesses in some of the poorest companies in the world. Unfortunately, many of those places do not have legal systems that allow us to invest with certainty that, if there is a dispute, we will be able to get our money back. Of course, one of our big areas of responsibility is to look after UK taxpayers’ money: that is part of our mandate. So unfortunately, for some places where we invest we have to go through an offshore structure.
The second point is that we have a very important mission to pool capital from other investors to come in alongside us into difficult countries. This is an enormously important role. If we look at CDC’s investments from 2004 until now, we have supported fund of funds that total $30 billion in Africa and south Asia, of which CDC has only provided $5 billion—so that is $25 billion from other investors. Those investors come from lots of different jurisdictions themselves, so the capital does have to be pooled somewhere. Those investors, who are already cautious about the countries in which the investments are being made, have a lower risk tolerance than CDC does, for legal certainty; so they insist on a safe jurisdiction. We, however, do play our role, because we insist that that pooling is done in the best, or the most compliant, of the offshore centres in the OECD register.
Do we think that the situation is ideal? We don’t. We look forward to the day when every country where we invest has a safe legal regulatory system, where we can invest directly in every single country; but that is not the case today. What we have done, though, is encourage an important project that we have been working with DFID on, to examine the possibility of an onshore centre in Africa. That work has led to the Governments of Kenya and Rwanda taking this very seriously. It would be a very long-term project, but we are very keen that it gets progressed over time.
Kate Osamor
Q How many offshore jurisdictions do you currently use?
Diana Noble: It is a short list. We can provide absolute clarity about exactly how many, subsequent to this Committee. On the list are certainly Mauritius, which is well accepted as a place for pooling capital, particularly for Africa and south Asia; Guernsey; and Cayman Islands.
Rory Stewart: I have the list: at the moment, it is Cayman Islands, Guernsey, Jersey, Luxembourg and Mauritius.
Richard Fuller (Bedford) (Con)
Q I apologise, Mr Streeter, for being slightly late. Graham, can I ask you a little about the potential for the CDC to attract investment from other investors? Diana was just talking about the fund of funds drawing funds in, but at the top level of the CDC are there opportunities to get sovereign wealth or other enlightened investors, perhaps high net worth individuals, to put their money alongside the increasing capital of the CDC?
Graham Wrigley: That is an interesting question. The other day someone asked us whether it would be possible to turn the CDC into an ISA or a PEP. Looking at how other DFIs are funded, the IFC has created a vehicle whereby people have invested alongside the IFC; the FMO is owned partly by some banks as well as—
The Chair
Q Do you want to explain some of those acronyms for the record?
Graham Wrigley: Yes. I am sorry. The IFC, which is the International Finance Corporation and is part of the World Bank, has created a programme called the AMC, which has mobilised other capital. The FMO is the Dutch equivalent of the CDC and it is partly owned by some banks. The CDC’s business model, though, is one whereby we are 100% owned by the UK Government, and that is how we see ourselves. We see ourselves as we are, as the world’s oldest development finance institution.
We have mobilised other capital mostly through the fund structures, and we are now looking at permanent capital vehicles whereby we will get investors who are interested at the project level. It has not been on our agenda for the past five years to look at raising capital at the CDC level because, as I said, we see ourselves as 100% owned—
Richard Fuller
Q Are you open to putting that on your agenda? If the British taxpayer is being asked to put more money in—Diana was talking about how well we are leveraging in at the project level—surely we should have a strategy. Loads of people, not only in the UK but around the world, may be willing to put their money alongside the expertise of the CDC, so will you look at that?
Rory Stewart: May I come in on that? Technically that would be a call for the Department for International Development rather than for the CDC, and it would be set out in the five-year forward business strategy produced at the end of this year. It is certainly something we can consider. Among the things that we would have to consider is the fact that we are driving the CDC very hard to make high-risk investments in some of the most difficult countries in the world. We have dropped our expectation of the level of financial return because our primary objective is development, so the type of investor who would co-invest with the CDC would have to be a specialised one, engaged, essentially, in some form of philanthropic investing. But we can certainly look at that.
Richard Fuller
Q I am intrigued by Mr Wrigley’s suggestion about an ISA or a PEP, which are much more about individual investors. Every day on the television we see requests for people to put money—£2 a week, £3 a week—into those sorts of things. There is a tremendous interest in this country in development work, and pride in the public support for it. Would you be interested, Minister, in taking up the indication from Mr Wrigley about an ISA/PEP model to galvanise individuals in this country to put some of their money alongside the CDC?
Graham Wrigley: May I be clear that that was not my suggestion? The CDC, as the Minister said, provides incredibly high-risk, development-driven, impact investment in the hardest countries in the world, and it is the last place I would recommend anyone put their pension—
Richard Fuller
Thank you for the clarification, Graham. I did not mean to misinterpret you. It was something you said. But, on the principle, Minister?
Rory Stewart: Perhaps, Mr Fuller, we can sit down and explore your idea in more detail. It is an interesting idea.
Alison McGovern (Wirral South) (Lab)
Q I have two questions. The first is for the CDC—I do not mind if you answer, Diana, or if Graham does—and the second is for the Minister.
The first question is on crowding in versus crowding out. What is your measure for additionality? Can you tell me numerically what the test is? How do you know for sure that you are not doing what the private sector would do anyway, and how numerically do you know that projects and funds are meeting that test?
Secondly, the Bill proposes an incredible level of freedom on investing in the CDC. Why is the cap so high? Why are we expressing such a high level of confidence in CDC, as opposed to any other aid mechanism?
Diana Noble: I am happy to take the first question. It is a very important question that has been extremely high on the agenda of the board and the management team over the past five years.
We felt back in 2012 that this had not been taken seriously enough by the CDC pre-2012. We engaged an extremely experienced person—ex IFC—to look at the whole area of additionality for us. He wrote a long report and went to talk to all the other DFIs as well. Our guidance to him was, “We want CDC to have the highest standards of additionality across all the DFIs.” This is a difficult area. He has written a long report and I would be very happy to share it with Committee members.
The report led to some broad principles that say that CDC completely understands that we must play a unique role in every investment that we make. This is not generic across a portfolio; this is a standard that the investment committee applies for each investment that we make. We must be satisfied that our unique role is either that we are bringing capital that another investor will not bring or that we are bringing some unique expertise that is important and will lead to a material improvement that another investor will not bring. We take that incredibly seriously.
The team of CDC has no interest in doing what the private sector will already do. We take real pride in being distinctive and bringing something special to our investing companies.
Alison McGovern
Q May I briefly follow up on that? You say that either there is not another investor, which is clear, or that we need to bring some unique experience. What does that really mean? That seems to me like a catch-all.
Rory Stewart: The primary measure that has been set by the Department is the development impact grid, which defines what the most difficult countries are in which to invest. It looks at three criteria—GDP per capita, the amount of capital available and the difficulty of doing business. The last two help us from a strategic level to answer your question. I will hand back to Diana.
Diana Noble: You are right. It is at the point of investment that we say we are bringing expertise to a company. That is a forward look. It would typically be environmental and social issues. For example, we worked with an online retailer in India to transform how they thought about their supply chain and to sign them up to the ethical trading initiative, which was the first time that any online retailer in India had done that.
Of course, we are saying that at the point of the investment. We do not know whether it is going to happen. What we have done—again, we are the first DFI to do this—is implement an external objective review of every case, in which we only justify it on this additional expertise, not on capital. We had our first report back that said that in all of those cases—they are a minority—we did in fact actually deliver and in a lot of cases we delivered more than we expected at the time of the investment committee. I agree with you that none of us should be justifying an investment on an expectation that does not happen.
Rory Stewart: The answer to the second question is that over a five-year period we are looking at a ceiling option on the basis of a business case of CDC being able to draw down up to £4.5 billion. That is a very large sum of taxpayers’ money and we need to be very responsible about it. It is also worth putting that in context. The overall annual expenditure is estimated at £12 billion. To put that £1 billion in context, in a single year we would typically put something in the region of £5 billion into multilateral institutions. To illustrate that what we are putting into CDC is not out of proportion to other comparable investments, the type of funding we produced for the World Bank over the last three-year period was £3.3 billion. We are about to do another replenishment, but it is of that order.
Why are we putting it into CDC? Well, there are a couple of reasons. One is that we believe CDC is a very effective vehicle for delivering jobs and economic development in some of the hardest places in the world. The second thing, contextually, is that there is a difficult issue, to which we can return, of comparing a stock with a flow—in other words, comparing what will be a capital fund for CDC with the annual expenditure of the Department—but even at 8% we are likely to be significantly lower than the amount of money that Germany or France, for example, put into their equivalents.
Alison McGovern
Q Minister, you mentioned the index that is designed to drive investment to the poorest parts of the world, yet we have heard about investment in online retail in India. My understanding was that the Government’s policy is to move investment away from middle income countries, or countries towards the middle income range, such as India. How can the two approaches fit together? It makes no sense.
Rory Stewart: In the grid, we break India down by state and target the poorest states. There is a transition in India. You are absolutely right that the Government have decided to move away from traditional development grants and into technical assistance and the kind of financing that CDC would produce. We do two things in an Indian context: we target the poorest states and, specifically on the question of the online retailer, we are able to do things in India that we might not be able to do in some of the more testing, difficult markets. With that particular online retailer we are also able to focus on driving up labour standards and making sure that skills and worker safety are protected. It is worth bearing it in mind that India, despite all its very strong economic performance, still has some of the very poorest areas in the world. Enormous numbers of people are on less than $2 a day, and many are on less than $1 a day.
Patrick Grady (Glasgow North) (SNP)
Q I would like to probe a little more on the specifics of the hard figures in the Bill—the £6 billion and the ultimate cap of £12 billion. Where do those numbers come from? What was the needs assessment that these are about the amounts of money that the Department feels CDC needs? Was there dialogue between the Department and CDC to reach those amounts? Why go for such hard figures, rather than some kind of proportional formula? Is there any indication of a timescale in which these amounts might eventually be reached?
Rory Stewart: It is a question of setting a ceiling. We welcome this, but it is quite unusual in the Department’s spending to have to go through primary legislation in order to make a financial allocation. I mentioned to Ms McGovern that, in a three-year period, we would allocate, say, £3.3 billion to the World Bank. We do not do that through primary legislation. This Bill attempts to give the Department the ability to do what we do with the rest of our budget, which is to make decisions on the basis of ministerial decisions, accountability to Parliament and strategic decision making. Specifically in relation to CDC, we would like the ability, should a business case emerge, to give it more money without having to come back to Parliament with primary legislation every time we wished to do so.
Where was the figure arrived at? Well, the figure was arrived at after a discussion with CDC about the maximum possible amount it could realistically require over the period, which takes into account its staff resources, the demand in the developing world and its past spend. If you look at CDC’s last round, it put about £1.2 billion through in a year, of which £735 million was a recapitalisation from the Government.
Looking forward over the next five years—2016 to 2021—this would allow them to draw down something of the order of £1 billion a year. In effect, it is only £4.5 billion because of that £6 billion they already have £1.5 billion. On the next bit of what they take in the future, if I’m honest with the Committee, my preference would have been to say, for the reasons and principles I laid out in relation to our other spend—our investment to the World Bank—that Ministers could come back through secondary legislation. A statutory instrument is how I just did a £350 million addition to the World Bank. I think you were on that Committee, Mr Grady. That would be the process we would hope to do with CDC.
My preference would have been to just give Ministers the power to go to a Statutory Instrument Committee to ask for that money, but the Clerks of the House advised us that it would be better to set a financial limit to that power, so we chose for the period 2021 to 2026 the same amount we chose for 2016 to 2021. That is how that figure is arrived at.
Imran Hussain (Bradford East) (Lab)
Q Just to build on the point made by Mr Grady in his question to the Minister, I listened to the answer, but in the absence of a business case strategy or investment policy I am finding it difficult to understand how we can arrive at those specific figures because there is nothing to suggest how that money will be spent.
Secondly, does CDC have the capacity, given the totality of its lifetime spend of £1.5 billion? Such a massive increase would be an issue. Another question, probably to the Minister, is around the point made earlier by Ms McGovern and the areas where we have availability of private sector financing. Is there any idea of where the new strategy or investment policy will go with that? I take on board the example used—India. I accept that India has pockets of poverty, but in comparison private sector financing is more readily available perhaps than for other target areas.
Rory Stewart: Those are three very good questions around the business case, capacity and private sector financing. I will take them one by one.
The idea of this proposal—the primary legislation—is to provide an indicative ceiling around which a business case can be organised. Within the Department, we would expect to produce a business case and to have some sense of what money would be available. Currently, there would be no money available so it would not be possible at the moment for anyone to write, as the Department would hope, the forward strategy for future investment or produce a business case, which we hope to do in the summer of next year because Parliament would not have given us permission to give any more money to CDC.
Bluntly, if the Committee decided not to pass this legislation, CDC would have to start reducing staff and we would have to scale down significantly the future programme of investments because there would simply be no money legally available to CDC and there would be no purpose in producing a business case in the summer for future investment because that money has already been allocated. So we believe it is important to get your permission in principle for a seemly amount that we could give CDC should a business case be produced to meet it. That brings me to the second question.
I will hand over to Graham and Diane in a second, but I am absolutely certain that the board of CDC and its chief executive will not request the money from us if they do not feel they have the capacity to spend it and if market demand does not exist for that expenditure. They are under a strong obligation to their board to make sure they take this money responsibly, so even in a case in which DFID does its business through consultation with CDC and we decided, for the sake of argument, that a reasonable sum of money going forward over a five-year period was, let us say, £3 billion—I chose £3 billion because the £4.5 billion is a ceiling and we are not saying we will take that. That is what this business case is about. So let’s say it was £3 billion. They would then effectively be able to draw down on a promissory note, effectively. The Department would be saying, “You can draw down that money over a five-year period.” CDC would then have to come up with individual proposals—“Here is a solar programme in Burundi that we think is worth investing in”—and draw down the money from us. I do not want to speak for CDC, but it would certainly not be drawing down money if it did not feel that it had the resources to spend it responsibly.
That brings me to the third question of private sector financing and to Ms McGovern’s question. We are absolutely clear that we do not want to be in the business of crowding out private sector finance. One of the really good criticisms made of CDC in the National Audit Office report, the Public Accounts Committee report and the ICDC report was that it was doing exactly that, for example by making investments in coastal China. We stopped those things from 2012 onwards. The investments that we are now talking about in India are in places such as Bihar or the poorest bits of Uttar Pradesh, where the business environment is very difficult and very little capital is going in. We are also making sure that the grid is followed absolutely with every investment, so that we are not falling into that trap.
Graham Wrigley: This very important question is about how CDC and the shareholder respond to what we think is the very clear need for long-term, patient, impact-driven and additional capital in low-income countries, and about how we do that in a responsible and thoughtful way. We fully understand that this will be a very significant step in CDC’s history, but from our perspective, having worked on this for the last five years, this is evolution, rather than revolution as it might look from the outside.
Let me explain why. If we go back to 2012, when an entirely new mandate was created, a new team was empowered to go off and explore and see what would happen. At that time, the projections showed that if things went well, more capital would be required. That is precisely what happened, and it led to the recapitalisation in 2015. As the Minister has just said, we structured that recapitalisation such that the money could be drawn down if and when there was the market demand. Indeed, it was only this week that the first promissory note for that recapitalisation was called.
Going into the next five years, the team has now been established. It was 40 people back in 2012; we are now at 220. The commitment rates have gone up. We believe that the market need in our markets is growing, and for the last year we have also been working with the Department on a series of potential new programmes focused on high risk and on unlocking new forms of development impact.
The quantum and timing of any capital given to CDC will depend on two things: first, the shareholder making its decision about how CDC stacks up against other opportunities—the opportunity cost was debated in Parliament last week; and secondly, the view from CDC. As chair of CDC, I feel deeply responsible for making sure that any capital that we call is allocated for the purpose of development impact, and that our teams can execute that responsibly. That is the context for where we are now and for the Bill. We see this as a long-term discussion about the shareholding of CDC. CDC has to perform it for the purpose of development impact, which I promise you is what drives everybody who works in CDC.
Rory Stewart: Just to confirm, Graham, am I right that you are formally saying to the Committee that you would not draw down this money if you did not feel that you could spend it responsibly and have the resources to do that?
Graham Wrigley: No, we would not do that.
James Duddridge (Rochford and Southend East) (Con)
Q Thank you, Mr Streeter. I should have taken the opportunity to draw the Committee’s attention to my entry in the Register of Members’ Financial Interests; my apologies that I did not do so earlier.
I have two questions, Minister. First, going back to the cap, I wonder whether the Bill is future-proof. I think that we will pass the Bill—it will become an Act—there will be successful drawdown up to 2020 and 2025, and quite possibly at that point you will have to come back to the House to ask for more money. Can you go into a little more detail as to why the Clerks did not advise that? Recently, we have had the multilateral and bilateral review, and that does not get anywhere near the same scrutiny as this relatively, proportionately, smaller amount of money.
Rory Stewart: I think the argument from the Clerks is that Parliament does not like the idea of granting blank cheques, and I can completely understand why you would want to bring us back. Again, this was simply an attempt to get an in-principle agreement that in changing the way in which the CDC was funded, we would move to secondary legislation, but I can completely understand why you would want to put a cap on that, and we have accepted that; we are happy to take that.
James Duddridge
Q This is my second question. As I said, I think that the Bill will be passed, but if it is not and we accept as a Committee the need to put more money into economic development and jobs, what capacity would DFID have to spend the same volume of money? Is there an alternative? During Second Reading, there was a lot of talk about the opportunity cost of giving this money to the CDC. What else could DFID do with the money?
Rory Stewart: The key thing is that this is within our economic development portfolio, which is less than 20% of our spend, so it is about moving money from, essentially, David Kennedy’s part of the Department—within different programmes in his part of the Department. The intention is not to move large sums of money from our humanitarian activity, health activity or education activity. It is a different modality for economic development.
What alternatives might we have were you as a Committee to decide not to approve this legislation? We could, for example, give more money, through the World Bank, to the IFC. We could use a different form of DFI, which was not the CDC, and the World Bank could theoretically spend that money. That would not require primary legislation; it would require my going to you with a statutory instrument in the normal way we give money. Alternatively, we could spend the money, as we have done in the past, on technical assistance. That is a normal part of economic development activity. There are also various forms of livelihood programming that we have done in parts of the world. However, we believe that the CDC is a really good institution; we think that it is in many ways better than the other development finance institutions that we could look at as alternatives if you did not wish to go with the CDC. That is why we strongly suggest that we put the money into the CDC.
Richard Graham (Gloucester) (Con)
Q Over the years since the inception of the Commonwealth Development Corporation in 1948, the Government’s approach to it has fluctuated considerably. In the 1980s it was doing, on a smaller scale, broadly what Graham and Diana are now doing—direct investment—but then there was pressure to separate out and effectively privatise the private equity or venture capital element of it. With 0.7% of GNI going to DFID, you can take a longer, more strategic approach to the CDC, but the effective tensions, potential tensions, between ODA objectives, taxpayer return on equity and pursuing aid goals but not investing in things that might be done by the private sector otherwise, remain and arguably will be more in the public eye as the CDC expands. How will you balance those, and what is the longer-term strategy, in your view, for the future of the CDC?
Rory Stewart: It is a very good question. You are absolutely right: since 1948, the CDC has been through changes. I think that is because it was a very bold and imaginative move by the Attlee Government. It was a very unusual thing at the time; indeed, it was the first DFI. And from the moment that they were invented, DFIs have had to tread a thin line between two quite different things: a private sector modality—a desire to generate a commercial return—and a public developmental objective. A lot of the shifts you mention are about the pendulum swinging back and forth between these two types of objective.
Looking at the history of CDC, there have been times, in the 1980s for example, when CDC made a lot of very bold, risky investments in high development impact and lost money. It did not succeed in making money. There have been other times, under other leaderships—and this was true in the period criticised by the NAO, in the 2000s—when they went to the other extreme. We had a situation in which, during that period, CDC managed to generate £1.5 billion of profit—profit for the UK taxpayer, profit that is put back into the CDC and reinvested, but they were very high rates of return, largely achieved through the fund of funds strategy.
Now, we are using this piece of primary legislation, this discussion of the Committee and also the UK aid strategy and the CDC strategy being undertaken at the end of this year, to provide a much tighter definition of the key characteristics that take us forward. That is, philosophically, that the DFIs work when you get that balance right. The balance is right where the private sector element gives you the commercial discipline to make sure the investments you are making are genuinely sustainable, that they are going to keep those jobs and deliver revenue to the Government and value for money for the taxpayer. However, that has to be balanced with the public objective, which is the ability to make very patient long-term investment, to take a certain degree of risk and to pursue developmental impact. That is why we have put out this grid where, on the X axis and Y axis, we measure with every single investment how much capital is available, how hard the business environment is, how low the GDP capture is on both axes and whether the sector is likely to create jobs. That is also why we brought in Harvard University last year to review this and why we are now going through a 15-year longitudinal study to try and establish this.
I think we are getting better at this, but your warning, Mr Graham, is a good one and everything we are doing in our strategy, our metrics and our measurement is to ensure that we are not back in a world where this pendulum is swinging back and forwards all the while.
The Chair
Just before Mr Graham comes in again, five other colleagues have caught my eye and we must finish this session at 10.30 am, so we are going to have to speed up a little bit.
Richard Graham
Q May I follow up very briefly on three specific points? First, if having private sector expertise in CDC helps it focus on the commercial return element, sustainable investments and so on, which I totally accept, would a partial flotation at some stage not both achieve Richard Fuller’s earlier point—I think it was Richard Fuller who mentioned it—on bringing private money into the CDC, that is, the Government acting as a catalyst to bring money with it, on the one hand, while on the other, assure those people in the private sector that it was not the Government competing against them?
The Centre for Global Development called for the CDC to
“do as much as possible to demonstrate that it’s investing in projects that create jobs and growth which would not otherwise happen.”
Is that an impossible ask?
The last point is on the geographic eligibility. At the moment, you can invest in 63 countries, which is considerably more than the Commonwealth. What about Palestine or the middle east?
Rory Stewart: Okay, here we go.
The Chair
As briefly as you can, please.
Rory Stewart: Those were three very complicated questions, but I will try to deal with them very quickly. No. 1, the reason why a partial flotation would be difficult is that the returns we generate are deliberately low. We are only at about 3% return because we want to have a developmental impact. It would also have a significant impact on our governance arrangements, as we are currently a 100% shareholder.
The second question—is it an impossible ask? No, we do not feel it is an impossible ask. It is tough, but if you look at our investments in solar power around Burundi and CAR, that is a really good example of something that is extremely unlikely to have been done by a normal commercial investor. These are high-risk investments, generating a relatively low return. We are only able to do it because we are a DFI with that patient long-term investment policy.
The third question? I am so sorry, Mr Graham.
Richard Graham
Q Sixty-three countries at the moment. What about Palestine, for example?
Rory Stewart: This very interesting discussion has gone back and forth. As you are aware, the International Development Committee asked CDC to look strongly at investment to deal with the crisis around Syria and at what we can do to help bring stability to the middle east, for example. At the same time, other members of the IDC tabled amendments to the Bill that would not only take us out of middle-income countries in the middle east but would restrict investment to the countries with which DFID has bilateral programmes. My gut instinct is that that is an issue not for primary legislation but for Departments to address through their strategy in response to a changing world.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
Q I apologise for my late arrival. I was hosting a general from the British Army. Minister, I want to ask a very specific question about where these figures come from. I want to probe you further on them. You answered a written question from me yesterday—for Hansard, it is 55702—and said that the only capital requests that you received from CDC were for the £735 million. You said that you have not had any others. Can you be clear about whether CDC has requested capital increases to you beyond the £735 million?
Rory Stewart: The process is threefold. We will seek permission from Parliament to be able to recapitalise CDC. We want to know whether you are prepared to allow us to give any more money to CDC—£1, £10, £1 billion or £6 billion. We are looking for the option to give it more money. Then we will produce the five-year forward strategy for CDC, which will come together at the end of the year. Then we will produce a business case in the summer to lay out what we believe, in consultation with CDC, its likely requirements are in order to prepare our promissory notes. The final stage is that CDC will make a request on the basis of the projects it has. That is exactly what we have done with the £735 million.
We have discussed the ceiling that we are proposing to you in detail with Graham and Diana. At this early stage, they believe it is a reasonable maximum limit for the amount that they could conceivably need between 2016 and 2021.
Stephen Doughty
Q Who came up with the figure? Was it Ministers or CDC?
Rory Stewart: We did. Our Department came up with the figure.
Stephen Doughty
Q Okay. May I ask you a separate question? A minute ago, you said that CDC’s support to India is targeted at the poorest states, but you told me yesterday in a written parliamentary answer—55689—that the majority of new disbursements are still going to the richer states in India. In fact, the top disbursement is to Maharashtra, which is where Mumbai is located. You told me that 42%—that is only this year; it has been going up steadily—goes to the poorest, but the majority goes to the richest. Can you explain why that is, and do you want to clarify what you said earlier?
Rory Stewart: My understanding of what is happening there is that every business case in India needs to be scored against our development impact grid. To achieve the score that we are looking for—I believe it is a 2.3 score, and we are generally crossing 3.0—we have to reconcile on the X and Y axes the number of jobs that would be created through the investment. In other words, we focus on the sector, then on GDP per capita, which is broken down by state, then on the difficulty of investment, and then on the amount of available capital. Any investments, even in the wealthier states in India, will have gone through that grid.
Stephen Doughty
Q But the majority is not going to the poorest states. Is that correct?
Rory Stewart: Let me hand over to Diana on this.
Diana Noble: Can I explain our strategy? In a lot of cases, when you want to help poor countries, it is better to back businesses that exist elsewhere and encourage them to expand into those countries. Therefore, a lot of our investment is about the vision that we can create through these investments.
Let me illustrate that with a quick example. Last year, we invested in a mid-size Indian bank—RBL. The vision was to help it expand its business into rural areas, to the rural poor and into poorer states. That is, as I am sure you know, a big priority for the Modi Government. CDC did not just provide capital to RBL; we also helped it with expanding financial literacy training to 25,000 really poor women in Madhya Pradesh to explain to them how they can benefit from savings accounts and bank accounts. There are already results from that. RBL now has 1.9 million new customers in the rural and poorer areas. We are evaluating that by doing a random sample of loans to understand how that translates into new jobs as well. That is a really good example of our having a partnership with a high-quality operator, going to poorer places, helping them and sharing the results.
Rory Stewart: I did not answer your question directly. The answer at the moment is that, from our portfolio, 42% of the investment in India goes into the poorer states. The rest—the remaining 58%—does not go into the poorer states, but into states where we believe the business will benefit the people in India who are in need. Many of those investments are intended to be regional investments, so we may invest in a bank, for example, that is not located in one of the poorer states, in order to benefit ultimately the people in the poorer states.
The best way to evaluate such decisions is by looking at the individual investment and giving us an opportunity to discuss with you the individual company in which we have invested, so that we can discuss our theory of change. It is difficult to decide whether to make a regional investment to help the poorer states or whether to go straight to the poorer states. I think we should be accountable and talk to you about those individual investments so that we can explain why we have a theory of change and investment in a particular company.
Fiona Bruce (Congleton) (Con)
Q I would like to ask Diana about job creation. You say that one of CDC’s key strategic aims is to achieve development impact focused on job creation. How do you measure jobs that are created directly and indirectly? Last week, the National Audit Office said in its report that progress on measuring job quality has been slow. How are you working on that? How are you measuring productivity, quality of jobs and income levels?
Diana Noble: As you rightly point out, we focus on jobs because we believe a job is the first and the best step out of poverty. I think everyone on the Committee understands the difference that a job makes to someone in a poor country: to them and to their family. When we talk to workers it is clear that they also use the income particularly to educate their children, so it has a benefit for future generations. How do we measure job creation? This is something that we take very seriously. Two years ago, in partnership with some academics, we put in place a way to measure job creation across the whole of the Africa and south Asia portfolio.
We are the first DFI to collect data from all our portfolio companies. We do not just collect headcount data; we also collect revenues, supply chain, purchases, work and wages as well. The academic uses that to calculate not just the direct job creation but the indirect job creation. As you can imagine, some of our priority sectors, such as financial inclusion and particularly infrastructure and power, have a far greater job impact beyond the direct jobs. So we have now published the methodology on our website. We are going to go through a peer review process because we want it to become one of the industry standards. We have shown the data from that for two years now. We can start to compare and contrast it. It shows that the portfolio has created over 1 million jobs in the past two years. That is a number we take immense pride in.
You also rightly talked about job quality, because it is not just about volume. Quality has lots of different elements to it. What all of us sitting in this room might consider a good job is not necessarily so with the lens that you should use in the countries where we invest.
On job quality, before we make an investment, our fantastic environmental and social team go and sit down with the company and do due diligence on them. They say, “Are you up to standard, particularly in the areas of health and safety?” If they are not at the right standard, an action plan is agreed with management and put in place.
The second thing we do is collect data across the portfolio on fatalities and serious accidents. We have been doing that since 2008. We have very rich data now and have been able to combine that and give training back to portfolio companies and fund managers about the areas that lead to fatalities and serious accidents. We think that gives huge added value to our portfolio.
We are going further than that. We are collecting information on lost time injury frequency, particularly for manufacturing and construction—places where workers are potentially put at harm. We are looking at staff retention for some of our larger investments, because we are advised that it has a big correlation with job quality. We are doing an evaluation in Bangladesh at the moment—everyone on the Committee will be aware of the issues in garment factories there—to try to understand what workers really want out of their jobs, so that we can build that in. There is a big element of learning. We are on a journey, and there is still a long way to go.
Jeremy Lefroy (Stafford) (Con)
The question I wanted to ask has been asked, Mr Streeter.
Patrick Grady
Q I want to press you a little bit more on some of the policy and decision making and the opportunities we have with the Bill. ODA has a clear definition, and the various international development Acts put in place a duty to achieve poverty reduction, but is that sufficient for CDC, as was? We have heard about these business cases and impact grids. All these are policy-level decisions. The 1999 Act does not mention poverty, impact or international development. So, why not take the opportunity with this legislation to do what some of the amendments are attempting to do, which is to make it clear that CDC would have a statutory duty to meet those objectives or, at the very least, to put some of these processes into the legislation? Would that not help to reduce the risk of backsliding, returning to the days of excesses and concerns—which, I accept, are in the past?
Rory Stewart: Mr Grady, broadly speaking we are in sympathy. We are very clear that we expect all investments made by this Department to aim at poverty alleviation and, to relate to one of your amendments, to reinforce the sustainable development goals. The particular space that CDC operates within is our economic development space. We believe that the correct way to respond effectively to a changing world, to allow Ministers and elected Governments to put their policies through, is through the process we have of setting strategy and governance. One thing I was pleased with in the NAO report was the praise it brought forward for our governance. Any money we give to CDC has to follow that test. That is the fundamental test applied, whether we are giving money to CDC, IFC or a UN agency, or whether it is any of the £5 billion a year of multilateral spending. The way in which we control it is through not primary legislation but Government strategy documents.
Graham Wrigley: May I add, from the CDC perspective, that we have developed some organisational principles and pillars that we have shared with the shareholder? They cover the following things. The first is that our purpose is development. That is why everybody at CDC is there—Diana, me and everybody else. Secondly, we are the world’s oldest DFI, set up by Clement Attlee, supported by both major parties over the decades and 100% owned by the UK shareholder. We are very proud of that fact.
We have to balance—a question was asked earlier about this—development impact and financial return. That creates perpetual paranoia about whether we get the right balance. We see our goal as meeting the needs, and Diane will give you an example of that in a sec—
The Chair
She might not. We will draw things to a close now with two more quick questions.
Stephen Doughty
Q Some new research by the House of Commons Library suggests that CDC’s new investments, as a proportion, to Africa are actually falling over the past few years, with a majority going to south Asia, largely to India. Are you satisfied with that, given the poverty focus that is supposed to exist?
Rory Stewart: These are all really good questions. Fundamentally, things will change year on year. We would expect that with an investment strategy, because these guys have to make very difficult decisions. The NAO has been very clear that it does not want DFID Ministers micromanaging or interfering in the individual business decisions of CDC. I hope you would agree with that: if we were in the business of signing off on every single investment CDC makes, it would become a political arm of the Government, where we could be directing it to how it invests.
We set the overall strategy and framework; we have taken CDC out of places like China and given it the freedom to invest in south Asia and Africa. We have agreed a development grid; we are conducting a lot of research on how that happens, but I think it is perfectly reasonable that over a period more investment one year might go into south Asia than Africa. I think the way that we deal with that is through the next strategy that we produce, continuing this process of tightening accountability, but I do not think it is appropriate for me to start vetoing individual investment decisions by the board.
Alison McGovern
Q In this session, Minister, you said that you do not yet have CDC’s strategy, which we knew. We have discussed the fact that there was not much clarity about investments in India and whether or not they were going to the poorest states. You have explained that you are expecting CDC to increase the risk of the investments it makes at the same time as you are radically increasing the amount of capital available to it. So just for clarity, which do you believe to be CDC’s greatest priority? Is it the reduction of poverty; or is it return on investment, so that the CDC has continuity of capital?
Rory Stewart: The priority of CDC has to be to do good without losing money. The point is not to lose money while doing good, so we are focused on jobs and economic development without losing money. That is the guiding principle that CDC follows in everything it does.
The Chair
Final question.
Rory Stewart: I am sorry; there was a strange comment coming from Mr Doughty who, when he is not texting, throws things from the chair. We believe very strongly that economic development and job creation are absolutely core activities in the elimination of poverty. The distinction that Mr Doughty is trying to draw between economic development, job creation and poverty alleviation is extremely unorthodox and it is not one that the chief economist of our Department, or indeed any of the officials of our Department, would accept.
Imran Hussain
Q I have a final question for the Minister. While the CDC has made some progress since 2011, as I have said in the Chamber, does he at least accept that there is room for improvement around a greater focus on poverty alleviation, around greater overview and scrutiny and avoiding tax havens and so on?
Rory Stewart: Yes, we need to continually improve. One reason why this debate is useful, and why the primary legislation is useful, is to shine a light on all this stuff. None of us is at all complacent. These things are very difficult. The DFI is the leader in the world, we believe, in terms of trying to measure things that are very difficult to measure—how to treat job creation and economic development in some of the toughest environments in the world. We can keep improving and you are absolutely right that those things you have mentioned are exactly the kinds of things that our new strategy will attempt to improve, including, for example, caps on the amount of investment that goes to India.
The Chair
Thank you for getting that all done within time. We thank our expert witnesses and the Minister.
Examination of Witnesses
Sir Paul Collier, Tom McDonald, Terry Caulfield, Saranel Benjamin and Gideon Rabinowitz gave evidence.
Stephen Doughty
On a point of order, Mr Streeter. May I clarify something? The Minister made a comment a moment ago about me allegedly texting. I have actually been checking his written answers on my phone, which allows me to check the parliamentary system.
The Chair
That is perfectly in order. Thank you for clarifying that.
Greetings to our second panel. We are going to hear evidence from the National Audit Office, War on Want, Oxfam and Sir Paul Collier. Would you please give your names for the record?
Sir Paul Collier: I am Sir Paul Collier. I am professor of economics and public policy at Oxford University.
Tom McDonald: I am Tom McDonald. I am the National Audit Office director responsible for value for money audits of the Department for International Development.
Terry Caulfield: I am Terry Caulfield. I am an audit manager at the National Audit Office, responsible for our work on the Department for International Development.
The Chair
Terry, you may need to speak up a little bit. We did not quite hear all of that. It is fine for now, but I mention it for future reference.
Saranel Benjamin: I am Saranel Benjamin. I am the international programmes director for War on Want.
Gideon Rabinowitz: I am Gideon Rabinowitz. I manage Oxfam GB’s work on development finance.
Kate Osamor
Q Thank you, panel. This question is for all panel members. Do you feel that CDC is sufficiently focused on poverty eradication in line with DFID’s outcomes?
Sir Paul Collier: In a word, yes. I have been working on Africa for 40 years and it has been frustrating, because Africa is still poor. This year, per capita GDP in Africa is falling. We have a quiet crisis of trying to rekindle African growth. There is no secret about what rekindling growth and getting out of poverty means: it means raising the productivity of ordinary people and we know how to do that. Raising the productivity of ordinary people is what proper firms do. They perform a miracle of productivity every day by bringing ordinary people together at scale and specialisation, and making them dramatically more productive than they would be as isolated individuals. Africa is desperately short of proper firms, and the public interest in getting proper firms to go to Africa is enormous. That is the underlying rationale for CDC, and that is what it is doing.
CDC went through a very poor patch with this fund of funds idea, which was a crazy idea. It now has really expert management. What CDC is doing, and what DFID is doing to support it, is absolutely standard. This is what International Development Association money, which is the collective, concessional money given by the world’s rich countries to the World Bank, is being devoted to. The transfer to the International Finance Corporation—[Interruption.] I will shut up.
The Chair
Thank you, Sir Paul. Let us hear from Oxfam and War on Want.
Gideon Rabinowitz: Thank you for having us on this panel; we appreciate it. Oxfam recognises the importance of investing in economic development and the private sector as a fundamental part of our development efforts. Economic development needs to be a core part of what DFID and the British Government do with regard to aid. Our concern is to make sure that any aid funds that are invested in those causes really support the right types of jobs, growth and investment that reach the very poorest. The international community agreed at the UN that all development effort should be focused on reaching those left behind. That needs to be the prism through which we see this. Given that prism, we recognise that the reforms agreed in 2011 to CDC were a really important step forward. They focus CDC more on the poorest countries and strengthen its focus on looking at development impact and its investment standards, but we also think that that is the start of a journey that CDC needs to go on in the coming years to ensure that it is focused not only on DFID’s mission of development and poverty reduction, but on the international development community’s focus on leaving no one behind.
We want to note a number of areas where we think CDC can do more. The first point relates to its focus on the least developed countries. Only 12% of CDC’s investments currently go to the least developed countries—the most economically and socially vulnerable countries as measured by a comprehensive index by the UN. We have some questions about whether the sector focus is right. Agriculture, where the majority of the world’s poor make their livelihoods, accounts for only 5% of CDC’s investments at present. A decade and a half ago that figure was one third. There needs to be a re-engagement in sectors such as agriculture.
The Chair
I am sure that those points will come out in further questions; this is becoming a bit of a statement.
Gideon Rabinowitz: I will be very brief. The final point is that, whatever new resourcing authority is given to the Government through the Bill, we want it to leverage a continued focus on ratcheting up CDC’s development performance on those issues.
Saranel Benjamin: War on Want’s position is that we believe that UK taxpayers’ money should not be given to private funds that are going to be investing in projects, because that is basically getting returns on poverty—off the backs of the poor. It makes us very uncomfortable that UK taxpayers’ money is being used for that purpose. However, as we heard from the first panel this morning, the percentage of projects in which CDC is investing in Africa has reduced significantly. We were talking about agriculture; we have moved away from projects that were supporting small-scale farmers to those supporting large-scale agribusiness. That is causing displacement of people whose lands are being taken away and it is also creating a loss of livelihoods. I wonder how that goes together with the whole question of poverty eradication, when we are actually perpetuating it. I will come back to that later and maybe talk about a case study that we are looking at.
Stephen Doughty
Q I have a question to the National Audit Office. You have visited a number of CDC projects as part of your review, and you obviously saw some very positive examples in CDC’s portfolio. I think we discussed one in Sierra Leone, but you also visited a number of those in India—I believe it was Terry who visited those projects. Could you say a little bit about the projects that you visited, particularly with regard to the investment in healthcare? I know that CDC is investing in a lot of private healthcare in India, but not necessarily specifically in stuff that benefits poorer people—it is more a kind of general investment.
Terry Caulfield: Yes, we visited two healthcare facilities in Bangalore in India. One of them was perhaps more intended for middle-income families and one was more down the lower end. We came away with the feeling that they were doing a range of things. At the lower end, they were trying to provide maternity facilities for families who would not otherwise have access to them, perhaps for financial or educational reasons or because of other hurdles that they might have had to get over. In that particular case, they were looking to expand the facility in that location and then use that to expand further out. Against the backdrop of an understanding of how access to Indian healthcare works, they were coming in at a number of different levels. There is a diversity there.
Stephen Doughty
Q You make a big point about the issue of prospective development impact and whether CDC can prove its impact. Were you concerned when you heard the earlier panel talking about investments in richer places that theoretically will lead to jobs for poorer people, as people perhaps move to cities and take advantage? Do you think that is a bit too hazy? Can you explain a bit more about where you felt the CDC could be doing better to demonstrate impact?
Tom McDonald: One of the things that struck me from the projects that I visited in Uganda and Kenya was the need for a portfolio approach. Some of the projects clearly will have more of a development impact, and some will clearly do better financially. Some of them are harder to measure than others, particularly if the investment is through a fund or an intermediary.
In the report we say that, despite Parliament having expressed some concerns in 2008 and 2009 about how CDC measures impact, CDC has still been a little slow to put together a comprehensive picture of the approach it would expect to take, together with DFID, to provide Parliament and the taxpayer with a good view of what impact looks like. I should say that we are not suggesting that there is some simple way of doing that. Measuring all the different indirect and direct effects of the investments is complicated. For example, to answer your question directly, there was a commitment in 2012 to put together a measure of what quality of employment would look like. It has not made much progress on that. It has plans in place to try to evaluate some of its major investments and to improve the impact reporting, but for us, it is about the pace and comprehensiveness of that reporting.
James Duddridge
Q May I ask Sir Paul Collier a question in relation to the amount of capital that CDC has? There seems to be a view that CDC can absorb about £1 billion a year. Given your work on urbanisation and the vast amount of infrastructure investment that is needed, do you think that CDC could be challenged to spend much more on an annual basis or to ramp up to that point? That relates in particular to funding the urbanisation that Africa needs to attract the companies that you referred to earlier.
Sir Paul Collier: Africa is going through a rapid and very necessary urbanisation. Africa’s future is urban, but not all cities are environments in which ordinary people can be productive. You can have a mega-slum. At the moment in Dar es Salaam, the modal enterprise has one worker: scale zero, productivity zero, specialisation zero—doomed. Cities need to become platforms where proper firms can function. They need energy supplies and decent connectivity. That is what the infrastructure is there to do, basically: energy and connectivity. That is expensive.
Stephen Doughty
Q CDC could spend £1 billion just in Dar es Salaam.
Sir Paul Collier: CDC needs to scale up and scale up fast. I am hesitant about tying it in knots trying to get precise measures for this and precautionary measures for that, when the reality is that there are no techniques out there. Everyone is trying to build better measures. The International Finance Corporation has just hired for the first time a chief economist at vice-president level, designed to do that. People are trying to develop techniques, but it is difficult. To my mind, CDC’s priority, now that it has got sound, motivated management, needs to be to scale up. The task ahead for Africa is to get both the infrastructure and the private firms in before it is too late.
James Duddridge
Q Should not we be encouraging it to give more than £1 billion a year?
Sir Paul Collier: Yes, of course. The future of aid is to get decent firms to go to places where they will not make much money until there are lots more of them.
Alison McGovern
Q Very briefly, obviously there is a massive need for capital in Africa, and the question is how we should spend UK taxpayers’ money. I would like to come back to you, Tom. As we heard in the previous session, we are asking CDC to take increased risks with quite a lot of increased capital, but we do not yet have its strategy. Do you think that that approach is probably the wrong way round?
Tom McDonald: There is a cart-and-horse problem here, is there not? One of the things that we saw in the 2015 recapitalisation business case was that the Department did go through a thorough process of assessing, in collaboration with CDC, the art of the possible. There are good foundations on which the Department can build.
One of our worries, which we set out in the report, is that CDC has to be comfortable that it can absorb this money in two ways. One is internally: does it have the capacity to grow, still be agile and make decisions in the way it has done in the past? That is its internal operating model, if you like. The other is whether it has access to all the opportunities for investment. Now that it is again in the business of direct investment, that requires a lot more effort from the teams that are putting together these deals. There needs to be a discussion between the two bodies over the remainder of the spending review period, or the Parliament, about whether DFID is clear about what it wants from CDC, where it wants CDC to operate, and the principles on which it wants it to work. From CDC’s perspective, can it cope with the volume of money and can it, in good faith, invest all that in a portfolio of deals that will still allow it to meet its targets?
Gideon Rabinowitz: I have a very quick point to follow up on that. As well as our mission to tackle the injustice of poverty around the world, we are very keen in our work and our engagement with the development community to push for adequate public scrutiny and trust in the work that the British Government and institutions such as CDC do. We think that needs to be central to this debate, so these are really good issues that we are discussing. The absence of this investment strategy is making it a little difficult to get a fuller perspective. There is clearly a dynamic situation around CDC. I have looked at the business case for the last capitalisation last year, which said,
“CDC has previously determined that given investment needs, it could productively deploy up to £1bn of additional capital.”
We heard from this morning’s witnesses that that situation seems to have changed. An additional point was made in the business case that, of the £735 million that DFID allocated to CDC last year, it would need to go beyond that only in 2019. It is a very fluid situation, and the lack of clarity over that investment strategy and how the situation on the ground with CDC is changing poses challenges. It is important to get that clarity.
Richard Graham
Q A very quick question for you, Tom—probably a one-word answer. If I got you right earlier, you were calling for a more effective measurement of the quality of jobs generated by CDC. Do we have such a measurement in the UK?
Tom McDonald: A one-word answer would be no.
Richard Graham
Q Thank you. Saranel, it is clear that you would not want to see any money going from the taxpayer to CDC that would mean either selling it or closing it down, or possibly both. How would that help DFID achieve its goals of supporting businesses and jobs in the developing world?
Saranel Benjamin: I think we differ in how we see development. However, the fact that CDC is operating without a strategy begs the question of what it is prioritising. Why would one prioritise private education or schools, or private healthcare, in countries where the majority of people are not getting access to that? How does that justify the better use of UK taxpayers’ money? I think the question was raised earlier about whether we are choosing poverty reduction or profit-making.
Richard Graham
Q Okay. So you are against specific investments that have been, or might be, made. Are you against investment in businesses full stop?
Saranel Benjamin: I am against using business to conduct development in the global south.
Richard Graham
Q So you do not believe that creating jobs through business is a constructive way of meeting development aims?
Saranel Benjamin: I don’t think that that is the only thing that should be done in terms of development, but from CDC’s point of view, that seems to be not just about job creation, but about supporting projects that have absolutely nothing to do with poverty reduction. I cannot see how supporting top-level real estate in Kenya, for example, is about poverty reduction.
Patrick Grady
Q I just want to ask any panel member who might want to reflect on the levels of transparency in CDC and the opportunities for parliamentary scrutiny. I particularly want to ask the reps from War on Want and Oxfam how their transparency in reporting requirements from DFID have changed in recent years and whether they have any views on how they should apply to CDC.
Gideon Rabinowitz: Oxfam is a signatory to the international aid transparency initiative, which is the comprehensive aid transparency framework that is applied across the development community. The initiative was started and promoted by the UK Government, who have obviously played an important leveraging role in promoting transparency across the world.
We are ambitious implementers of IRT and in our dialogue with DFID right now, we are being encouraged to look at how we can apply those standards and the standards introduced by the initiative further down our supply chain with our local partners. It will be a challenge, but one that we shall pursue head on. Throughout the chain of delivery partners we work with, we will look at ways we can address those standards.
One of the questions we think it would be really useful for the Committee to think about is, how—whatever is agreed through the legislation—can we help to ratchet up the level of transparency of CDC? It has made progress, but the last time it was assessed against IRT standards, it scored “poor”. We have not seen a fundamental change in the level of information that is currently reporting, so it has some catching up to do. We hope this legislation can help.
Saranel Benjamin: That is a really good question, because while listening to everybody talking, I was thinking that when we have to apply to DFID for funding, there is absolutely no way we would get funding if we just went and said, “Can I have £500,000 and I will give you the strategy later?” That would never happen for the development sector.
James Duddridge
Q You are not owned by DFID. It is not like for like at all, is it?
Saranel Benjamin: No, but it is still the use of taxpayers’ money, which DFID—
James Duddridge
It is a ridiculous comment.
Saranel Benjamin: No, DFID subjects the development sector to a number of processes involving deep scrutiny of all our work. It does not do that with CDC. The fact is that a case study such as Feronia, for example, can exist. Either CDC can say that it did not know that it was happening or DFID can say that it did not know that it was happening. It seems to me that there is a lack of oversight.
Fiona Bruce
Q Can I ask Terry and Tom about value for money? How should CDC be scrutinised by the various bodies that will scrutinise it, assuming it gets this increased money—DFID, Parliament, the International Development Select Committee, ICAI and the Sub-Committee on the Select Committee, which I chair, which scrutinises ICAI? In view of the increased funding, how can we ensure that we scrutinise value for money effectively? What measurements should we be using?
Tom McDonald: That is a very good question. The first duty is with DFID as the shareholder. What we have seen of the reforms that have been put in place since 2012 is an increased volume of reporting from CDC back to the Department, characterised by a no-surprises policy. CDC is very clear that if it is thinking of undertaking something new or innovative it will consult with DFID first. Similarly, it will have quarterly shareholder meetings and with the shareholder produces a significant volume of information. These are all improvements from the previous regime that Members have talked about before and they help to mitigate the risk that CDC at some point in the future might engage in some of the poor behaviour that we saw previously.
That is the first line of defence in terms of scrutiny. Who else might do that? We will clearly continue to have an interest. We have been writing reports on CDC for at least 20 years. Obviously, it is up to Parliament how else it wishes to do that. The difficulty, as with other aspects of DFID’s spending, is following the money. We have this problem with multilateral expenditure. When DFID makes a payment to a CDC or a multilateral body, it is quite for us as the auditors to track that money through to the eventual point of impact. We have to be creative about it and find ways of doing that. It is not straightforward.
Fiona Bruce
Q I am probing a little, if I may. You say that it is up to us how we do it, but you have just spent eight months looking at CDC day in and day out. I am seeking to glean the benefit of that detailed insight when the Independent Commission for Aid Impact and our Sub-Committee, which scrutinises it, looks at the issue. What should we be focusing on? Where should we be asking questions?
Tom McDonald: If you look at our value for money conclusion, we essentially divided it between, on one hand, the economy and efficiency with which CDC was being run and with which DFID was overseeing it, and the effectiveness of CDC. Looking at the first two e’s, we concluded that DFID’s oversight of CDC has improved considerably, and that CDC’s operating model is now pretty economic and efficient. It is a pretty good way for CDC to organise itself and spend the money that DFID has allocated to it.
On the subject of effectiveness, which we discussed at the beginning, this is clearly not an easy thing, but we still think there is more to do. There is more on which DFID could press CDC, and there is perhaps more on which Parliament could press both DFID and CDC to give a better picture of what CDC itself says is its ultimate objective: changing people’s lives, not just creating jobs.
Imran Hussain
Q Just a further question to Ms Benjamin from War on Want, to follow up from colleagues. I am slightly lost. Are you saying that you are principally against the development finance institution model—that would considerably weaken where I thought you were coming from—or are you concentrating on specific instances where you think the money was not spent well and most efficiently to target poverty alleviation? You gave the example of the Republic of the Congo. Can you elaborate on that and be more specific about where you are heading? I am slightly confused about where you are going with it.
Saranel Benjamin: As I said, we come from very different development backgrounds. For War on Want, a charity that works with partners in the global south, it is not about creating jobs; that is our approach. We are about supporting grassroots communities and organisations to allow them to envision the change that they want to see in their own countries. For me, when I see a private firm like CDC investing or looking for opportunities, I see it looking for an entry point for the UK to make a profit in the global south. For me, that is what it looks like. Given the use of tax havens, those countries are not really benefiting from what is being invested in those countries.
Again, look at the quality of jobs being created. Feronia in the DRC is one example. Workers are being paid less than $2 a day. Are you telling me that that is poverty reduction? Is that job creation? There is a dispute about the land on which Feronia operates; it is a 100-year-old land struggle. The largest investor in Feronia is CDC, which holds 67% of the investments owned in Feronia. The land dispute has been going on for a number of years, and communities have been displaced off that land. CDC claims that it is all legitimate, but it refuses to make the lease agreements or concessions publicly available. We have requested them from CDC, and have yet to have an acknowledgment that the email was received.
Rory Stewart
Q Very quickly, for Tom McDonald and Sir Paul Collier, Saranel has just said that CDC exists for the UK to make a profit in the global south, and the countries are not really benefiting from those investments. Do you agree with that?
Tom McDonald: We did not assess the whole portfolio, in terms of the impact that it was having. We have to rely to some extent on the prospective assessment of impact that CDC is now doing on a regularised basis for all its investments. I honestly cannot give a yes or no answer as to the impact on the south.
Rory Stewart
Q Do you agree that the prime purpose of CDC is for the British Government to make a profit in the global south, and that our investments are not benefiting the people in those countries, which is Saranel’s claim?
Tom McDonald: From what we saw when we visited the projects in east Africa and India, there is a clear desire to benefit the people of those countries, as well as for CDC to achieve its own targets.
Rory Stewart
Sir Paul?
Sir Paul Collier: It is not worth entertaining, I am afraid.
The Chair
Well, just answer the question, if you will.
Sir Paul Collier: I am sorry. It is self-evident that the path out of poverty involves business. It is also self-evident that not enough modern business is going to these very poor countries. So it is a very strong public interest to use public money to try and encourage firms to go to areas where they are needed but where they will not make much money. That is the rationale for the whole of the development finance institution enterprises. Clearly, CDC is controlled by DFID; DFID is controlled by Parliament; and the objective of getting people out of poverty runs right through both organisations.
Rory Stewart
Q Just as a quick follow-up, Sir Paul, you have used the phrase “public risk capital”; would you expand a little bit on what you are saying about the need for public involvement?
Sir Paul Collier: Yes. These environments are risky environments, in which there are not great amounts of money to be made by private enterprise. That is why so few firms go there. So one of the purposes of public money is to bear some of the risk. I believe we should be prepared to lose some public money in incentivising firms to go to places where there is a public interest. Parliament has not, and DFID has not, authorised CDC to go that step—yet. I very much hope that that will happen. In the negotiations for the latest International Development Association round—IDA 18, which is being signed this month—the World Bank’s aid arm is authorised to lose money in International Finance Corporation investments, to get firms to go to places where there is big public interest. We are on a journey, and scaling up CDC is part of that journey.
Richard Fuller
Q Just on the issue of low-tax environments and tax havens, and their use by CDC, I am not sure if you were all present for the earlier evidence session, in which a question was asked about that, but essentially the point was that in a number of the locations in which CDC operates they do not have the financial infrastructure or probity to encourage either CDC or other investors around that. Do you think that CDC makes effective and good use of tax havens in its investing, and do you have any concerns about that?
Sir Paul Collier: I should say that I was instrumental in the British G8 trying to clamp down on secrecy havens and get the compulsory register of beneficial ownership, so I had a lot of fight to push this agenda forward. The use of the overseas territories for registering companies has a triple function: sometimes it is a tax haven, which is bad; sometimes it is a secrecy haven for banking, which is worse; and sometimes it is a neutral administrative centre for a lot of third-party investments. If a company from the middle east wants to invest, along with a company from India and a company from Singapore, along with CDC, they try to find a neutral territory.
Richard Fuller
Q So CDC is the third of those.
Sir Paul Collier: Yes, where CDC is a party in it, and often it will be—
Richard Fuller
Q I think we understand, but I appreciate you clarifying. Mr McDonald, from the point of view of the NAO?
Tom McDonald: We did not actually look at that in our reports—
Richard Fuller
Q Do you have any concerns about it?
Tom McDonald: I am aware of the CDC’s position, but we have no view as to—
Richard Fuller
Q If you had a concern about it, would you have looked at it?
Tom McDonald: [Pause.] I suppose—
Richard Fuller
Q I think one can infer that you did not have a concern, as you have done an extensive review of CDC and you did not even think about it as a topic to look at.
Tom McDonald: We did consider it at the beginning. It didn’t—
Richard Fuller
Oh, you did consider it. But it wasn’t a priority.
Tom McDonald: It didn’t emerge as a priority.
Richard Fuller
You are quite evasive, Mr McDonald, in your answers. I mean, just in the answers to the Minister you were quite evasive.
Richard Fuller
Q Specifically on this, Mr McDonald, you should have told the Committee right at the start, yes, you thought about it, but you didn’t think it of concern to look at in your inquiry, shouldn’t you?
Tom McDonald: When we start a value-for-money audit, we have to consider a huge number of issues. This was one of the ones that we considered at the beginning but didn’t undertake any detailed field work on. Apologies.
Stephen Doughty
Q I have a follow-up question for Oxfam or War on Want. I do not agree with everything War on Want says, but a good point it made was about the differing standards that appear to be applied to the CDC as opposed to non-governmental organisations, other multilaterals and so on. The multilateral aid review is pretty robust on how we should deal with multilaterals—publish every item of spending over £500 and so on. Gideon, perhaps you could say a little more about where a double standard might be going on here in expectations.
Gideon Rabinowitz: I have made the point already: it is clear and on the record that the CDC has a bit of catching up to do on transparency. One of the reasons why it would be helpful for it to make progress on transparency is that everyone would then know a lot more about where it is investing, what it is investing in, what the justifications for those investments are, and why it thinks it is providing financial and value additionality in those investments. We would all be starting this debate from a different position if there was greater awareness of what the CDC was doing and how it is working.
The other point that we are keen to emphasise is that if there is some way in which the Bill can leverage that additional transparency to include encouragement of reporting around a wider range of development impacts and indicators to help secure our confidence that the CDC is focused on the right investments, that would be very valuable. The type of indicators that we have to report against in our programmes could be rolled out more broadly in some of those investments.
Stephen Doughty
Q May I ask a separate point, Paul? You said, “Take more risk. Get in there. Get things done.” Are you not worried that the CDC’s profile appears to be declining in Africa and still heavily focused on middle-income countries? Looking at the projects in lower-income countries, there appears to be quite a lot of diversity, but do you think that they ought to be even more risky, more poverty-focused, or more focused on Africa than on, say, India?
Sir Paul Collier: Yes, I do. I should also say that with risk comes an incidence of failure. The CDC is in a risk business in difficult environments; we should all get used to accepting a rate of failure. The CDC should not be judged by the fact that it will have some failures. If it has no failures, it is not doing its job.
Stephen Doughty
Q It is too risk-averse at the moment, do you think?
Sir Paul Collier: That may be true, actually. The emphasis on scrutiny, scrutiny, scrutiny, without any understanding of context, drives people into that sort of risk-averse behaviour. Yes, we need transparency and scrutiny, but that has to be in the context of an understanding that the basic mission we want the CDC to do is difficult and will involve a rate of failure.
Fiona Bruce
Q On scaling up and the challenges of recruitment and retention, which are highlighted in the NAO report, I am interested to know whether you think that CDC will be able to meet the recruiting challenge and what particular skill sets are needed for CDC, as opposed to other international development work, bearing in mind that a lot of people want to work in this field. Why will CDC have particular challenges?
Tom McDonald: CDC does face a significant challenge if it is going to make use of additional capital to recruit and retain the people it needs to manage that money. In the past, CDC has found it to be quite a slow process to recruit people at the senior level, but it gets there. The real difficulty is recruiting and retaining people at the middle levels of management, because CDC is competing, effectively, with other funds and private equity employers who can afford to pay a lot more. What CDC has changed is that whereas it used to benchmark its salaries against the private equity industry and therefore pay people a lot more through their overall benefits packages, now it benchmarks pay against other DFIs, which we think is a good step. The danger is that as average pay has come down, CDC is in the process of reconsidering its remuneration framework with DFID. That would be something we would want to watch very carefully, because the pressures on retention and recruitment might start to force that average pay up again next year.
Fiona Bruce
Q I was not so much concerned about pay levels—well, I am concerned about pay levels, but I am particularly concerned about the skill sets that you are saying there is potentially a shortage of, or there could be a shortage of, for these particular appointments.
Tom McDonald: I don’t think there is an absolute shortage of skill sets. It is about finding the right packages and opportunities to get the right people in to do the job. Because of the change in strategy since 2012, CDC needs a lot more people with experience of making direct investments—understanding the context, as Sir Paul was describing, knowing what an opportunity looks like in a local market, and then being able to put a deal together that makes commercial sense, but also has a development impact. There probably are not that many people who have both of those skill sets.
Richard Fuller
On a point of order, Mr Streeter. In some comments earlier about Mr McDonald, I used the word “evasive”, which on reflection I think was overly strong. I would not like those to remain without correction.
The Chair
Thank you—much appreciated, and I did notice.
Thank you, witnesses, for all your expert evidence, which has been greatly appreciated by the Committee.
Ordered, That further consideration be now adjourned. —(Andrew Griffiths.)
Commonwealth Development Corporation Bill (Second sitting)
Tuesday 6th December 2016
(7 years, 4 months ago)
Public Bill CommitteesRead Full debate Commonwealth Development Corporation Act 2017 View all Commonwealth Development Corporation Act 2017 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 6 December 2016 - (6 Dec 2016)
The Committee divided: - Ayes: 2 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 8 - Question accordingly negatived.
The Chair
We now begin line-by-line consideration of the Bill. Before we begin, I ask that everyone ensures that all electronic devices are turned off or are switched to silent mode. Members may remove their jackets if they wish—although it may be a little chilly today for that.
The selection list for this afternoon’s sitting is available in the room. It shows how the selected amendments have been grouped together for debate. Amendments grouped together are generally on the same or similar issues. A Member who has put their name to the leading amendment in a group is called first, and other Members are then free to catch my eye to speak on all or any of the amendments within that group. A Member may speak more than once in a single debate.
Please note that decisions on amendments do not take place in the order that they are debated, but in the order in which they appear on the amendment paper. In other words, debate occurs according to the selection and grouping list, and decisions are taken in the order on the amendment paper. I hope that explanation is helpful to Members.
Clause 1
Amount of the limit on government assistance
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
I beg to move amendment 6, in clause 1, page 1, line 4, leave out “£6,000” and insert “£3,000”.
The Chair
With this it will be convenient to discuss the following:
Amendment 1, in clause 1, page 1, line 4, leave out “£6,000” and insert “£5,999”.
Amendment 3, in clause 1, page 1, line 4, leave out “£6,000 million” and insert
“the amount specified in subsection (1A)”.
This amendment paves the way for amendment 4.
Amendment 4, in clause 1, page 1, line 4, at end insert—
“(1A) After subsection (1), insert—
(1A) The amount specified in this subsection is whichever is the lesser of the following amounts—
(i) £6,000 million,
(ii) the amount determined in accordance with subsection (1B).
(1B) The Secretary of State shall determine the amount for the purposes of this subsection by estimating the amount which will constitute 5% of official development assistance in the relevant period determined in accordance with subsection (1C).
(1C) That period begins with the financial year in which the Secretary of State considers that the Crown’s assistance to the Corporation (determined in accordance with subsection (2)) will exceed £1,500 million and ends at the end of the fourth subsequent financial year.
(1D) For the purposes of this section, “official development assistance” has the same meaning as in the most recent annual report laid before each House of Parliament in accordance with the provisions of section 1 of the International Development (Reporting and Transparency) Act 2006.””.”.
This amendment, together with amendment 3, would replace the proposed limit on government assistance under section 15 with a new amount, expressed as either £6 billion or 5% of forecast official development assistance over a five year period, whichever is the lesser amount.
Stephen Doughty
It is a pleasure to serve under your chairmanship, Ms Ryan, and for the first time, I think. I know you take a keen interest in these matters, so it is particularly delightful to serve under you, as it was to serve under Mr Streeter this morning—I know he is equally interested in the Bill. We had a wide-ranging debate on Second Reading and a wide range of issues were also explored by all members of the Committee during some excellent scrutiny of the witnesses who were before us this morning.
Amendment 6 stands in my name and those of my hon. Friends the Members for Edmonton and for Bradford East. It regards the nub of the matter, which is the amount of money—aid money; taxpayers’ money—that the Bill intends to allow the CDC to receive. It is a very large sum: up to £6 billion, leading up to £12 billion, which I know we will come to discuss in due course.
As I said on Second Reading, I am not opposed to the existence of the CDC and I am not opposed to much of the important work that it does; I recognise that it does some excellent work. Indeed, the National Audit Office is clear that the CDC is largely meeting its own standards and the strategy that was set for it in 2012. However, that is not the issue before the House or, indeed, the Committee; rather it is whether we should grant such large sums of money to CDC as opposed to directing that important aid money to other uses.
Despite having listened carefully to the Minister and the CDC itself—I have met its representatives—and reading much of the documentation about the Bill, I am still at a loss as to where the £6 billion and £12 billion figures have come from; I do not believe that the case has been made for that expenditure. There may be a case for increasing capital for the CDC, and I am sure we will hear many of those arguments today, but I have certainly not seen the case to justify the expenditure of a potential extra £4.5 billion over this spending round, as implied by the Minister’s earlier comments and the contents of the explanatory notes to the Bill, nor do I see the rationale for potentially expanding that sum to £12 billion.
The information we have before us is very vague. Paragraph 10 of the explanatory notes to the Bill says:
“Increasing the limit on government assistance to £6,000 million will enable the Secretary of State to accelerate CDC’s growth over the current Spending Round in response to forecast market demand—”
which is not actually explained anywhere, nor has it been explained in answers to questions I have put to Ministers—
“over CDC’s next strategy cycle and in order for CDC—”
this, again, is very vague—
“to play a fuller role in the delivery of the UK’s international development objectives.”
Those are very short sentences and paragraphs to justify the potential spending of £6 billion, rising to £12 billion. Let us remember that the CDC only required capitalisation from the UK Government of £1.5 billion over the entire period between 1999 and 2016. We understand that the bulk of that has come at the CDC’s request, although I know that there are a variety of views out there on that. In recent years, we have seen the big recapitalisation of £735 million in two tranches, which I am glad to say was accompanied by a business case. Not all of that case was met, but at least there was some rationale for it—whether it should have gone through is not relevant now—whereas there is no rationale for the proposed increase.
I think it was the NAO that said that there is a cart-and-horse problem here. This is a huge potential uplift and we have not seen any kind of rationale for it, any clear statistics, analysis of markets or suggested project sectors, just a vague assurance that it will all be all right on the night and that Parliament should therefore go ahead and approve large sums of money on the nod. We have also heard doubts expressed by the NAO and others about whether the CDC even has the absorptive capacity to accept that sort of uplift in such a short space of time.
We had reassurances from the Minister that the uplift would only come in response to clear demand and with the clear ability to take it on, but the reality is that the NAO has criticised the CDC for risks in its staffing and for its organisation. Even regardless of that criticism, I question whether any organisation could take such an uplift in such a short space of time, whether it was a non-governmental organisation, the World Bank or a UN agency. We ought to treat our scrutiny of development finance institutions and multilateral agencies with the same brush, whether they are close to the Department for International Development or slightly further away; I will come back to that point in due course.
The other issue is that there is an opportunity cost here that I hope we will be able to explore in the debate. The Minister earlier seemed to suggest that if we do not give the money to the CDC, we will inevitably have to give it to a development finance institution that is performing less well or is perhaps even less focused than the CDC, but I do not think that he has made that case very clearly.
I have read in detail the multilateral aid review that the Minister published last week and that we scrutinised in an urgent question on Friday. It does a lot of good things; it gets into the meat of what some agencies are doing and it points out agencies that are not performing well. Has the CDC been put through that level of rigour? Is it subject to the same expectations of transparency, poverty focus, effectiveness and accountability to beneficiaries, taxpayers and the Government? I am not sure that it is. Where would it appear in the multilateral aid review’s graph of agencies? Undoubtedly it would do well in some areas but in others I suspect it would not, particularly given the NAO’s commentary.
Given what DFID expects not only of multilaterals but of its bilateral partnerships and its partnerships with civil society organisations, there seems to be a double standard. One example is that DFID now expects multilateral agencies to publish details of everything they spend over £500. That is a good thing, but we clearly do not have the same transparency from the CDC. Yet we are planning to give it extra billions of taxpayers’ money via the Bill—initially up to £6 billion and later up to £12 billion. At the very least, we ought to provide a level playing field for assessment and expectation, so that we are absolutely sure we are investing our money in the routes that will lead to the greatest reduction in poverty, that align with our wider development objectives, that are coherent and that meet the wider objectives of the Government and the Department.
Conversations with the CDC and comments from the Minister have revealed a crucial issue: the CDC has not requested this capital increase. The Minister told me that in a written answer last night and confirmed it in this morning’s Committee sitting, and the CDC itself has also confirmed it to me. That seems a very odd situation. I can understand a generic conversation—“Well, if x were y and y were z, we might be able to take a bit more money or do this or that”. But not even to have a request, never mind a clear rationale or expectation of what could be done with £6 billion of taxpayer funding—let alone £12 billion—is extremely concerning. Is the tail wagging the dog? Is this Ministers putting pressure on an organisation to accept significant increases in money, perhaps for some other purpose which I will come on to, rather than it being based on a real set of demands and a real set of expectations of what could be delivered? I am concerned when I hear that from the Minister or from the CDC, and I am concerned when it is confirmed in writing. It is in contrast to the situation in which it made a request for recapitalisation in the last year. It was perfectly reasonable for there to have been a request—I do not know about the value—but the CDC put forward a business plan which was discussed over a period and the Department agreed the £735 million.
The Minister of State, Department for International Development (Rory Stewart)
indicated dissent.
Stephen Doughty
The Minister is shaking his head but the CDC did request £735 million; it told me so. Perhaps the Minister wants to intervene? The Minister’s own written answer to me last night, when I had asked him specifically what recapitalisations had been requested by the CDC in each of the past six years, told me that it had requested £735 million. So I am confused as to why he is shaking his head; perhaps he would like to intervene?
Rory Stewart
Thank you. It is a great pleasure, Ms Ryan, to serve under your chairmanship. I will try not to intervene too much, since this is not really my responsibility, but as a point of information, I think there are two separate issues here. The first is the question of the CDC calling on a promissory note, which is what would happen in the future. In terms of the £735 million request the hon. Gentleman is talking about, when the Government have funds available and have legislative authority to allow money to go into the CDC, the CDC will then make a request. That would be true in the future too, so if the Bill gets through Parliament and the money is available, so the option is available, and the promissory note and the business case from DFID are in place, at that point the request would come from the CDC. One would not anticipate the request coming from the CDC at this stage. That has not happened in the past and it would not happen in the future.
Stephen Doughty
I find that a very odd suggestion when we are talking about such large sums. One would expect there to be the architecture of a request, or the basic bare bones of a request, even if the specific details were not there. We are not talking here about £100 million or £200 million, large sums as those are, we are talking about £6 billion and £12 billion. These are huge sums as a proportion of the overall aid budget and in terms of our commitments to other multilateral development finance institutions. Now the Minister suggests that we just accept these back-of-a-fag-packet calculations— £6 billion, £12 billion—without any kind of rationale for what they are. He said earlier that the department had come up with those figures, that he had come up with those figures, and they had been presented to the CDC, rather than the other way around. One would expect the CDC, as the expert in the markets and sectors it is investing in, to be suggesting to Ministers, perhaps, where potential investments could be made, where returns could be achieved and where poverty eradication could be delivered.
Rory Stewart
I am contradicting myself by intervening again. There is an important distinction here. This is a piece of enabling legislation. The CDC is in a very unusual position. Unlike our normal relationship, where we can, for an NGO such as Oxfam, give money without coming to Parliament, or for a multilateral organisation such as the World Bank, go through secondary legislation, a statutory instrument, this is unusual. This is one of the only organisations we deal with where Parliament had imposed a cap. So what we are asking for is enabling legislation which would allow DFID, if it had a request from the CDC, to give it the money. This is not our giving it the money, it is creating an option and a ceiling against which, in the future, the CDC would be able to present a business case.
Stephen Doughty
The Minister suggests we should not be sceptical of the Government and their intents. It is the role of this House to be sceptical of the Government and their intents. To suggest that Ministers are going to take powers but might not use them is a slightly curious argument: I have not seen many cases of that in the past. The timing of this is very odd, given some of the other circumstances, which I will come on to.
Stephen Doughty
I will give way in a moment, but I just want to make one point. We have seen a very important change in the definition of the ODA, which occurred only last year. Previously, as I said on Second Reading, it was the issue of the CDC net disbursements that contributed to our ODA figures. Normally we looked at the money that the CDC was investing, returns from that investment, the function of the two and ended up, usually, with a positive number. Over the past five years it had been a £100 million or £200 million positive contribution to our aid effort. In fact, last year it would actually have been a negative contribution of minus £9 million. However, the Government changed the rules. They decided to count the capital inflow into the CDC—all of it, in its entirety—as ODA, as aid, rather than the function of what is actually, potentially, being achieved.
Jeremy Lefroy
It is a pleasure to serve under your chairmanship, Ms Ryan. The hon. Gentleman raises a very important point about the capacity of DFID and, indeed, the capacity of the two continents—Africa and part of the continent of Asia, south Asia—to absorb this kind of money, but does he not agree that one major challenge facing the world at the moment is the need to create in the next 15 years 1 billion jobs, most of which will be in those countries, and that the amount of money that we are talking about is tiny in comparison with the amount that would be required to create those jobs and thereby to alleviate poverty?
Stephen Doughty
I agree that the challenge of creating jobs is huge and one in which we and others should be playing a role, but it is not solely our role. Again, I hope that one question that we will get on to discussing is whether we should be providing what is in effect private capital in some of these locations or whether the capital should be coming from other sources: other Governments, institutions or DFIs. Indeed, should that be the responsibility of the Governments themselves? We will undoubtedly come on to that in discussion of some of the new clauses, but one of my fundamental questions is about the focus of this money: where is it going currently, and is it doing all that it could do? Professor Collier himself said this morning, in relation to the current bias of funding towards south Asia and India in particular, that he thought that there should be more focus on Africa. I agree.
Jeremy Lefroy
I agree, too, on that point. Will the hon. Gentleman also accept this point about the other DFIs? The Dutch DFI has invested far more money than we have, and the Netherlands has a population one quarter the size of the UK’s. The French Proparco is in a similar position to the UK, but the Germans have invested three times as much. We are laggards in this respect.
Stephen Doughty
We are not here to discuss the Dutch DFI, but I do know a reasonable amount about it. It provides only marginally more than us. It does do interesting work; it does not do exactly the same work as us. I do not know its history of recapitalisations and how much additional ODA money it has received recently. It would be interesting to look at that. However, the question here is this. What is the best use of our money? Are we not investing or have we reduced investment in other sectors where we could be using our aid in order to do this, and is that the right choice? That is the question before us, and when we look at, for example, DFID’s closures of bilateral programmes in places such as Burundi, we do not have clarity from the bilateral aid review on whether there will be further closures or changes.
We have heard worrying things about cuts in bilateral funding for HIV/AIDS programmes, despite the good money that is going into the global fund. We have seen a shift away from certain sectors and from budget support. We have seen a shift away from investing in free healthcare and education, and in teacher salaries, and with removing user fees for healthcare, for example. When the CDC invests in private healthcare and private school systems, we might have a debate about the role that voluntary and private play in healthcare and schools, but again it is an opportunity cost—it is a choice about where we invest these things.
I accept the hon. Gentleman’s wider point about the importance of jobs, investing and crowding in capital into some of these sectors, but we have to question what we should be doing with our money and whether that is right versus other potential sources. I contend that the Government simply have not come forward with a case that justifies this level of cap. Some increase in the CDC’s budget might be justified, but certainly not at this level.
Stephen Doughty
I will give way in a moment, once I have made another point.
All that needs to be seen in line with some of the other issues. I mentioned the diversion of aid and the shifting of aid between priorities, but by 2019 26% of ODA will be spent by Departments other than DFID. That is a significant shift from where it was. As the hon. Member for Rochford and Southend East knows, I am not opposed to cross-Government working or other Departments spending ODA, but that level of it is concerning. With the CDC on top of that, as well as the prosperity fund, which we discover was given £1.3 billion of ODA in September this year—much of it spent through other Departments and yet ending up in India, China, Malaysia, Mexico and other locations—the picture of where our aid spending is shifting to gets worrying. Is it shifting away from the poorest countries and the poorest people, and from the core services that I believe we should be supporting?
Rory Stewart
Given that the hon. Gentleman seems to have such fundamental concerns about the CDC—its accounting practices, the role of Government, its strategy, its spending—will he clarify why he is proposing to give it £3 billion in his amendment?
Stephen Doughty
As the Minister knows, in this House we have a thing called probing amendments and, like the Minister, I have drawn up a suggested figure—
Stephen Doughty
Indeed. We can put any figure down and, without the rationale, we can have a debate—the Minister might criticise me for a £3 billion figure, I can criticise the Minister for a £6 billion figure. The fact, however, is that the Minister has not provided a clear rationale or business case for £6 billion—nor has he for £12 billion—and there are some interesting suggestions from the SNP Members about proportions. Those are all issues that we ought to discuss. I made it clear earlier, I am not opposed to the CDC getting more money, but I am concerned about the period over which it gets it, the total amount and the caveats that we might then place on the CDC to receive it.
Stephen Doughty
I will happily give way, although the Minister said that he would not intervene all the time.
Rory Stewart
I am just trying to understand. The hon. Gentleman is seriously proposing an amendment to this House which we will vote on to give £3 billion to the CDC. Will he justify why he wishes to give it £3 billion? This is a real amendment, to a real piece of legislation before this Committee.
Stephen Doughty
It is not Question Time for me; it is Question Time for the Minister—[Interruption.] It is Question Time for the Minister proposing the legislation. He must explain the rationale—[Interruption.]
The Chair
Order. May we keep this within the rules? If people want to make an intervention and the Member gives way, that is fine; shouting across the Floor is not fine. Everyone will get an opportunity to speak.
Stephen Doughty
The hon. Member for Rochford and Southend East is looking anxious to intervene. He has, for example, posted an amendment suggesting reducing the CDC funding to £1—I will happily give way to him to explain that.
James Duddridge (Rochford and Southend East) (Con)
It is actually £1 million, but my amendment is probing, as the hon. Gentleman’s is. What the hon. Gentleman is getting wrong—I do not think wilfully—is that the Minister does not need to present a business case and, indeed, he should not present a business case now. This is a figure that might be reached on the basis of drawdown and a request of the CDC with a business case which he will then analyse.
Stephen Doughty
But the CDC has not made such a request and, as the NAO said this morning, it is the cart before horse. That is the problem. I do not expect the Minister to provide a detailed analysis of every single project that we will invest in over the next 10 years, but a paragraph in the explanatory notes and some vague assurances about market demand are simply not good enough. We are talking about spending, potentially, billions of pounds of taxpayers’ money. Would we suggest the same amount went to a non-governmental organisation such as Oxfam or indeed the World Bank?
Imran Hussain (Bradford East) (Lab)
Does my hon. Friend agree that the central issue is not an increase in funding but the sheer level of funding? This is an organisation that in its whole life has had funding of £1.5 billion. On the Opposition Benches we want to probe why there is such a significant increase, which is a reasonable view to take.
Stephen Doughty
Absolutely, and that gets to the nub of the issue. The Minister has been a veteran of many debates in this House and in Committee, so he knows full well the format in which debate takes place on amendments. Amendments are tabled to discuss the fundamental issues and the matters around them. Therefore, given the faux outrage at me for suggesting £3 billion versus £6 billion, he needs to explain—he has not done yet—his rationale for £6 billion and £12 billion, which I have yet to hear.
Richard Graham (Gloucester) (Con)
I am curious, partly because the hon. Gentleman’s amendment proposes an absolute sum of money, but more because everything he has said so far suggests that he is almost as close to the lady from War on Want in disapproving strongly about the activities of the CDC and the ability of Government to allow it to access more capital if it makes the right case for doing so. Therefore, I suggest the emphasis is slightly on him to try to demonstrate to members of the Committee why he has decided that £3 billion is the appropriate figure. I imagine that he was influenced this morning by hearing Sir Paul say that we need to get on with investing more in business in order to provide the jobs that Africa in particular so badly needs. I leave it to him to point out that that is what he thinks.
Stephen Doughty
The hon. Gentleman clearly did not listen to what I said either on Second Reading or in Committee this morning. He knows full well that I do not support the views of War on Want on the role of business and private capital in supporting developments, jobs and job creation. I made it clear that I did not support that part of its views. What I did support was the suggestion that the CDC is being given a different set of rules to play by from other development finance institutions and indeed other routes on which we can put our valuable aid money, for which we should demand the highest levels of scrutiny, transparency and effectiveness, and coherence with the rest of our programme.
I do not want to stray too far from the terms of the amendment, but in the new clauses we will discuss some of those issues of coherence. Without additional safeguards and caveats on where that money is spent, the transparency arrangements, the business case that should be presented and so on, whatever number we put in, whether it is £1 million less that the hon. Member for Rochford and Southend East suggests, the £3 billion less that I suggest or indeed any other figure, or a proportion as suggested by SNP Members, we could see multiple distortive effects. For example, the value of investments currently going into middle-income countries is still significantly higher than into lower-income countries. The value of investments going into Africa has gone down and the value of investments going into south Asia—mostly to India, a country to which we were supposed to end giving aid—has in fact gone up. The reality is, if we boost the CDC’s budget further without any change in that overall strategy, we will see a multiplication of that effect.
Richard Fuller (Bedford) (Con)
On a point of clarity, when the hon. Gentleman talks about the value of investments, does he mean the valuation of investments made historically, and therefore revalued on the balance sheet, or is he talking about new disbursements?
Stephen Doughty
I am talking about the issue before us today, which is about new investment and new disbursements. The figures I am referring to about those shifts relate to new disbursements by CDC—new investments made in recent years. We can have a lengthy debate about what went on in CDC before 2012 and the legacy investments that are still part of the portfolio—
Stephen Doughty
We are not going to do that here. We are talking about the future. We are talking about where this money would go. I am concerned that in recent years, despite the progress, there has not been a big enough shift into the types of markets, sectors and places that would fit more coherently with DFID’s objectives. The CDC is operating in 65 countries and DFID in only 35. I accept that there might be some difference in that and some difference of focus, but that is a huge difference and yet potentially we will decide to give billions more.
I will draw my remarks to a close, but I simply do not see that the case has been set out or the rationale has been given. I do not think there is enough clarity on the absorptive capacity. I do not think there is enough justification of the opportunity costs of not investing by other routes. The crucial fact is that the CDC did not request this money. Did it even request the legislation, I wonder? Perhaps the Minister will be able to provide us with documents to that effect, asking for the legislation to be made available. The CDC has just been given £735 million extra. It seems slightly odd that it then requests a Bill for £6 billion or £12 billion more.
I am very interested to hear what the SNP has to say about its proposals to other Members.
James Duddridge
It is a pleasure to serve under your chairmanship, Ms Ryan. I have only two groups of points. The first is on process. I am a great fan of the “Daily Politics” show and was very disappointed when the hon. Member for Cardiff and Penarth resigned from the Front Bench. This is the first time I have sat on a Bill Committee where a Back Bencher has led the amendments in this way. The Labour Front Benchers, the hon. Members for Edmonton and for Bradford East, have added their names to the amendments, but have not tabled any in their own names. I will not do so in this debate, but I am thinking about leading a debate on the good use of Short money, because the Labour Front Bench is paid to do the job that is being done by the hon. Member for Cardiff South and Penarth on its behalf.
The Chair
Order. Will the hon. Gentleman stick to the issues in front of us? A discussion of Short money is not relevant here.
Stephen Doughty
I am sure that my hon. Friends on the Front Bench will confirm that they are in full support. In fact, we have discussed the amendments at great length. It is simply a procedural point. I was not aware until I was informed by the Clerk earlier about the ordering of names, despite having been on many Bill Committees. I was informed by the Chair at the start that I would be called first because my name came first in the list. I assure the hon. Gentleman that the amendments have been fully discussed with the Front Benchers and have their full support. No doubt the Front Benchers will speak to the amendments in due course.
James Duddridge
Fantastic. My Front Bench also seems to be aware of that situation. I look forward to listening to the SNP’s contribution on amendments 3 and 4 and to seeing how its Front Bench is taking things forward.
Amendments 1 and 2, which I tabled, are probing amendments. I had taken myself off to table amendments that increased, not decreased, the amount and was told that while it would be permissible to table them, it would not be permissible for them to be selected, because of the money resolution. I therefore want to enter into a debate about whether it is the right amount. I have tabled an amendment that would make it lower, rather than higher, although I believe that there is capacity to invest more money in CDC, and faster. I do not share the scepticism of others around the table. I hope to see the £6 billion target reached earlier, rather than later.
This morning’s evidence session was incredibly useful and covered a lot of the points and queries that I would have wanted the Minister to address in his remarks. With that in mind, I will not detain the Committee any further.
Patrick Grady (Glasgow North) (SNP)
It is a pleasure to serve under your chairmanship, Ms Ryan. I will speak to amendments 3 and 4, which stand in my name and that of my hon. Friend the Member for Coatbridge, Chryston and Bellshill.
I agree with pretty much everything the hon. Member for Cardiff South and Penarth had to say. The Minister has been asked repeatedly how the figures of £6 billion and £12 billion were arrived at. It increasingly sounds as if they were arbitrary figures based on a best-guess discussion with the CDC about what it might manage to spend over a particular period in the coming years.
Amendments 3 and 4 try to relate the amount of investment in the CDC more clearly to the overall amount of official development assistance the Government are likely to have at their disposal over a spending review period of the lifetime of a Parliament. Of course, the amount of ODA can go up or down in any given year, because it is, by definition, a proportionate target: it is a percentage of gross national income. Indeed, in the autumn statement a couple of weeks ago, the ODA forecasts were revised down because the economy as a whole is contracting, not least because of the Brexit result.
Using those forecasts, the Library estimates that amendment 4 would mean that £3.77 billion of additional investment could be made on top of the £1.5 billion already invested, making a total investment of £5.02 billion. The effect of amendment 5, which I appreciate we are not discussing immediately, would be to bring the upper cap to £9.77 billion. As the hon. Member for Rochford and Southend East just said, the money resolution means that those numbers cannot go above £6 billion or £12 billion in any event. It is worth noting that introducing such a formula would mean that in the event of a significant decline in GNI—some sort of catastrophic economic collapse, which I am sure will not happen under this Government—the cap on investment could reduce, meaning that the Government would have to divest.
James Duddridge
The first time the hon. Gentleman mentioned a contraction in the economy I let it go, but I thought the economy was growing at about 2.2%. It is the fastest growing economy in either the G7 or the G8—forgive me for not knowing which. Does he have the wrong numbers, or is he drawing a distinction between GNI and GDP and being selective?
Patrick Grady
As I said, the autumn statement demonstrated that GNI will go down and therefore the ODA forecasts are being revised down as well. The point I am trying to make is that if we are going to find a way of varying the cap on investment in the CDC, finding a way to make it proportionate to overall aid spending would seem to be the more sensible way of doing that.
Philip Boswell (Coatbridge, Chryston and Bellshill) (SNP)
In amendments 4 and 5, my hon. Friend and I have suggested a percentage adjustment mechanism. In this case, the figure of 5% is proffered. Does he agree that such a mechanism is altogether more equitable and appropriate? Will he elaborate on that for the Committee’s further consideration?
Patrick Grady
I thank my hon. Friend for that point. The point of equity and proportionality is what I am trying to test. As I have said, under my formula, the figures would come out not that much lower than the caps proposed in the Bill. Let us accept, in good faith, that we will hear some rationale for those caps. My formula would take us not a million miles away from those numbers. The point is that under my formula, the caps would vary over time, depending on what the total ODA spend was likely to be.
Even if the Minister objects to the particular formula, I will be keen to hear why some kind of proportionate formula is not preferable to the hard numbers in the Bill. We have heard about other amendments that probe those numbers. A formula that linked the caps to the total ODA spend over a period of time surely would help to clarify the link with the overall amount of ODA and the balance of the Government’s development priorities, which we will discuss when we debate the new clauses.
Jeremy Lefroy
I will make four brief points. First, there are several reasons for bringing forward the Bill, but one of the major reasons is that reducing the expected rate of return of the CDC’s investments, which I absolutely agree with, creates a need for more capital.
Under the last Labour Government, the CDC grew substantially, was well managed, invested in funds and made a lot of money out of significant investments, such as that in Celtel. All of that was good and I welcomed it, but it perhaps was not in accordance with the CDC’s original mission, although I would argue that it helped to reduce poverty. Capital was generated internally to quite a considerable extent. The required rate of return was relatively high, those returns came in and that money was reinvested.
Now that CDC is quite rightly supposed to focus on harder investments with lower rates of return and higher risk, there inevitably will not be as much free cash flow or free capital available for investment, so the shareholder —the UK Government, DFID and the taxpayer—needs to be prepared to put in more capital if we are to meet those objectives.
The second point is about middle-income countries. I fully accept the Minister’s point about the importance of targeting lower-income countries wherever possible, but let us not forget that the range for middle-income countries is, frankly, ridiculous. It goes from just over £1,000 to £13,000 per year. At the lower end are countries that are basically low-income countries and at the higher end are relatively wealthy countries. If we categorise all middle-income countries as somehow moderately wealthy, that is simply not the case. There was a point—not now, sadly, because of what is happening there—when South Sudan was briefly a middle-income country; look at where it is now. We have to be very careful when we talk about middle-income countries as though they are a homogenous group; they are not.
Stephen Doughty
The hon. Gentleman is making an important point and I have no doubt we will discuss this further. Is he not concerned, though, when he looks at the amount that is going into India, for example, and at individual states within India, where the majority of even the CDC’s new disbursements are still going to the richest states rather than the poorest? The top disbursement was to Maharashtra, where Mumbai is.
Jeremy Lefroy
Absolutely, we should look at that. However, there are more of the poorest people in India than in the whole of sub-Saharan Africa. If you take the view that a company in India in which you invest is likely to have national ambitions and wants to work across India, you would hope that it would therefore target the poorest as well as those who are perhaps better off. I agree, though, that the CDC needs to look at this and ensure that it does not stray back into the realms of investing only in fairly soft, nice, high rate of return investments.
My third point is about employment. I have already mentioned the figure of 1 billion jobs. The World Bank says that 600 million jobs are required across the world in the next decade; others have put it as high as 1 billion. There will be more of those 1 billion jobs in the middle-income countries than in the low-income countries, so we need to invest across the two if we are to tackle this enormous threat.
I was in Tunisia last week at the launch of the Parliamentary Network’s middle east and north Africa chapter—I chair the global network. The problems that a country such as Tunisia faces, with a population of 10 million and unemployment among graduates of 60%, are enormous. We know the social consequences of that. Tunisia has a very high rate of young people who have gone to Syria and Iraq to fight for Daesh. That is one consequence of the very high rates of unemployment and the lack of hope in those countries.
Finally, this is about investment. We talk about money being spent, but it is actually investment. Once it goes in, provided it is well-managed, it is recycled. As I have said, the money that made about £500 million of profit from Celtel under the last Labour Government was recycled into investment and is still there. Some of it may have been invested twice since then. This is not a one-off hit where we make a grant to an organisation and it does excellent work, but is then gone. It is money that goes round and round, that is recycled and that creates jobs.
Stephen Doughty
The hon. Gentleman makes an interesting point and I agree that it is investment and it is recycled—the CDC has shown that. However, does he not agree that that applies to our whole aid budget? If we invest in the education of a girl through a bilateral programme, with the opportunities that provides in her life and the opportunity it gives her to contribute to the economy, that is, similarly, an investment.
James Duddridge
The hon. Member for Cardiff South and Penarth is wrong. It is not an investment in the same way, in that it is not so easily controlled. An investment in a girl’s education is, indeed, an investment, but we are discussing an investment that has an actual return, which we can reinvest and have some degree of control over, as the aid budget is targeted in different ways. It is a different type of investment. As I said on Second Reading, it is a gift that keeps giving.
Jeremy Lefroy
I will conclude by saying that I feel a little like I am in the middle of a great argument, but I probably agree in some way with both Members.
Kate Osamor (Edmonton) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Ms Ryan. This is the first time for me, but I am sure there will be many more.
I want to speak about investment. That word has been used many times and in the absence of an investment strategy from the CDC, we feel very sceptical about why we should use taxpayers’ money in this way. It is only fair to ask the Minister to present that to us, so that we can have a debate in which we feel we have all the information. That is my brief contribution on this group of amendments.
Imran Hussain
It is a pleasure to serve under your chairpersonship today, Ms Ryan.
I will sum up the points that we are making. My hon. Friend the Member for Cardiff South and Penarth has gone into some detail, as always, on where we stand. I want to place the Labour Front Bench firmly in line with his views, to answer the point made by the hon. Member for Rochford and Southend East.
The issue here is the Government’s intention. We are not in any way, shape or form anti-DFI or against the spirit of the corporation. It was brought in by a Labour Government many years ago and we accept, on the record, that the CDC has been improved since 2011, as I said on Second Reading. As my hon. Friend the Member for Cardiff South and Penarth set out, we want to be satisfied on the rationale behind the level of increase; the lack of strategies and investment policies—the phrase “cart before horse” has been mentioned on many occasions and I will not go into it further—the CDC’s capacity; and the fact that it has not requested this money. Those are all pertinent points. Finally, regarding the concern about where and how this money is currently being spent, I agree with Members on both sides of the Committee on the logical point of view that has been put forward. Nevertheless, that concern remains.
The Minister’s earlier intervention was most helpful, when he set out his reason for why the business case, the strategy and the investment policy were not forthcoming. He gave the guarantee, which I want to press him on, that no money would go to the CDC unless it was requested by the CDC. Even so, it has to be done in the light of a proper business case, a strategy and an investment policy. Secondly, I press him to give some indication as to when those important strategies and policies will come forward. They are central to these proposals and I hope he genuinely gives us dates and assurances in that regard.
Rory Stewart
It is a great pleasure to serve under your chairmanship, Ms Ryan.
I will begin by saying that I have a lot of sympathy with the points that the hon. Member for Cardiff South and Penarth is making; they are all incredibly important. He has an encyclopaedic knowledge of CDC and has identified a number of issues in relation to CDC that we take very seriously. They range across its accounting principles, its reporting framework, the scope of the countries in which it operates, its overall effectiveness, its absorptive capacity, the strategy and business case systems, theories of change and types of investment. I think these are all good concerns and there is nothing mentioned by the hon. Gentleman that I would disagree with in principle. These are the kinds of questions we would expect DFID and Parliament to ask, as well as CDC to ask of itself before it makes an investment.
The real question is what is appropriate to put in the Bill, what is appropriate to be done through Parliament, what is appropriate to be done through the Department and what is appropriate to be done through CDC. That is where I hope I can provide a bit of assurance to right hon. and hon. Members of all parties.
I think we can take it as read that there is an overall agreement that we should give some more money to CDC. There is some disagreement about how much more money—the different amendments suggest different views on how much money and how that money is calculated—but the basic principle is that CDC is a good thing, that economic development is a good thing, that DFIs are a good thing and that, particularly at this moment, as Sir Paul Collier pointed out strongly in this morning’s evidence session, we should be investing more in economic development and jobs in Africa. That is something we all agree. The question is how we do it and how we ensure that it is done in the right way.
The hon. Member for Glasgow North proposed a quite detailed amendment, but there is a small technical issue. He suggested that we aim at a 5% ODA amount, but there are two issues with that. We considered looking at that in the Bill, but the reasons we rejected it were twofold. There is an issue with confusing a stock with a flow. In other words, the measure is designed to create the capital that is invested and reinvested over time— that initial investment made by the Attlee Government continues to be recycled nearly 70 years later—whereas the ODA allocation is an annual allocation and an annual spend.
There is an issue around trying to compare a stock and a flow, and we can go on to that. In fact, rather good graphs have been produced, comparing stock and flow investments of Germany, France and the Netherlands, showing that, in proportional terms, Germany is spending nearly three times as much and France is spending nearly twice as much as we are. The reason I have not deployed those kinds of arguments is that I just do not think that that stock and flow comparison is good.
However, there is a more technical reason why we would reject the exact amendment. The way in which the amendment is written—at least on the basis of the analysis by our in-house lawyers—is that it would refer to the entire cap for the entire sum available to CDC. In other words, that 5% would not be 5% of future money. The way in which the amendment is drafted means that it would incorporate the £1.5 billion of its existing money. That would therefore limit us to only a further £1.5 billion over a five-year period. That would not be 5% of ODA. It would be about 2.5% of ODA, which we think would be considerably lower. The £3 billion number, which is what right hon. and hon. Members have been getting at, is a more plausible figure as an additional amount to the £1.5 billion. We can talk about that over time.
Very quickly, I will deal with the question of additional responsibilities, which is at the core of the questions asked by the shadow Secretary of State—the hon. Member for Edmonton—and the shadow Minister, the hon. Member for Bradford East. The basic questions are: are we are putting the cart before the horse, why are we using taxpayers’ money for this kind of investment, when will we present our strategy, what are our real intentions, and what kind of guarantees are taking place? The answer is that, in effect, we have a whole series of procedures. What we are asking Parliament to do is only the first stage of a whole series of checks and balances.
We are asking this Committee, and we are asking Parliament, to agree to the principle of lifting the existing cap on CDC—in other words, putting CDC more into the type of arrangement that we would have with any of our other donors. It is very unusual that CDC has a capped amount. That is not true for the amount of money we give to an NGO or to the World Bank. In fact, we are actually giving more to the World Bank than we would envisage giving to CDC. We are asking Parliament to lift the cap.
The next bit—the question of how the business strategy, the business case and individual investment decisions are written—would then be taken forward by the Department, in line with the UK aid strategy, and debated in Parliament. Directly to answer the question of the hon. Member for Bradford East, who wanted dates, in December 2016 we will complete our business strategy, which will lay out the strategy for the next five years for CDC. It is the strategy that the hon. Member for Cardiff South and Penarth was referring to as our last strategy. We will have a new strategy of that sort. That strategy will do a number of things that will address concerns raised in many of the amendments as the Bill passes through the House. It will, for example, tighten our impact assessments, put more focus on gender and set a cap on India. The next thing that will happen is that in summer 2017—this is quite a slow process—we will bring together a business case to draw down a promissory note of money; in other words, to say, “This is the amount of money we believe is the kind of money that CDC may need to call up.”
Stephen Doughty
It is very helpful of the Minister to set out this process. Did I hear him correctly a moment ago when he said there would be a cap on India?
Rory Stewart
Indeed. I am happy to repeat that for the record. The intention is that, in our forthcoming business strategy, there will be a cap on the amount that CDC can spend on India.
As we move forward to the summer, we will produce the business case. The business case will define the amount of money, whatever that is. It could be, for example, £3 billion, which is roughly in line with some of the amendments that have come forward, but we would have the option to go up to £4.5 billion. I do not honestly believe that that business case will be going up to £4.5 billion, but we would have the option to do that.
The next stage is that CDCs needs to make very detailed investment decisions, which take a long time. A lot of these investment decisions take two to three years. Let us say that CDC was going into solar power in Burundi. It would have to get in on the ground. It would have to ensure that it had a viable business and then it would have to go through our development grid, which is the next stage of the process. That means ensuring that it had checked GDP per capita, it had checked the amount of capital available, it had checked the business environment and it had checked that this is a sector that creates jobs. That is just the first stage.
The next stage CDC needs to go through is to present a development impact theory. That individual investment needs to have a theory: exactly what contribution is this going to make to jobs, economic development and poverty alleviation? Within our strategy, at the end of this year, DFID will ask CDC to publish that development impact theory, so that the theory can be seen case by case with every investment and it will be possible to challenge that theory.
At that stage, CDC would then come back and call down on the promissory note to call down that money. Then other forms of monitoring come on. We are a 100% shareholder of CDC, which is why some of the analogies with giving money to NGOs or World Bank institutions are slightly different. This is us giving money to a wholly owned DFID institution. Every quarter, we as DFID shareholders meet the board and assess its performance. We have an annual review process. On top of that we have all the other processes: NAO, Public Accounts Committee and the International Development Committee. Independent Commission for Aid Impact reports would also be able to get into the business of CDC. It is that and, finally, it is our basic confidence in our institution that allows us to even begin the process. We would not come to the Committee asking for permission to make more money available unless we were confident that we had a good management team in place with a strong history and a strong track record of development; otherwise, we would be wasting hon. Members’ time.
We believe that this is a good institution that will be in a position for us to produce the business case, and that it will be in a position to find investments. I absolutely guarantee—
Imran Hussain
Is the Minister giving an absolute assurance that no further investment will go to CDC before the full, thorough business case and investment policy comes before the House again?
Rory Stewart
I am giving an absolute assurance to the hon. Gentleman that no money will be given to CDC until a full strategy is developed and published, which can be debated in the House—that is a strategy coming in December—and no money will go to CDC until a full business case is written in huge detail, which will be prepared in the summer of 2017. Following on from that, there will be the individual investment decisions. I am happy to give that assurance. On that, I would ask the hon. Gentleman kindly to withdraw the amendment.
Stephen Doughty
This has been a helpful debate and we have covered some useful issues. I am still not convinced but I appreciate the steps the Minister has taken to explain some of the process and his assurances that issues that I and others have raised are being taken seriously. I welcome that; the Minister said nothing in principle that I would disagree with. I will record that and remember that as the Bill passes through its remaining stages.
I am intrigued by the Minister’s admission that there would be a cap on India. I would certainly like to know more about that. Is he able to give us a specific value or percentage? Given some of the wider points I have made, and no doubt will make with regard to other amendments, it would help if he would explain whether the Department has thinking on that on other countries. On the subject of middle-income countries versus lower-income countries, there are some odd situations where CDC seems to be putting money into places like Egypt. That country is not without its problems and not without poverty, but is not exactly a focus country for DFID. I would say there is a huge divergence between where DFID is operating bilaterally and where CDC is.
It would help if the Minister explained where CDC sits in relation to the transparency that is expected of other development finance institutions. It is all very well to go through the scrutiny and the checks and balances, because it is clear what those are, but it appears to me —I am not satisfied on this point—that CDC is being held to a different standard. We might not be a 100% shareholder in the World Bank, but we hold significant shareholdings as a major donor, and we take those very seriously. We use our influence there as a voting board member to take decisions, whether on individual loans or overall strategies.
The Chair
Before I call the hon. Member for Cardiff South and Penarth, it may be helpful for the Committee to be aware that, if amendment 7 is agreed to, not only will all of the other amendments in the group fall, but all of the new clauses cannot be debated because they all refer to a provision that amendment 7 would remove. Nevertheless, I have decided that it would be helpful for there to be separate debates afterwards on some of the new clauses—but I do not wish to hear repeated arguments about the principle of the delegated power.
Stephen Doughty
I beg to move amendment 7, in clause 1, page 1, line 5, leave out subsection (3).
This amendment removes the power of the Secretary of State to set a limit on government assistance above £6 billion up to £12 billion by means of secondary legislation.
The Chair
With this it will be convenient to discuss the following:
Amendment 2, in clause 1, page 1, line 7, leave out “£12,000” and insert “£11,999”.
Amendment 5, in clause 1, page 1, line 7, leave out “£12,000 million” and insert
“the amount specified in subsection (4A).
(4A) The amount specified in this subsection is whichever is the lesser of the following amounts—
(i) £12,000 million,
(ii) the current limit at the time plus the amount determined in accordance with subsection (4B).
(4B) The Secretary of State shall determine the amount for the purposes of this subsection by estimating the amount which will constitute 5% of official development assistance in the relevant period determined in accordance with subsection (4C).
(4C) That period begins with the financial year in which the Secretary of State considers that the Crown’s assistance to the Corporation (determined in accordance with subsection (2)) will exceed the current limit at the time and ends at the end of the fourth subsequent financial year.
(4D) For the purposes of this section—
‘the current limit at the time’ means—
(a) prior to the making of any regulations under subsection (4), £6,000 million,
(b) thereafter, the limit set in regulations made under subsection (4) then in force;
‘official development assistance’ has the same meaning as in the most recent annual report laid before each House of Parliament in accordance with the provisions of section 1 of the International Development (Reporting and Transparency) Act 2006.”.
This amendment would set a new limit on the power to make regulations to increase the limit on government assistance under section 15, expressed as either £12 billion or the current limit at the time plus 5% of official development assistance over a five year period, whichever is the lesser amount.
Clause stand part.
Stephen Doughty
I am conscious of your admonishment not to repeat the arguments I made when I moved amendment 6, Chair. I will discuss a few other issues, specifically around the use of a statutory instrument in this way, the value of it and the way in which other replenishments and funding rounds are agreed for development finance institutions.
Many of the arguments that we have already discussed also apply to amendment 7, although I will come to one that we did not cover, but the fundamental issue is whether the Government should be given this level of power. There is a debate to be had about how much we give CDC, over what time period and with what caveats, but giving the Secretary of State the power to come back at the time of their choosing, which could be next week or in 10 years’ time, and not just increase the amount by another couple of billion but double it, is very significant. I am always extremely reluctant to grant Ministers such powers, whether they are financial powers or Executive powers.
We all know that despite the procedures of this House and the fact that many Members take an active interest in Delegated Legislation Committees and statutory instruments, secondary legislation often does not receive the same scrutiny as primary legislation. It often goes through on the nod or is scheduled on funny days when Members are not available. Obviously it is the responsibility of all Members to turn up and hold the Government to scrutiny, but given the debate we have had on the matter in this Committee and in the legislative process, it seems odd not to ask the Government to come back later with another Bill.
Let us not forget that a Bill was not required from 1999 to today, when only £1.5 billion was used. Even if there was an expansion, not to require another Bill for quite a significant period and just to put through another uptick, perhaps by a mischievous future Secretary of State or the current one, seems very odd.
I must come back to the Minister’s point about other development finance institutions and the processes they are subject to. Most development finance institutions, including the global health fund, the World Bank’s International Development Association, individual development banks and UN agencies, tend to go through replenishment rounds. They agree a set period, put out strategies and requests to donors for funding and come back on a three or four-year cycle. Those requests have to be justified so that we can scrutinise them and say whether we agree. Indeed, that is the very purpose of the multilateral aid review: to look into whether we are giving money in all the right areas and where we think some development finance institutions are underperforming.
I am concerned that, although CDC may be doing better in line with its 2012 plan, making improvements and shifting its focuses, as we have heard from the Minister, without any ability to come back and have a full, thorough debate about the nature of the organisation, the caveats that are placed on it and the overall cap of funding that it should receive, we are giving Ministers a completely open-ended power to increase that funding very significantly. Let us not forget that £12 billion is equivalent, roughly, to the annual aid budget—I know the Minister has made it clear that it will not be used in one year, but it is a very significant sum of money. We ought to be acting with real caution when giving Ministers such powers.
It would help if the Minister could be clear about the time periods he is looking at. If he is talking about 20 years, let us hear him say that. I would still be nervous even so, because a future Secretary of State or Minister might change their mind, but it would help to smooth the debate if we heard that statement from the Minister.
The other issue that the Committee did not discuss in our consideration of the previous amendment was the focus on sectors. I mentioned the problem of multiplying potential shifts into certain countries or regions, away from stated objectives; that argument applies equally to sectors. If we increased the limit to £12 billion, it would be magnified even further. I was concerned to receive an answer from the Minister today about certain sectors in which he stated that the CDC continues to disburse into some really questionable areas. One is private, fee-paying education—the CDC’s portfolio value in 2015 was £56.9 million. Another is private healthcare providers and services, in which the CDC had a total portfolio value in 2015 of £117.9 million. Its portfolio value in extractive industries—metals and mining—was £9.3 million; the portfolio value in palm oil, which we have discussed in relation to the Feronia case and other matters, was £20.4 million; the value of the investment in real estate is £147.7 million; and in fossil fuels, the current value of CDC’s portfolio is £250 million. That seems to me to be at complete odds with DFID’s wider development objectives for Government coherence.
To come back to the nature of the amendment—I can see Ms Ryan looking anxiously at me—those sorts of issue will be magnified even further by rapid increases in the budget without caveats being placed on it. Ms Ryan, you have rightly said that were we to vote on the amendment, and were it to pass, we would not get a chance to discuss some of those other matters, but the power being given here without assurances is simply not acceptable and I have great concerns about giving that power to Ministers.
James Duddridge
I shall raise only two points. I made all the comments I could possibly make on amendment 2 in the previous debate, so I will not detain the Committee further. I am sure it is terribly bad form, but I hope, Ms Ryan, that you will not mind, if we are still sitting when the business in the Chamber gets to the Adjournment debate, which is on rail services in my constituency, Southend, that I rush off before any possible vote.
Patrick Grady
I share many of the concerns outlined by the hon. Member for Cardiff South and Penarth. Amendment 5, tabled in my name, would apply the same formula to the upper cap as my previous amendment, and I have obviously heard the Committee’s view on that. I heard the Minister’s view as well and I appreciate the fact that he has given it some consideration. Even if that particular formula would not meet the standards that DFID would like it to meet, it would be interesting to see whether there was a way of coming up with a proportionate formula. That would answer a number of points that have been made today.
We have heard from a number of witnesses and in other evidence to the Bill, as well as from other hon. Members on Second Reading and since, that the £12 billion figure is particularly high, especially as it might theoretically be some years down the line before that maximum is reached or a need for it is felt. In that case, the points made by the hon. Member for Cardiff South and Penarth about the use of a statutory instrument are correct; it would perhaps be better if the Government were to come back with primary legislation in due course. We may come on to some of these issues in the debates on the new clauses, but the hon. Gentleman made a point earlier about the number of other arm’s length bodies that have the potential to receive an 800% increase in their funding from the Government with so little scrutiny. We should bear that in mind.
Richard Fuller
It is a great pleasure to serve under your chairmanship, Ms Ryan. I speak against amendment 7 —that will be no surprise—and in favour of clause 1(3). I would like to use the opportunity to probe the Minister a little, without straying too much into strategies, about the general thinking on direct versus indirect investing and how that relates to the figures, particularly the figure of £12 billion.
It is my view that the CDC has had unparalleled success in identifying and stimulating people in a variety of countries to set up first-time funds that then contribute to economic development in countries around the world. That role is, in itself, a tremendous aspect of British development policy—finding people in new countries who can then assist in the economic development of their countries.
We heard on Second Reading from the former Secretary of State about why getting the CDC to focus a bit more on direct investing had an advantage, in that people would then recognise that the CDC was there—it was good branding for us, developed a deeper understanding of countries and we were less stand-offish—but there is a value in indirect investing. As the Minister will know, the UK budget is only part of the money in that role. There is a multiplier effect from the CDC providing its money into first-time funds, because those funds then attract third-party funds as well. Does the Minister feel there is the right balance between direct and indirect investing? Can he reassure me that the CDC will continue to focus on the identification and creation of first-time funds in developing countries and that he shares the view of its role in the development agenda for the United Kingdom?
Jeremy Lefroy
I accept that the potential increase from £6 billion to £12 billion is very substantial. I note that subsection (3) talks about regulations. Does the Minister envisage gradual increases, perhaps of a billion at a time, through regulations under secondary legislation? I believe that secondary legislation is a very adequate way in which to do this and that hon. Members need to take it very seriously, as the hon. Member for Cardiff South and Penarth has mentioned. However, it might reassure Members if somewhere in the Bill or in an amendment it was stated that the increases would be no more than, say, £2 billion at a time. After all, we are now considering raising the amount by £4.5 billion in the Bill, yet, as I understand it, we are looking to put it up by £6 billion through secondary legislation. It might therefore be proportionate to indicate that we would expect the Government to come back to the House on more than one occasion if the sum were to go from £6 billion to £12 billion.
Imran Hussain
For the sake of avoiding repetition, I will cite the case I previously outlined, because I think the arguments are exactly the same. The only additional point is that I agree with my hon. Friend the Member for Cardiff South and Penarth, who makes the point that using a statutory instrument to double the increase, if not more, is something that MPs will be uncomfortable with, for obvious reasons.
Rory Stewart
Ms Ryan, thank you very much for chairing this debate. I will deal with these issues very quickly, because I do not wish to detain people very long. A few issues of fact: first, this will not be an additional £12 billion on top of the £6 billion. We are talking about lifting the ceiling, so it will be an additional £6 billion. Essentially, the whole debate—we keep coming back to it in different ways—is about the fact that the CDC, through an accident in history, is governed by completely different rules from any other body to which we can give money. In the initial legislation, from 1948 onwards, a cap was put on the amount of money that the Government could put in. An additional cap was put in during the early 2000s when the Government were proposing to sell off CDC. The cap was put in there simply so that the Government did not pump more money into this organisation before it was sold off. That was a perfectly legitimate intention of primary legislation, but it puts us in an eccentric position in that it is possible for us to give, theoretically, unlimited money to an NGO, to a research council or any other body, to the World Bank and to other financial institutions, whereas the CDC is the only institution for which we have to return to primary legislation every time we wish to give it money.
The point about this ability to go up to £12 billion in the future would be that it would try to put the CDC into a similar position to the other recipients. In other words, on the basis of Parliament, the Minister and the Department, a decision would be made on the strategy on how the money was to be allocated. Money could be allocated to an NGO, it could be allocated to CDC, and we would do that through the normal departmental process.
The hon. Member for Cardiff South and Penarth asked about time. My strong belief, which I am happy to put on the record, is that the money we are asking for—that first ability to increase by £4.5 billion—would be the absolute maximum over the next five-year period up to 2021. We do not intend to come back for the next money until at least after 2021-22. At that point a new Government—it could be a Government, theoretically, of the Labour party—would have the option to come, through secondary legislation, and ask for the ability to increase the cap up to £12 billion. That, again, I would anticipate being for continuous, steady state investment. That £12 billion simply reflects, again, about £1 billion a year from the 2021 period going forward to 2026. That is the kind of money we are talking about and that is the kind of plan that is in place.
To conclude, we have heard very detailed, powerful and encyclopaedic speeches from the hon. Member for Cardiff South and Penarth. He has already made enormous arguments about the sectors and countries in which we should be investing. I request, if possible, that we do not return to those when the amendments are discussed, because they have already been made in enormous detail during the debate so far.
Stephen Doughty
Ms Ryan, I am sure that you, rather than the Minister, will decide what is in order. I have no doubt that we will want to explore some of those issues in further detail. I am sure the Minister does not want to, but I hope we can prevail on you. The fundamental issue here concerns my outstanding question: why £12 billion? Where has this figure come from? What is it based on? It seems to have been arbitrarily picked out of the air. It is an 800% potential increase, as the hon. Member for Glasgow North pointed out along the way.
It is helpful that the Minister talked about the timescale. He says that it goes up to 2021 and that he does not intend to come back before 2022. My question is, why give this power now at all? Why not just require another simple, one-clause Bill to increase the cap if CDC is shown to be performing, to be reforming, to be diverting its focus more to poverty eradication, more to some of the countries we want to work in, or some of the sectors we would like to see it working in? Why not come back? This happens with other legislation. An armed forces Bill comes through regularly to maintain funding for our standing armed forces, and there are many other instances where simple pieces of legislation are proposed and receive the required level of scrutiny—indeed, this has happened with the CDC in its lifetime. My concern is why we would give such extensive powers at this stage. I take in good faith the assurance of the Minister, but obviously, as I have said before, that does not apply to future Ministers. The Minister mentioned the issue of selling off CDC; what if a Minister wanted to do that in the future? This would allow a Government to pump money into it before a sell-off. That is concerning and should concern all of us in this Committee.
I was interested in the point made by the hon. Member for Stafford about gradual increases. Will the Minister reflect on the possibility of considering an India cap of a certain amount beyond which CDC could not increase, whether it be £1 billion or less, at a time, whether that was a year or a two-year period, and coming back with secondary legislation to do that? That might give a lot more assurance as to the scale of the increase and it would not be prey to the sorts of pressures that I know exist within the Department in terms of overspending more generally. We have a 0.7% target that we need to meet. As the CDC contributes to that, it is incredibly tempting, if there has been underspending in one Department or another, to suddenly pump a load of new capital into it, record it as official development assistance for that year, as has happened, and have it contribute to the overall figure.
However, I think the Minister has said some important things. I want to hear more about the caveats and strategy for CDC going forward and while I wholly object to the suggestion of giving statutory instrument powers, secondary legislation powers, I am sure that this will be an issue that those at the other end of the building will look at in great detail in due course. At this stage I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 1 ordered to stand part of the Bill.
Clause 2
Short title, extent and commencement
Question proposed, That the clause stand part of the Bill.
Rory Stewart
As hon. Members will be aware, clause 2 is entirely standard. The only point of any note is that in this case, the Bill will come into force on Royal Assent. As we have discussed, this is an enabling Bill. The amendment made by the Bill to the cap and the introduction of the delegated power have no immediate effect and nothing is gained by subjecting them to delay or later commencement by Ministers, so it is appropriate that they come into force on the day the Bill is passed.
Question put and agreed to.
Clause 2 accordingly ordered to stand part of the Bill.
New Clause 1
Condition for exercise of power to increase limit: poverty reduction
“After section 15 of the Commonwealth Development Corporation Act 1999 (limit on government assistance), insert—
‘15A Condition for exercise of power to increase limit: poverty reduction
(1) The Secretary of State may only lay a draft of regulations under section 15(4) before the House of Commons if he has also laid before the House of Commons a review in accordance with subsection (2).
(2) A review under this subsection must provide the Secretary of State’s assessment of the extent to which the increase in the limit on the Crown’s assistance to the Corporation is likely to contribute to a reduction in poverty.
(3) In this section, “reduction in poverty” shall have the same meaning as in section 1(1) of the International Development Act 2002.’” —(Patrick Grady.)
This new clause would require any draft regulations to increase the limit on government assistance under section 15(4) to be preceded by a review, also to be laid before the House of Commons, of the extent to which the increase in the limit will contribute to a reduction in poverty, the aim of development assistance.
Brought up, and read the First time.
Patrick Grady
I beg to move, That the clause be read a Second time.
I mentioned during the evidence session that nowhere in the Commonwealth Development Corporation Act 1999 do we find the words “poverty” or “impact,” or even the phrase “international development”. We have heard much on Second Reading and in Committee—in evidence and during our debates—about the robust business cases, policies and decision-making procedures that are in place in DFID and CDC, but at the end of the day, that is all they are: policies and procedures. New clause 1—and perhaps some of the other new clauses—attempts to make it much clearer in the legislation that governs the CDC that it must meet the same high standards set for DFID and all the other Departments that spend money towards the ODA target. The new clause would require any proposal by the Government to raise the limit on Government assistance to CDC to be accompanied by a report to the House about how such an increase in investment was expected to lead to a reduction in poverty, as defined by the International Development Act 2002.
As we have just heard, the Government are asking for authority to increase their investment in CDC to up to £12 billion by statutory instrument. That is both a significant amount in itself and nearly 10 times the current investment cap. As I said a minute ago, I wonder how many other arm’s length bodies have received or have the potential to receive such an increase—800%—in their funding from the Government by statutory instrument without any additional information justifying that being required to be laid before Parliament.
If Parliament is to be asked to increase the funding cap, it should have information at its disposal to help it make that decision. Ministers keep telling us that robust business cases will be presented, but—
Philip Boswell
My hon. Friend quite rightly focuses on the robust business case that is required. New clause 2 would better enable transparent goals and practice in terms of checks and balances to be implemented prior to a commitment on funds—
The Chair
Order. The hon. Gentleman mentioned new clause 2. We are debating new clause 1.
Philip Boswell
My apologies, Ms Ryan; I meant new clause 1. Given the previous concerns about potential bad practice, which were raised on Second Reading, does my hon. Friend recognise the potential for misuse of this substantial fund as an enticement in titanic and desperate international trade negotiations due to Brexit? Should not a serious, transparent and fully accountable stage-gate approval review be implemented before any funding is approved on a case-by-case basis?
Patrick Grady
My hon. Friend makes an important point. As I said, Ministers have told us that robust business cases will be presented, but that is an assurance from the current crop of Ministers and the current generation of CDC officials. Putting reporting requirements in the Bill would help to future-proof against any risk of CDC backsliding into the kinds of questionable behaviours that were raised on Second Reading. My hon. Friend also raises interesting points about precisely how this massive potential investment in CDC relates to the Government’s ongoing trade agenda and their interests in trading with different parts of the world, especially in the light of Brexit.
The mechanism proposed in the new clause may not be perfect, and some of the other new clauses are, in some ways, a bit more robust and may place a heavier burden on the Government, but are the Government prepared to use this opportunity to make it clear in the Bill—as they seem to be doing in debate and in the evidence we have heard—that the primary purpose of the CDC and the taxpayers’ money that it spends is to reduce poverty around the world, and that people come before profit?
Stephen Doughty
I am interested in this new clause. I think it will be very helpful to have the CDC more tightly linked to the terms of the International Development Act 2002. That set an important legal framework, which has guided the use of our ODA aid over the past 14 years, and therefore there are important safeguards within it that need to be closely looked at as regards the CDC. One of the issues is with the transparency around the CDC. Perhaps the Minister can clarify some of these, but when someone delves into the detail of some of the projects, organisations and programmes that we are funding, although there are a significant number of projects that are clearly focused on poverty reduction and are in some of the poorest countries in the world, there are others where it is questionable as to what the poverty-focused role is.
We heard this morning about the private healthcare provider in India. We could, but will not at this stage, get into a lengthy debate about the merits of private and voluntary healthcare versus public funded healthcare in developing countries, the role in transition and so on. It concerns me that CDC appears to be investing in a private fee-paying hospital without a focus on access for some of the poorest patients, for example, or some explanation as to why that money is focused on poverty eradication rather than as just a generalised investment.
I looked into one of the others called Qiming Venture Partners, which is a Chinese-based entrepreneurial fund. It describes itself as one of the top funders of entrepreneurs in the internet and consumer products; I struggle to see how that relates to poverty reduction. It has some very interesting pictures on its website of its staff sitting on tanks in Mongolia. I am happy for the Minister to clarify the nature of that investment, and if it is something completely different I will happily withdraw my comments about it, but it is very odd.
Another one we heard about this morning was Feronia. Clearly that is an investment in agribusiness, and we can see links there to poverty reduction and jobs in the agribusiness sector. However, there are also questions about the potential negative effects on livelihoods and poverty eradication because the investment is in palm oil. There are questions about land grabs, the rights of people living in the area and whether that is even a sustainable product to be investing in. Again, it seems odd that we are investing in fossil fuel projects when we are told that climate change is one of the biggest threats to developing countries and people in the poorest countries. I know that that is not just a problem to CDC; it applies to some of our investments through other development finance institutions, and is something we ought to look at much more closely.
I feel that tying CDC more closely to the wider terms under which DFID operates, and the wider terms in which our ODA is spent, would be helpful. Otherwise we might get some very interesting challenges and could even have legal challenges—judicial reviews—on some of these projects, particularly if we were to put in large sums of new money. I am sure that some of the campaigning organisations would take great interest in seeing whether some of these projects actually adhere to the principles that we set out for the Department and the spending of our ODA. I am encouraged by the new clause, and am certainly interested in the Minister’s comments on it.
Rory Stewart
This is an important principle—we should be focused on poverty reduction and the particular aspect of poverty reduction through job creation and economic development. I absolutely agree, and that is central to the mission of the CDC and its investment policy, but we are circling around a bigger issue: where is the appropriate place for this to happen?
I think that the only disagreement between myself and the hon. Member for Glasgow North is that this is a straightforward Bill, which is designed to lift the cap. We believe that the appropriate place to determine spending decisions and exactly how strategy works is through the normal departmental process. That would be true for our investments in the World Bank and in Unicef, money we would give to Oxfam or Save the Children, or anybody. We have procedures and processes to do that, which do not happen through primary legislation. We will continue to present that five-year strategy in December for the hon. Member for Glasgow North and other right hon. Members to interrogate. We will continue to present the business cases. We will be held absolutely accountable in law. In 2015 we passed a law that we would spend 0.7% on overseas development assistance as defined by the OECD. The money we are giving is governed by that legislation, which commits us legally to make sure that that money is driven precisely in the directions that the hon. Member has raised.
The hon. Member for Cardiff South and Penarth continues to raise many different issues. I am struggling to work out in which sequence to answer them, because many of them are things I thought the hon. Gentleman was attempting to raise in later amendments. I hope that we are not going to keep hearing again and again about the same caseloads.
Richard Graham
It seems to me that the hon. Member for Cardiff South and Penarth has raised interesting points about individual investments by the CDC. He is concerned about where the geographic spend is. The figures probably suggest that it has been 48% in Africa over the last few years, but there is an interesting question there, on which the Minister might want to comment: if one invests in a business that is, for the sake of argument, based in Mumbai but investing in east Africa, is that geographically described as an Indian investment or an east African investment? The hon. Member then had questions about sectoral investment. There are interesting questions there, because if someone is building hospitals, they are also in construction, and therefore there are jobs for people building the hospital. Is that classified as an investment in health, in construction, or both?
The Chair
Order. This is an intervention. If the hon. Gentleman wants to speak longer, he needs to indicate—
Richard Graham
I will bring it to an end almost immediately. It struck me that the Minister might want to confirm that the CDC can be held to account directly before the Select Committee and that that is the place to ask specific questions on specific investments and their sectoral and geographic emphasis, rather than in this Bill Committee.
The Chair
I think it is for me to decide where the best place for the questions is, and I have allowed them.
Rory Stewart
To conclude, and to follow up from my hon. Friend the Member for Gloucester, the questions about poverty and the impacts of our investments need to be asked again and again, right through the process. They need to be asked in Parliament; they can be asked through urgent questions; they can be asked through this process. They also need to be asked primarily in details about the CDC’s mission, its investment policy, the ex ante decision making based on the development impact grid, through the development impact theory on each individual investment, and we have to do it in a way that gets a very difficult balance right, because the National Audit Office has been very clear that it does not want the Department micromanaging and interfering in individual business cases and decisions. We are supposed to be setting the overall strategy, driving where the money is meant to be and driving it towards exactly the kind of indicators that right hon. and hon. Members have raised. Given the number of measures that the Government will be taking to address exactly the issues raised, not in the Bill but through all the existing other processes, within both the CDC and the Department and the wider parliamentary and public accountability process, I ask politely that the new clause be withdrawn.
Patrick Grady
That was an interesting and helpful response from the Minister. He has repeatedly said throughout this process that the CDC is different from all the organisations that DFID disburses funds to, precisely because of the way it is constituted in statute and the historical legacy, going back 70 years. This is an important opportunity to include in the Bill some of the assurances that the Minister continues to give us, to make it clear that poverty reduction is one of the purposes of the CDC. I hear what the Minister says about withdrawing the new clause at this stage. If I do so, I hope that he will understand if we choose to come back at a later stage with more detail. Perhaps the Government would indicate that they are willing to work on how we can build into the legislation some of the reassurances that we keep asking for and they say they are going to give us. On that basis, I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 2
Condition for exercise of power to increase limit: Sustainable Development Goals
After section 15 of the Commonwealth Development Corporation Act 1999 (limit on government assistance), insert—
“15A Condition for exercise of power to increase limit: Sustainable Development Goals
(1) The Secretary of State may only lay a draft of regulations under section 15(4) before the House of Commons if he has also laid before the House of Commons a review in accordance with subsection (2).
(2) A review under this subsection must provide the Secretary of State’s assessment of the extent to which the increase in the limit on the Crown’s assistance to the Corporation is likely to contribute to achievement of the Sustainable Development Goals.
(3) In this section, “the Sustainable Development Goals” means the Goals adopted at the United Nations on 25 September 2015.””—(Patrick Grady.)
This new clause would require any draft regulations to increase the limit on government assistance under section 15(4) to be preceded by a review, also to be laid before the House of Commons, of the extent to which the increase in the limit will contribute to achievement of the Sustainable Development Goals.
Brought up, and read the First time.
The Chair
With this it will be convenient to discuss new clause 10—
Condition for exercise of power to increase limit: assessment of contribution to Sustainable Development Goals
After section 15 of the Commonwealth Development Corporation Act 1999 (limit on government assistance), insert—
“15A Condition for exercise of power to increase limit: assessment of contribution to Sustainable Development Goals
(1) The Secretary of State may only lay a draft of regulations under section 15(4) before the House of Commons if he has also laid before the House of Commons the documents specified in subsection (2).
(2) The document specified in this subsection is a report containing an assessment by—
(a) CDC, and
(b) the Secretary of State
of the extent to which the proposed use of the new investment enabled by the proposed increase in the current limit at the time will contribute to progress in relation to the Sustainable Development Goals.
(3) In this section—
“the current limit at the time” means—
(a) prior to the making of any regulations under section 15(4), £6,000 million,
(b) thereafter, the limit set in regulations made under section 15(4) then in force;
“the Sustainable Development Goals” means the Goals adopted at the United Nations on 25 September 2015.””
This new clause would require any draft regulations to increase the limit on government assistance under section 15(4) to be preceded by the laying before the House of Commons of assessments by both CDC itself and the Secretary of State of the extent to which additional investment will contribute towards progress towards the Sustainable Development Goals.
Patrick Grady
I have already explained why reporting requirements are important and we heard the Minister’s response. The new clause asks for a report on how increasing the limit on Government assistance would help to achieve the sustainable development goals. It is worth putting on record why that is important. The sustainable development goals ought to be the overriding framework that explains in more detail what poverty reduction and international development look like in practice in the 21st century.
As I did on Second Reading, I pay tribute to the work of the previous Prime Minister in leading the process that drafted and achieved the agreement of the global sustainable development goals by every country at the United Nations. The emphasis now has to be on meeting those goals.
I received correspondence from the Secretary of State in response to my contribution on Second Reading and she emphasised the CDC is working towards some of the specific SDG goals: number 8 on employment, number 5 on gender empowerment, number 7 on energy access and number 13 on climate change. But the SDG framework is holistic and it is important to show how progress is being made across the board, and that progress in one area is not being traded off against progress in another.
As with the previous requirement to report on poverty reduction that we had hoped for, this proposed new clause would help prevent any risk of backsliding. It would clearly frame the work of the CDC in a global context that would shape the global development agenda through to 2030. Even if the Minister is not willing to accept the new clause, here or on Report, it would still be useful to hear assurances on how the totality of the sustainable development goals are to be reflected in the CDC’s work through the additional funding of this Bill.
Stephen Doughty
I want to make some brief comments. As with the previous new clause proposed by the hon. Gentleman, it is helpful to align more closely the CDC to the overarching frameworks that apply to DFID and our aid budget. DFID has been a leader in going out to fight for the global goals, and in working with other Government Departments. However, the global goals do not apply only to DFID; they apply to our domestic Departments. They bring up important issues of coherence and focus, as I touched on earlier. If we are using them to apply to other areas of DFID spending such as our bilateral programme, funding through other multilaterals, the ODA being spent by other Government Departments and domestic policy on climate change, there is no reason to expect that the CDC should do any less.
We have heard the idea of micromanaging CDC discussed a few times. When we look at the sectors it is investing in at the moment, there are clear inconsistencies. I know the Minister does not like me to bring up examples but I will because they are important and I want to understand why those inconsistencies arise. We could include a much clearer framework about poverty eradication around those 17 global goals that cover everything from hunger, health and wellbeing, the quality of education and affordable and—crucially—clean energy. It is slightly odd that the CDC seems to be investing in fossil fuels.
The goals also include sustainable cities and communities, climate action, peace, justice, strong institutions and partnerships. The crucial issue is, who is involved in development and taking decisions? Are these measures just done to people in developing countries by corporations or investors or do they involve people living in poverty or excluded in some way in decisions about their future? Those are admirable goals and should form a guiding framework for the work and spending of our aid money, whether that is by an NGO, DFID directly or the CDC.
Imran Hussain
I associate myself with comments made by the SNP Front Bench team and, indeed, my hon. Friend the Member for Cardiff South and Penarth. I am not going to repeat what has been said, but I will make two additional points. The CDC should work towards the SDGs as much as possible, but as we stand, there is some confusion around their overall monitoring. Those criteria have not been released and I urge the Minister to consider that.
The other option, not the least option open to the Minister—and I am sure he will give assurances—is a matter that can also be dealt with through the business case and the strategies enshrined in that, to make sure the most effective way of contributing to the SDGs is laid out before Parliament.
Rory Stewart
This is an example of a clause where we strongly agree that SDGs are central to what the CDC should be doing. We are already delivering on these things. In 2015 alone, 326 women received jobs through the CDC investments; that is SDG 5. We provided 56,000 GW of electricity; that is SDG 7. SDG 8 on economic growth is, of course, central to everything the CDC does.
The bigger argument is that, as the SDGs were presented, people talked about a $2.5 trillion demand per annum for investment in the world’s poorest countries. The CDC is the major instrument that will be used by the British Government to deliver that kind of investment into the private sector.
However, to respond to the shadow Minister’s point, I think this is a good way of focusing the Department’s mind and making sure that, as we develop the strategy for the CDC going forward over the next five years, the SDGs are baked into that process. We take the SNP spokesman’s suggestion that it is important to understand the SDGs as a holistic set: that we do not simply look at them goal by goal, but that we group them together.
Stephen Doughty
The Minister made helpful comments earlier on about capping aid to India. Is he willing to consider looking at restricting, for example, the CDC’s ability to invest in fossil fuels, as this seems at odds with the global goals?
Rory Stewart
It is a good challenge. We invest enormously in renewable energy. We have just made a difficult investment in solar energy in Burundi and the Central African Republic—not a place where most people want to go into investment. Unfortunately, Africa’s need for energy is extraordinary. We do not invest in coal, for example, that is not something we go into, but we support some gas-powered stations through Globeleq. That is a difficult trade-off, but we believe Africa is currently falling behind. As I have mentioned before, China has been building about 8 GW of power in a two-month period, with Africa delivering 6 GW of power over a decade.
I feel that we have to get the balance of our investments right and I respectfully disagree with the argument put. I do not think it would be responsible for economic development in Africa to put us into a position where we cannot invest at all in any conventional energy source. With that, I would ask that new clause 2 be withdrawn.
Patrick Grady
What the Minister said at the end was disappointing, because, in fact, there is an opportunity for Africa and many parts of the developing world to leapfrog the technologies that have polluted our skies and buildings and all the rest of it over so many years. Surely, if the CDC’s investment is for anything, it should be in innovative, clean technologies. That is what we are trying to get to with the various amendments and new clauses we have been tabling, to make it clear in statute that this is its duty and not to allow it space to make excuses such as “Well, it’s difficult” and “We have to do this” and that jobs are more important than the longer-term viability of the planet. I am not convinced that is the case.
That is why we continue to seek assurances. Again, if we withdraw this new clause, we hope the Minister will reflect on the points made over the course of the debate in Committee. When the Bill comes back to the House on Report there might yet be ways in which it can be strengthened to take some of the points on board and reflect them going forward. On that basis, however, I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 3
Condition for exercise of power to increase limit: prior bilateral programme
After section 15 of the Commonwealth Development Corporation Act 1999 (limit on government assistance), insert—
“15A Condition for exercise of power to increase limit: prior bilateral programme
(1) The Secretary of State may only lay a draft of regulations under section 15(4) before the House of Commons if he is satisfied that the condition in subsection (2) is met.
(2) That condition is that any new investment in a country enabled by the proposed increase in the current limit at the time is in a country to which the Secretary of State provides assistance through a bilateral programme at the time.
(3) In this section—
“country” has the same meaning as in section 17 of the International Development Act 2002;
“the current limit at the time” means—
(a) prior to the making of any regulations under section 15(4), £6,000 million,
(b) thereafter, the limit set in regulations made under section 15(4) then in force;
“assistance” has the same meaning as in section 5 of the International Development Act 2002.””—(Stephen Doughty.)
This new clause would limit any new investment arising from any increase in the limit on government assistance under regulations under section 15(4) to countries where the United Kingdom maintains a bilateral programme at the time.
Brought up, and read the First time.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
I beg to move, That the clause be read a Second time.
The Chair
With this it will be convenient to discuss the following:
New Clause 4
Condition for exercise of power to increase limit: limitation to eligible countries
‘(1) After section 15 of the Commonwealth Development Corporation Act 1999 (limit on government assistance), insert—
“15A Condition for exercise of power to increase limit: limitation to eligible countries
(1) The Secretary of State may only lay a draft of regulations under section 15(4) before the House of Commons if he is satisfied that the condition in subsection (2) is met.
(2) That condition is that any new investment enabled by the proposed increase in the current limit at the time is in a country in Schedule 2A (Eligible countries).
(3) In this section “the current limit at the time” means—
(a) prior to the making of any regulations under section 15(4), £6,000 million,
(b) thereafter, the limit set in regulations made under section 15(4) then in force.”
(2) After Schedule 2 of the Commonwealth Development Corporation Act 1999 (Modification of Companies Act 1985 &c), insert—
“Schedule 2A
Eligible Countries
Afghanistan | |
Angola | |
Bangladesh | |
Benin | |
Burkina Faso | |
Burundi | |
Cameroon | |
Central African Republic | |
Chad | |
Congo (Democratic Republic of) | |
Congo (Republic of) | |
Côte d’Ivoire | |
Equatorial Guinea | |
Eritrea | |
Ethiopia | |
Gabon | |
Gambia, The | |
Ghana | |
Guinea | |
Guinea-Bissau | |
Kenya | |
Lesotho | |
Liberia | |
Madagascar | |
Malawi | |
Mali | |
Mozambique | |
Myanmar | |
Nepal | |
Niger | |
Nigeria | |
Pakistan | |
Rwanda | |
Senegal | |
Sierra Leone | |
Somalia | |
South Sudan | |
Sudan | |
Swaziland | |
Tanzania | |
Togo | |
Uganda | |
Zambia | |
Zimbabwe.” |
This new clause would limit any new investment arising from any increase in the limit on government assistance under regulations under section 15(4) to certain eligible countries.
New Clause 5
Condition for exercise of power to increase limit: LDCs and LICs
After section 15 of the Commonwealth Development Corporation Act 1999 (limit on government assistance), insert—
“15A Condition for exercise of power to increase limit: LDCs and LICs
(1) The Secretary of State may only lay a draft of regulations under section 15(4) before the House of Commons if he is satisfied that the condition in subsection (2) is met.
(2) That condition is that any new investment in a country enabled by the proposed increase in the current limit at the time is in a country which is classified as either—
(a) one of the least developed countries, or
(b) one of the other low income countries.
(3) In determining the classification of a country for the purposes of subsection (2), the Secretary of State shall use the latest analytical classification of the world’s economies prepared by the World Bank.
(4) In this section, “the current limit at the time” means—
(a) prior to the making of any regulations under section 15(4), £6,000 million,
(b) thereafter, the limit set in regulations made under section 15(4) then in force.””
This new clause would limit any new investment arising from any increase in the limit on government assistance under regulations under section 15(4) to the least developed countries and other low income countries.
Stephen Doughty
The new clauses are all probing and designed to get further into this issue of the CDC’s disjoint from DFID’s overall focus, whether that is the disjoint from the Department’s bilateral programme, from its focus on individual countries, or from its focus on income and countries considered to be least developed or low income. Again, I mention the Minister’s interesting comments about India; I would be interested to know if he would consider looking at the broader issue.
The three new clauses look separately at the respective issues. The first one would amend the Bill to require that the CDC’s new money was only invested in countries where DFID has a bilateral programme. New clause 4 would set out a very specific list as to where CDC was able to invest. I know that it already has a list, but I think that it should be shorter and I have suggested some countries that could be removed from it. I am sure we can have a debate about that.
New clause 5 suggests that any new disbursements should be focused on those countries defined as least developed or low income, rather than on middle-income countries where the significant proportion of the CDC spending does appear to be going.
The disjoint is very clear on the bilateral front. DFID currently invests in 35 countries. We are not sure where that is going because we do not have any detail on the bilateral aid review—perhaps the Minister could enlighten us as to whether that list is likely to increase, decrease or change in some way—but the CDC is in 63 countries. When we look at where other aid is being spent through other Government Departments, that number gets even higher. This is a worrying trend.
Library briefings for this Bill go into quite a bit of detail, particularly with regard to new clause 5, on relative investment by income group between 2010 and 2013. I am referring to page 5 of the Commons briefing for those who have it with them. It reflects that there has been an improvement in the situation, and it says that there is
“an increased emphasis on the poorest countries brought about by the new investment policy between 2010 and 2013. The share of new investments in the very poorest least developed countries (LDCs) increased from 4% to 12%, and from less than 1% to 4% in other low income countries (LICs). The share decreased in both lower middle income (LMICs) and upper middle income countries (UMICs).”
I did try to get the data on the two most recent years but I understand that the OECD has not given its full analysis of which countries fall into those categories and, conscious of some of the points made earlier, that information would be very helpful. I hope for, and would expect that there has been, a further trend in the direction highlighted. Again, it would be helpful for the Minister and the Department’s statisticians to set this out for us. However, there is still a huge distortive effect. The share of new investments even just up to 12% in the least developed countries—12% of the CDC’s investments by income group—is not a lot. I am not saying that investments in the middle-income countries are not going to the poorest people, because in some of those cases they clearly are, but when we delve into the detail, as we have done in the case of India, the picture is not clear and the majority of the investments, as of today, still go to the richer states rather than the poorest.
South Africa is another concerning example. The situation with South Africa and whether the CDC is allowed to invest is a complex one, but I asked the Minister in a written question whether or not there was an analysis of investment by state and I was told that the CDC does not assess its South African investments by state. We are not even able to understand whether the CDC’s investments are going into poorer or richer parts of South Africa. We get an answer by portfolios and by sectors, but that is concerning to me.
Richard Graham
It looks as if new clauses 3, 4 and 5 offer three different options on the way in which the CDC could spend money geographically. They do so first by limiting its list of eligible countries to those where bilateral aid is already happening; secondly, by limiting that list to a new schedule to the Bill in new clause 4—schedule 2A—that the hon. Gentleman has tabled, which looks to be of about 43 countries and gives no particular explanation as to how those were chosen or why they differ; and thirdly new clause 5 uses other multilateral definitions. Which option is the hon. Gentleman advocating? All three contradict each other to some extent.
Stephen Doughty
Indeed, but—the hon. Gentleman will be familiar with the flow of debate in Committee—the tabling of probing amendments to discuss and debate different suggestions is very much the way in which we scrutinise, suggest alternatives and allow debate in the House. Personally, I think the latter option in new clause 5—some sort of measure based around ensuring that the CDC more closely focuses on the LDCs and LICs—would allow the CDC to have a little bit more flexibility than by restricting it to the bilateral programme.
That option would recognise some legacy investments—for example, those that have been mentioned in which money being spent in one country might actually benefit another. Perhaps some of the partnerships between India and Africa, which are very interesting, are such examples. I do not want to completely rule those out; there are some legitimate reasons for them. I want to see a much tighter focus on the poorest countries than appears to be the case at the moment. It is difficult to see where things are without the data for the last year, but we can see where they were a couple of years ago.
If we look at the trend in the last few years, in terms of new investments by region, another briefing helpfully provided by the House of Commons Library shows that the share of the total percentage of investments going to Africa has actually declined since 2012, while the share going to south Asia—which I would imagine, were we to delve into the detail, is going to India—has gone up. That concerns me, not least given what Professor Collier said, and what other Members who I know support the CDC getting more money have said. Those are the facts and statistics provided by the neutral House of Commons Library; they are there. It will be much more helpful to see where those trends are going and where the focus is, and then to be assured that Ministers were going to bear down in terms of setting caveats for the CDC—whether those are over specific countries where DFID has synergies with its bilateral programme, or, indeed, an overall focus on poverty eradication.
I am intrigued to hear that the CDC plans to expand its network of offices. At a time when we are talking about one UN and bringing UN agencies together in one office, and about an enhanced in-country co-operation between DFID and the Foreign Office, it seems slightly odd that the CDC could open new offices in locations where we do not maintain a bilateral programme and where there are not necessarily those synergies. I think that Ministers ought to look much more carefully at that, to ensure that there is coherence between what the CDC is doing and what the rest of Government are doing.
I will leave to one side comments on the detail of some of the sectoral arrangements in some of the locations. I conclude by appealing to the Minister to give us a bit more detail and a bit more assurance on what sort of caveats and guidance will be given—not micromanagement but clear guidance about what kind of shift Ministers expect in return for a new investment, particularly if it is a large one. For example, would they expect the CDC to stop investing completely in middle-income countries over the next three or four years? That seems to be incongruous with what the Department itself has said; the Government have made a big deal of ending aid to India, China, South Africa and other locations, yet we see aid to those locations increasing through this CDC route. That seems to be a difficult argument to make.
We all struggle with making the argument for international development to our constituents. At the moment, there is a good degree of cross-party consensus in the House about the importance of international development and aid, but I have difficulty explaining why we should be supporting some of the poorest people in the world to my constituents; I have real difficulty explaining why aid money should be used to fund a private hospital in India. We all need to take care to ensure that we are robustly focusing our aid, our effort and our limited taxpayer funding on the poorest and on the countries that align most closely with our existing development programmes, where we have an added advantage.
Jeremy Lefroy
I have to say that I agree with a considerable number of the hon. Gentleman’s points, although I see some problems with the way in which the new clauses address them. For instance, if we restricted new capital to a certain list of countries, where would that leave the self-generated capital, both from existing investments and from these investments once they are sold? That does not seem to be clear, so in effect we would have to segregate capital raised through the profits or the free cash flow of the sale of existing investments, and capital raised through the sale of new investments that had been restricted to certain countries.
Stephen Doughty
The hon. Gentleman will correct me if I am wrong, but has that not already happened with regard to legacy investments in Latin America, for example, as a result of the changes in the strategy for CDC in 2012?
Jeremy Lefroy
Yes, it has, absolutely, but what I am saying is that the new clauses are not specific enough to achieve what the hon. Gentleman wants.
I must also repeat my earlier point that middle-income countries are a very broad church. I think I mentioned that they cover gross national incomes between £1,000 and £13,000; forgive me, but I meant between just over $1,000 and just over $13,000—dollars, not pounds, although that is less of a difference than it was a year ago. I believe firmly that a country with a gross national income of $2,000 or $3,000 per head per year is absolutely the kind of country that we should be investing in to create the jobs I referred to earlier, but it would be counted as a middle income country.
My final point is that when we invest in multilateral institutions such as the World Bank through IDA, we are investing in low income countries; but when we invest through the International Bank for Reconstruction and Development, which is the major part of the World Bank, we are investing indirectly in middle income countries, including India, China, Brazil and all the other countries that the hon. Gentleman mentioned. I would not like us to treat the CDC differently from our investments in the World Bank or in other multilateral institutions such as the Global Fund.
Imran Hussain
Again, I associate myself with the comments made by my hon. Friend the Member for Cardiff South and Penarth. I have two additional general points. We have to look at the 2011 review. There were clear purposes behind it, one of which was that the CDC had lost its focus. As a result of the review, we saw the new universe of countries and, as I said earlier, have ended up in a better place today than we were in four or five years ago.
My hon. Friend is absolutely right that we must not lose our focus on development impact and where it can be greatest, and nor must CDC. We must continue to focus on the poorest countries, where the impact will be felt the most and where it is most needed. The CDC’s ultimate goal must be to alleviate poverty, and that goal is not best achieved in some of the countries that have been used as examples.
Rory Stewart
If I may, I will focus not on particular sectors but on the issues addressed by the new clauses: the type of countries in which CDC should be working.
I wish to make four arguments. First, there are significant technical problems with the amendments, but I do not wish to take up too much of the Committee’s time with them, so I will move on.
Secondly, there is a conceptual difference between DFIs and the bilateral programmes at DFID. It is perfectly reasonable for a Government looking at their overseas development programme not to limit themselves to where they happen to have a bilateral programme. A bilateral programme traditionally means somewhere where we happen to have a DFID office and are running our own bilateral programmes through our own staff. There might be an argument that we do not wish to have a bilateral programme in a country because we already have CDC operations taking place in that country.
The third argument, which I again do not wish to rehearse because it covers a lot of the issues that we have talked about today, is how to get the balance right between Parliament—it is absolutely right that Parliament should have the job of determining the overall financial allocation—and the discretion given to the Secretary of State and the Department to determine country programmes. It would be unfortunate if we ended up specifying in primary legislation a specific list of countries where we would and would not operate, as a result of the judgment calls that a Secretary of State or Department, from any party, has to make—the world changes very quickly.
Right hon. and hon. Members have raised some difficult judgment calls. India has 35% of the world’s population who exist on $1.25 a day, which is more, in absolute numbers, than the number of poor people in sub-Saharan Africa. That is a difficult philosophical discussion, and different people on different sides of the House will have different views on whether we wish to focus on that, but whether we focus on those people or not seems reasonably to be a judgment call for the Department and perfectly in accordance with the International Development Act 2002. It is also true that it may be necessary to make investments in a wealthier state in order to help a poorer state. It may be necessary to use South Africa’s financial institutions in order to support poverty alleviation in other African countries.
Finally, it may be necessary to respond to quickly changing events in the world. For example, nobody predicted the conflagration in Syria. We are suddenly having to put bilateral programmes into middle income countries—Syria, Iraq, Jordan, Lebanon—where we never had bilateral programmes four years ago, in order to deal with 3.5 million refugees, horrendous killing, an extreme humanitarian disaster and a UN tier 3 emergency. The International Development Committee has been asking us to get the CDC to invest in exactly those situations. The new clause would prohibit us in primary legislation from doing that. With respect, I believe that these things are best left to the discretion of the Department. We are very happy to share all our thinking on how those decisions are made with Parliament in the normal fashion. With that, I hope that the new clause will be withdrawn.
Stephen Doughty
I thank the Minister and the hon. Members who have taken part in the debate for their comments. In response to the hon. Member for Stafford, I should point out that the fact that some of the other DFIs are focused in some of those other middle income countries is all the more reason for the CDC to have a different focus. We have less control in those organisations, by being a part-shareholder and part-donor. We have 100% control over what the CDC does. If we are contributing in that way to some particular important niche project that the World Bank is funding, for example, why do we need to add to that with an organisation over which we have a greater degree of strategic control? We are supposed to be leading—that is the mantra—and setting an example. We should perhaps be going to some of those more difficult locations that Professor Collier was talking about and addressing some of the innovative solutions that the hon. Member for Glasgow North was talking about on green energy. We ought to be leading, not just matching what other development finance institutions are doing.
The Minister makes a good point about not limiting the provisions to the bilateral programme in strictly defined terms, as the new clause—a probing amendment—would do. The example that he gave of Syria was a good one. There is also a very good argument to be made about francophone Africa, where CDC and our bilateral programme could play a bigger role and we could perhaps come alongside other investors. The Minister had a fair point on tight definitions and on listing countries.
I would ask the Minister to look again at the issue of the rankings of countries. In terms of CDC’s total disbursements in Africa and south Asia over the past seven years, the lion’s share has gone to India and South Africa, with £760.5 million and £194 million respectively. Money has also been disbursed to some very odd locations —these are not small amounts. Some £27.6 million has gone to Mauritius, £12.6 million to Morocco, £53.6 million to Egypt and £9.8 million to Algeria. That does not seem to fit into the categories that the Minister alluded to.
There is a debate to be had about India. I accept the point that he made, but it is not the argument that has been used in the past by advisers in his Department. In fact, the special adviser to the Department when he was at the TaxPayers’ Alliance resoundingly criticised DFID for continuing aid to India which, he argued, had a space programme and everything else. He said that all aid should be stopped. The Government, including his Government, have made a big fanfare to the public and to this House about aid to India ending, and yet it continues. I think there is an inconsistency there, and it would be useful to know where we stand and where we are heading, because it is not what is being said.
Rory Stewart
Just to clarify the position on the record. The Government intend to stop all conventional bilateral grant aid to India. Support in India will then be targeted through technical assistance and through the CDC instrument of financial investment in private sector companies.
So the distinction that the Government are making is between traditional bilateral grant aid and instruments such as the CDC. Specifically on the question of balance, I absolutely take these points on board—60% of the investments since 2012 have been made in Africa, only 40% in south Asia, including Pakistan and Bangladesh. I absolutely understand the importance of keeping a rigorous development grid and development impact theory to make sure that CDC focuses on the countries that need aid most.
Stephen Doughty
I thank the Minister for his point. It was not the impression that was given by the Government at the time about aid to India. The clarification is helpful, but again we get into the value and the total amount that is going to India rather than other locations. For me, and for many others who contributed to this debate, it is simply too high. That is why I welcome what the Minister has said about a cap. However, I urge him to look at a cap in some of these other countries. There are some very odd outlier examples here which do not really fit in any way with our wider objectives, our strategic interests, or our poverty reduction objectives. There does not seem to be any clear explanation, and I think we ought to be bearing down more tightly on that.
It would be helpful for the Minister to explain, as we go through the next few days on the Bill, whether he would consider tough stretch targets.
Stephen Doughty
Well, we do have another day—the Whip is commenting—which we could get to, depending on where we are. We will certainly have time on Report and Third Reading, but it would be helpful to know by then the sort of stretch targets that the Minister envisages for the CDC, if it were to get extra money, and where it would be forced, perhaps not completely banning it from all investment in middle income countries—I accept some of the points that have been made—to have a much, much more significant focus for where its new investments are going, because it is clearly not meeting that at the current time. I beg to ask leave to withdraw the clause.
Clause, by leave, withdrawn.
New Clause 6
“Condition for exercise of power to increase limit: prohibition on use of tax havens
After section 15 of the Commonwealth Development Corporation Act 1999 (limit on government assistance), insert—
“15A Condition for exercise of power to increase limit: prohibition on use of tax havens
(1) The Secretary of State may only lay a draft of regulations under section 15(4) before the House of Commons if he is satisfied that the condition in subsection (2) is met.
(2) That condition is that any new investment enabled by the proposed increase in the current limit at the time is not in either—
(a) an investment entity, or
(b) a company
which uses, or seems to the Secretary of State likely to use, tax havens.
(3) In determining whether the condition in subsection (2) is met, the Secretary of State shall consider—
(a) information provided by the OECD on countries or territories which are considered to be tax havens, and
(b) such information as is available to the Secretary of State, whether supplied by the CDC or others, about the current location of funds of the potentially relevant entities for the purposes of subsection (2).
(4) In this section, “the current limit at the time” means—
(a) prior to the making of any regulations under section 15(4), £6,000 million,
(b) thereafter, the limit set in regulations made under section 15(4) then in force.””.—(Stephen Doughty.)
This new clause would prohibit any new investment arising from any increase in the limit on government assistance under regulations under section 15(4) from going to an investment vehicle or company which uses or seems likely to use tax havens.
Brought up, and read the First time.
Stephen Doughty
I beg to move, That the clause be read a Second time.
This new clause relates to the issue of tax havens, which has been a persistent concern, not just on this side of the House, which is why it is in the name of myself and of my hon. Friends. I know that it is a matter of concern to Members across the House and to many of the campaigning organisations out there. There seems to be a major issue of incoherence between the Government’s stated policy to bear down on tax avoidance and the types of vehicles that facilitate it, and CDC’s continued investment, even to this year, through these vehicles.
I have had the argument made to me about the reason for using investment vehicles and companies that are not located in the country where the investment takes place. I think that it is a very reasonable argument, in that sometimes the legal framework—the fiduciary control frameworks—whatever they might be, are not good enough for us to be spending taxpayers’ money, or for CDC to be spending its own funds, or, when it comes to other investors, for them to be willing to accept the risk of, for example, a fund in a particular African country.
However, I struggle to understand why so many of the investments continue to be made through offshore havens such as the Cayman Islands and Mauritius rather than simply under the law of England and Wales. Some would argue that the UK is a tax haven. We are not going to get into that debate here, but I do not understand why these investments are being made through Cayman in particular.
Kate Osamor
I have not spoken a lot today. That is not because I have not been in support of my hon. Friend the Member for Cardiff South and Penarth, which I believe is the right way of saying it—I have heard many versions today. I want to speak on this clause, because my issue relates to tax havens and the way the CDC is using them. In the evidence session earlier today, Diana Noble of the CDC admitted that at times it has to use tax havens, but I feel that DFID should be looking at transparency. We should be working more closely with CDC because we are setting up a system that could be exploited, and I am concerned that we could be sitting back and not using the power that I believe DFID could be using.
This is the time to look at how the relationship was initially set up and at how we might reform that relationship, not because we should be micromanaging but because we should be taking some responsibility for taxpayers’ money. I say that because, while there is cross-party support for DFID in this House, there is a lot of tension outside among people who do not agree with the way we are spending money. If this was highlighted and got into the wrong hands—the Daily Mail—it could turn into a situation in which the Government would have to fight back. I ask that we look at that relationship, make it a lot more transparent and also look at what will happen when Diana Noble moves on, because a new CEO may not able to turn things around the way she has. She has made great changes, but she is moving on, so we need to look at how that new relationship with DFID will be, and this is the time to change that situation.
I support the clause and I hope that the Minister can reassure us that we will not be in a situation going forward whereby the CDC, or similar organisations, have to use tax havens because the country they are functioning in does not have systems to take the tax.
Jeremy Lefroy
I have a lot of sympathy with the points made. I cannot support this new clause because I do not think that the international situation lends itself to being practical for the CDC at the moment. Regrettably, there is not the range of options for CDC to make its investments at the moment alongside other partners. When it is direct investments, which I am very glad to see the CDC has started to do again since the new arrangements in 2011-12, there is absolutely no reason why the investment cannot be made directly into the share capital of the company in which the investment is being made. However, when you are trying to leverage other investments, as the CDC often does, alongside other DFIs or other private sector entities, you have to arrive at a mutual agreement as to what jurisdiction is most suitable, both from the point of view of the ability of the legal system to uphold agreements and in terms of when dividends are paid, and whether double tax arrangements and so on are in place.
These are all practical matters, but I very much agree with the hon. Member for Edmonton and the hon. Member for Cardiff South and Penarth that there is an opportunity here for the CDC to set the pace—for instance, here in the United Kingdom, where we have such a fine legal system, as is being displayed right at this very moment across the road.
Jeremy Lefroy
That is true from whatever point of view we approach the matter. Why can we not set up the kind of structure, based in the UK, that would be perfectly reasonable for funds to see as an acceptable basis for making their investment alongside the CDC?
Rory Stewart
I shall try, for the sake of right hon. and hon. Members who are under time pressure, to be quite short in answering. Of course, I agree strongly with points made about the absolute importance of this. The CDC never invests in any of these locations in order to save tax or to avoid scrutiny. There are only two reasons why we would do it, and those are the reasons that were raised by the hon. Member for Cardiff South and Penarth; which is to say either because the regulatory environment in the country in which we are investing is not sufficiently robust for us to be able to trust UK taxpayers’ money to that location, or because we are attempting to accumulate a larger fund where we are trying to get co-investors. We are very proud of that. We have brought in, at times, £1 billion of investment and have managed to bring in £30 billion behind it, so that is a multiplier effect of 30 which might not have been possible had we not been able to ensure that we were able to go through certain offshore centres.
However, we are very focused on this issue. The Labour Government made great progress in focusing on the white list. The hon. Gentleman mentioned Anguilla and the British Virgin Islands. To be absolutely clear, as I think he is aware, we do not, nor would ever, invest in those locations, nor would we invest in Panama. We only invest in the places that have been put through the OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes as compliant locations.
Nevertheless, I agree that in the long run we need to develop financial sectors within Africa to ensure we can make secure investments through African locations, rather than having to go through offshore centres. DFID is now running a big programme on that, which is something the CDC can learn from. To respond to my hon. Friend the Member for Stafford, we absolutely should be taking the lead on this. On that basis, I ask that the motion be withdrawn.
Stephen Doughty
The Minister provided some helpful assurances, but again, I want to see much clearer targets and guidance. I still do not feel satisfied on the indirect effects. He mentioned that we do not invest in Panama, but of course, many of the CDC’s investments turned up in the Panama papers. The reputational damage that does not only to the United Kingdom but to the CDC is significant, because it suggests an organisation and a Government who do not take these commitments seriously, however much we might be able to explain an individual instance.
The 2014 report from Eurodad—the European Network on Debt and Development—found that 118 out of 157 fund investments made by the CDC went through jurisdictions that feature at the top of the financial secrecy index. To be clear on the scale, between 2000 and 2013, these funds received a total of $3.8 billion in original CDC commitments, including $553 million in 2013 alone. Whether or not there is avoidance or malfeasance going on with the CDC portion of these investments, the indirect effects in terms of payments being made to fund managers and financial services businesses in the Cayman Islands and others that may be engaged in other activities is significant. Transparency is also significant, in terms of being able to assess and properly scrutinise the information available. I am keen to press the new clause to a vote. It is important that we test the Committee’s view on it, although no doubt we will return to this issue in due course.
Question put, That the clause be read a Second time.
Stephen Doughty
I beg to move, That the clause be read a Second time.
This new clause regards prohibitions on the sectors in which the CDC can invest. I have chosen four issues about which I think there are questions—and questions have been asked. We could equally add the issue of fossil fuels, which has already been discussed. I have specified the for-profit education sector, the for-profit health sector, the real estate sector and mineral extraction. [Interruption.] I notice the Minister disappearing for a moment; I will allow him a moment to use the bathroom.
Stephen Doughty
Moving swiftly on. I hope that the Whip can report my comments to him.
My concern—obviously I have been through some of the examples before—is the percentage investment in different sectors. We have heard the presentations, whether from the Secretary of State, or the chief executive and chair today, about how wonderful the CDC is, and all the wonderful work that it does; but they tend to draw on specific projects, which I do not doubt do excellent work on poverty eradication, and make a difference. However, those reflect only part of the picture.
From an overview of the CDC’s portfolio, 40% is invested in what, I think, according to the House of Commons Library, is designated as “other”; 16% is in the financial sector; 8% is in power; 9% is in industry and manufacturing; 12% is in other infrastructure; 6% is in agribusiness; and 9% is in services. When we look at new CDC investments by sector from 2012 to 2015, according to the Library the share of new investment seems heavily focused on the financial services industry.
I know that the CDC makes many important investments that the Government promote, including access to microfinance, technological solutions or enhancing banking services for the poor. I have nothing against the financial services industry. Indeed, I have many financial services industries in my constituency. I am well aware of the important work that has been done under many Governments on investing in mobile phone banking technology, for example; again, that work began under a Labour Government but has continued to a great fruition in recent years.
There seems, however, to have been a very heavy focus on the financial services sector and very little on anything else, whether industry, healthcare, education or other sectors. Of the investment in education and healthcare, for example, as we saw from the example of India, a significant proportion seems to be going to the for-profit sector. I do not want to reiterate statistics that we heard earlier, but that seems to me to be of great concern. It does not seem to be in line with DFID’s previous objectives of expanding free healthcare and investing in health systems.
I worry—and this is where we come to the issue of opportunity costs of investment in the CDC versus other potential routes—that the Department has started to skew significantly away from some of the work that was done to support the development of strong, national, public, free-at-point-of-use healthcare and education systems. We know how much of a deterrent user fees are to the poorest and to other excluded groups in accessing healthcare.
We also know from DFID’s past how strategic catalytic investment in those sectors has resulted in massive uptake. Importantly, there is also a secondary effect—citizens demanding from their Governments that public health and education services should be provided. That creates the virtuous circle, the social contract, and has much wider benefits for governance, relationships between citizens and the state, and the promotion of democracy and stability. I am therefore concerned that CDC is investing in private solutions, that money still appears to be going into things such as real estate, and that there are questionable investments in such things as palm oil.
I mentioned South Africa earlier, but did not talk about specific sectors. We can see that the bulk of investments in South Africa went into the financial sector, and then agribusiness and food. That is surprising. I have visited South Africa many times and, if we are investing in some of the poorest people there, the issues are often food security and access to HIV treatments, among others. Yes, financial services are important, but the skewing that appears to be happening in the projects seems odd. Again, without being able to access detailed information on the nature of individual investments, we cannot necessarily create aggregates for whether the investments in healthcare or education, for example, are to help more vulnerable and more excluded people to get services, albeit at a low cost, or whether we just see a generalised investment, as in the Rainbow Hospitals in India.
Can the Minister explain the plans the Department has for pushing the CDC and why he thinks the split is so geared towards financial services as opposed to other sectors? Can he also specifically comment on the investments in the for-profit education and health sectors and the other ones I mentioned in this new clause?
Rory Stewart
These are a very good set of questions. Indeed, we are concerned—as is the hon. Gentleman—about which sectors we invest in. To reveal a little of the thinking in the forthcoming strategy, we are likely to put more of an emphasis on agriculture. The biggest element for investment is infrastructure and energy and I spoke at length on Second Reading about why we take electricity generation so seriously. I am not going to rehearse those arguments now. The hon. Gentleman will be aware of why that is an important sector for Africa.
Financial services is also a vital sector, for the reasons laid out by Sir Paul Collier in the evidence session, which we all had the privilege to hear today. Poverty alleviation in Africa will have to be driven by much more productive, specialised businesses. In addition to energy, the fundamental constraint on the development of those business at the moment is the availability of capital. Foreign direct investment levels in Africa are at an all-time low. We see this in livelihoods and supporting these lower income groups, through the support we provide through microfinance. Indeed, microfinance and all that kind of activity is included within financial services.
Large sums of capital available for medium and larger-sized enterprise, however, are going to be central. To pin down what we mean by this with an example, in Sierra Leone after the Ebola crisis, a number of serious investments were possible but were stopped because of people’s fear about the Ebola crisis. It was our ability to take a more patient, long-term view as a public investor that allowed us to provide the capital investment that generates those jobs. A lot of these economic development opportunities and jobs we are talking about are driven by financial services.
To return to the shadow Minister’s challenge, this is assessed by us in the individual development impact theory attached to each case. With regards to the new clause under consideration, we would oppose the idea of limiting in the Bill the sectors in which someone could invest, because sectors are very country-specific. To take an example from Afghanistan, I can completely understand why the hon. Member for Cardiff South and Penarth wishes to say there should be no investment in the mineral sector. However, in a country such as Afghanistan, the mineral sector is almost the only credible possibility for macroeconomic growth and therefore for the country as a whole. Supporting marble, jewellery extraction and other exploitation of natural resources in Afghanistan is a lifeline for that country in a place where they are struggling to generate private-sector investment and have a huge effect on revenue.
We will not get drawn into a difficult discussion about the position of private health and education, except to say again, from an Afghan context, I have seen directly how some of the poorest people who have been unable to access healthcare manage to access it through affordable, low-cost health clinics. This is in Kabul, where wealthier people are giving about $1 or $1.50 a day to be able to go to a health clinic. That money is then often recycled to allow a proportion of people to access the clinic at a more affordable rate.
Even without that cross-subsidy, in many countries, the only way we can get health and education to people in the short term, unfortunately, is by supporting these structures. There is a disagreement that we are not going to be able to resolve today, where we believe the private provision of education and healthcare can be a good way of delivering those kinds of service. With that, I ask that the new clause be withdrawn.
Stephen Doughty
I thank the Minister for his comments. I was pleased to hear that he thinks there might be more of a focus on agriculture and a strategy for it. That is an important step forward. As I made clear, I think that financial services are important, and I agree with many of the points he made. My question is, is there too much going into them to the exclusion of other sectors? I and other Members want there to be a clearer rationale for why that is happening at the expense of other things.
I do not think there is much disagreement about the importance of investing in infrastructure and energy, with the exception of the point about fossil fuels, which we discussed earlier. I wish we had done more of that in this country—that is what the previous Labour shadow team argued for, and we continue to do so. However, there remains an outstanding question about why so much of the new investment is going into just that one sector and why small amounts are going into others.
The point that the Minister made about the mineral sector in Afghanistan is fair, but I am sure he understands why there is a lot of scepticism, given the history of exploitation and poverty creation through the extractive industries, particularly in Africa and elsewhere. The UK led on the extractive industries transparency initiative, the Kimberley process and other measures for bearing down on the negative side effects. I hope that, if CDC invests in those potentially highly controversial sectors in the future, it will have a very clear public rationale for why it is doing so and will set out what the benefits are and what safeguards have been put in place; otherwise, there is the risk of creating a different impression.
The Minister is right that we do not agree on the issue of health and education. I do not think that the UK Government should be investing in private healthcare and education in developing countries. There is a role for the private health and education sectors in those countries—I am not opposed to the existence of a private health and education sector in this country, although I would not choose to use it myself—but should we be helping to expand them? Should we be bankrolling them by investing taxpayers’ capital into, for example, private hospitals, when it is not clear how those services will be made more accessible to the poorest? I urge the Minister to look more closely at that issue.
I came across the example—perhaps the Minister can write to me about it—of an investment we are making in an education programme called GEMS Africa, which appears to be running a series of private schools in what it describes as leafy residential suburbs in Nairobi and charging up to £10,000 a year. That does not sound like low-cost education—it is certainly not no-cost. It would be good to have some clarity about the type and nature of some of these investments, because that does not seem to be right. I think the Department should focus its resources on supporting the development of strong public health and education systems that are free at the point of use. We did excellent work on that previously, and it is a shame that we have moved away from that. I hope the Department will rethink that. I am sure we will debate this issue further, so I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 8
Condition for exercise of power to increase limit: adherence to DFID partnership principles
After section 15 of the Commonwealth Development Corporation Act 1999 (limit on government assistance), insert—
“15A Condition for exercise of power to increase limit: adherence to DFID partnership principles
(1) The Secretary of State may only lay a draft of regulations under section 15(4) before the House of Commons if he is satisfied that the condition in subsection (2) is met.
(2) That condition is that any new investment enabled by the proposed increase in the current limit at the time will be an entity which has agreed to adhere to the DFID partnership principles.
(3) In this section—
‘the current limit at the time’ means—
(a) prior to the making of any regulations under section 15(4), £6,000 million,
(b) thereafter, the limit set in regulations made under section 15(4) then in force;
‘the DFID partnership principles’ means—
(a) the principles set out in the DFID guidance note of March 2014 entitled ‘the Partnership Principles’, or
(b) any DFID guidance note of the same title issued with the approval of the Secretary of State.”—(Stephen Doughty.)
This new clause would require any new investment arising from any increase in the limit on government assistance under regulations under section 15(4) to go only to entities which agree to adhere to the DFID partnership principles.
Brought up, and read the First time.
Stephen Doughty
I beg to move, That the clause be read a Second time.
I do not want to detain the Committee for too long on this new clause, because it refers to some of the issues that we discussed earlier, in terms of setting the overall framework for what CDC is doing and ensuring it is coherent with what the rest of Government—specifically DFID—are doing. Members may or may not be familiar with the partnership principles, which are an important set of principles that underpins DFID’s bilateral work, the types of relationships it has and the kinds of restrictions and caveats it places on that work.
For the benefit of the Committee, there are four partnership principles. The first is a commitment to reducing poverty and achieving what was then the millennium development goals—I am sure it is now the sustainable development goals. That is the commitment of a partner to address the constraints to poverty reduction and progress against those goals. The second is a commitment to respecting human rights and other international obligations. That is the commitment of a partner to respect human rights—particularly economic, social and cultural rights—as well as the civil and political rights of poor people. Third is a commitment to strengthen financial management and accountability and to reduce the risk of funds being misused through weak administration or corruption. The fourth is a commitment to domestic accountability, which is enabling people—a little bit to do with what I was just talking about with private healthcare and education—to hold their Government and public authorities to account for delivering on their commitments and responsibilities, and not undermining that either by supplanting those relationships or by diverting people’s attention.
Rory Stewart
Again, I shall endeavour to be short, before we move on to the final new clause, because Members need to go.
I am very pleased with the tone of the debate. As a result of the Opposition challenges, we will take their proposed measures seriously. The Opposition will hold us to account when they see the strategy and how we plan to address things. Unfortunately, however, there is a technical reason why we are reluctant to accept the new clause, which is that partnership principles are primarily addressed to Governments. At the core of our partnership principles is the intention to strengthen
“the management of public finances”
and to enable
“people to hold the government and public authorities to account”,
so we would be reluctant to extend them for technical reasons.
The basic theme behind the new clause, however, is correct, and we shall deal with that through internal processes. We now have a team in CDC who focus on issues of ethics, and they look exactly at business integrity. Until about three weeks ago, in fact, we had a larger team looking at such issues than the International Finance Corporation itself has.
We touched on Feronia, and I am happy to talk about it in more detail—perhaps we can even visit it. The case is a difficult one. The company has been around in various forms for 100 years. It is trying to sustain jobs three weeks upriver in the Democratic Republic of the Congo. We are really serious about improving standards there and, since we increased our investment, we have been pushing up wage rates and improving safety standards, but there are huge challenges. We have inherited some 19th-century boilers and other challenges, and we have to work closely, but it is a classic example of the challenges of CDC going into a real frontier market, in a difficult and sometimes dangerous place, where 9,000 people depend on us directly and 30,000 indirectly for their jobs. We are trying to get the balance right as we gradually increase standards while maintaining that important part of the economy of the area.
With that, I ask politely for the amendment to be withdrawn.
Stephen Doughty
I appreciate the spirit in which the Minister took the new clause. I accept the technical reason. Obviously, the partnership principles apply to partner Governments, but it seems they could be transposed quite easily. It is quite clear that the headline standards CDC would be expected to adhere to would be the same as the Department’s bilateral programme as a whole.
I appreciate the Minister’s comments about Feronia. It would be good to have more information in writing about that and what steps are being taken. I accept his point that there are sometimes difficult examples and situations. Professor Collier made the point this morning that we should be taking more risk, and we do not expect everything to be perfect or right from day one, particularly when we are operating in difficult environments. However, when repeated concerns are raised about a particular case but there appears to not be the clearest response, we risk going back to the darker days of CDC’s past and some of the other investments. There were serious issues, which I do not want to dwell on, off the coast of west Africa and so on that enjoyed a great deal of scrutiny and criticism at the time.
A key point we have been debating is that if we expand CDC’s resources at a huge pace and by such a significant amount, without safeguards, particularly if we are increasing the appetite for risk, there is a risk that more will go wrong. Without a clear caveat, clear standards and transparency, so that we here in Parliament and citizens of developing countries can scrutinise fully these investments and whether they hold to principles of human rights and ethics, we will potentially get ourselves into very serious difficulties. That is why I am so worried about the quantum of increase, despite the Minister’s welcome statement about his intentions. I hope he will look seriously at the possibility of ensuring CDC adheres in that way. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 9
Condition for exercise of power to increase limit: report and business case
After section 15 of the Commonwealth Development Corporation Act 1999 (limit on government assistance), insert—
“15A Condition for exercise of power to increase limit: report and business case
(1) The Secretary of State may only lay a draft of regulations under section 15(4) before the House of Commons if he has also laid before the House of Commons the documents specified in subsections (2) and (3).
(2) The document specified in this subsection is a report submitted by the CDC to the Secretary of State giving an account, in respect of the most recently completed financial year, of—
(a) the investment activities of the CDC by country and sector, and
(b) the remuneration of staff, including anonymised information on individuals receiving a salary during the financial year in question in excess of £150,000.
(3) The document specified in this subsection is a business case for the proposed use of the new investment enabled by the proposed increase in the current limit at the time which includes information on—
(a) the expected market demand,
(b) the proposed sectors,
(c) the proposed locations, and
(d) the prospective development returns.
(4) In this section, ‘the current limit at the time’ means—
(a) prior to the making of any regulations under section 15(4), £6,000 million,
(b) thereafter, the limit set in regulations made under section 15(4) then in force.”—(Stephen Doughty.)
This new clause would require any draft regulations to increase the limit on government assistance under section 15(4) to be preceded by the laying before the House of Commons of an annual report for the preceding financial year giving information on investment activities and remuneration and a detailed business case for the proposed additional investment.
Brought up, and read the First time.
Stephen Doughty
I beg to move, That the clause be read a Second time.
I will not dwell on this new clause too long, because it simply states some of the arguments I made earlier about the sort of business case and rationale that my hon. Friends and I feel should be provided before significant increases in CDC’s capital receipts go ahead.
The new clause mentions expected market demand, proposed sectors, proposed locations and prospective development returns, as well as clear and transparent information on the investment activities of CDC and on remuneration. I have not dwelled too much on remuneration, but it bears looking at. Although the headline salaries of CDC’s chief executive and others have come down significantly, which I welcome, they are still substantial. The number of staff within CDC who are in the higher income brackets concerns me. I realise there is a trade-off here, and it is not a debate we will conclude today, but we should set out all that information clearly before Parliament authorises such significant increases of money.
I feel we have had a productive debate today on many of the issues. I welcome the new information that the Minister provided. It would be good to see some of that in writing, and perhaps through further amendments, but I still fundamentally feel that the increase is too big, with too much power being given to Secretaries of State. Who knows if the Minister will be in his place in the future? It is too much of a temptation, without clear safeguards.
I hope that other Members who join us on Report will look carefully at these issues. I have no doubt that my hon. Friends will table amendments for the whole House to vote on, in the light of information we have heard today from the Minister. Serious concerns remain. I do not think the Minister has made the case yet, and certainly not for this level of increase, but I do not intend to press the new clause to a vote.
Rory Stewart
With your permission, Ms Ryan, I hope to thank people more formally on a point of order, but this has been an excellent and testing debate. I will try to come back to that point.
We take the issues that the hon. Member for Cardiff South and Penarth has raised seriously. We have an online searchable database in which is contained all the remuneration, every investment decision and every fund, including the name, description, location and sector. The annual reports and accounts are now published with that information. We are pushing—he will see this in the new strategy coming forward—for even more transparency.
We already feel that CDC is a real leader among DFIs in the world, but that is not good enough. It is not good enough for us to be better than other DFIs. We can keep improving. After the evidence session, I had a conversation with Oxfam about the concrete proposals it has for more that we could do internally. We are very open to those kind of challenges. There are absolutely no issues from us or from CDC in trying to prove again and again that we are a world leader on transparency. I thank the hon. Gentleman for saying that he will withdraw the new clause.
Stephen Doughty
I thank the Minister for his remarks. I think it would be helpful and more likely to gain support across the House were he to come back with a lower level of increase over a defined period and were he not to give those secondary powers. I do not think anyone is suggesting that there is not the potential for more good work to be done through CDC, but it is the question of the value and the caveats that need to be put in place before that goes forward. I do not think that the Government have made that business case yet. I look forward to hearing more from the Minister in due course, and I thank everyone who has taken part in today’s debate. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
Rory Stewart
On a point of order, Ms Ryan. I put on record my enormous thanks to the Bill team, to the Doorkeepers, to Hansard, to the Clerks and to you for your chairmanship. Please put on record that we have explored all the amendments at great length and are finishing the Committee half a day early. In particular, I give huge thanks to all the Members—the hon. Member for Coatbridge, Chryston and Bellshill, my hon. Friend the Member for Congleton, the hon. Member for Cardiff South and Penarth, my hon. Friends the Members for Rochford and Southend East and for Bedford, the hon. Member for Glasgow North, my hon. Friend the Member for Gloucester, the hon. Member for Bradford East, my hon. Friend the Member for Stafford and the hon. Member for Edmonton—who contributed greatly to our debates. I also thank my hon. Friends the Members for Rochester and Strood and for Sutton and Cheam, the hon. Member for Wirral South, my hon. Friend the Member for Burton and the hon. Member for Ogmore for their attendance.
I will conclude with a personal note. I pay huge tribute to the level of scrutiny I have received from the hon. Members for Cardiff South and Penarth and for Glasgow North. I am extremely pleased, to be honest, that I am defending an institution that I am genuinely proud of and that does a genuinely good job. If I was not confident about the institution I am defending, it would have been extremely uncomfortable to be subjected to that level of expertise and scrutiny. I thank them so much for doing such a good job of holding us to account. I again thank the Clerks, the Doorkeepers, Hansard and everybody for allowing us to conclude half a day early.
Kate Osamor
Further to that point of order, Ms Ryan. I want to tag on to the Minister’s remarks and thank everyone who contributed today. My hon. Friend the Member for Cardiff South and Penarth has worked tremendously hard, and I wanted to thank him for all his work and the scrutiny he has put the Minister under. I appreciate it, and it has helped the debate no end.
Bill to be reported, without amendment.
Westminster Hall
(7 years, 4 months ago)
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Household Food Insecurity
(7 years, 4 months ago)
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Mrs Emma Lewell-Buck (South Shields) (Lab)
I beg to move,
That this House has considered household food insecurity measurement in the UK.
It is a pleasure to serve under your chairmanship, Mr Gapes. Back in 2014, I said in this House:
“People are going hungry, and, with each passing day of this terrible excuse for a Government, more and more are falling into poverty, with little or no chance of escape. There are no second chances in Britain today. Food poverty is a clear consequence of the Government’s ideological assault on the social safety net and the people who rely on it. One hungry person is a complete disgrace, but thousands of hungry people are a national disaster.”—[Official Report, 12 December 2014; Vol. 589, c. 1500.]
That was one of many speeches I have made in this House about hunger and food poverty, and I have to say that I am getting increasingly fed up with the Government’s inaction. It is estimated that 8.4 million people in Britain now live in households affected by food insecurity, which means that millions of people in Britain—one of the wealthiest countries in the world—are hungry and malnourished.
The Government need to measure and to begin to tackle household food insecurity. Such action is long overdue. Food-insecure households lack reliable access to a sufficient quantity of food, yet there has been no national measurement of household food insecurity in the UK for more than 10 years.
Ms Margaret Ritchie (South Down) (SDLP)
I congratulate the hon. Lady on securing this important debate. Is she aware that the Environment, Food and Rural Affairs Committee, of which she is a former member, is currently conducting an inquiry into food waste? It is concentrating not on household waste but on food waste that is discarded by the producer because it does not fit the requirements of either the retailer or the processor. Does she agree that such food waste could help those who are suffering from food poverty?
Mrs Lewell-Buck
I am aware of the EFRA Committee’s inquiry, and it would be good for the Government to back the Food Waste (Reduction) Bill of my hon. Friend the Member for Bristol East (Kerry McCarthy).
Although we have national statistics on how much households have spent on food and on individuals’ dietary intake, those data cannot tell us exactly how many households in the UK are unable to feed themselves adequately.
Ruth Smeeth (Stoke-on-Trent North) (Lab)
I thank my hon. Friend for securing such a vital debate. Does she agree that the rate of the problem is not constant throughout the year: there are peaks and troughs? Some families struggle in the run-up to Christmas and during school holidays because their children do not go to breakfast clubs or receive free school meals. If there is no additional support from the Government, the issue of holiday hunger will become more prevalent. Parents have to find the money for an additional 10 meals per week per child to ensure that their children are not malnourished.
Mrs Lewell-Buck
My hon. Friend is correct: holiday hunger is a scourge on this country. In a former life, I was a child protection social worker, and families used to say to me that school time was the only time their children could be guaranteed a healthy meal. They dreaded holidays. My colleagues and I often had to do shops for those families to feed them.
David Simpson (Upper Bann) (DUP)
I congratulate the hon. Lady on securing this debate. She started off by giving the Government a very hard time. I am not a spokesman for the Conservatives but, in 1996—20 years ago—the United Nations decided that it would eradicate food insecurity. What has it done since then?
Mrs Lewell-Buck
Unfortunately, I am not here to speak on behalf of the United Nations, but all the statistics show that the situation has got worse in the United Kingdom since 2010. Prior to that, we had the odd soup kitchen, and food banks were unheard of. Now, we can hear people in every street in every constituency talking about food banks and people who are going hungry.
Food insecurity has a terrible impact on households. Parents are unable to afford to feed their children nutritionally balanced meals, as my hon. Friend the Member for Stoke-on-Trent North (Ruth Smeeth) said, which breeds a sense of shame, stress, anxiety and social isolation. Severely food-insecure adults and children go whole days without eating in this day and age, simply because they lack money. People are living on the bread line—in fact, many are living below it. Recent research from the Joseph Rowntree Foundation shows that people are going from just being hungry—as if that was not bad enough—to living in destitution. They lack clothing, toiletries and heating, and for many homelessness is becoming a reality.
Recently, a woman called my constituency office in desperate need of help after having problems with her benefits. She had no money for gas or electricity, and no food to feed herself and her four young children, all of whom are under 10 years of age. She was alone and unable to leave her home to get to the nearest food bank, which in any case was closed. Even if she had been able to leave her home, she did not have the necessary funds for public transport. In the end, my staff contacted one of the many food bank volunteers in Shields and managed to get food delivered to her and her children. If they had not been able to pick up and deliver that food, that family would have endured the further pain of starvation.
That is one of the everyday experiences that are being documented in food banks, GP offices, classrooms and charities across the country. I am sure that all my colleagues hear similar stories day in and day out from their constituents. When the all-party group on hunger, of which I am a member, travelled the country in 2014, we found that the overriding reason why people visited food banks was the Government’s punitive welfare regime and incessant use of sanctions. The recent debacle with Concentrix shows that the Government’s response to those who are most in need has not changed: they are simply not bothered about them.
All those personal tragedies point to a permanent scarring of life chances. Demonstrable links can be found between food insecurity and educational performance. Children’s intellectual and physical development is damaged by each episode of food insecurity that they experience. The physical and mental health impacts of food insecurity affect the entire economy. Evidence from Canada suggests that the healthcare costs of people who have experienced episodes of severe food insecurity are 121% higher. For those reasons, there is growing consensus among not only Members of Parliament but academics and civil society organisations that the Government should initiate a programme of regular and robust monitoring of food insecurity prevalence so that we can establish precisely the magnitude of the problem, identify which groups are at the greatest risk and properly target resources at prevention.
Fiona Mactaggart (Slough) (Lab)
I congratulate my hon. Friend on securing this debate. This is a very important issue. She is right to say that the Government have a responsibility to count the numbers so we can have a strategic response. In the meantime, we have to recognise the wonderful work that food banks do—she mentioned her own, and Slough food bank is brilliant—to plug the gap. Civil society is doing its best; it is time for the Government to step up, too.
Ruth Smeeth
An extraordinary feature of the debate is that other countries, which we consider allies, already view this as a state responsibility. In the United States, for example, to tackle holiday hunger, there is a federal programme, which has been federally funded—there has been no research—for more than 50 years. That is part of the country’s normal engagement. Feeding one’s citizens is definitely regarded as a Government responsibility. Does my hon. Friend agree that our Government need to open their eyes and look at things in the round, because not only people on benefits, but the working poor are struggling to feed their families?
Mrs Lewell-Buck
I agree. The very least that any Government can do is to ensure that people in their country are fed and cared for when other parts of the state have let them down.
Our best estimates suggest that 500,000 different people received food assistance from the Trussell Trust, the UK’s largest network of emergency food aid providers, in 2014-15. However, many, indeed most food-insecure people choose not to access emergency food aid, and not all food banks are Trussell Trust ones. New preliminary data from Gallup World Poll suggest that 8.4 million people—17 times the number accessing Trussell Trust aid—lived in food-insecure households in 2014. Those data were gathered through the United Nations Food and Agriculture Organisation food insecurity experience scale, which is an internationally validated tool for measurement of household food insecurity. It showed that we ranked in the bottom half of European countries for protecting our population from food insecurity and hunger.
Unfortunately, the survey through which those data were collected had a national sample of only 1,000 households and did not collect detailed information on respondents’ characteristics. We therefore do not know who is worst affected. What is more, the FAO does not intend to fund that survey beyond 2016. Instead, it will encourage states to produce national measures in their own routine national surveys. That includes us. If we did so, we would be able to track our progress on implementing the global sustainable development goals—to which the UK has said it is committed—intended to end hunger and ensure universal access to safe, nutritious food by 2030.
On 29 November, the Office for National Statistics was due to launch a consultation to establish what metrics should be incorporated into national statistics to track our progress on the goals. The consultation has now been delayed indefinitely. We should, however, move forward swiftly and decisively with such vital monitoring. It would put us in step with other nations, such as the USA and Canada, which regularly monitor prevalence rates, with the data collected playing a game-changing role in creating effective prevention strategies.
Ruth Smeeth
We heard an extraordinary story about food poverty in the run-up to this year’s Olympics in Brazil, which has made access to food a human right and, therefore, has provided access to food not only for children and the most vulnerable, but for everyone—from the poorest to the wealthiest. It has done so from an economic position that is nowhere near as positive as our own.
Mrs Lewell-Buck
Our country is lagging behind. Our response to the crisis is embarrassing, and things have never been more pressing. Only last week we heard that the number of hospital beds in England alone taken up by patients being treated for malnutrition almost trebled over 10 years. Malnutrition is a complex condition, but food insecurity adds a significant risk. The prevalence of both may well increase if left unchecked in the coming years.
Mark Durkan (Foyle) (SDLP)
I commend the hon. Lady for securing this important debate. The experience of the Disability Discrimination Act 1995 and the Autism Act 2009, for example, is that the core initiative is to ensure an obligation on the state, or parts of the state, to know the numbers and to identify the needs. Essentially, that is what she is calling for in this debate. That has to happen not only at a UK level, but at regional and local level because, in relation to holiday hunger, school holidays vary in length in different parts of the UK.
Mrs Lewell-Buck
I thank the hon. Gentleman for that intervention. Later in my speech I will outline to the Minister how easy it is to introduce such a measure and how little it would cost.
The drop in the value of sterling as a result of Brexit uncertainties means that food prices will start to rise—by between 5% and 8% in the coming year, according to the Food and Drink Federation—and that will place even further pressure on households struggling to put food on the table. On average, healthier food costs two and a half times as much as food high in fat, salt and sugar, and people who experience food insecurity often cut back first on healthy, perishable and more expensive fruit and vegetables.
Proposals for measurement have received a considerable amount of support in the UK. In January 2015, my colleagues and I on the Environment, Food and Rural Affairs Committee recommended that the Government should collect statistically robust data on the scale of household food insecurity. The APPG on hunger has recommended measuring and monitoring food insecurity. The Administrations of Scotland, Wales and Northern Ireland are starting work on the development of metrics for each of the devolved nations. A UK-wide picture of the nature of food insecurity, however, could not be formed without applying a standard measurement tool in all four nations.
Securing a commitment to measurement from the Government has, however, proved immensely difficult. That is despite the interventions of the APPG and of the EFRA Committee, debates and questions in the House, and the work of organisations such as the Food Foundation, Sustain and Oxfam, which have consistently brought the data gap to the attention of officials in a variety of Departments.
The data gap could easily be closed through inserting a short list of questions into an existing annual survey instrument, such as the living costs and food survey or the national health surveys. The marginal cost is estimated to be between £50,000 and £75,000 per year. Surely it is worth the Government investing that small sum to address one of the biggest scandals of our time.
The UN food insecurity experience scale, and the United States Department of Agriculture’s household food security module from which it was adapted, have been rigorously designed and tested to measure the inability of households to access food. One of those tools could be inserted seamlessly into a UK research programme. Each of the international scales involves asking respondents a series of questions about their ability to access sufficient quality and quantity of food over the preceding 12 months.
I therefore urge this House to move towards annual measurement of food insecurity using an internationally recognised survey tool, beginning in 2017. The Government cannot continue to bury their heads in the sand when this is one of the biggest scandals of the past six years. They should be ashamed that hunger has grown on their watch and they should be doing all they can to stop such a grotesque blight on our society.
We are at grave risk of accepting food poverty and inequality as a normal part of society. Due to Government inaction and erosion of the welfare state, the safety net that once existed, which used to aid people who fell through it through no fault of their own when they fell on difficult times, has been stripped away. The gap is being filled by a range of charities and faith groups, and it should embarrass and shame the Minister and all his colleagues that they have sat back and allowed others to deal with this heart-breaking disaster of, at times, their very own creation.
Is that not the crux of the matter? In truth, the longer the Government refuse to measure the problem, the longer they do not have to acknowledge the scale of it and the longer they do not have to do anything about it. That is a huge dereliction of duty. They are more than happy to allow charities and the likes of the Trussell Trust to do their job for them, which is to care for children, families and vulnerable individuals who are not able to meet the most basic human requirement to feed themselves. It is telling that, when the Trussell Trust first published its shocking statistics about the scale of the problem, some on the Government Benches denounced those figures as distorted, rather than focusing on the shocking fact that food banks exist on such a scale at all.
As I speak, in my constituency, there will be a mother wondering how she is going to feed herself and her toddler today, schoolchildren struggling to focus because their stomachs are rumbling, parents who yet again skipped breakfast to ensure that their children did not have to, families searching their cupboards for what is left and elderly people who are unable to access fresh food. But that is not just the case in my constituency; it is the situation in constituencies and homes across the UK. It really is time that this Government got a grip on this problem. They must start by collating the data that they need to address it. As I have outlined, implementing measurement is not an insurmountable or costly challenge, and this Government owe it to every man, woman and child who woke up hungry this morning and will go to bed hungry tonight, in one of the richest countries in the world, to do so.
Jim Shannon (Strangford) (DUP)
It is a pleasure to speak in this debate. I commend the hon. Member for South Shields (Mrs Lewell-Buck) for setting the scene so well and giving us so much detail about this issue, which we all have an interest in and wish to speak about. It is always nice to see the shadow Minister in her place. I know that the Minister will touch on the issues that we raise, because he is a man of compassion and understands them only too well.
I was speaking to my hon. Friend the Member for Upper Bann (David Simpson) before the debate started, and I cast my mind back to the situation when I was younger—that was not yesterday—and the things that our families had at that time. I was extremely blessed as a child to have parents who worked night and day to put food on the table. We may not have had the choicest cuts of meat, and we may have had lunches that were eggs in a cup and that was it, or dinners of potatoes and veg with no meat, but there was always filling food on the table. Those memories of my early days are particular to me but probably resonate with many others in the Chamber. My biggest insecurity about food was whether my two brothers would steal half a sausage from my plate. That was a fact of life—we challenged one another for what we had. We may not have had much to spare, but we had enough, and that is all anyone needs. We had a lovely upbringing, but we were by no means wealthy.
It breaks my heart to think that there are children in the UK—in my community and in the communities of everyone in the Chamber today—who are living hand to mouth. The hon. Member for South Shields set that scene very well, and it resonates directly with us all. I hate to think of mothers taking less on their plates to ensure that there is enough on their children’s plates. That should surely be the stuff of second world war TV dramas such as “Home Fires” as opposed to what is happening in the UK today, but there are indicators that it is not a thing of the past. Indeed, recent analysis by the Food and Agriculture Organisation of the United Nations, which my hon. Friend the Member for Upper Bann referred to, suggests that 8.4 million people in the UK live in food-insecure households. What does that mean? The UN said that it would eradicate food poverty and insecurity by a certain time, but it did not. Words are hollow if they do not lead to actions that ensure change. Notes from a recent meeting in this place say that to be food insecure means to be
“unable to secure enough food of sufficient quality and quantity to stay healthy and participate fully in society.”
I welcome the Environment, Food and Rural Affairs Committee’s inquiry into waste, which the hon. Member for South Down (Ms Ritchie) and my hon. Friend the Member for Upper Bann, who are members of that Committee, referred to and another member of that Committee told me about at a function last night. How do we address food waste in homes, businesses and supermarkets? In Strangford—I believe that this is happening in other constituencies too, but hon. Members will confirm whether that is the case—supermarkets have deals with community groups about food that is coming close to being out of date. For instance, Tesco and Asda in Newtownards phone community groups on a Friday or Saturday and say, “This food is going out of date. Can you make use of it?” Those groups can, and they take it directly to the people who need it.
Ms Ritchie
Does the hon. Gentleman agree that labelling—sell-by dates and use-by dates—is not only confusing but an imprecise science? That needs to be reviewed as part of the wider debate about food waste reduction.
Jim Shannon
The hon. Lady is absolutely right. I hope that the Committee’s inquiry will address labelling, which we also talked about last night. We often have products that are near their sell-by dates, and my wife is very strict about them, but I am perhaps not so strict. I feel that the sell-by date may not necessarily mean that the product is not edible, and I therefore challenge myself to eat it. Whether that is right or wrong, it has not affected me in any way. It is not the reason why my hair fell out, and it is not the reason for many other things.
David Simpson
Mr Gapes, I may have the same problem with my hair falling out.
David Simpson
I am sure that my hon. Friend will agree that there needs to be some process whereby when supermarkets reject certain foods, such as vegetables, because they are not the right shape, size or whatever, they are put on the shelves at a reduced price rather than put into anaerobic digesters. I know that some supermarkets are doing that, but more could be done.
Jim Shannon
The knowledge that my hon. Friend brings to this debate is enormous. He has been in business for many years and he knows the system. Again, those words could be used in the inquiry, which he will be directly involved in as a member of the Environment, Food and Rural Affairs Committee.
Supermarket chains are taking steps to enable products that are close to their sell-by dates to be given to community groups and directed to those in need. That is a great idea, which I welcome and I hope is carried out further afield. In the home, we need to be a wee bit more careful about the food we use, how we use it—from freezer to fridge—and its shelf life. Those are all important issues for us to look at. However, there is currently no routine measurement of food insecurity in the United Kingdom, and an absence of regular data collection means that the true magnitude of the problem remains hidden. Perhaps the Minister could give us some idea of how data are gathered, collated and then used to address this issue.
The hon. Member for South Shields referred to food banks. I do a lot of work with my local food bank. When I first began that interaction, I was shocked by the level of need in my constituency and the range of people who were struggling. The first Trussell Trust food bank in Northern Ireland was in my constituency, so I have particular knowledge of food banks. I do not see them as necessarily negative; they have positive effects, in that they bring people, churches and Government bodies together with one focus: to help those who need help now. Food banks have a positive role to play in our society. I always think of the Simon slogan, “One in three of us are just one pay cheque away from homelessness.” The issue is real for a great many of us: there but for the grace of God would any of us be too. It is not enough simply to be thankful that we are not in that scenario. It is up to us to ensure that families in the United Kingdom are safe and secure in knowing where their next week’s food will come from.
Just last Saturday morning, I had the privilege of helping out in Tesco with the food bank team, who handed out lists to people to let them know what many people will need over the Christmas period. I was not surprised by the level of giving, as I know the compassion of the people in my constituency is hard to equal—as indeed is that of many others. I was encouraged by the inherent goodness of the women who rushed around with their children tagging along behind them and still took the time to grab handfuls of items for the food bank. They asked what items the team wanted and put them in their trolleys. There were also men who put items in their trolleys and gave financial contributions. I was also most encouraged by the number of young people who did their best to help out. Children said, “Mum, we need to help—what can we do?”
It is wonderful that the community steps in, and I cannot speak highly enough of the food bank, the Trussell Trust and, in my area, the Thriving Life church, which was behind that initiative, and which has a wonderful compassion centre designed to help others out. The churches across the whole of my constituency, and in Ards in particular, came together to stand in the breach in the truest and best ecumenical sense. We in this place as well have an obligation to assess the need and meet it.
Through the food bank, I have had the ability to give vouchers to people I am helping who have had their benefits stopped. We know clearly what the issues are, and I am reliably informed that the advice centre in Newtownards is one of the first stops for a great many people whenever they are looking for vouchers to help them because they have literally no money. With the recent tax credits palaver, I have even had staff members —I am blessed with good staff—put their own money on to electricity cards to see people through the weekend. That is my staff, other staff, churches—good people coming together to do their best. However, that should not have to happen. We have a responsibility to ensure that help is at hand for those whose benefits are called into question instead of them being left with nothing to feed their children with. Our churches and people come together in the very best sense.
In my own area of Newtownards, the food bank provided 2,230 three-day emergency crisis food parcels last year. That was in one town. We have many food bank outreaches in Comber, Kircubbin, Ballynahinch and Saintfield, and churches and individual bodies are stepping outside what they normally do to help directly. I see a community full of compassion that is moved to help those who are less well off. That has got to be great news.
Especially at this time of year, as we approach Christmas, many families will again be on the breadline. Some of the major companies in my area will make contributions—I have a local butcher who gives turkeys. We do our best to come together through the Trussell Trust food bank and the Thriving Life church in Newtownards. In 2015-16, the Trussell Trust food bank network provided—these are incredible figures—1,109,309 three-day emergency food supplies and support to UK people in crisis. Those enormous figures give us an idea of the magnitude of what it does. Of those, more than 400,000 went to children. Again, I underline the clear need of children in poverty. We are here today to make a plea for those people.
There is food insecurity in the UK—that much is clear. What we are doing to address it is not so clear. I look to the Minister, who I am confident will give us the answers we need, to outline the steps that will be urgently taken to ensure that we fulfil our obligations and responsibilities not only to our constituents but to all constituents across this great nation of the United Kingdom of Great Britain and Northern Ireland.
Mary Glindon (North Tyneside) (Lab)
It is an honour to serve under your chairmanship, Mr Gapes. I congratulate my hon. Friend the Member for South Shields (Mrs Lewell-Buck) particularly on her perseverance in securing the debate, which she has sought for more than six months. It is unfortunate that she is not too well today, but no one can say that she has not made an excellent case. We need to thank her for all the work she has done herself and as part of the APPG on hunger, which has also done a lot of work. If the Government had accepted some of the recommendations of the APPG’s detailed report, “Feeding Britain”, produced under the chairmanship of my right hon. Friend the Member for Birkenhead (Frank Field), there may have been a little less need for the debate. There were 72 recommendations in that report and now, two years on, it is perhaps an indictment of the Government that none of those recommendations has been heeded.
In raising this issue today, my hon. Friend has made the case for the Government to start measuring food insecurity across the whole of the UK. Her request was eloquently illustrated and reinforced in interventions from my hon. Friend the Member for Stoke-on-Trent North (Ruth Smeeth), my right hon. Friend the Member for Slough (Fiona Mactaggart), the hon. Members for South Down (Ms Ritchie), for Foyle (Mark Durkan) and for Upper Bann (David Simpson) and in the speech by the hon. Member for Strangford (Jim Shannon), who pointed out how, in the face of adversity, communities have come together and worked with groups such as the Trussell Trust to help people, showing that, when the worst things happen to fellow human beings across the UK, it brings out the best in others.
I am glad to hear that the EFRA Committee is looking at food waste. Only last night, we had FareShare in Westminster. It is making a huge contribution by using 10,000 tonnes of the 270,000 tonnes a year of food waste and producing 65 million meals. That is wonderful, but, again, so much more could be done.
We need look only at Hansard to see that hunger and food insecurity have been raised time and again with various Departments. We also know that, in response to questions, Ministers have, time and again, found an excuse not to introduce any kind of measurement. The fact remains, as has already been said, that food insecurity has not been measured in this country since 2003. It is totally unacceptable that, in the UK—I will say this again; it has been said twice before—more than 8 million people lived in households reporting having insufficient food. That was back in 2014, and we know that that number must now be far larger. The statistics are nothing but shocking, and it is totally unacceptable that here, in the sixth largest economy in the world, in the 21st century, so many people are going hungry and, perhaps we should say, are starving.
I congratulate all the organisations that have been mentioned that are working hard to combat the effects of food insecurity. I agree with the Food Foundation that the Government must conduct research to find out more about why certain groups are affected and how food insecurity affects food choices and people’s health so that they can put in place policies that can start to tackle the problem laid out by my hon. Friend the Member for South Shields. As we have heard, the devolved Administrations are taking steps individually to measure food inequality, but each is using a different method. What is really needed is a standard measure for food insecurity across the whole of our nation.
It is nearly two years since the EFRA Committee, in its report, recommended that the Government
“collect objective and statistically robust data on the scale of household food insecurity”.
The coalition Government responded by saying that the issue was complex, and they did not agree that the living costs and food survey was suitable for collecting data on food insecurity.
As has been said, we know the use of food banks has ballooned to more than 1 million in the past year, but we cannot use the figures collected by the Trussell Trust on the use of food banks because they are not regarded as an appropriate measure. Recent data from Gallup World Poll indicated that, in 2014, 17 times more people lived in food insecure households than used a food bank.
The Government are signed up to the United Nations sustainable development goals, the second of which is:
“End hunger, achieve food security and improved nutrition and promote sustainable agriculture”.
Does the Minister agree that it is time for the Government to be proactive, and not only to contribute to the UN Food and Agriculture Organisation but to listen to the advice of the University of Oxford, the Food Foundation and Sustain, which all suggest, as my hon. Friend the Member for South Shields has said, that standard questions on food insecurity, as used in the UN FAO food insecurity experience scale, should be added to existing UK surveys such as the one suggested by the Environment, Food and Rural Affairs Committee two years ago?
It has already been pointed out that the cost of adding those pertinent questions, which so far have been tried out only in a survey of 1,000 people, would be £50,000 to £75,000 a year. They would provide accurate nationwide data about how severe the problem of food insecurity is. The scale is used in other countries and has proved successful. As my hon. Friend the Member for Stoke-on-Trent North has said, if Brazil can do it, so can we. The consultation by the ONS on how to track the sustainable development goals, which was due to be launched at the end of November, has been put back indefinitely. What can the Minister do to bring it forward and to ensure that the consultation begins?
With the reduction in sterling since the referendum on the EU, the prices of products that we import from Europe such as fresh fruit, which is a basic and important ingredient of a healthy diet, will increase. I must reiterate that supermarket prices will increase by at least 5%. Can something be done to stop more pressure being put on the food purchasing power of those who are deemed to be just about managing, and those who are deemed not to be managing adequately, so that food insecurity will be made less, not more, likely for them?
We have already noted that people in food insecurity have poor health, and the NHS is at breaking point, unable to take the added strain that is put on it when people’s health is at risk simply because they are malnourished. How can we allow the blighting of the future of young people who go to school hungry and, because they are not fed, cannot learn properly? The only answer to those questions is that the Government must commit to the adoption of a routine method of measuring food insecurity in the UK, so that policy and resources can be targeted and we can reach the point at which no one in this country goes hungry.
The Minister of State, Department for Environment, Food and Rural Affairs (George Eustice)
I congratulate the hon. Member for South Shields (Mrs Lewell-Buck) on securing the debate. I know that as she outlined in her speech, she has been engaged with the issue for several years. Although I disagree with some of her analysis, we can all agree that the food banks in all our constituencies do fantastic work. I want to pay tribute in particular to the one in my constituency of Camborne and Redruth, which is run by a wonderful volunteer called Don Gardner and supported by many local churches. I have visited it regularly over the past few years. When I visited a few weeks ago it had support from National Citizen Service volunteers, who were giving some of their time as part of their project. Last year, because the charity is so valued, it was nominated by students at the local Camborne Science and International Academy as their charity of the year. I shall visit again in a few weeks as part of the preparations for Christmas, and I am sure that many hon. Members will be doing the same in their constituencies.
The food bank movement has grown in recent years, there is no doubt about that. However, we must recognise that there has always been charitable support and food aid on offer in this country, whether from the Salvation Army or other projects. Food banks were developed first in the United States, and the concept caught on in countries such as France and Germany. More recently, predominantly with the leadership of church groups, they have grown in the UK as well. We should recognise their value and contribution to civil society. Many food banks, including the one in my constituency, are beginning to move on from offering just crisis aid and food support to helping people with other problems—with housing, getting a job, or other problems and issues in their lives that contribute to their need to rely on food banks. Indeed, in my constituency other agencies are brought on board, to come to the food bank. My constituency caseworker will go to the Camborne food bank this afternoon. We have an agreement that our caseworker will attend once a month, or more often if there is a need, to help people to resolve other issues in their life, such as housing and benefits. The Government have also made it clear that job coaches from local jobcentres can go to food banks to help to support people in getting a job.
I want to talk about aspects of the analysis that the hon. Member for South Shields gave with which I disagree slightly, beginning with food prices, which I think are the nub of the debate. Food prices, and commodity prices generally, are predominantly governed by changes in weather events, energy prices and exchange rates. The truth is that the biggest spike in food prices in recent times took place in 2008, during the financial crisis. Prices continued to rise gradually until the beginning of 2014, but they have been falling ever since, for almost three years now. In fact, food prices are now down by more than 7% since that peak at the beginning of 2014. I accept that with sterling depreciating against the euro and other currencies recently, and because currencies and exchange rates are a major driver of food prices, that may change, but it is important to acknowledge how things have changed in the past three years, with food prices going down substantially.
The long-standing measure of household food security that we have is the annual living costs and food survey. We look in particular at the percentage of household income spent on food by the poorest 20% of families. The reality of that consistent measure of household food security and affordability, which we have had for many years, is that it has been remarkably stable in the past decade at about 16% to 16.5%. Indeed, at one point last year I think the percentage spent by that lowest-income 20% of households was lower than it was in 2008-09. So there is clear evidence that there is some stability, if we look specifically at household spending.
Mary Glindon
Is it true that people suffering food insecurity do not buy the best food that they could—the food they need to have a nutritious meal? Do they not often buy food that is calorie-laden, cheap and filling, as opposed to good-quality, nutritious food?
George Eustice
Given that food prices go up and down but household expenditure on food seems to remain remarkably consistent, it suggests, as the hon. Lady points out, that people change their choices and preferences. The hon. Member for South Shields made the point that people abandon fruit and veg because they regard it as too expensive. In my view, veg is actually relatively cheap at a supermarket or any other market. It tends to be other things—ready meals and meats, in particular—that are more expensive and add to the cost of food. Fruit and veg, which are the healthiest option of all, are still relatively cheap.
Mary Glindon
One of the reasons for that given by people who are in food insecurity is the relatively short life of some fruit and veg. Fruit and veg is perhaps beyond the tight budgets of those who cannot afford to buy fresh food every day.
George Eustice
I buy fresh fruit and veg, as I am sure do many other Members. Somebody made a point earlier about sell-by dates. The truth is that veg will actually last quite a long time if it is refrigerated, in my view. Of course, there is also frozen fruit and veg, which is also relatively cheap.
Jim Shannon
The Minister is being most generous to all of us in giving way. I am sure he recognises the importance of home economics classes for children at every level of school, including primary and, particularly, secondary schools. Those classes are and should be very much part of pupils’ lives. They give them the opportunity to produce a meal at a reasonable price, and it is good for a child or young person to do that and take that meal home. Does the Minister value home economics education in schools and how it teaches people to prepare meals in later life, as I do?
George Eustice
I very much agree with the hon. Gentleman. He will be aware that the Department for Education launched the school food plan two or three years ago. Hardwired into that, as well as giving schools quite specific criteria about the type of healthy and nutritious food they should have as part of their school meals, was the idea that all schoolchildren should visit a farm, so that they can see how their food is produced and understand the connection with that food production. There was also the idea that primary school children should be taught to prepare a basic food dish, so that they get used to managing and handling food. That means that they know where their food comes from and how to handle it. I very much agree with the hon. Gentleman that that is an important point.
The Department for Environment, Food and Rural Affairs has recently consulted on all of its statistical surveys. For each Office for National Statistics survey, including the living costs and food survey, there is a steering group that also includes representation from the devolved Administrations.
As we all know, the best route out of poverty is to have a job or to find employment. It is important to note that employment is now at a record high, at more than 74.5%, and that the number of people in work has actually gone up by 461,000 this year, to record levels. I recognise that in many constituencies, including my own, the issue is not so much worklessness as low pay. That is why the Government are increasing the national living wage to £7.50 from April 2017—and we have made clear that we intend to increase it further. We need to tackle low income, and we have outlined our plans to do so.
Mrs Lewell-Buck
Will the Government actually check and enforce that the national living wage is being paid? Their record on that is woeful; a lot of places do not pay the national living wage and the Government are just not interested.
George Eustice
It is not a DEFRA role to enforce that particular area, but I am sure that the Low Pay Commission and other parts of Government will look seriously at the points the hon. Lady raises. Payment of the national living wage is a legal requirement, and it is enforced.
Alison Thewliss (Glasgow Central) (SNP)
It is generous of the Minister to give way. Does he accept that under-25s are not entitled to the higher rate of the minimum wage and are not going to get any kind of discount when they go to the shops for their messages? The Government should make sure that the living wage is a real living wage, as set by the Living Wage Foundation, and is accessible to people of all ages. Everyone needs access to food that they can afford.
George Eustice
The hon. Lady points out that the national living wage applies to those over the age of 25, but the national minimum wage applies to people of all ages, including those under 25.
George Eustice
The hon. Lady is right that it is not that at the same rate as the national living wage, but we have made great progress in recent years in tackling youth unemployment and helping people to get their first job in life. I actually think there is a distinction between those over the age of 25, who have been in work for some time, and those who may be trying their first job.
Not everybody is in work, and it is often said that late benefit payments or sanctions are a contributing factor in increased food bank use. It is worth noting that even the Trussell Trust’s report suggested that, based on its assessments, sanctions accounted for about 5% to 10% of the increased use of food banks. They do not account for all of it on their own.
When it comes to late payments, 90% of jobseeker’s allowance claims are now paid on time and within the 10-day limit, while nearly 89% of employment and support allowance claims are also paid within that timeframe, which is considerably better than in 2009-10. Indeed, the timeliness of payments has improved by about 23%. The Government have also responded to concerns over occasions when people have their payments delayed by introducing short-term benefit advances. Those are now being quite actively publicised in jobcentres, and they can be paid to people the very next day.
It is important to note that the use of sanctions has fallen sharply. Indeed, they are down by half for both JSA and ESA claimants in the year to March 2016. The Government have introduced the concept of mandatory considerations on sanctions so that we can deal with disputes more quickly. The truth is that we need some kind of sanctions in the benefit system for it to be fair and equitable. Staff at my local jobcentre are clear that they use sanctions as only a last resort. Even when they believe sanctions are justified, they have to be cleared by somebody up the line completely unconnected to the case in question. Often, the recommendation that there should be a sanction is not upheld. Huge progress has been made on sanctions. We have responded to some of the points that people have made, and, as I said, their use has halved in recent years.
Mrs Lewell-Buck
I am listening carefully to what the Minister is saying about sanctions. The head of the National Audit Office recently said that
“there is more to do in…reducing them further”.
Does the Minister disagree?
George Eustice
I have not seen that particular report, but I make the point to the hon. Lady that the number of sanctions halving in one year is, I believe, a dramatic change to what has gone previously. As I said, I believe that having some sort of sanctions is crucial if we are to have a fair benefits system. We cannot have a fair system if there is no kind of penalty or sanctions for those who do not abide by their obligation to seek work.
A number of hon. Members mentioned food waste, which is an important issue. There is always going to be some surplus food in any food chain. We have the Waste and Resources Action Programme and the Courtauld commitments, which aim to reduce food waste. WRAP’s research from 2015 showed that 47,000 tonnes of food—the equivalent of 90 million meals—was redistributed to help feed people. In the hierarchy of recycling, making sure that food does not go to waste in the first place, and is used to feed people, is our key aim. I commend and applaud the great work that organisations such as FareShare and FoodCycle do to help unwanted food from places such as supermarkets go towards helping local communities.
We have had an interesting debate, and again I commend the food banks in our constituencies for all their good work. We have a lot of statistical measures of poverty, and when it comes to the affordability of food, the long-standing metric of household expenditure on food is the most reliable and consistent indicator we have. I am therefore not persuaded at the moment that we need an additional set of questions along the lines that hon. Members have outlined. I take issue with those who say that we have ignored some of these issues. Indeed, huge progress has been made on sanctions, getting people into work, raising wage levels and ensuring that good food is recycled to those who need it.
Mrs Lewell-Buck
I thank all hon. Members for their contributions. It is always good to hear from the hon. Member for Strangford (Jim Shannon) and my neighbour, my hon. Friend the Member for North Tyneside (Mary Glindon), who spoke from the Front Bench today.
It is no surprise that the Minister disagrees with my analysis, but would it not have made a nice, refreshing change if he and his Government had held their hands up and admitted that their experiment with the welfare state has left an enduring and growing scar on this country? Food banks moving on to helping people with housing and all the other issues that have been referred to is yet another example of agencies and charities filling a gap left by his Government. They should not be doing that work—those are the basic tenets of government.
The nub of the debate is not food prices, as the Minister said. It is the fact that his Government’s policies have led to hunger and poverty on a massive scale and that they are refusing to measure it, despite there having been no national measurement for 10 years. He referred briefly to benefit sanctions and said he was not aware of the NAO report I mentioned. To be clear, 400,000 sanctions were imposed last year, despite there being limited evidence of their being justified, leading to “hardship, hunger and depression”. I suggest he goes and reads that report carefully.
George Eustice
It may be that we should exchange notes after the debate, but in the year to March 2016, there were 219,000 JSA sanctions, which was down from 497,000 in the same period in the previous year.
Mrs Lewell-Buck
The figures I am quoting are from November this year, when the report came out, so perhaps we should share notes.
It is a real shame that the Minister is out of step with everybody else on this. He is out of step with the cross-party APPG, the cross-party Select Committee, the Food Foundation, Sustain and Oxfam, which have all worked tirelessly on this issue. It is a real shame that he has not got the guts to press his Government to introduce a national measurement of household food insecurity. It would cost only up to £75,000 a year. That is considerably less than his annual salary and a little less than the salaries of most people in this House. I will not detain the House any longer, because I am getting angry, and I am upset.
Question put and agreed to.
Resolved,
That this House has considered household food insecurity measurement in the UK.
Smart Meter Roll-out
(7 years, 4 months ago)
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Mr Alistair Carmichael (Orkney and Shetland) (LD)
I beg to move,
That this House has considered smart meter rollout across the UK.
It is a pleasure to have secured this debate and to serve under your chairmanship, Mr Gapes.
I think—or at least I hope—that the subject of the debate this morning would not be described as a matter of political controversy; it is a matter on which there is broad agreement. Essentially, I approach the debate on the basis that the Government are doing a good thing in the smart meter roll-out and, as a parliamentarian, I think it is our duty to explore whether they are doing it as well as might be possible. In the early days, we estimated that the smart meter roll-out could save the UK economy as a whole something between £17 billion and £40 billion between now and 2050. Obviously, there are a tremendous number of variables in an estimate of that range and over that period of time; I am one of those people who thinks that the upper end of that estimate could be conservative.
Before the Select Committee on Energy and Climate Change was dissolved, I had the pleasure of serving on it. Our last report on the energy revolution looked at what is being done in other parts of the world and, in particular, on the west coast of America in California and Seattle. It is apparent that many technologies that will assist consumers in the demand-side management of their energy use are not that far over the horizon. The foundations that we could lay through the smart meter roll-out could be built on in a significant way, both from the point of view of consumer flexibility and choice and in contributing to some of the wider issues about fuel poverty and climate change.
The Government have a target of 100% smart meter roll-out by 2020. What I want to explore this morning is whether that target is likely to be met, and whether it may be sensible at this point to reappraise the desirability of meeting that target. Given the history of the project to date, sticking to that 2020 deadline may bring some unexpected consequences. Energy UK has told me that so far its members have installed in excess of 3 million smart meters. That is significant progress, but when it is measured against the fact that we have in the region of 27 million households, and there may be in the region of 53 million energy meters to be installed, we see the scale of the challenge that the Government now face.
My first question for the Minister, when he addresses this issue, is: what is the likelihood that we are going to get to the 100% target by 2020? At this stage, are the Government looking at the possibility of reviewing it? What conversations are they having with Ofgem and what dialogue do they have with the suppliers in the industry? From the various energy companies and consumer groups that I speak to, such as Citizens Advice and Which?, there is growing consensus that the target will not be met but that, with a determined adherence to it, we could bring a range of unintended consequences.
This is a good time to look at these things again, when there is not a great deal of political heat surrounding the subject—no pun intended. However, if we get to the point where we have to review the target in two or three years’ time, at that point, politics will come into it. I am no better than anybody else; I will be there in two or three years’ time with the Hansard of today’s debate saying, “You were told at the time that you needed to do something. Why didn’t you?”
In many areas of the country, the key to the roll-out comes down to connectivity, which has indeed been problematic for the project and the concept as a whole. This ties into other areas of Government policy encouraging connectivity, especially for the more remote and rural areas. We know the commitments that the mobile phone operators have made in terms of expanding their coverage and getting 3G and 4G coverage across the whole country. They are now looking at the Airwave infrastructure that has been put in place for the emergency services, seeing the competitive edge that has been given to EE, which is the company rolling that out, and saying, “Surely we should be allowed to use these masts as well.” This is an area where public money is being put into infrastructure for one purpose, when it could have a benefit for another purpose. Surely, given that it is all the taxpayers’ pound, someone within Government should be joining up the dots to ensure that that does happen.
The issue is the limitations of what is available through the connectivity available to our constituents. It does not meet the expectation and the promises. The danger is that something that is a thoroughly desirable proposal in concept, could be undermined by poor consumer experience.
I suspect that, if we drew a Venn diagram of areas with poor connectivity and areas where we have a high number of households living in fuel poverty, we would find a substantial overlap. That is particularly acute in my own constituency. In the Northern Isles we have poor housing stock; long, dark, cold winters, because of our geography; and an ageing demographic. The Scottish Government’s most recent figures put levels of fuel poverty at 63% of households in Orkney and 53% of households in Shetland—the Western Isles were also up there at 62%—measured against a Scottish average of 35%. In pensioner households, in Orkney the figure is 85%, for the Western Isles it is 75% and in Shetland it is 44%.
Smart metering is obviously not going to be the panacea that cures fuel poverty, but it is important as part of the suite of options available to us. It is ironic that those who stand to benefit most and have the greatest need are, again, being left behind in the roll-out process. A bit of political direction, understanding that this is not going to succeed if it is just left in the major conurbations and urban areas, and that when we say 100% across the whole of the UK, it needs to mean exactly that, would be of enormous assistance. What is being done by the Minister and his Department to ensure that those of us in what would be termed as hard-to-reach areas are not left behind?
One of the major recent challenges, which is related to the connectivity issue, has been the performance of the Data Communications Company. That is the central resource needed to support smart meters. Just before the last election, the then Secretary of State signed off a replan of the DCC timetable. That left us with an aim to deliver the first operational services from 2016, with a central planning assumption of August 2016 as opposed to the original one of December 2015. The DCC, which is managed by Capita, has since drawn down all its available contingency and will have delivered all its final releases beyond the “maximum” agreed contingency, but we still have no confirmed date for the final release. Inevitably, given that we are now in December 2016, there will be slippage into 2017. Even if we take the optimistic view that we may have operational roll-out of DCC-enabled services by April 2017, that still leaves us with, at best, three years and eight months to deliver the remainder of the target. That is how tight things are.
The delays in the DCC have other consequences. The meters that have been rolled out are, for the most part, the first version of the smart metering equipment technical specifications—SMETS1, as the jargon has it—and a range of problems comes with that. SMETS1 has been rolled out because that is the only thing available at present, but SMETS1 was only ever intended to be a low-volume learning experience. The lessons have been learned and the limitations have been seen.
Suppliers know the issues that come from SMETS1 meters and want to go on to SMETS2 meters. It is frustrating for them not to be able to. Again, we risk damaging the concept by continuing to roll out something that we know to be suboptimal. SMETS1 meters do not have the flexibility of SMETS2 technology and, in particular, do not allow the switching of suppliers, which consumers regularly hear messages about from Government. Because of that technical issue, something in the region of 130,000 of the 3 million-plus smart meters that have been rolled out are currently operating dumb as a consequence of changing suppliers.
There have also been issues about pre-payment customers—people have lost credit and payment card functionality has been lost—and we know that there will be other technical issues. There is still no industry-wide solution for what they call multi-dwelling units—what to you and I, Mr Gapes, would be a block of flats. There is a lack of dual-band communication hubs, which use a frequency of 868 MHz and which are important for thick-walled properties and for reaching over long distances.
The challenges of the DCC timetable have led suppliers to whom I have talked to conclude that they are unlikely to meet the technical challenges until probably mid-2018. With pressure, they may be able to pull that forward but, again, it all takes us closer to the 2020 deadline and makes it all the more difficult to meet that. The insistence on the 2020 deadline will bring a range of other issues for suppliers, such as equipment and training of installers. Something that can take up to 26 weeks and cost the supplier in the region of £21,000 will become an even greater pressure on them if they are working to bring in a greater number of installers to meet that somewhat artificially imposed deadline.
Essentially, as I said at the start, the roll-out is a good thing, which the Government should be doing. We should not, however, pursue a timetable that will be counter-productive to achieving what we all know and agree is a good thing. To take a step back, I suspect that, since May 2015, there has been a lot of churn in Government energy policy, with a lot of changes, particularly in relation to subsidies for renewables and other areas. A lot of high-level political decisions have had to be taken, and the Department of Energy and Climate Change has been folded into its current home. The programme looks as though it might have slipped through the cracks of Government. It needs somebody to take it up, to give it direction and to ensure that, at the end of the day, we have something that merits and is deserving of the original vision we had when we embarked on the programme. It needs a political hero, and I can think of no finer a political hero than the Minister.
James Heappey (Wells) (Con)
It is a pleasure to serve under your chairmanship, Mr Gapes. I will not speak for long, so that the Minister will be able to reply to the right hon. Member for Orkney and Shetland (Mr Carmichael), with whom I had the pleasure of serving on the Energy and Climate Change Committee for 18 months. I rise to endorse all that he has said. He identified a lot of issues with the smart meter roll-out, and it would be good to know that the Government are aware of them. From all my conversations with Ministers, I am confident that they see the problems and are seeking to tackle them, but the timeline that was set, which the previous Secretary of State and the previous Minister of State in DECC both told our Committee they were fully confident of achieving, does not seem quite as achievable as the Committee was told it might be.
I hope that the Department for Business, Energy and Industrial Strategy will embrace the importance of digitising the energy system and the role of smart meters within that. Digitising the energy system is key to delivering a decentralised generation system and to being able to load-shift, and therefore being able to flatten supply and demand curves and achieve greater energy security through less demand. It is also key to achieving greater efficiency in how we use energy, which, of course, will lead to lower prices. Smart meters in homes and businesses are the linchpin of achieving that.
However, I also absolutely agree that there has to be a user experience. A mysterious grey box of tricks that gets put in underneath somebody’s stairs, and if it does not have the connectivity that it should, so that it does not work, the perception is immediately that it does not do anything and is a bit useless. We need to ensure that smart meters work from the get-go. They also need to be accessible. The in-home displays are great, but there is an odd thing whereby people can only start with a certain screen. Many consumers have said that it would be better if the default screen showed the financial usage, so changing that would be helpful.
We need to make sure that the energy market is set up to allow smart meters to deliver real savings through half-hourly settlement. At the moment, all that people can really do is go round their house like the Ghostbusters, with their in-hand displays, seeking the thing that is using energy at any one time. The savings are not insignificant, but they are a fraction of the savings that could be unlocked if we properly digitised people’s home and business energy by putting smart meters in and ensuring that they worked and that the market was set up to take advantage of that digitisation.
The arrival of the Department for Business, Energy and Industrial Strategy is actually a huge opportunity within the smart meter roll-out, because under one roof there is now responsibility for not only energy policy and the energy market but consumers, tech and innovation. Seeing all those things as part of the roll-out is helpful, instead of the Department of Energy and Climate Change potentially seeing it as an energy policy issue and the Department for Business, Innovation and Skills as a consumer issue.
My final plea is that the Department seizes the opportunity to make sure that smart meters are future-proofed, so that the internet of things can be operated through and around them and the home experience really works. My sense is that people will see the benefits of having a smart meter in an IoT-enabled home not purely from an energy perspective, but in terms of the wider consumer experience, and that they will be very grateful for the energy savings that come with it.
The Minister for Climate Change and Industry (Mr Nick Hurd)
It is a huge pleasure to serve under your chairmanship, Mr Gapes. I congratulate the right hon. Member for Orkney and Shetland (Mr Carmichael) on securing a debate on an issue that will touch and affect every home in the UK. It has drawn quite a crowd of visitors, whom we should welcome. I also welcome the new hon. Member for Richmond Park (Sarah Olney) to her place. I thank the right hon. Member for Orkney and Shetland for the constructive way in which he framed the debate, which is exactly what I would expect given his record in the House. I acknowledge the valuable contribution of my hon. Friend the Member for Wells (James Heappey), who, as I have said on Twitter, is one of the more thoughtful Members of Parliament on the subject of energy. He is always interesting on the topic.
As the right hon. Member for Orkney and Shetland said, the roll-out is a good thing and a long overdue upgrade of an outdated system. I am talking about not just meters—the technology for which is basically 100 years old—but how smart meters fit into a broader and more ambitious strategy to upgrade our energy system, as my hon. Friend the Member for Wells alluded to. Liberal Democrat Secretaries of State in the coalition Government, in which both the right hon. Member for Orkney and Shetland and I served, wrestled with the trilemma of security, affordability and increasingly clean sources of energy. We are also dealing with the matter of how to make the system smarter and more flexible so that it delivers a better experience for our constituents—perhaps by doing away with the nonsense of estimated bills now that we are in 2016, and with calls to call centres. We desire to give our constituents a greater sense of control and, of course, the opportunity to save money.
The roll-out is not the silver bullet for fuel poverty—that is entirely right—but the data suggest that the people with the first wave of smart meters are saving about 3%, according to British Gas surveys. Those are not insignificant sums of money. For our constituents on prepayment schemes, smart meters are a better system for the ability to top up and to read balances quickly. We see smart meters as the foundation of the smart, flexible energy system that we are working towards and to which we are committed. The Secretary of State recently launched the consultation with Ofgem. That is the direction of travel, and we are extremely committed to it because there will be significant benefits to the country—not just to our constituents, but to the people we rely on to supply energy.
There is a smarter future ahead, and that is what we are working towards. The roll-out is unequivocally a good thing, but the right hon. Member for Orkney and Shetland was right to identify some big challenges, none bigger than meeting the roll-out target. However, I associate him with being someone of optimism and ambition—he is a Liberal Democrat, after all—so I say to him that we should not give up on our ambition at this stage. There is no basis on which to do so. It is a challenging target but, as he will know as an experienced politician, if we take our foot off the accelerator, people will read the wrong signals. We want to send a strong signal of our commitment to ensuring that every household and small business is offered a smart meter by the end of 2020. We will follow the evidence and see what it tells us about the feasibility of the target in a few years’ time. The right hon. Gentleman may be in a position to say, “I told you so”—he has teed that up nicely—but I hope not. Now is the wrong time to send a signal of slipped ambition.
There are other challenges, including making the early smart meters interoperable. The right hon. Gentleman is entirely right about that. We should not want our constituents to trade off the opportunity to get a better tariff against the opportunity to retain smart functionality. I assure him that the DCC has begun a project to enrol the early SMETSI 1 smart meters from 2018 in order to make them usable by all energy suppliers, rather than just the one that initially installed them. It is an issue, but one that will go away.
Another challenge that the right hon. Gentleman rightly highlighted is reaching all consumers, including those at risk of being left behind. That requires both a wide area network and a home area network. The DCC is contracted to provide wide area coverage to 99.25% of meter points in Great Britain from 2020, which is, incidentally, greater than for current television and mobile services. There are big challenges, but it is wrong to slip back on our ambition, not least because we can point to good progress being made.
The right hon. Gentleman mentioned a figure of about 3 million smart and advanced meters being in operation. Actually, as of June 2016—these are slightly out-of-date data—the official number is that there are more than 4.2 million smart and advanced meters operating under the programme. Again, we now have some data from the quite large British Gas survey, which show what cost savings the roll-out is delivering for our constituents. The current run rate is about 3%, which is slightly higher than expected. We now have a sense of how popular the smart meters are, with eight out of 10 people recommending them and high levels of customer satisfaction. We have also updated the latest cost-benefit analysis.
Mr Alistair Carmichael
I completely accept what the Minister says about the signals that can be sent by taking the foot off the gas, to use his analogy, but there are technical issues coming down the tracks. The suppliers are all telling us that the roll-out could take them into the middle of 2018. What is the Minister doing to engage with the suppliers to bring that date forward?
Mr Hurd
We are not naive about this. We have set a demanding challenge, so the ongoing conversation with suppliers to talk through some of the practical differences is an essential, fundamental part of the Government’s responsibilities and Ofgem’s responsibilities. I am keen to mention that we have recently published the latest cost-benefit analysis of this ambitious programme, which suggests that we are looking at a significant net benefit of about £5.7 billion for the roll-out—including through supplier cost savings, system benefits and energy efficiency for our consumers. That all leads me to reassert the fundamental point that we remain committed to the programme. The right hon. Gentleman suggested that ambition might have slipped a bit and that the scheme might have been a ball dropped by a busy new Department. That is absolutely not the case. The fact that the Secretary of State recently announced an ambitious consultation about the direction of travel towards a smarter, more flexible system places the roll-out in that context. It is a top priority for the Department.
I want to give the right hon. Gentleman some reassurance about his constituency. He spoke powerfully about the levels of fuel poverty there, and the data are striking. He was candid about the fact that this agenda is not the whole solution to that challenge, but his desire to ensure that no communities are left behind in the process is laudable, and is an aim that is absolutely shared by the Government.
In response to the questions on whether remote rural areas of Scotland be excluded from the roll-out and what the planned communications coverage will be, I would like to place on the record that Arqiva is contracted to provide network coverage to at least 99.5% of Great Britain’s premises in the north region, which covers Scotland, by the end of 2020. That level of coverage compares favourably with other technologies such as mobile and broadband networks. Arqiva is on track to deliver its contractual coverage commitments, having already achieved coverage of more than 80% of premises in the region. Building the smart metering wide area network in Scotland has led to considerable progress and, subject to detailed planning, the DCC is confident that the right hon. Gentleman’s constituency will have a high level of premises coverage. There is a licence obligation on the DCC to strive—best efforts—for 100% coverage.
I hope that I have given the right hon. Gentleman some reassurance regarding his constituency and the fact that, despite some slippage in timetable—a matter of a few months, which, in the scheme of things and against the backdrop to which he alluded, is not the end of the world—the Government and the new Department attach the right level of priority and importance to the roll-out, which we sincerely believe will deliver a much better experience for our constituents in interacting with the energy systems on which they depend. The roll-out is the foundation for a much smarter energy system as we move to upgrade the energy infrastructure of the country after so many years of dithering and delay. It is absolutely at the core of that strategy.
Question put and agreed to.
Tidal Lagoons and UK Energy Strategy
(7 years, 4 months ago)
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Stephen Crabb (Preseli Pembrokeshire) (Con)
I beg to move,
That this House has considered tidal lagoons and UK energy strategy.
It is a pleasure to serve under your chairmanship, Mr Paisley. This is a timely moment for the House to return to the subject of tidal lagoons as a future energy source, and specifically the projects of Tidal Lagoon Power Ltd, starting in Swansea bay, for which it has already received a development consent order.
My hon. Friend the Member for Carmarthen West and South Pembrokeshire (Simon Hart), my constituency neighbour, led the previous Westminster Hall debate on Swansea tidal lagoon on 8 March 2016, which underlines the keen interest in this project from people in west Wales. It is encouraging to see colleagues here from across the United Kingdom, which demonstrates that what we are discussing is of strategic importance to the whole UK’s energy policy, economic policy and industrial policy.
The previous debate was essentially held under a different Government, when energy and climate change belonged in a stand-alone Department under a different team of Ministers led overall by a different Prime Minister. I welcome the new ministerial team at the Department for Business, Energy and Industrial Strategy. The team is experienced and well equipped to take on the challenges before us. I also welcome what the new Business Secretary said to the Institute of Directors on 27 September in his speech on industrial strategy:
“Many of the policies and decisions that form our industrial strategy will not be about particular industries or sectors, but will be cross-cutting.”
I welcome the departmental integration of industry with energy to make that happen, and tidal lagoons are a good example of the kind of opportunity that such integration is intended to foster.
The last general election feels like ancient history, but it is worth reminding ourselves that Conservative colleagues stood on a manifesto that:
“All parts of the UK will soon be helping to deliver secure, affordable and low-carbon energy, from the Hinkley Point nuclear power station, to offshore wind turbine manufacturing at the new Green Port in Hull, the next generation of pipelines West of Shetland and the Swansea tidal lagoon.”
I am proud of that manifesto commitment, and I would like to see it delivered.
Ten months ago the Government announced an independent review of the feasibility and practicality of tidal lagoon energy in the UK, recognising that tidal lagoons have the potential to provide the country with clean and secure energy but saying that more work needs to be done to determine whether it provides value for money. The Government therefore commissioned a review of the technology to improve our understanding of how tidal lagoons could contribute to the UK’s future energy mix in the most cost-effective way. The purpose of the review, led by the widely respected former Energy Minister Charles Hendry, was to help to establish an evidence base to ensure that all decisions on tidal lagoon energy are in the UK’s best interest, to better understand whether tidal lagoons can be cost-effective and to consider the impact on consumer bills both today and in the longer term.
Geraint Davies (Swansea West) (Lab/Co-op)
Does the right hon. Gentleman agree—perhaps the Minister will reflect on this too—that, given that 75% of identified fossil fuels cannot be exploited if we are to fulfil our Paris and COP 22 climate change obligations, the spot price of oil, which is often deflated by Saudi excess production to attack frackers, should not be the point at which we identify value for money? We should get sustainable green power at the lowest cost possible, even if the cost of oil is down.
Stephen Crabb
The hon. Gentleman makes his point well. The purpose of the Hendry review is to help to provide clarity so that the Government can determine the role that tidal lagoons could have as part of a long-term strategy to provide secure, clean and affordable energy for families and businesses across the country. The review is now complete and will be presented to the Government this afternoon. I, and I suspect the Minister, have no idea what the review says and what it concludes, but given the strength of support for a tidal lagoon industry across such a wide spread of business and political opinion, I imagine that Mr Hendry has heard some powerful and compelling arguments that cannot be dismissed lightly.
It would be absurd to ask the Minister to address his remarks this afternoon to the contents of the review—he will rightly need time to digest and assess it—but my one request is that he commits today that a decision will be made, along with a full response to the review, in as short a timeframe as possible. Even as I say “as short a timeframe as possible,” I sense the scope that that allows for foot dragging, so I seek assurance that the Government will respond in a timely and purposeful way, with no foot dragging. This cannot become another third runway decision, where industry makes repeated calls for a Government decision only for it to be kicked further down the road. There is too much at stake.
Craig Williams (Cardiff North) (Con)
I commend my right hon. Friend for securing this important and timely debate in the light of the Hendry review. Does he share my hope that the Minister will outline when he will share the Hendry review with Parliament? The review will provide great context for our future debates.
Stephen Crabb
I agree with my hon. Friend, and I look forward to the Minister addressing that point later this afternoon.
A key feature of UK energy policy, whatever else might be said, it that it is not neutral. It does not rely solely on market choices to drive new investment. To that extent, we have an activist energy policy that demands big, difficult and timely choices from Ministers. A core objective of recent UK energy strategy, as the last Secretary of State for Energy and Climate Change, my right hon. Friend the Member for Hastings and Rye (Amber Rudd), said last year, is to ensure
“enough electricity generation to power the nation.”
As ageing and dirty power plants are retired from use, delivering on that objective becomes more challenging. National Grid now projects that, without emergency measures, the UK’s winter electricity margin stands at just 0.1%.
The vision we are discussing today speaks directly to that energy challenge. How do we harness the phenomenal tidal range that surrounds our country to replace many of the ageing power plants that are being decommissioned?
Kevin Brennan (Cardiff West) (Lab)
It is encouraging that the right hon. Gentleman is a former Secretary of State for Wales and for Work and Pensions, and he has support from the hon. Member for Cardiff North (Craig Williams), a Treasury Parliamentary Private Secretary, which gives me hope that perhaps there is something in the wind to suggest that we might get the early decision for which he is calling—we would support such a decision. Will he support me in asking the Minister to give us a decision before the end of this year?
Stephen Crabb
It would be fabulous to have a sense of the timeframe in which the Minister will be making his decision, but it might be unfair to ask him to provide one today, given that he probably has not yet seen the contents of the review. I do not even know the length of the report, and it might take a bit of time to digest. The key point raised by the hon. Member for Cardiff West (Kevin Brennan) is essential: we need a timely decision in the shortest possible timeframe.
The vision of harnessing tidal energy is exactly why Tidal Lagoon Power was started five years ago with the aim of providing home-grown, secure power from a fleet of tidal lagoons around the British coast that could provide low-cost, zero-carbon power for the next five generations, thereby building a new British industry of turbines, generators and turbine housing, with all the manufacturing and engineering jobs, skills and investment that comes with it. That is a compelling and exciting vision of energy and industrial policy coming together in the national interest.
Neil Carmichael (Stroud) (Con)
Does my right hon. Friend, and hopefully the Minister, agree that the key point about this and other projects is that they represent long-term investment? The strike price that this project will achieve underlines that this is a cost-effective way of producing energy.
Stephen Crabb
I agree with my hon. Friend, and I will address that point later. It is with a long-term view and an appropriate framework of support for the right projects that the prospect of a new UK tidal energy industry is within reach, and with it a source capable of providing 10% or more of the UK’s total electricity requirements.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
The right hon. Gentleman is making a fine speech. The strike price over 90 years is £96.50, which compares with the Hinkley Point strike price of £92.50 over 30 years, both at 2012 prices. Of course, it is often forgotten that nuclear has had 60 years of support, and 44% of the budget of the former Department of Energy and Climate Change was spent on addressing the legacy of old nuclear. Putting all that together, Swansea bay and other tidal lagoons represent very good value for money.
Stephen Crabb
The point about comparability is well made. Although the purpose of this debate is not to do down any other energy source, I recognise that drawing such comparisons is right and proper in this context.
A tidal lagoon industry would mean multi-billion-pound infrastructure investments in two areas of the United Kingdom with ideal conditions for tidal lagoon infrastructure: the Severn estuary and the Liverpool bay and Irish sea area. I understand that about a dozen viable sites have been flagged to Charles Hendry as part of his investigations, and that Tidal Lagoon Power is working on specific projects for five of those sites, starting with a pathfinder project in Swansea bay and moving shortly afterward to the first full-scale lagoon in Cardiff.
New manufacturing facilities to serve the various lagoon sites across England and Wales will be served by a UK-wide supply chain. Original manufacturing will be spread throughout the UK; particularly important components will come from a number of regional centres of excellence, mirroring the UK’s historic manufacturing heartlands, including South Yorkshire, south and west Wales, the west midlands, western Scotland, Tyneside and Teesside.
A UK tidal lagoon industry would represent a world first. The wide body of bespoke maintenance and engineering expertise it would build up could lead to the export of skills, knowledge and human resource to projects in the first phase of international tidal lagoon deployment, potentially securing up to 80% of global market value in that space. That is absolutely what UK industrial strategy should be all about: renewing and enlarging world-class manufacturing and engineering skills right across the United Kingdom.
John Penrose (Weston-super-Mare) (Con)
Does my right hon. Friend have any views, or evidence of any views, about how the cost per unit, or per bay created, might drop as the industry gets under way? I am thinking of the solar photovoltaic industry, where the cost per unit has decreased dramatically over many years. It is important that we have some sense of how much cheaper tidal lagoon energy might become, because the costs will ultimately be borne by consumers through their energy bills. Many people are struggling for cash these days, and we are trying to drive up the productivity of the UK economy, so lower long-term cost to the consumer if we can make it work will be an important prize to gain.
Stephen Crabb
That question goes absolutely to the heart of the matter, and I will address it in a bit more detail later. The figures that I have seen from Tidal Lagoon Power demonstrate that as we move from the pathfinder project in Swansea to the larger full-scale fleet of lagoons starting in Cardiff, the costs of energy generation decrease markedly. That does not even assume any of what economists call project learnings, which help to drive efficiencies in future projects.
Neil Carmichael
I thank my right hon. Friend for giving way a second time. The key point here is that one project will help to start the next project, and therefore another and another. That is the central reason why this project as a whole is important: it will create more opportunities still.
Stephen Crabb
Again, my hon. Friend demonstrates his knowledge of the potential industry that we are discussing. His point is well made.
It is envisaged that the machining and pre-assembly of the turbines will take place at a new purpose-built facility in the Swansea bay city region. Heavy fabrication of steel components will take place at a new purpose-built facility, also in the region. Final full assembly of the turbines will take place on site in the turbine housing itself. The turbines’ control systems and generators, which connect to the turbines and generate renewable electricity, will be manufactured in Rugby, also from a majority of British-made parts. Meanwhile, a Stafford facility will provide high-voltage switch gear and control and protection systems, all of which demonstrates the UK-wide potential for the supply chain to serve a new tidal lagoon industry.
Quite simply, the development of a fleet of tidal lagoons, starting with Swansea, would provide an enormous boost to UK civil and electrical engineering, our manufacturing sector and our domestic steel industry. According to Graham Honeyman, chief executive of Sheffield Forgemasters:
“Being part of the Tidal Lagoon project would be an important win for this business. The prospect of working on a new power generation concept is an exciting one and is inspiring to our team. The possibilities for this concept, which could play a huge part in addressing the global power deficit, are vast. For such a project to be delivered through British designs and implementation would also be a great boost to the UK economy.”
Mr MacNeil
I am grateful to the right hon. Gentleman for giving way again; he is making a fine speech. What he and other Government Members have been talking about is first mover advantage. We could make a strong case for first mover advantage. I hope that the Department for Business, Energy and Industrial Strategy is listening to that point. It should not be seen in any way as a cost to consumers. The previous Department was obsessed with snapshots of the cost to consumers in the present, whereas we should be looking towards long-term savings to consumers that will eventually be achieved through this work and the first mover advantage.
Stephen Crabb
The hon. Gentleman makes an excellent point. If we are serious about rebalancing the economy, revitalising our industrial sector and creating new high-quality manufacturing jobs and apprenticeships, we need real and substantial projects to enable that to happen. The proposals for a tidal lagoon industry comprising five or more lagoon projects around the UK represent exactly the kind of new thinking that we need for our industrial strategy.
Tidal lagoons would mean new jobs, requiring new skills for a new industry. To give one example, there is currently no UK facility of sufficient size to serve the tidal lagoon sector with caissons, the large watertight chambers in which construction work may be carried out underwater. Tidal Lagoon Power and its partners have identified a number of potential sites for such a purpose-built facility around the Welsh and Scottish coastlines. The construction of such a facility would further enhance the UK’s civil engineering capability and upskill our industrial workforce.
In a report to Tidal Lagoon Power extending its earlier work for the Welsh Government, Miller Research and SEMTA found that the development of four tidal lagoons in Welsh waters would support 22,000 jobs in manufacturing and assembling the main component parts of the turbines, generators and sluices, which equates to 15% of the total number of people working in manufacturing in Wales in 2014.
Albert Owen (Ynys Môn) (Lab)
The right hon. Gentleman and I agree on the importance of low-carbon technology, particularly to port communities in west Wales such as the ones that he and I represent. They have natural deep water and the facilities and skills from previous industries. Rather than reinventing the purposes of those ports, we should continue their excellent record of serving the energy sector.
Stephen Crabb
The hon. Gentleman makes an excellent point that is well understood in Government. The Government recognise the particular importance of ports as linchpins in their local economies.
If Ministers choose to harness our abundant natural resources and, in doing so, launch a new industry here in Britain, just as the Danes did with wind, we will secure a considerable competitive advantage over new market entrants from day one. Britain’s first post-Brexit industry will not only underwrite a strong domestic order book but help to put us at the front of the queue in future technology export markets. If we seize the moment now, wherever a new tidal power project is commissioned in future—from Garorim bay in South Korea to the Gulf of Kutch in India—there is every chance that the people, the parts and the components that build it will contain the words “Made in Britain”.
Christina Rees (Neath) (Lab/Co-op)
The Hendry report is good news for the Swansea bay tidal lagoon, after five years spent raising £48 million. The right hon. Gentleman is making a valid point about the jobs that it would create, but it would also create apprenticeships, which we in Wales need at the moment. What are his views on that?
Stephen Crabb
Perhaps we need another occasion to talk more fully about the role that apprenticeships play in rebalancing the economy, but the hon. Lady makes a vital point. If we are to have a new tidal lagoon industry, there is a lot of training to be done. A lot of new skills need to be brought into the workforce, so one can readily see that apprenticeships will play a key role.
I will draw my remarks to a close by drawing attention to the elephant in the room, which a number of hon. Members have already mentioned: money and affordability. I was discussing the Swansea tidal lagoon project with one Minister recently who described it to me as “eye-wateringly expensive”. When I pressed him on that, it became embarrassingly clear that he did not understand the project at all and was merely repeating what he had heard someone else say about it. A myth of unaffordability has grown up around the vision of tidal lagoons as it has developed over the last five years.
Let us be clear: the projected investment costs should not deter us. We know that investors are ready to support the Swansea bay project, whose overall project cost is about £1 billion to achieve construction and connection to the national grid. Tidal Lagoon Power has already spent around £50 million on the development work, and another tranche of money is ready to be used to bring the project to financial close, as long as the Government give the green light. Of the total capital investment of around £1.3 billion, we know that around 84p of every £1 will be spent here in the UK, and at least 50% of that will be spent in Wales. For the Welsh economy, a project of that scale would certainly help to move the dial in terms of gross value added.
We have still have not addressed the crucial point on which this whole thing hangs: value for money. I am interested to see what the Hendry review says about it, but after seeing the figures that crossed my desk when I was a Minister, and again more recently, I have been greatly encouraged that the project does represent value for money. By taking a long-term view of the asset—for that is what it is: a long-term source of power generation—and using established modelling that will be familiar to Treasury officials, the current net value of subsidy for Swansea could amount to a contract for difference equivalent of £89.90 per megawatt-hour. We would be talking about a 90-year contract with a diminishing subsidy each year for 35 years—because it is de-linked from inflation—which then starts to pay money back to the Government for the rest of the life of the contract. That compares favourably with Hinkley C, which locks in an escalating strike price with a contract for difference of £92.50 per megawatt-hour.
The point is that it is affordable: Swansea bay tidal lagoon would put an additional 18p on to household bills, and would require only 0.41% of the 2020-21 levy control framework budget in its first year. By its 35th year, Swansea bay would require just 0.15%—effectively a rounding error—of the levy control framework budget. To put that into context, Hinkley C will add around £12 to household bills.
Geraint Davies
Does the right hon. Gentleman accept that because the value of the pound plummeted by something like 20% after the news of Brexit—I think it is now down by around 14%—the lagoon will be much greater value for money, because it obviously costs more to import oil and energy if sterling has a low value?
Stephen Crabb
I genuinely do not know about that. We are discussing the long-term view. I do not know what oil and gas prices, or the value of sterling, will be in six months, let alone in 35 years.
The Swansea bay project does have strong credentials as a stand-alone project, but think about a Cardiff tidal lagoon as the first full-scale project. That would see the cost of electricity drop markedly, with a potential contract that could, I am told, take around £5 off the average household electricity bill. That is why it is so important to talk about a tidal lagoon industry, not just about doing Swansea as a one-off. It is the fleet of full-scale lagoons that will unlock the full energy opportunity for the UK. If we get it right, the country will win with low-cost, reliable and clean power and the emergence of a new globally significant industry here in the UK. Tidal power is reliable, as well as clean, and it is not subject to the vagaries of the weather. It is predictable—we know exactly when every high tide will be for years ahead—and tidal lagoon systems will be built to last for at least 120 years, making them all the more worthy of investment.
We have a unique and historic industrial opportunity before us, and we absolutely should seize it. We have the natural resource on our coastline, and we need new sources of low-carbon power. We have a rich industrial heritage that has bequeathed us the skills, the capabilities and the ambition to take on the challenge. After five years and expenditure of more than £50 million, the pathfinder project at Swansea bay is almost ready to start construction. The project has planning consent, strong funders, strong industrial partners, political and public support, and a delivery team and supply chain ready to kick into action. It has also proved to the international marketplace that the successful commercial development of tidal lagoon infrastructure can be achieved.
I urge the Minister not to delay in his consideration of the Hendry review. I urge him to seize the moment, to give the go-ahead to Swansea bay, and to launch this affordable, sustainable, first new post-Brexit British industry, which will serve our energy needs into the 22nd century.
Several hon. Members rose—
Ian Paisley (in the Chair)
Order. Because of the extensive interest in this subject, I have a list of at least nine Back Benchers to call to speak, so I am going to impose a four-minute limit on speeches. The Minister and shadow Minister have indicated that they have a considerable amount to say. With that in mind, we will move straightaway to Liz Saville Roberts.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Diolch yn fawr, Gadeirydd. I congratulate the right hon. Member for Preseli Pembrokeshire (Stephen Crabb) on securing this debate, which I hope we can use to build the cross-party consensus that we need to get moving on tidal lagoons, as well as many other much needed Welsh infrastructure projects. The Government seem to be rather caught in the headlights of Brexit.
I shall make my case for increased investment and urgency in the development of tidal lagoons in three parts. First, and most appropriately, I will outline the benefits of tidal lagoons for meeting current and future energy capacity requirements. I will then briefly touch on how they can contribute to our environmental targets, before finally outlining the economic benefits. Those Members who are familiar with energy policy will recognise my speech as an expanded response to what is known as the energy trilemma. I will conclude by highlighting the deficiencies in the Wales Bill and how it continues to hamper Wales’s ability to make use of its natural resources.
Eighteen major power stations, totalling 17,767 MW of capacity, have closed since 2012. By 2020, the amount of lost power is expected to rise to over 38,000 MW, representing more than a third of our current capacity. According to Tidal Lagoon Power, that means that, having put everything else into the mix, we will end up with a 32 GW deficit.
The 350 MW Swansea bay tidal lagoon will pave the way for projects between Cardiff and Newport, which are planned at equal capacity to Hinkley Point C. The projects will generate the lowest-cost electricity of all new power stations, and can be online in the mid-2020s. A 3,000-plus MW lagoon on the north Wales coast is planned for completion shortly afterwards, with two other projects in the pipeline for development slightly further down the line. As a fleet, the five scoped projects can generate secure, clean energy for 30% of UK homes for 120 years.
We face a clear and present risk when it comes to our long-term energy security. The highly predictable and secure energy created by tidal lagoons means that they face few of the uncertainties or dangers of other carbon-neutral technologies. A home-grown industry, producing power on our shores—what is more secure than that? What is there to like more than that?
I turn briefly to the role of tidal lagoons in meeting environmental targets, which is the second aspect of the energy trilemma. Whatever the impact of Brexit on the UK’s energy and environmental policy, under the Climate Change Act 2008, we are committed to reducing carbon emissions by 57% by 2030, on 1990 levels. As recognised by the Committee on Climate Change, it is likely that new technologies, including tidal lagoons, need to be implemented to meet that target.
In Wales, our abundant resources, particularly tidal energy, give us huge potential to become a world leader in carbon-neutral energy generation. However, Westminster is the dog in the manger when it comes to Wales’s abundant natural resources. For centuries we have been reined back from cultivating and benefiting from our own resources because of arbitrary restrictions from Westminster.
The third aspect of the trilemma is often referred to as energy equity—that is, the affordability of energy for consumers—but I shall also touch on the broader economic implications of tidal lagoons. As the first of its kind, Swansea bay tidal lagoon is undoubtedly more expensive than some of the rival technologies. However, as the project is small, its impact on household electricity bills will be small as well. For consumers, Swansea bay’s real benefits lie in its ability to act as a catalyst for an industry of cost-effective renewable energy in the form of future tidal lagoons.
That said, at a local level, during construction, Swansea alone will employ 2,323 workers, and 181 during operation. It will add around £316 million of gross value added throughout construction, and £76 million annually thereafter. We must also remember the possibilities for exporting the technology. At a time when exports are crucial to the future of the economy, why are the Government dragging their heels on the issue of getting shovels into the ground at Swansea? We can demonstrate to the world that we can lead the way on innovative technological solutions to our energy needs.
I conclude by highlighting the vicissitudes that Wales endures from Westminster. Despite Wales having a natural treasure trove of renewable resources, particularly tidal energy, Westminster refuses to let Welsh people benefit from their own environment.
Unlike under any other devolution settlement, under the current Wales Bill, there will be an arbitrary 350 MW cap on what our National Assembly can develop. That means that the lagoon in Swansea, which has already received planning permission, would have been a project decided on by Cardiff Bay, but any of the other larger projects would remain the preserve of Westminster.
My final plea to the Minister is this: allow the people of Wales to control their own natural resources, so they can make the best use—
Antoinette Sandbach (Eddisbury) (Con)
I am very grateful to serve under your chairmanship, Mr Paisley.
My right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) has painted the golden uplands of tidal power, but while it is of strategic importance the cost is eye-watering. Although 50% of the benefit may go to Wales, it is the poorest consumers who will end up paying the subsidy on this project. I therefore urge the Minister to exercise caution in relation to the project. There are undoubted benefits, should the predictions come true about Swansea bay tidal lagoon power, but there is no guarantee that subsequent projects will be delivered, or that they will secure licensing consents from Natural Resources Wales. Past experience of energy projects at Milford Haven docks shows that there can be substantial delays in obtaining consents from NRW.
It is clear that the pricing for the tidal lagoon is far more expensive than Hinkley Point. It runs over a 90-year contract, whereas the Hinkley Point contract runs only for 35 years. The difference in the contract for difference is that decommissioning costs are included in the Hinkley Point contract. That makes tidal power—or this particular project—look very expensive. When one considers that the initial bid was £168 per megawatt-hour, one can see why a degree of caution needs to be exercised and why there has been movement away from the project. Would unique intellectual property be generated in the UK that would benefit the UK? Clearly, there would be skills advantages. I accept my right hon. Friend’s arguments about the skills benefits that could be gained and the engineering benefits that could come to the UK. However, those are not unique skills. They are very transferable. They can be taken anywhere and there would be no guarantee of their subsequently returning. We would be the first adopter, but there is no guarantee that we would retain the benefits, because of the lack of IP that would accrue to what amounted, in effect, to more than £2 billion-worth of subsidy from the British taxpayer.
I therefore urge the Minister to be cautious. I look forward to reading the Hendry review and seeing the evidence base, which I know has been looked into in great detail. The project has potential, but not at the strike price that is proposed.
Sue Hayman (Workington) (Lab)
It is an honour to serve under your chairmanship, Mr Paisley.
I congratulate the right hon. Member for Preseli Pembrokeshire (Stephen Crabb) on securing this important debate. I am here this afternoon to put on record my support for the proposed tidal lagoon developments, particularly the one in west Cumbria, which would be situated on the Solway firth at Maryport in my constituency.
Hon. Members may know that, in west Cumbria, we market ourselves under the name of “Britain’s Energy Coast”. We started with Calder Hall, which is now part of Sellafield. We were home to the world’s first commercial nuclear power station and we now have the proposed nuclear new build at Moorside, which we hope will be given the go-ahead soon, following the welcome announcement about Hinkley Point C.
It has been reported that the west Cumbria tidal lagoon, with its 90 turbines set in the breakwater, could have a generating capacity of 2 GW. If that capacity is added to the 3.4 GW of capacity that would be produced by Moorside, west Cumbria alone would produce around 10% of the UK’s electricity needs.
The Tidal Lagoon Power group states on its website:
“In addition to helping the UK transition to a low carbon future—providing secure and affordable low carbon energy—we believe that a West Cumbrian lagoon could be uniquely positioned to deliver a range of economic, social and environmental benefits which are strongly aligned with local priorities for economic growth, tourism and leisure, flood risk management”—
flood risk management is very important for my constituency—
“coastal erosion, infrastructure improvement and social inclusion.”
Maryport is a beautiful coastal town, but it badly needs a boost and a west Cumbrian tidal lagoon could bring huge economic benefits—thousands of jobs during the construction period, as well as regeneration and investment in the local community. It has also been suggested that there could be a factory to build the turbines near the port of Workington, which would give that area, and the port, a big boost.
The lagoon company has been consulting local people closely, but it is important that it listens to the local fishermen, who have expressed concerns to me. Their livelihood comes from the waters of the Solway. I am glad that the Tidal Lagoon Power group has said that it is setting up a fisheries peer review group to advise on the effects on fish. The group must do everything in its power not to disadvantage the fishermen.
I have been really impressed by Tidal Lagoon Power’s comprehensive strategy for the wider community in Swansea bay. As the right hon. Member for Preseli Pembrokeshire said, it is seeking to invest in recreation, tourism, sport and the arts, which is exactly what we need in west Cumbria. The Solway firth is beautiful; it is a hidden gem. More people need to know about it, to visit our attractions and to taste our local food, particularly the seafood, so that they know that there is so much more to Cumbria than just the Lake district. If hon. Members have a few moments this afternoon, we are having a Cumbria day in the Attlee suite. I urge them to come along and taste some of the delicacies on offer.
In conclusion, I absolutely support the pathfinder tidal lagoon project in Swansea bay. I am pleased to hear that Charles Hendry’s report appears to be imminent and I urge the Minister to let us know when it will be published, so that we can all take a look at it. If we can get this first project off the ground, areas such as the one I represent will be able to benefit greatly from this huge investment in our future, which will also help to bridge the national energy gap and ensure that we meet our international climate change commitments.
Stephen Kinnock (Aberavon) (Lab)
Thank you very much, Mr Paisley, for calling me to speak. It is a great pleasure to serve under your chairmanship and I congratulate the right hon. Member for Preseli Pembrokeshire (Stephen Crabb) on securing the debate.
My constituency of Aberavon, along with that of my hon. Friend the Member for Swansea East (Carolyn Harris), a neighbouring constituency, would be the home of the Swansea bay tidal lagoon project, which would be the first such project in the world. Tidal lagoon power is an idea whose time has come. The Swansea bay tidal lagoon would produce enough energy to power 150,000 Welsh homes for 120 years, meeting 11% of Welsh energy needs with clean, green, reliable and sustainable energy, saving almost a quarter of a million tonnes of carbon during each year of operations. It would directly sustain over 2,000 construction and manufacturing jobs in Wales, and support as many as 311 UK industrial and manufacturing businesses along the supply chain. Crucially for my Aberavon constituency, the project will require more than 100,000 tonnes of steel, much of which will come through the Port Talbot steelworks. Tidal Lagoon Power has committed to procuring as much steel as possible from UK suppliers and it should be commended for making that pledge and held to it.
As the project will be the first of its kind in the world, it is estimated that, in its first year, 200,000 people will visit the lagoon to see the national boating centre and other facilities. That will mean £8 million in tourism revenue, including £2 million from the oyster-shaped visitor centre, £500,000 from the national boating centre and almost £1 million from the elite performance sports centre. The project has the support of almost 90% of local stakeholders and it was included in the manifesto upon which every major party stood at the last general election. In sum, the Government are fast running out of excuses for delaying a positive decision.
A final decision will, of course, be made following consideration of the Hendry review. That was supposed to have been received before the autumn statement, but we understand that the Government asked for the report to be delayed, in the light of the possible ramifications of other announcements. Can the Minister please inform us what impact, if any, the autumn statement has had on the review?
We now understand that the review is expected to be submitted to the Secretary of State this afternoon. Can the Minister please inform the House whether the review has already been submitted? If not, when will it be submitted? Will he commit to his Department publishing the Hendry review publicly?
Members of this House, our constituents and local businesses should see the review and the case presented by Hendry either for or against tidal lagoon power. There are live investment decisions that need to be made or at least planned imminently. For the decisions to go forward, investors need at the very least a clear sense of the decision-making and implementation process. Will the Minister please make clear what the formal decision-making process will be and when we can expect a public decision? Will we have to wait until the Budget? Will the Secretary of State make a statement in the coming months either as a separate stand alone statement or as part of his national industrial strategy statement? Will the Government also make it clear what the timescale and process will be for implementation of any decision following the Hendry review? Investors, business and our communities need an end to the uncertainty. All major parties made clear manifesto commitments to tidal lagoons and in particular to the Swansea bay tidal lagoon. It is about time we fulfilled those commitments and delivered jobs, energy and opportunity to the Swansea bay region.
Jim Shannon (Strangford) (DUP)
It is a pleasure to serve under your chairmanship for the first time, Mr Paisley. It is good to have a colleague in the Chair. I also thank the right hon. Member for Preseli Pembrokeshire (Stephen Crabb) for presenting such a good case.
Strangford lough in my constituency is one of the most beautiful loughs in the whole world. I defy any Member of this House to come and have a coffee and a delicious scone in Harrisons of Greyabbey, sit on the veranda looking over the lough and argue that the view could be beaten. I would argue that the view could never, ever be beaten. Not only is Strangford lough the most beautiful, but it has the potential for so much energy production. Indeed, we were proud to trial the world’s first tidal current energy turbine, the SeaGen. Tidal power is an important part of any renewable energy plan as it is a guaranteed source of power and, unlike wind power, can be relied on every day. Generating electricity from two massive underwater propellers, the SeaGen was lowered into place in 2008 and bolted to the seabed in one of the world’s fastest tidal currents.
Strangford lough is one of Europe’s most protected areas, providing unique habitats for marine and bird life. It is a Ramsar area and also an area of special scientific interest. The location was chosen for the turbine project because it offered sheltered waters close to shore, but still exposed the generating device to the full rigours of the tides. The pull of the waters of the Narrows in Portaferry and Strangford is significant and in the early stages some of the blades were damaged. SeaGen generated 1.2 MW: enough power for around 1,500 homes.
There were of course environmental aspects and questions. A study of the environmental impact of SeaGen will, I hope, open the door for other such projects. There had been fears that large marine mammals such as seals would be hit by the propellers. We have a good colony of seals in Strangford lough. The environmental monitoring report that gave the all-clear stated:
“There have been no changes in abundance of either seals or porpoises detected which can be attributed to SeaGen; seals and porpoises are continuing to swim past SeaGen, demonstrating a lack of any concern or hindrance.”
David Simpson (Upper Bann) (DUP)
Does my hon. Friend agree that, as the United Kingdom prepares to leave the European Union, it is essential that we get the energy strategy correct across the whole of the United Kingdom, so that we can offer companies a competitive spirit for business?
Jim Shannon
I thank my hon. Friend for that intervention. As a businessman, he focuses on the issues that we want the debate to focus on. The Minister will, I hope, respond to that.
The SeaGen project ended and was dismantled in January this year. The years of operation have opened the door for other such tests. There has been consideration of similar projects on a larger scale in other coastal areas, so the SeaGen project in Strangford lough has given the necessary information to the Department to use for further projects. Perhaps the Minister will give us some idea of how the SeaGen project can be used for the furtherment of other projects.
My opinion is clear: the less dependent we are on crude oil and its supply from other countries, and the more we can get from our own renewable resources, the better. I support such projects for that reason.
The levy control framework, established by the former Department of Energy and Climate Change and Her Majesty’s Treasury, set a cap for the forecast costs of certain policies funded through levies on energy companies and ultimately to be paid for by consumers. Since November 2012, the framework has covered three schemes to support investment in low-carbon energy generation: the renewables obligation, feed-in tariffs and contracts for difference. It sets annual caps on costs for each year to 2020-21, with a cap of £7.6 billion in 2020-21, in 2011-12 prices. According to the latest forecast, the schemes are expected to exceed the cap and will cost £8.7 billion by 2020-21. That is equivalent to £110—around 11%—on the typical household fuel energy bill in 2020. That is £17 more than if the schemes stayed within the cap.
I will conclude shortly. I understand other Members want to speak, so I will not take extra time. We need to do more, and projects such as SeaGen at Strangford lough are possibly the way to go as they also seek to address the environmental impact duty that we must stick by. The environmental reasons for renewable energy are clear and compelling. Although I am not someone who would ban the use of fossil fuel or nuclear reactors as needed, I do feel we should make the most of the great resources that we have in our tidal energy provision. I am anxious to see how we can develop that in Strangford lough and throughout the Province—indeed, across this great nation of the United Kingdom of Great Britain and Northern Ireland—so that we rely less on fossil fuels and other energy sources that are not on our doorstep.
Geraint Davies (Swansea West) (Lab/Co-op)
It is great to have you in the Chair, Mr Paisley. I have been a supporter of tidal lagoons since I was elected in 2010. At that time, I asked searching questions about flood mismanagement, possible contamination and suchlike. Those have been looked at and, essentially, this project is good for jobs, for the environment and for the economy, so we should go forward. The hon. Member for Eddisbury (Antoinette Sandbach) shakes her heard. I should mention what she said about nuclear power.
Nuclear power is good, but if we look at global uranium supplies, at the current rate of consumption, which is 2.5% of global consumption, we will run out in 50 years. If that goes up to 12.5%, we will run out within 10 years. So we need a diverse portfolio that does not exclusively rely on nuclear.
As I mentioned earlier, 75% of fossil fuels cannot be exploited, so we need to look carefully at the tidal lagoon project. There is no excuse for further delay. The previous Chancellor came to Swansea with the former Prime Minister and in the autumn statement of 2013 mentioned the Swansea bay lagoon, but we are still waiting. We now have the Hendry review, which has found that the project is technically sound, is value for money and will deliver economies of scale and falling marginal costs as the portfolio is spread around. So, as hon. Members have said, let us get on with it and let us have a target date. Let us say by June next year. I do not think by Christmas is realistic, but let us have a target date and let us get on with it.
The only thing that has dragged on is the issue of cost. As I have mentioned already, the oil cost is not a proper indicator, because we cannot exploit all the oil and, also, we cannot really go down the road of fracking. People may have read the recent Council of Europe report on hydraulic fracturing. It concluded that, given that methane is 86 times worse for global warming than carbon dioxide and fracking has fugitive emissions of 5%, fracking is twice as bad as coal for global warming, so we need to have very tight controls on fracking. Perhaps the Minister will respond to that. Will he undertake to ensure that fugitive emissions are below 1% for the whole process and below 0.1% at the well head? If we can get that out of the way, it opens the door for Swansea bay lagoon and other lagoons like it as pathfinders. We should not mess around when we know that strategically other options are not open to us.
It looks as though we will be heading towards the disaster called “Brexit”. Let us assume for a moment that the Government do not delay triggering article 50 beyond the French and German elections and do not give the people a final say on the deal, in which case they would reject it. Let us assume we go for Brexit. Obviously, fuel prices will be much higher because sterling will be devalued owing to a lack of confidence in the economy outside the European market, with tariffs. That makes the Swansea bay lagoon better value for money. In the short term, of course, some of the component parts to build it will increase in price. However, overall, it is a great project. We have been waiting long enough. Let us get on with it. In the interests of the environment, of the economy and of Britain, let us do it.
Carolyn Harris (Swansea East) (Lab)
It is a pleasure to serve under your chairmanship, Mr Paisley. The lagoon is located in my constituency and that of my hon. Friend the Member for Aberavon (Stephen Kinnock). Since I was elected the people of Swansea East have made it abundantly clear that the tidal lagoon is one of the issues that matters most to them. It matters for jobs, for investment, for business and for industry.
Mark Pawsey (Rugby) (Con)
The hon. Lady is talking about investment in jobs, and there will be an impact in my constituency, where GE will build the 16 generators, involving £18 million of investment in the plant at Rugby and the creation of 100 additional skilled design, installation, service and maintenance roles. Is not that a compelling reason to proceed?
Carolyn Harris
That was very clever of the hon. Gentleman, and yes, it is a compelling reason.
Most of all, the project matters for the sake of hope, which I am sure the hon. Gentleman’s constituents will now have. It was, and remains, a beacon of hope for a region in transition. Swansea knows a thing or two about making the most of its natural assets, but our once great industries are now in decline and our city has suffered as a result. When the lagoon plan emerged—a modern plan for a new low-carbon era that would once again place Swansea’s natural resources at its core and redeploy a skilled and committed workforce built up over decades—we questioned, probed and challenged. When we were satisfied with the answers we received, we backed it to the hilt. Let me make it abundantly clear: Swansea supports the tidal lagoon, but more importantly, it needs it. It is the foundation stone for our city deal. It is important for the regeneration of our waterfront; for our plans to get people back into work; for retaining the next generation of talent; and for showcasing to the UK and the world a city that I am proud to call home.
I was sceptical about the need for an independent review, but I am delighted to report that those of us who saw the review in action were impressed by its engagement and endeavour. However, it is now finished, and I hope that the Minister will explain what we can expect next. We have heard this afternoon that the review may be lodged today, so we need to know what the next steps are. We have seen the views of the 40-strong all-party group and the more than 100 Back-Bench MPs from across the House who signed a letter to the Government to support the project. Now is the time for the Government to put their money where their mouth is. Now the deed is done, and we need to know where we go from here. We need to know that Swansea will get the tidal lagoon it deserves.
Jessica Morden (Newport East) (Lab)
I too congratulate the right hon. Member for Preseli Pembrokeshire (Stephen Crabb) on obtaining this timely debate. He mentioned that the Hendry review is with the Government this afternoon, and I share the desire to hear about it from Ministers as soon as possible. The debate is a demonstration of how much cross-party support there is in this place, as my hon. Friend the Member for Swansea East (Carolyn Harris) said, for the development of tidal lagoons. That support is pretty unique, and indeed there is also cross-party support in the Welsh Assembly and elsewhere. I should also mention that my hon. Friends the Members for Cardiff South and Penarth (Stephen Doughty) and for Ogmore (Chris Elmore), who are upstairs in a Bill Committee, want their support for the project to be stated.
We all hope that the Minister will have something to say this afternoon about when he will share the Hendry report with the House, as it was not mentioned in the autumn statement. The delay is frustrating, because we want the Swansea bay tidal lagoon to go ahead—and, as others have said, not just as a one-off or a stand-alone project, but as a pathfinder for yet more tidal lagoons across Wales and beyond, including in Newport, as set out in Tidal Lagoon Power’s plans. A couple of streets away from my home there are the most beautiful views of the expanse of the Severn estuary. From my constituency office on the banks of the Usk we can watch the dramatic rise and fall of the second highest tidal range in the world every day. It is an amazing natural resource on our doorstep, and we are just not using it. At a time when we desperately need clean, secure energy, year-round, entirely predictable energy, tidal lagoon technology is the key to delivering a low-carbon energy future in Wales. We have to grasp that opportunity.
The benefits for Wales and elsewhere have been clearly spelled out in this debate. They include the chance for Wales to be a global leader in the technology, starting in Swansea. More than 2,000 direct jobs would be created in the manufacturing and construction process, and many more would be created in tourism and the supply chain. There would be a huge boost to the Welsh economy. There would also be the potential for long-term cost reduction as more lagoon technology was built, and, importantly, for exporting the technology. A Newport lagoon further down the line would bring construction jobs and the chance to use Welsh steel, which my hon. Friend the Member for Aberavon (Stephen Kinnock) mentioned—it has been an incredibly difficult time for that industry. The Liberty House Group in my constituency supports the project; a lagoon in Newport would be less than a mile from its steel plant, which I visited recently.
The project is not only a matter of renewable energy generation and playing our part in meeting climate change targets. There is also a chance for coastal regeneration and a boost to recreation and tourism. The leader of Newport City Council, Debbie Wilcox, has given it her backing and said it is a “marvellous opportunity for Newport”. There is huge added value in the project—not least from up to 33,000 jobs at the four lagoons in Wales, were they to go ahead. It is an amazing opportunity that we should grasp for Swansea, yes—but also for Newport. I urge the Government to make a timely decision.
Callum McCaig (Aberdeen South) (SNP)
It is a pleasure to serve under your chairmanship, Mr Paisley. It has been a good debate and I congratulate the right hon. Member for Preseli Pembrokeshire (Stephen Crabb) on securing it and on the manner in which he made his case. It is notable that with the honourable exception of the hon. Member for Eddisbury (Antoinette Sandbach) everyone who has spoken so far in the debate has been in favour of the project; there were speakers from all the nations and several regions of the UK, and all bar one were in support. Debates such as this bring me out in a bit of a cold sweat, because I may have to brutalise some constituency names that I do not know how to pronounce. I thank all those who mentioned the constituency of the right hon. Gentleman and saved me from pronouncing it as if it might normally follow the word “Elvis”—that is how I would have read it. Such debates are an educational process for many of us, and this one has certainly been educational for me with respect to learning to pronounce the names of parts of the beautiful country of Wales.
The speech of the right hon. Member for Preseli Pembrokeshire touched many key points, and these were replicated by many Members who spoke. The project is potentially a key part of the Government’s industrial strategy, and the cross-party support that it enjoys is balanced by its cross-cutting benefits. It is not just an energy project; we have heard that it will boost tourism and support the steel industry. It also ticks a number of the boxes on which the Government are trying to deliver with their nascent industrial strategy. It links business with energy; it provides a low-carbon technology; it has the potential to spread the economic benefit and boost economic growth outwith London and the south-east of England; and it has the potential to develop a sizeable and exportable technology. Those are all things that, I think, we would like.
There may be issues as to the cost, as the hon. Member for Eddisbury said. However, as I often do when we discuss technology of this kind, I remind the House that we must ask not only the cost of doing something, but the cost of not doing it. It may be difficult to account for that, and it will be interesting to see whether the Hendry review touches on it. However, the right hon. Member for Preseli Pembrokeshire said that we should aim to emulate the Danes in their development of onshore wind. They have developed an industry and have world-leading technology and exports coming from that. I sought to intervene on the right hon. Gentleman, but my attempt was somewhat lost in the debate. As well as emulating the Danes, we need to make sure we do not emulate ourselves as to what we did in relation to onshore wind technology. The original leaders in that technology were here, and the lead was ceded to the Danes who picked it up and ran with it, and are now in an enviable position. Let us not repeat our mistake over onshore wind with tidal technologies.
Tidal lagoons and technologies are an important aspect of the matter, but not the only one. The hon. Member for Strangford (Jim Shannon), who is no longer in his place, mentioned the potential of the tidal scheme—SeaGen—in Strangford lough; and in the Pentland firth between Scotland and the Isles of Orkney there have been world firsts in the deployment of tidal turbines in an area renowned for its tides. That has potential, and I would like to question the Minister about the contracts for difference that were announced last month. We know that they have excluded technologies that are cheaper than offshore wind—onshore wind and solar will not be allowed to bid in—but technologies that are more expensive have also, effectively, been excluded. Essentially, we will have a competitive option process that only one technology will be able to win. That does not seem like fair competition to me—it would mean a broken promise to the tidal industry—and I hope that the Minister can address the matter. That promise of a de minimis amount of electricity through the contract for difference process has seen the development of several stages of proposals that would look to bid in—in particular, MeyGen in the Pentland firth. That could be part of a compelling story of a UK tidal industry, with the tidal lagoons and turbines as compatible—sister—technologies in which we could be a world leader. I wholeheartedly support the deployment of offshore wind, but not its being the only show in town. Because of the Government’s decision—their fixation, it would seem, on that technology—we risk losing one aspect of that story. I really hope that the Government will reconsider their decision and engage with those looking to pursue the schemes to see what can be done to develop them.
I will not take up my full amount of time, but I want to return to tidal lagoons. The scheme ticks many boxes and its development has support across the Chamber and, I think, Parliament as a whole. The lagoon will be a pathfinder in Swansea, the first of its kind. We have a history of developing energy technologies in which numerous firsts of a kind have turned into ones of a kind. I hope that Swansea goes ahead but, if it does, it must be a pathfinder. It must be a scheme that leads to the development of a technology. There is no point in our paying a large amount of money to do this once, then not learning from it, not reaping benefits for future development and, most importantly, not having the technology to export. I fully support the scheme, as does my party.
Dr Alan Whitehead (Southampton, Test) (Lab)
We have had an excellent debate, with contributions from Members on both sides of the Chamber indicating almost unanimous support for the Swansea bay tidal lagoon. That outcome—the clash of ideas in the white-hot heat of full agreement—should be impressed on the Minister. Even though there was what might be regarded as one dissenting view from the hon. Member for Eddisbury (Antoinette Sandbach), I think that she supports the idea. She made some important points about value of money and about how careful one needs to be to get that right.
We can, I think, say that there is agreement, more or less, about the principle of the Swansea bay tidal lagoon and full agreement, at least by the Opposition, about the practice. Indeed, Opposition turnout and the first-rate contributions made by my hon. Friends the Members for Aberavon (Stephen Kinnock), Swansea West (Geraint Davies), Swansea East (Carolyn Harris), Newport East (Jessica Morden) and Workington (Sue Hayman), and by the hon. Member for Aberdeen South (Callum McCaig), indicate just how full the support is on this side of the House, not just from south Wales Members but across the country. I think that is because we need to make it clear that support for Swansea needs to be based, as Members have emphasised, not just on whether we build that tidal lagoon but on what it means for tidal lagoon technology for the UK’s future and what it means also for the series of lagoons that can come about as a result of the Swansea proving lagoon.
That series of tidal lagoons is not a concept based on thin air; it is not about harnessing an as yet untried technology that might come from the middle of nowhere and save us as far as low-carbon power is concerned. Essentially, it works on a simple principle of proven, well-known technology, of water entering the lagoon subject to its flow through a turbine, both when it is coming in and on its release when the lagoon is full, that allows for the generation of some 14 hours of utterly predictable power. We know that the principle works well because, as the Rance barrage in France has shown, the technology is reliable over many years and, as has been mentioned, it is a power source with a lifetime far in excess of those estimated for wind, gas and even nuclear. It is likely also that the outage time over a long period will be relatively low.
Swansea is not a large lagoon in terms of what is possible. It will have an installed capacity of 350 MW, which is approximately a tenth of the most worked-up second lagoon, in Cardiff bay, which comes in at a capacity close to that of Hinkley Point C power station. However, it is the possibility of Swansea being the proving ground for a number of tidal lagoons that will not only be cheaper to construct and operate than Swansea but will open up the prospect of a large contribution—perhaps 10%—of our electrical power needs that ought to be a condition for supporting it. What we should be investing in as a country is not Swansea, but Swansea and the prospect of all the others as a major component of our future energy make-up.
As Members have mentioned, as far as our country’s overall energy make-up is concerned, power plant is going offline at an alarming rate, with 23 GW of conventional thermal plant being closed or mothballed since 2010, and a further 24 GW—mostly of coal and nuclear—to be closed by 2025. It is unlikely that nuclear will even begin to make up that gap. Hinkley is delayed by longer than seven years and will probably not be on line until 2026-27 and, according to the latest consultation, coal is due to come offline by 2025.
We need replacements for the lost capacity, and a lot of that will come from the aggregation of renewables, but at present the only plan appears to be that gas-fired power stations will be built out at some pace between now and the late 2020s. We know that gas power stations are not, at present, getting built and, indeed, the Government are pursuing expensive capacity market operations—with an auction today or thereabouts possibly costing us £2.5 billion—for capacity over the next period. That is the last chance saloon, one might say, for gas plant procurement under the present arrangements. Swansea, and other lagoons, would certainly serve as a substantial alternative to some of that build, which, if procured, would cost substantial amounts—something that needs to be taken into account where value for money is concerned. All energy, at the moment, is expensive to build. All energy, at the moment, is being subsidised in its build. It is not about considering just what Swansea might cost but about what the alternatives might cost as well. Under those circumstances, Swansea performs, in the long term, very well.
Within a few years, perhaps, a number of those replacement power stations will need replacing anyway. Meanwhile, Swansea and other lagoons would have sailed through the period, producing reliable ultra-low-carbon electricity. By the way, in terms of a larger lagoon strategy, they will be able to supply reliable and known amounts of power pretty much round the clock, for the simple reason that the time of high tide varies considerably along the UK coast. I always like to try to introduce a not very well known fact into my contributions and today it is that, right this minute—this very minute—it is high tide in Morecambe bay. That means that if there were to be a lagoon in Morecambe bay it would produce power for seven hours either side of its high tide.
It is not high tide in Swansea. High tide was at 10.20 am. Power could be produced seven hours either side of that high tide, which would overlap almost exactly with the power produced in Morecambe bay on its high tide. With a series of lagoons, there would be round-the-clock, reliable, known, predictable power that was just as predictable and round-the-clock as any nuclear power station or gas-fired power station that we might care to build in this country.
The benefits of developing Swansea and subsequent lagoons are manifest from a low-carbon energy point of view. As Members have alluded to, there would be considerable other benefits, too. Jobs and supply chains would be created, mostly in the UK. It is estimated that 65% of the pathfinder project spend will go on UK content, which is close to the figure achieved by the North sea oil and gas industry. There would be 200 jobs in Swansea and perhaps 11,000 jobs in Cardiff during construction, and several thousand jobs during operation. Developing Swansea is important for what UK plc should be doing to secure the exportable potential of those technologies in which we are world leaders. We certainly are leading in tidal, tidal stream and wave.
As the hon. Member for Aberdeen South said, we only have to look back a little to see how close we came to securing exportable UK industry in wind before we lost our lead and most of our manufacturing and expertise to others, most notably Denmark, because we did not back the development of our world lead through industrial strategy. Yes, I have mentioned the words “industrial strategy”. It appears in the title of the new Department—the Department for Business, Energy and Industrial Strategy—but there is still an absence of anything that looks like an actual industrial strategy from the Government. We were promised a Green Paper on industrial strategy would appear shortly. With lagoons, we have an industrial strategy in the round already, with jobs, a supply chain and exportability. It is running up to us, metaphorically asking us to bite its hand off, and at the moment we are not responding in a positive way.
In all of this, we have to consider the question of value for money, which the hon. Member for Eddisbury mentioned. Comparatively, lagoons provide value for money. Undoubtedly even Swansea will come in as better value for money for electricity-generating purposes than the deal we have concluded with Hinckley C. Comparatively it is in the same league as offshore wind. A series of lagoons would certainly be much better value overall, although we need to cast our minds towards the longer term in thinking about value. Swansea is asking for a CfD for 60 years. That is half the operating life of the lagoon, with payments reducing substantially over that period. Swansea is not asking for a block CfD degressing through future projects; it is asking for a CfD degressing within the project’s lifetime.
I know the Government have not been idle in all this, although on the surface not much has happened since general support for the idea of the Swansea bay lagoon was included in the Conservative party’s 2015 election manifesto. Indeed, as my hon. Friend the Member for Aberavon said, it was also in the manifestos of all the other major parties. I hoped we would hear something positive about Swansea in the autumn statement, but nothing was announced. We will have to wait until the Hendry review has been examined. That review is headed by an estimable former Energy Minister, the right hon. Charles Hendry. I am confident he will have a positive look at value for money and the bigger picture I have described of the lagoon, but we do not know where that review is. We think it is on its way to Government as we speak, but we have not yet had any confirmation that it has been received, or whether there is a timetable for looking at that review or for action after it has been considered. I join my hon. Friends in calling for early publication of the review so that we can all have sight of what it is about. We also call for an early Government response to that review, even if a final decision about proceeding with the Swansea tidal lagoon has not been made.
I conclude by emphasising that timing is important. We have a worked-up, permitted, committed plan that cannot stand in suspended animation while people spend so long making up their mind. Swansea bay, in case anyone needs reminding, is not an interesting concept that we can cogitate on at our leisure, but a real project that needs to be developed within a reasonable timescale. Otherwise all the money invested in it—£50 million—will start to go stale and the project may fail, possibly never to be revived. We need to get on with it, not just for Swansea’s sake, but for the sake of a real solution that could be producing power by the very early 2020s if it is given the go-ahead now. It would be a solution for our mounting energy gap in the early part of the next decade.
Ian Paisley (in the Chair)
If the Minister can take about 12 minutes, that will give Mr Crabb a minute and a half to wind-up at the end.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Jesse Norman)
Thank you very much, Mr Paisley. Members have already widely noted the honour it is to serve under your chairmanship, and I add my support to that sentiment. I congratulate my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) on securing this important debate. It is testimony to him and the importance of the issue that he has generated such cross-party support and so many interesting speeches. The sentiment in the room has been so evident.
My right hon. Friend has long been a proponent of the economic benefits that tidal lagoons could bring to his constituency and to south Wales as a whole. Naturally, he and other Members here today are keen to understand better how the development of a tidal lagoon at Swansea specifically and a fleet of tidal lagoons around the UK coastline—were they to go ahead—would benefit their local economies. However, as he acknowledged, this is a difficult and complex question. The technology is new and untried, and the development warrants due care and consideration before decisions are taken. That is why in May the Government commissioned Charles Hendry to undertake an independent review of the strategic value of tidal lagoons in the UK. Among other things, the review was intended to consider whether and in what circumstances tidal lagoons could play a cost-effective role as part of the UK energy mix, to examine the potential scale of the opportunity, including in the supply chain, and to consider different sizes of projects as the first of a kind.
Contrary to what some Members have said, building a tidal lagoon in Swansea is not a manifesto commitment of the Conservative party, but it is mentioned in the manifesto. There is a commitment to explore the lagoon as a source of affordable energy, and that is exactly what Charles Hendry is being asked to do in his review. We are expecting him to deliver his report to Government very shortly. Colleagues may know better than me how shortly, but whenever that is, this debate is a timely opportunity to discuss the issues. Apparently, drafts have been sent to or discussed with officials—certainly in one case—but it is important to note that the review is not about Swansea as such. Rather, it is a general review of the costs and benefits of tidal energy. As it has not reported, it is irrelevant that the autumn statement has occurred, contrary to what some colleagues have tried to insist. It would be wrong for Government to announce anything while a review we had commissioned was under way. We look forward to receiving it and reading it with great interest.
The question has been raised as to whether, as my right hon. Friend said, there will be a timely and purposeful decision. Members asked when the Hendry review would be published and whether there would be a decision before the end of the year. Colleagues will understand that any decision before the end of the year would be unrealistic at this late stage, and my right hon. Friend acknowledged that. We will give this matter thorough and careful consideration. There will be no dragging of heels.
Geraint Davies
Is the Minister willing to set a target deadline that he will not go past? Will he say, “By June next year, we will try to do better,” or will he set no deadline at all?
Jesse Norman
The fairest thing to do is to see what the report says before we come to a view about an appropriate timetable. It would be quite wrong to prejudge the report and its conclusions.
For all the enthusiasm of my right hon. Friend the Member for Preseli Pembrokeshire for tidal lagoons, I note that he has taken a measured approach, respecting the complex issues that are being raised, for which I thank him. As he said to the House when he was Secretary of State for Wales,
“The Swansea tidal lagoon proposition is very exciting and commands wide support across the business community in Wales, but we also need to recognise that the project is asking for a very significant level of public subsidy and intervention. It is absolutely right that”
the Government
“should conduct very robust due diligence in making sure that such projects will deliver value for the taxpayer.”—[Official Report, 13 January 2016; Vol. 604, c. 842.]
That is precisely what we will do. We will take the time necessary to look at the review’s findings in relation to tidal lagoons, particularly in the context of a wider assessment of the nature of the UK’s future energy mix and our plans to reduce carbon emissions.
Last month, the Secretary of State set out his vision for how the energy sector should develop, in the context of our new UK industrial strategy. He recognises that the Government’s role must be to create the right framework for growth, harnessing both existing and new technologies, to deliver more secure, cleaner energy at a lower cost. That is our goal: a reliable, clean and inexpensive energy system.
Of course, new technologies such as tidal lagoons may have a role to play, but not at any cost. My hon. Friend the Member for Eddisbury (Antoinette Sandbach) rightly raised several issues, and we look to the energy review and other discussions to resolve them. She raised not merely the issue of cost, but her concerns about the lack of intellectual property, planning uncertainty and delays. The Government should properly consider those issues as part of a wider decision-making process.
As colleagues know, the contract for difference allocation round, which we announced last month, is under way. Overall, our energy policies and priorities have not changed. It is worth saying, in relation to the remarks of the hon. Member for Aberdeen South (Callum McCaig), that it is not true that CfDs do not include tidal stream technologies, although it is true that there is no ring-fenced allocation for them within the auction. That is because our responsibility is to bill payers. Tidal stream, which is not a technology that we are specifically discussing in the context of tidal lagoons—it is a different technology—has a strike price about three times higher than that of offshore wind. Until those prices fall, it may be difficult for it to compete. When they do, it will come within the policy horizon.
Callum McCaig
In fairness to myself, I do not believe that I said it was excluded; I said it is effectively excluded, which the Minister may have touched upon himself. Ignoring the potential first mover advantage for tidal stream technology, how does he expect its price to come down if it does not have the support to deploy and develop a downward price trajectory?
Jesse Norman
That is a perfectly reasonable question. Historically, the expectation has always been that technologies have to demonstrate that they are capable of benefiting from support. Given that the distance in the range of cost is so high, a judgment has been made that that technology has not done so at the moment, but other technologies have succeeded in doing so.
Other colleagues raised issues such as the rate at which costs might fall with other lagoons, the degree to which different projects could inspire different learning, and the first mover advantages, all of which should be resolved and discussed in the context of the Hendry review.
Jim Shannon
In my contribution, I mentioned the SeaGen project in Strangford lough in Northern Ireland—a pilot scheme sponsored by the Government to get results in relation to the environment. Perhaps the Minister is going to tell us what the results of that pilot scheme are so that we have some idea of what we are doing now.
Jesse Norman
I am sorry to have given up time for that intervention, because I was coming to that point. SeaGen, as the hon. Gentleman recognises, was a research test bed, and it is being decommissioned now. It received a £10 million grant from the Department, and those conclusions are being carefully assessed. It is a project in which there has already been public investment. [Official Report, 14 December 2016, Vol. 618, c. 6MC.]
It is clear that we cannot allocate subsidies to every technology that asks for them. We have said that our focus will be on key technologies that have the potential to scale and deliver long-term cost savings, in which the UK has a comparative advantage and whose costs to consumers are acceptable.
Jesse Norman
I am very short of time. I am so sorry. I have taken an awful lot of interventions, and I want to make progress.
I note the enthusiasm of my right hon. Friend the Member for Preseli Pembrokeshire for the proposed Swansea bay project, but it is the Government’s job to consider the advantages and disadvantages and to scrutinise the evidence to ensure that decisions are taken in the longer-term interests of the UK and consumers. It is worth focusing on the significant uncertainties associated with the project—in particular, the use of a new and untried technology in a marine environment, the length of time over which the commitment would be made, and the planning issues, which have already been mentioned.
Since the debate on the economic impact of tidal lagoons in March, the Department has continued to have discussions with the developer of the Swansea bay lagoon. I cannot comment on those discussions, given their commercial nature, but the most recent proposal put forward by the developer would be a very significant deviation from current Government policy. It would not be impossible, but it would require careful consideration. We have always been clear that we will consider the findings of the independent review of tidal lagoons and all other relevant factors in deciding whether to proceed with negotiating a CfD on this project. The developer is aware of that.
The issue of value for money quite properly remains at the forefront. I mentioned the concerns about consents and leases, decommissioning and the supply chain. I note that the China Harbour Engineering Company is no longer working with the developer. There is also an issue of state aid approval. The point is that, even under ideal circumstances, it will take some time to resolve those issues, and the Government will need to take our time to consider the review and make a judgment in a proper and effective way.
As this important debate draws to a close, let me say that I expect a copy of the review’s report to be on my desk and those of colleagues very soon, and we will give it careful consideration. I assure hon. Members that the Government will strike the right balance between responding in a swift and timely way and taking the time required to consider this complex issue in the detail it deserves.
Ian Paisley (in the Chair)
Mr Crabb, given that the Minister has been generous in giving up a bit of time, you have the opportunity to accept a bouquet and take a bow, but not much more, before I put the Question.
Stephen Crabb
I will do that. First, thank you for your excellent chairmanship, Mr Paisley, which has facilitated this very good debate about not just the Swansea project—it was never about just the Swansea project—but the potential for a tidal lagoon industry for the whole of the United Kingdom. The sheer number of colleagues who participated from all parts of United Kingdom and all parties demonstrates the overwhelming support for the Government to take forward a new tidal lagoon industry. I am reassured by the fact that the Minister said there will be no dragging of heels. He said that the Government will not support this project at any cost, but nobody was asking for them to support it at any cost. We have discussed some very reasonable figures and comparisons between different energy types.
This debate will carry on in other forums over the coming months. I hope we get a full, positive response and a decision from the Government, if not by the end of the year—perhaps it would be unreasonable to expect that—then certainly by the spring or summer.
Question put and agreed to.
Resolved,
That this House has considered tidal lagoons and UK energy strategy.
Flood Re Insurance Scheme
(7 years, 4 months ago)
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John Stevenson (Carlisle) (Con)
I beg to move,
That this House has considered the Flood Re insurance scheme.
It is a pleasure to serve under your chairmanship today, Mr Hollobone. I am delighted to have the opportunity to move the motion.
Back in 2005, Carlisle was badly affected by floods, following which substantial investment was made in flood defences. By December 2015, the view was that Carlisle was probably safe from further floods and would not be affected. Exactly one year ago today, however, Storm Desmond struck the United Kingdom and in particular Cumbria. It was an extraordinary weather event, and the floods had a profound effect on our city.
For the record, the emergency services were absolutely brilliant. We must also recognise the contribution of individuals—friends, families, strangers—and communities. They all did a terrific job. I acknowledge, too, the contribution of Government. Central Government and local government rose equally to the challenge of the times, giving great support, manpower and assistance to the community.
To give one small example, the week after the floods I asked the then Chancellor at Prime Minister’s questions if he would support the Cumbria Community Foundation. He indicated that he would match any funding raised. The foundation subsequently raised £5 million, which meant that, with the matched funding from central Government, £10 million was available, helping people enormously throughout Cumbria to recover from the floods. Work by the Environment Agency and the Cumbria Community Foundation is still going on, and people are gradually getting back into their homes. For the future, the Government have also committed a further £25 million to flood defences, which I am sure the EA will invest in and around Carlisle over the next few years.
What of the impact of Storm Desmond? From a Carlisle perspective—not even Cumbria, just Carlisle—more than 2,000 individual homes were directly affected. The knock-on impact on families, friends and the wider city was considerable. Furthermore, hundreds of businesses were affected, ranging from small, one or two-employee businesses to large factories such as McVitie’s, which has more than 800 staff—I am delighted that it is back up in production now.
Nor should we forget the side effects of the floods on sporting facilities. Carlisle lost its tennis, rugby, squash, football, cricket, bowls and athletics facilities. The impact of that on the wider community is quite extraordinary. Furthermore, many people do not appreciate that three secondary schools were also affected. One of them has closed at its original site and is looking to move to a different location. The impact on Carlisle, its community, individuals, families, businesses, schools and social clubs, can therefore be appreciated. The effect was dramatic and is still ongoing.
It is important to set the scene for the Minister and explain what happened in Carlisle as a result of the floods then and subsequently. However, the purpose of today’s debate is to address one particular aspect of flooding, namely Flood Re, which I will talk about from my perspective. A number of my colleagues are present today, and they will have their own views and issues to do with their own local communities, including the impact that Flood Re may or may not have had on individual households and the wider community.
For the record, Flood Re was an excellent bit of thinking by the Government and the insurance industry. Overall, it has been a great success. It took a number of years to get there; nevertheless, it was an inspired bit of thinking by the industry and Government, which reached a sensible compromise that has been hugely beneficial to many people up and down the country. The statistics are starting to tell the story about the number of people who managed to get insurance under the Flood Re regime.
An important thing from the Carlisle perspective was that the 2015 floods came, in many respects, unexpectedly—given what had happened in 2005 and the subsequent work on flood defences. At the time the community was badly affected and morale was low, but the one thing that gave people a little confidence was that through the Flood Re scheme they knew they could get insurance. That was vital for individuals and householders. I congratulate the Government and the insurance industry on Flood Re, because it is a job well done.
Therefore I am not here to be negative; I am here to be constructive. As with any new idea or piece of legislation passed by the House, however, sometimes issues can be overlooked, particular circumstances not taken into consideration, or judgment calls by the Government or the industry might need some adjustment or further thought. Perhaps the Government need to review the Flood Re regime and make some adjustment to it for the future.
I will concentrate on the specific issue of long leaseholders, although I accept that there are other issues with regards to leaseholds and so on. For example, there is what I call the accidental landlord—someone who for whatever reason, perhaps a job, might have to move to a different part of the country. Such people might not be able to sell their house, or they do not want to because they intend to move back to the area, so they lease the property out while purchasing or living elsewhere. That is clearly an issue, because they would not be able to get Flood Re insurance for the house they have vacated. That is a side issue for me, today in particular, but it is worth the Government looking at it.
I will concentrate on the long leaseholder. The purpose of Flood Re, as I understand it, is to help owner-occupiers—those who own their own principal private residence—not commercial owners. I fully understand the thinking about commercial owners, and in many respects I accept that.
Seema Kennedy (South Ribble) (Con)
I thank my hon. Friend for securing the debate. He is always a great champion of Carlisle and the north-west. May I make a point about non-commercial, community assets? On Boxing Day in my constituency, the village of Croston was badly flooded by Storm Eva, but Croston community centre is not eligible for assistance under the Flood Re scheme and it has been quoted excess of £35,000. The future of the centre, which of course was a hub of activity in the floods, is now unviable. I know my hon. Friend is concentrating on long leaseholders, but does he have anything to say about that?
John Stevenson
I have some sympathy with what my hon. Friend says. In Carlisle, the sporting facilities were badly affected and they have ongoing issues with their insurance. She has raised a similar issue, which the Minister might wish to address when she sums up.
Craig Whittaker (Calder Valley) (Con)
My constituency, including several thousand homes and several thousand businesses, was also badly hit. Last weekend I met some residents of a block of 10 leasehold flats, next door to seven bungalows. The bungalows are eligible for Flood Re, but the 10 leasehold flats are not—one resident had bought a flat because they could not afford a bungalow. Does my hon. Friend agree that the £50,000 excess that each flat individually is being charged for flood insurance is excessive? Does he agree that Flood Re should be relooked at for that area of private residents?
John Stevenson
My hon. Friend is in many respects raising the very issue that I am about to deal with, so I obviously have a great deal of sympathy. Again, it will be interesting to hear what the Minister says about that point.
The real issue concerns long leaseholders who live in a property that is in effect their principal private residence—it is where they live, have their family and community, and so on. To all intents and purposes they are homeowners, but for a variety of legal and technical reasons they do not own the freehold—they are long leaseholders, but they do not own the freehold.
A group of long leaseholders will have a lessor, which is usually a management company. The management company owns the freehold and individuals take a lease on the property. Often the management company is in fact owned by the leaseholders. Leases may be for 999 years, and the freeholder is the management company, which would control it from there. They would be responsible for the communal areas, which could include grass cutting and roads, and may be responsible for parts of the fabric of the property, depending on the nature of the leasehold interests—whether it is a tenement flat going upwards or a group of properties next to each other. There will be variations, depending on the structure of the agreement at the outset. Interestingly enough, the landlord will be invariably responsible for ensuring that covenants between leaseholders are enforced to ensure that they comply with certain requirements under the terms of the leases.
It is interesting that the Flood Re legislation already allows for that set-up to a certain extent. It is allowed for properties of three flats, and three only. We could therefore have a situation where a landlord occupied one of the three properties—admittedly, they would have to live in one of them—and had another two on leasehold that are covered by Flood Re.
I will read from a letter from someone in the circumstances that I have raised. The freehold area is known as Willowbank, and he says:
“Willowbank is owned by a company, but that company is owned by the 29 leaseholders. The company has no income and no reserves. It makes no profit and pays no dividend. The two directors are paid neither a salary nor expenses.”
In many respects, Flood Re was there to help people like that. They are principal private occupiers who own their properties that are effectively freehold, but for whatever technical reason they are called leasehold and not covered by the legislation.
The legislation is meant to cover the whole of the United Kingdom, which includes Scotland, and in Scotland they have tenement blocks. As I understand it, the set-up under Scottish legislation is similar, but the tenement blocks, which are similar to the scenario I have set out, are covered by Flood Re legislation. I genuinely believe that it was not the intention of the legislation or of Parliament to exclude those I have described from Flood Re. I think the goal was to help secure the insurance requirements for people in those circumstances.
Mrs Helen Grant (Maidstone and The Weald) (Con)
I want to come in on the positive aspects of Flood Re. Having grown up in Carlisle, I would also like to say that it was horrific and heartbreaking to see so much of the city knee deep or worse in water. I hope that most people have fully recovered.
More positively, Flood Re has made a real difference to many in my constituency, who have seen reduced premiums, reduced excesses and insurance made available when it was not before. Notwithstanding my hon. Friend’s reservations, will he commend the Government on taking such positive action and remind them that many businesses are still worried and in need of help?
John Stevenson
I agree wholeheartedly with my hon. Friend. Flood Re has been a success. I have seen that in my constituency, where people now have confidence that their house will be insured. What I am trying to get at is a small group of people. In the setting I mentioned earlier, 29 houses were involved and in another scheme in Carlisle there are, I think, 68, but there will not be many other than those. I suspect that there will not be too many in such circumstances in the flood areas up and down the country, so most people will be able to get the appropriate cover, which, as she rightly says, is a positive.
Mr Andrew Smith (Oxford East) (Lab)
The hon. Gentleman is being generous in giving way. I, too, congratulate him on this important debate, which will be welcomed by his constituents and by everybody who has been seriously affected by flooding. Has he examined the proposal recently launched by the British Insurance Brokers Association that is intended for commercial properties and which I understand will also cover long lets? Is there not a danger, though, that because premiums are calculated on specifically targeted risk, they might end up as unaffordable for people in long-lease properties?
John Stevenson
The right hon. Gentleman raises an interesting point. I am aware of the proposal with regards to commercial properties, which may be a way forward for them. I have concentrated on a narrow point with regards to the circumstances surrounding Flood Re.
To conclude, will the Minister bring forward a constructive review of Flood Re? Will she consult Flood Re and the insurance industry? Will she listen to the concerns of homeowners in my constituency who genuinely feel that they are being let down by the legislation and are unable to get that security and insurance for flood? It is an ongoing concern for them that if we get another Storm Desmond, they will not necessarily have the money to refurbish their properties. I do not think that is the intention of the legislation. I hope the Minister will take on board the arguments that I have set out about the legislation and will acknowledge that there was an oversight, or that something was missed when it was considered, and that it would be appropriate to bring forward primary or secondary legislation to expand Flood Re to cover that small group. That would assist a small group of people in my constituency, but it would be hugely beneficial and give them confidence for the future.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Dr Thérèse Coffey)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I thank my hon. Friend the Member for Carlisle (John Stevenson) for raising the issue of access to affordable flood insurance and the Flood Re scheme. For those at high flood risk, whether households or businesses, or indeed community leaders and their surrounding communities, this matter is a central one.
I would also like to thank other hon. Members for their interventions. I hope to address them all during my response. The anniversary of Storm Desmond—we had Storm Angus last week—is a timely reminder that the potential for flooding, and the devastating impact it can have, is never far away. It is worth reflecting on the purpose and value of Flood Re, which replaced the statement of principles—a series of agreements made by the Government and the insurance industry since the 1960s on the provision of insurance to those at flood risk.
However, the statement of principles had limitations. Under the statement, members of the Association of British Insurers agreed to make insurance available to domestic and small business properties in areas that were not at a significant risk of flooding. For properties in significant flood risk areas, the statement of principles provided an offer of cover only to existing customers, provided that plans were in place to reduce the risk within five years. There was no availability of cover for those most at risk if they had not historically had flood insurance or the risk was not being reduced. Importantly, the statement of principles did not provide for the affordability of flood insurance.
Dr Coffey
I would like to make some progress and then I will happily hear from my hon. Friend.
In the insurance industry, traditionally there has been an informal cross-subsidisation of the costs of flood risk, which is a common approach to managing risk in the insurance sector. However, commercial pressures and the availability of more sophisticated flood risk models have given rise to a trend towards insurers increasingly assessing local flood risk and imposing risk-reflective terms. Without Flood Re and with an immediate transition to fully risk-reflective prices in a free market, many households at high flood risk in the UK would probably experience a significant increase in their insurance premiums in the coming years. I therefore welcome the comments made by my hon. Friend the Member for Maidstone and The Weald (Mrs Grant).
Tom Tugendhat
I draw attention to my entry in the Register of Members’ Financial Interests. As my hon. Friend the Member for Carlisle (John Stevenson) elucidated, the Flood Re scheme has gone some way towards supporting communities, individuals and housing that is vulnerable to flood risk, but it is clear from the original legislation that it does not work in isolation. It works alongside flood defences not simply as a repair product but as part of a structure to build confidence in housing and industry in flood-affected areas. Will the Minister say a little about the flood protection the Government are introducing and how that will defend communities, particularly in areas such as the Medway?
Dr Coffey
I certainly hope to come on to that. To return to the genesis of Flood Re, the Government, working with the insurance industry, established the scheme to help householders at the highest flood risk who were blighted by not being able to access affordable insurance. It is expected to help about 350,000 households. Flood Re not only limits the price of flood insurance according to council tax band but limits the excess to £250. It ensures that all home insurers in the UK are part of the solution. It is a complex scheme, but it is a world-first and it is the fifth biggest reinsurance scheme globally and the second largest in Europe. There is much international interest in what we are doing.
Flood Re is providing relief for thousands of householders at flood risk and brings real practical and emotional comfort to many, as has been said. Fifty insurance companies, representing more than 90% of the market, now offer access and in its first six months of operation 53,000 households have benefited. This portfolio will build as the market matures, with Flood Re policies expected to grow in number over the next three years. I encourage hon. Members to advertise that to their constituents. Nevertheless, it is worth emphasising that a number of factors beyond flood risk determine any insurance quotation and it remains important for householders to shop around for the best deal.
Julian Sturdy (York Outer) (Con)
I agree with the Minister and my hon. Friend the Member for Carlisle (John Stevenson) that the Flood Re scheme is a good one and has been successful, but does the Minister accept that there is more to do for businesses, particularly small businesses, in flooded areas such as York and Carlisle? When flooding hits, it has a huge impact on small businesses. Will she consider extending the scheme to cover businesses?
Dr Coffey
I intend to address that issue towards the end of my contribution. If I do not manage to do so in sufficient detail for my hon. Friend, I will be happy to have further discussions.
I stress that Floor Re is a transitional measure. It was designed with a 25-year lifetime to help householders at high flood risk to adapt to risk-reflective pricing. That sets the challenge of how collectively as a country we can bring down the risk and impact of flooding over the next 23 years. The Government are spending record amounts on flood defences, with a £2.5 billion six-year capital floods programme, which will provide better protection for at least 300,000 homes. My hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat) will be aware of some of the protections, and I know that he is pressing for more for his constituents.
There is a growing understanding that, regardless of our significant investment in flood defences, a residual risk of flooding remains. Flood defences are not always appropriate, and where they are we have seen that they can be overtopped in extreme events, as happened a year ago. We need to work across the whole catchment area to slow the flow of water through natural flood management and to prepare for any flooding that does occur. As well as ensuring we have a first-class emergency response to flood events, there is much we can do to adapt our homes and businesses to become more resilient.
Only last week, I visited Warrington and saw at first hand a new flood defence scheme at Victoria park where work is still in progress. Back in 2013 and within two weeks of the first phase being built, the scheme prevented 200 properties from being flooded. That was fantastic for the residents, but reminds me of the need to help people to understand the residual flood risk that inevitably remains. It is important to take measures to try to stop water entering a property and to speed recovery. Returning home is increasingly important and relatively simple steps can make a big difference—for example, flood resistant air-bricks; raising sockets; and using tiles instead of carpet. Property-level resilience can play a significant role in making people and their property less vulnerable to the physical and mental impacts of flooding.
A few months ago, we published the Bonfield property flood resilience action plan in collaboration with the commercial sector. It explores how collectively business and Government can best enable and encourage better uptake of such measures for properties, including businesses, at high flood risk.
Turning to leaseholds, particularly long leaseholds, I have commissioned my officials to look at the nature and extent of the problems that my hon. Friend the Member for Carlisle described, as we need to look at them in more detail. He will be aware of the wider issue of small leasehold property, to which he referred. The insurance industry regularly informs us that for, the most part, affordable commercial insurance and contents insurance for individual leaseholders is available through Flood Re, but there are examples of individuals and leasehold properties with more than three residential units struggling to access affordable business insurance. Likewise, there are examples of residential buy-to-let properties not being covered and owners finding it difficult to obtain insurance.
Evidence is building and the challenge is not easy. Much consideration was given during the creation of Flood Re to whether to include leasehold properties. From a practical perspective, insurers determine whether an individual property is at high flood risk on a household-by-household basis and can allocate the cost using a simple domestic insurance model. For leasehold properties, buildings insurance will often cover numerous dwellings, which may well have different levels of flood risk. It would be difficult to establish a consistently fair approach to how lessees should cover that risk.
There are also considerations of principle. With Flood Re, when the insurer has a direct relationship with the homeowner, the competitive market gives us confidence that the benefits provided by the scheme will reach the households for which it is intended. It is not clear that a similar scheme for leasehold properties would achieve this.
I have been saying for some time that there is good news. I am very pleased that yesterday the British Insurance Brokers Association announced the launch of a new commercial product designed to help small businesses at high flood risk to access affordable insurance. The scheme will also be open to leasehold properties. It will no doubt help some, and I hope it will help the vast majority of those who are struggling. On tenement housing in Scotland I was not aware of the difference in application, and I will certainly ask my officials to add to that. Should there prove to be a need for additional action, I remain open to exploring what can and should be done.
I have great sympathy with what my hon. Friend the Member for South Ribble (Seema Kennedy) said and I am happy to explore it further. There is a similar challenge, in that that is not quite as straightforward as individuals’ domestic dwellings, but let us look at it and see.
Flood Re is not a panacea. There is no evidence of a systemic problem, but I recognise that there is a real problem for the individuals, businesses and communities involved. I am particularly concerned about smaller businesses that cannot easily move premises. I hope that using granular postcode data and recognising the benefit of property level resilience measures, the new products from insurers—as of next week, I believe—will enable more small businesses to obtain affordable insurance.
In parallel, the Department for Environment, Food and Rural Affairs is working to understand the nature and extent of the problem. I thank the hon. Members who have shared examples with me and encourage businesses to work with us to help the Government to have a more comprehensive picture of the challenges that they face. Where there is a clear need for further action, the solutions are varied. Extending Flood Re to cover businesses is not possible, because the scheme is predicated on a domestic rather than commercial insurance model. Equally significant is the question of who pays to subsidise profit-making businesses, which are often more able to move premises than households.
My hon. Friend the Member for Carlisle asked about Flood Re and the ongoing concern. Flood Re will be reviewed every five years. It needs to be given time to work, but there are separate policy questions that we need to look at with regard to scope. Flood Re will continue to interpret legislation and I assure hon. Members that we are in regular contact on it.
People should be aware that Flood Re does not extend to properties built during or after 2009. Planning law means that properties built in a high flood-risk area should already be resilient to flooding. Extending Flood Re to cover these properties would only incentivise unsuitable development. That is why we have not done that.
Mr Andrew Smith
Will the Minister, as part of her ongoing review, review the level of premiums that are charged under the British Insurance Brokers Association scheme in relation both to leasehold properties and to those of small businesses? The danger of a finely targeted, granular approach is that some may find the risk premium unaffordable.
Dr Coffey
The right hon. Gentleman will be aware that the principle of using taxation to support citizens is well established. The principle of forcing businesses to subsidise one another is not established and would be a significant difference.
The product is coming out formally next week and we need to see how it works. There are other models that will be encouraged and this might help the community centre to which my hon. Friend the Member for Carlisle referred to think about adding extra insurance against the excess, if that excess is deemed to be too high to manage without additional protection.
I urge hon. Members to make sure that their constituents are aware of the Flood Re scheme and the benefits it can bring. I encourage hon. Members to make sure their constituents are flood aware and prepared for flood events. That could be signing up to the flood alert service and making properties more resilient. Touch wood, Mr Hollobone, I hope that we do not have an incident similar to Storm Desmond last year. However, we are not relying just on touching wood. I praise the Environment Agency for all its work in the last year, working alongside councils to make sure we are better prepared for this winter. I assure the House that this Government are committed to continuing to protect hundreds of thousands more homes in the coming years.
Question put and agreed to.
Road Traffic Accident Prevention
(7 years, 4 months ago)
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Mr Philip Hollobone (in the Chair)
Will all those who are inexplicably not staying for the next debate please leave quickly and quietly, because we now have an hour-long debate on the very important subject of road traffic accident prevention?
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
I beg to move,
That this House has considered road traffic accident prevention.
It is a pleasure to introduce my debate under your chairmanship, Mr Hollobone. We are long-term colleagues and often compete for Mr Speaker’s eye, but always on a very good and familiar basis, so I am looking forward to this debate.
Some hon. Members will know that road traffic accident prevention is a long-term interest of mine. As a very young man, a very long time ago, I came into the House after having seen the deaths of two young people who were thrown from their car and who died by the side of the road. That image never left me or my imagination—it haunted me—and when I got into the House, we had tried 13 times to introduce compulsory seatbelts, and 13 times that had been defeated. On an all-party basis, a number of us organised and formed a group to campaign. As you might know, Mr Hollobone, the 14th time, the night before a royal wedding, we kept our troops here on an amendment tabled by Lord Nugent of Guildford, a Conservative peer. It bounced back to the House of Commons. We kept our troops here and the others did not. Remember that in those days Mrs Thatcher, Michael Foot and both Chief Whips were against seatbelts. We held our nerve, kept our troops here and, by a majority of 72, seatbelt legislation was introduced. How many lives have we saved since then? It was a really good fight and victory.
These days, we could all be in a nice cosy bubble, thinking, “Isn’t it wonderful? The UK, the British, are leading on road safety. We are an exemplar to the rest of the world. We sometimes vie a little bit with Sweden, but we are pretty darn good.” Well, I have to tell you, Mr Hollobone, that 1,730 people died on British roads last year. For 1,730 families, there was a knock on the door to tell them that their loved one was dead. And these are preventable accidents. This is not like a disease; it is not like getting something ghastly and wasting away. This is something that happens for all sorts of reasons, but it means that those families are devastated. If I may say a little on the financial side, it of course costs the country a great deal. Every road death costs an enormous amount of money, and that is in addition to the human tragedy.
When we organised the seatbelt legislation, a group of MPs set up something called the Parliamentary Advisory Council for Transport Safety. Today, most people call it PACTS, and it has become one of the most influential transport safety groups in the world. We are an exemplar to many Parliaments throughout the world, and we spend a lot of time persuading other Parliaments to follow our path.
Also, after 10 years, we got together with a group of the Dutch, Germans, Belgians and Swedes to form the European Transport Safety Council, which has become the most influential group across Europe. We are very proud of that. Sometime afterwards, I had the honour of being asked to form, with the backing of the World Bank, the Global Road Safety Partnership, which operated and still operates right across the world, trying to save—this is a desperate number—the 1.3 million people in the world who die every year on the roads. Yes, some countries have much less regulation than we do. In India and China particularly, the situation is tragic, as it is in South Africa. There are dreadful accidents, deaths and serious injuries in other countries, but today I want to concentrate on the UK.
As I have said, 1,730 people died on our roads last year. I think that we are becoming a little cosy and complacent about that number of deaths. I am not saying that we are becoming too complacent. I am looking at the Minister, who is a good friend of mine. He is a very good Minister, but I will nudge him today in a kindly way. Five people are killed every day in our country. That is five families destroyed. Ahead of today’s debate, I was inundated with emails and tweets, many of which were from bereaved families who had been torn apart by the actions of drunk, drugged or distracted drivers. That is the truth of the matter: the deaths are preventable.
All the time in this Parliament we are trying to get more Members engaged in reducing the casualties on their patch, bringing the figures down home. Every year, PACTS issues to every Member of Parliament—I hope that everyone can pick this up online or through PACTS—a dashboard showing what happens in their constituency, but it does not only show that: it shows how many deaths and how many serious accidents there have been, and we rate the constituency against other similar constituencies. That is a very useful tool. Someone cannot say, “I happen to live in a very dense urban area and the roads are terrible,” or “I live near a motorway.” All that is accounted for, so if someone’s constituency is well above the norm in this regard, they as the Member of Parliament should be out there campaigning with a coalition or partnership.
Jake Berry (Rossendale and Darwen) (Con)
On the subject of the dashboard and distracted drivers, has PACTS come to a view on the modern phenomenon of new cars having significant IT and entertainment systems—something a bit like an iPad—incorporated in the dashboard and what effect that innovation has had on the number of accidents?
Mr Sheerman
That is a brilliant intervention, because it is in the later part of my speech! It is true that the very sophisticated dashboard that some models of car now have, showing drivers not only how to park—self-parking—but all the hazards and all the different information that they can log into, is becoming an area of great concern, but the reason I have kept to a good, true and relatively sane path in transport safety is that I was converted by some of the best scientists in our universities and in the Transport Research Laboratory and other places to always remember: do not go for hearts and flowers; go for good science, good evidence, and what works in countries such as ours. I have always stuck to that, and it has guided me and my colleagues very well.
Understandably, there is an uprising of feeling when something dreadful happens, and recently we have seen some dreadful things—families being killed, mothers with children being killed, by distracted drivers. We know about that, but we have to bear it in mind that, overall, good science, good evidence, should be the watchword. I look at my friend the hon. Member for Rossendale and Darwen (Jake Berry)—he is a friend on these matters particularly—and I say, “Let’s do the science. Let’s do the evaluation of the level of distraction caused by every innovation, including the new design of car interiors.” I think that that should be ongoing. I have not seen the results of research on that, but I know that it is a worrying area.
In Europe, 26,300 people died last year, and there was a slightly rising curve in our own country. I want now to mention the Twitter involvement in this debate. May I commend it, Mr Hollobone? What a wonderful innovation it is that now, when there is to be a Westminster Hall debate, we can involve the broader public by asking what they think about the debate we are to have on the following day. We had one for an hour yesterday. There was a lot of involvement and there were excellent ideas.
One of the top concerns for people was driver education. There is no doubt that young people are very vulnerable in the early years after they first learn to drive, when there are many accidents. There is evidence of young people not driving in the proper way and of that leading to pretty horrific casualties—the deaths and serious injuries of young people in their teens and early twenties.
My wife knows me extremely well—we have been married a very long time and have four children and 10 grandchildren; I do not know if that is a record among those in the Chamber, but I would not mind putting a bet on it—and always thought I had something of the Italian in my driving style, but I once amazed her by passing the test for the advanced driving certificate. I took the advanced drivers’ course possibly because I thought I was not a very good driver. A lot of evidence shows that good driving behaviour comes from good learning and good education early in a young person’s career. I talked to a chief constable in one of the coastal towns in which we used to have party conferences three or four years ago, and he said, “I am not so worried these days about young people having accidents; I am worried about elderly people who share with younger children a diminishing ability to judge distance and speed, and who drive very badly as they get older. There is no one in the family with the guts to say, ‘Mum, Dad—it’s time you stopped driving.” We therefore need good training at the early age and at the later age, and to ensure that the Government do all that they can so that young people and older people are well educated on this life-and-death issue.
More than 200 tweets yesterday wanted distractions to be given a top priority. One of the largest distractions that people are talking about these days is mobile phones, and I absolutely agree that there should be that level of public interest. Yesterday there was the interest in the issue of drink and drugs, and we have had steady improvement. The Minister knows that I am concerned that there is still not an effective roadside test for alcohol, so that people do not have to take up so much police time by going to the police station for testing, and so on. We have roadside testing for drugs but not for alcohol at the moment. However, there is no doubt that the real priority for the public is the distraction caused by mobile phones.
We see high-profile cases in which people who are distracted by their mobile phones cause dreadful accidents. I do not want to go into all the recent tragic cases, but many in this Chamber will know of the family killed by the lorry driver who was scrolling through songs on his phone. That was a terrible thing to have happened, and I can see why anyone who loses their lovely family, or members of their family, wants the strongest possible sentence available for that sort of behaviour. I have a lot of respect for that view, although it does sometimes lead people to look for a silver-bullet solution for the problems that we face. There is no silver bullet, but there is the evaluation of all accidents backed up by good evidence. Although I have sympathy with the idea of having stiff penalties for people who use their mobile phones or who drink or take drugs and drive, it will not save all those lives. It is more complicated than that.
There is also less public knowledge about the risk of drivers with poor eyesight. Road crashes due to poor driver vision are estimated to cause 2,900 casualties in the UK every year. I am not advertising Vision Express—my glasses are not from Vision Express, by the way—but its interesting survey found that 94% of people are unaware that vision can deteriorate by up to 40% before the driver starts to notice. Leaving drivers to self-report poor eyesight seems to Vision Express—I share this view—not to be a good idea. I certainly noticed as I got older that my vision, especially at dusk and when driving at night, was not as good as it should be. I recommend that we have tighter control on tests of good vision for drivers, certainly as they get older.
Rebecca Harris (Castle Point) (Con)
I want to intervene before the hon. Gentleman gives my entire speech. Does he agree that too few people really understand about the loss of eyesight and the fact that they lose their eyesight in the way that they do? We need to do more as a nation to publicise it and get people to recognise it.
Mr Sheerman
The hon. Lady is absolutely right. I will not detain the Chamber for long with the rest of my speech, but I add that the UK is one of only five EU countries that does not legally require drivers to be tested by a medical or optical professional as part of their driving test, so she is absolutely right.
Another issue that is becomingly increasingly evident—with this I will upset the Minister—is the lack of police officers making sure that our roads are safe. The number of road traffic officers is down 23% from 2010. I raised this issue on Monday in Home Office questions, which you were there for, Mr Hollobone. The night before, I was coming back from Cambridge, with my wife driving, and on the M11 an enormous rescue van—a lorry—with another lorry on top was proceeding at over 65 mph where there was a 50 mph limit. The size and weight of that in an accident would have killed a lot of people. Road traffic technology is able to detect such drivers. There are those who drive—I said “like maniacs”, but perhaps that was a bit harsh—in a very dangerous fashion with no fear that there will be a flashing blue light and that they will be pulled over, and I have to say there is a relationship between proper policing on the roads and good detection. I go to many conferences on transport safety and have spoken at a number of big conferences this summer. I see wonderful technology there, but that will not replace the police—in cars and on motorbikes—on our roads. That point will probably upset the Minister most; he and I usually get on quite well.
The Government have said that they are serious about making our roads safer, but I will ask the Minister about another thing that will upset him—that is, targets. For some reason, both the coalition and the present Governments believed that targets are not the sort of thing that they should have. They do not like them, and there is a kind of ideological resistance to them. However, all the research across the world—he knows I believe in research—shows that if we do not have targets for road casualty reduction, we do not get the reduction. We have to have a road casualty reduction programme. That is a very important point. I do not know of any leading expert, in or out of the Government, who honestly disagrees with that view. We need targets in order to get a reduction.
I was taken by the people who got involved with us on Twitter yesterday and said that we need to have that wonderful, but perhaps unrealistic, target of zero casualties and zero deaths on our roads. That is visionary and optimistic, but we know that targets work. We all know that we do not get casualty reduction in any country, or any part of a country, without a partnership and a team that have passion and leadership and care about this useless waste of life.
Mr Hollobone, you know that I am passionate about this issue. I know that not enough of our colleagues in the House of Commons are still interested enough in transport safety. It is a bit unfashionable and not sexy enough for some, but it is vital to the people that we represent.
Mr Andrew Smith (Oxford East) (Lab)
I thought that my hon. Friend might be perorating towards a conclusion. [Interruption.] No, there is much more to come. I commend him for his passion and all his work over the years on this important subject. Will he say something about cyclists’ safety in particular? I am sure that a number of the tweets he mentioned would have referred to that. Does he agree that we all have an obligation, whether as cyclists or as motorists, to promote cycling safety? He referred to the Netherlands: do we not have a lot to learn from the success of its dedicated provision for cyclists in the interests of safety?
Mr Sheerman
My right hon. Friend makes a very fair point. I made a decision that I would not cover everything in this discussion but, yes, increasingly there are vulnerable road users including cyclists and pedestrians, both children and adults. There is also an increasing concern—I am sure the Minister is listening—about the number of really horrid, terrible, tragic accidents involving heavy goods vehicles. All the conferences and presentations I saw this summer mentioned the increasing relationship between horrible accidents in places such as London and HGVs. But, to be honest, I have to say—I am not a London MP, but a Yorkshire one—there has actually been more improvement in road safety standards and casualty reduction in London than in many places outside. We can get carried away by the passion and enthusiasm, but my message is that these are avoidable deaths, and we should use good science, good evidence and practical work done in other places to learn and improve.
Mr Philip Hollobone (in the Chair)
The debate finishes at no later than 5.30 pm. The guideline speech limits for the three Front Benchers are five minutes for the Scottish National party, five minutes for Her Majesty’s Opposition and 10 minutes for the Minister. That means that I need to call the Front Benchers no later than seven minutes past 5. It is now nine minutes to 5, which means that we basically have 15 minutes, and there are four people who want to speak. If hon. Members limit themselves voluntarily to four minutes, I will not have to impose a time limit. If you go over four minutes, somebody is not going to be able to speak. Rebecca Harris will show us how she can make all the points she wants to within four minutes.
Rebecca Harris (Castle Point) (Con)
Thank you very much for calling me in this important debate, Mr Hollobone. As the Minister is well aware, I have been campaigning for a long time to raise awareness of the issue of drivers being medically fit to drive, particularly focusing on drivers having regular eye tests to prevent unnecessary casualties on our roads. I have been doing so ever since I met one of my constituents, Rev. Brenda Gutberlet, who told me the tragic story of her niece, Natalie, who, at the age of 28 and using a pedestrian crossing properly, was knocked down by a driver who knew he was unfit to drive because his eyes were too poor. He killed Natalie and she died on Valentine’s day 2006. Her death was entirely preventable and the family have been campaigning tirelessly ever since to try to make improvements.
There have been improvements—in particular, the introduction in 2013 of Cassie’s law, giving the police the power immediately to ban from driving anyone who fails a roadside test. The law was particularly welcome and I have seen it in action myself. I went out with my road safety reduction partnership in Essex, led by the superb Adam Pipe. I was in a car with a road safety traffic officer who pulled over a gentleman driving at 20 mph on a dual carriageway. When tested at the roadside, he failed the number plate test at five metres. He was a very nice elderly gentleman who did not realise how bad his eyesight was and reported to us that he had not has his eyes tested since he was in the Army. We were able to take his licence off him, get him home and refer him to get a prescription.
The nub of the matter is that there are people out there who do not appreciate how much their eyesight has deteriorated because the brain adjusts and they get used to it. They start saying, “Well, it’s a bit blurry, but I can kind of see and I am only doing local journeys.” We really need to get the message across to people who knowingly drive with poor eyesight and to those who, frankly, do not realise that they are driving with insufficient eyesight to be safely behind the wheel of a car.
The hon. Member for Huddersfield (Mr Sheerman) mentioned the statistics in recent research by Vision Express. It thinks that about 3,000 casualties a year are caused by poor eyesight, but it is hard to know because they are not all recorded and it is not always obvious that they were due to poor eyesight, so there could be many more. We need statistics, but we also need to ensure that drivers understand their responsibility, particularly when they get to about 40 and their sight problems start to fall off the edge of a cliff. An awful lot of people simply have not had their eyes tested since they took their driving test, which was, on average, 15 or so years ago, and for many a great deal longer.
To be honest, I am not calling for compulsory sight testing. I do not think we necessarily need to legislate, but we could do things such as using electronic motorway displays to remind people of the need to take tests, as Brake and Vision Express have been calling for. They would like to see gantry signs saying, “Eye tests save lives.” Perhaps we could also do something like asking people, when they renew their licence, not just, “Are you fit to drive?”—that is easy to tick and say yes to—but, “Have you had an eye test within the last couple of years?” It is much harder for someone to prove that they have had an eye test.
We take our cars for an MOT every year to ensure they are roadworthy. Why should we not do the same thing for our eyes, which are equally important when it comes to driving? Many opticians offer free tests and many groups are eligible for them. Even if people are not eligible for a free test, the cost of an eye test is considerably less than the cost of a full tank of petrol. The cost of even the most expensive prescription is a fraction of what it costs for the privilege of staying on the road. I call for more awareness of the need for eye testing. I would very much like to ensure that it is a necessity for people’s sight to be sufficient for them to be fit to be behind the wheel, and for driving with poor eyesight to be as socially unacceptable as drink and drug-driving is today.
Alan Brown (Kilmarnock and Loudoun) (SNP)
It is a pleasure to serve under your chairmanship again, Mr Hollobone. I congratulate the hon. Member for Huddersfield (Mr Sheerman) on introducing this important subject and speaking so passionately about it more than 35 years down the road, for want of a pun.
It is amazing that the number of road accident fatalities today is roughly a quarter of the number in the 1920s and 1930s when there were far fewer cars on the road. That is testament to the improvements in vehicle design, road engineering and driver behaviour, including attitudes towards drink-driving and wearing seatbelts. I commend the hon. Member for Huddersfield for outlining the passionate campaign and the hard work that went into making seatbelts compulsory. It is amazing to think that that was resisted so much within Parliament as it is accepted as normal behaviour now.
It is welcome that the UK has the third lowest accident fatality rate among OECD member states, and there has been a recent decrease in the number of fatalities compared with 2014 but, as we have heard, 1,730 deaths still mean 1,730 families getting a tap at the door. To that end, I was happy to serve today on a Delegated Legislation Committee that agreed to double the penalty points for the use of mobile phones when driving, but I was a bit disappointed by the response from the Minister when I challenged him on the drink-driving limits over which the UK Government preside. He reverted to the standard Tory argument of not targeting those who have a glass of wine on a Sunday. For me, as I have said, that is nonsense.
In the Scottish Parliament, Tory MSPs were particularly vexed about a wee granny having a gin and tonic, but it is a simple fact that alcohol impairs judgment and reaction time, and the UK Government are out of step with the rest of Europe. In Scotland, a lower drink-driving level has been introduced—50 mg of alcohol per 100 ml of blood—and there has been an 8% decrease in the number of people with drink-driving convictions. That is proof that it is further changing driver behaviour. Given that incremental changes make a difference to the number of road deaths, may I suggest that is one way we can go forward?
It will come as no surprise to Members that, as a Scottish MP, I think Scotland is leading the way on the reduction in deaths. If we look at the PACTS map and statistics, to which the hon. Member for Huddersfield referred, almost all constituencies in Scotland have low or very low indices. My constituency ranks 611 out of 650, which is very welcome—well within the top 10%. I was a local councillor before I became an MP, so I know full well the local investment by the council in junction redesigns, the roll-out of 20 mph zones and speed bumps. Another welcome change in behaviour that I have noticed is that people now actually request speed bumps, whereas there seemed to be a bit of resistance when they were first introduced.
The SNP has also invested massively in motorway upgrades and other infrastructure that helps to take people off the road, which is another way of reducing the risk of road accidents. The SNP Government have invested in rail infrastructure with the new borders railway and, as was touched on in an intervention, are investing heavily in segregation lanes for cyclists, which is to be welcomed. The SNP Government are spending £1 billion on public and sustainable transport, which is reflected in the record number of people who went to work by public or active transport in 2015. So much is being done, which is welcome. The UK Government have been undertaking similar schemes, but I urge the Minister to think again on drink-driving limits.
Mrs Flick Drummond (Portsmouth South) (Con)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I thank the hon. Member for Huddersfield (Mr Sheerman) for his passionate speech and for all his work over the years, which is good to see.
I welcome the opportunity to speak in this debate as a follow-up to national road safety week a couple of weeks ago. The debate is also timely, with the announcement of a consultation on sentencing for those who cause death or serious injury. Those are issues of vital concern to my constituents, because there is a worrying number of injuries each year in Portsmouth. The trend is downwards, but for one group in particular—cyclists—we have one of the worst records in the country. Portsmouth is a compact, flat city, and it should be a cyclist’s dream, but our congested roads, poor driving and, it must be said, bad cycling habits make it a much more dangerous place to ride in than it should be. The latest reported figures show that Portsmouth has by far the worst cyclist casualty rate outside London at almost 90 per 100,000 of population. The rate for the south-east region is just 36 per 100,000 of population.
I hope the Government’s progress on the cycling and walking strategy will continue, but it must be backed up by investment if my constituents are to feel safe on the streets. I am concerned that there may be some drift on the strategy as financial pressures change, and I look forward to hearing confirmation that cycling safety is still a Government priority.
I welcome the consultation on sentencing for dangerous and careless driving, because one of the biggest causes of public concern is that drivers can kill, wrecking the lives of victims and their families, but end up with sentences that feel like neither a punishment nor a deterrent. Although the number of deaths in accidents has fallen dramatically, we should recognise that that is largely down to the improved safety features built into modern vehicles and that driver behaviour has not necessarily improved at quite the same rate.
Far too often, we hear of people being killed or seriously injured by drivers distracted by mobile devices. Our always-online society can tempt drivers to fiddle with gadgets while they drive but, as we have seen recently, the consequences can be lethal. Although we have not recently had a fatality in Portsmouth because of such distractions, the risk is apparent to anyone standing on a busy road. It is not good enough for drivers to argue that they are stationary in a jam or in slow-moving traffic in a city centre. If they are not concentrating on what is happening around them, they are a danger to everyone.
The action that has been taken legally and socially against drink-driving has gradually driven down the incidence of such offences. In 1979, 1,600 people were killed in drink-driving accidents; by 2014, the figure had been reduced to 240. That is still 240 too many, but it is a good example of what can be done with determined enforcement and social pressure. We need to make it just as socially unacceptable to use a mobile phone while driving as it is to drink and drive.
In the long term, I would like us all to move to more sustainable modes of transport, because that is the best way to improve road safety. In modern cities, the use of diesel and petrol vehicles to get around is becoming unsustainable because of the hazards it imposes, the threat of pollution, the difficulty of parking and the gridlock caused by the sheer weight of traffic. Those are all particular threats in Portsmouth, a densely populated area with poor road access and public transport that is in serious need of investment—I am not shy about lobbying Ministers on that. In an urban environment, a change in travelling behaviour will get people from A to B quicker than sitting in a car.
Road safety is everyone’s business and, as we have seen in our efforts to address the drink-drive menace, it is important that social pressure against bad habits is constant and backed up by Government action.
Jake Berry (Rossendale and Darwen) (Con)
I congratulate the hon. Member for Huddersfield (Mr Sheerman) on securing this hugely important debate.
There are 2.7 million horse riders in this country—I am occasionally one of them—and 1.3 million ride regularly on our roads. Back in 2010, the British Horse Society launched a website so that horse riders who regularly use the roads can record accidents. Since the website was launched just six years ago, there have been 2,374 reported incidents involving horses coming into contact with cars on the road. Thirty-eight riders have been killed, and well over 200 horses have been killed by vehicles or euthanised at the roadside.
Riders coming into contact with other road users, particularly those driving cars, is an issue because there is no proper education system to teach learner drivers how to pass horses. The British Horse Society launched its “dead slow” campaign earlier this year, and it is about educating drivers so they know not to pass a horse, either with a rider or drawing a vehicle, at more than 15 miles an hour and to give at least one car’s width. In this debate on preventing road traffic accidents, I hope the Government will consider what they can do to educate learner drivers and other road users on the dangers of passing a horse.
Horses are flight animals, so when they panic, such as when a vehicle passes too close, their first reaction is to run away. They then often come into contact with such vehicles, doing a lot of damage to the vehicle, to the horse rider and to the horse. As we have heard, 200 horses and 38 riders have been lost. This issue was brought to my attention by a constituent, Joanne Heys, who fell off her horse in November 2015 and suffered severe injuries—the horse suffered injuries, too—on a stretch of road between Bolton and Blackburn. The road is a bit of a hotspot for horse riders because it links two of our main bridle paths. We have run a campaign in Tockholes to ensure that local road users in east Lancashire are aware of our huge network of bridleways, many of which intersect with main roads. Horse riders do not want to go on the roads—they want to be on bridleways—but they often come into contact with lorries, heavy goods vehicles and other road users. I hope that the Minister will take the opportunity in his summation to say a bit more about what the Government can do to consider further protections and education for horse riders.
The hon. Member for Huddersfield said that this debate is no longer sexy. Well, those of us who remember that wonderful film “Notting Hill” will remember that the sexy Hugh Grant claimed to work for Horse & Hound as he interviewed the beautiful actress with whom he was trying to start a relationship, so I thought I would quote my own appearance in Horse & Hound, which may be regarded as sexy, but not as sexy as Hugh Grant. This is from 18 November, and I am sure copies are available in the Library:
“I want people to have horse safety in their mind when they get in their car in East Lancashire.”
And, for that matter, in every other part of our country.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate the hon. Member for Huddersfield (Mr Sheerman) on securing this important debate. My only regret is that we do not have more time to discuss these issues today—obviously that is no fault of anyone here. The hon. Gentleman mentioned the human tragedy and the fact that we must work towards no lives being lost—a zero target. No one would disagree with his comprehensive review of what needs to be undertaken.
The hon. Member for Castle Point (Rebecca Harris) mentioned the importance of eye tests. When people go for an eye test, they get a subsequent reminder. Everyone should get involved so that they can keep their eyesight up to scratch for driving. The hon. Member for Rossendale and Darwen (Jake Berry) spoke about how horses can go into flight and the additional damage that this can cause. These are all important issues, and we all agree that road safety should concern us all, regardless of party colour or of where we live, work and do our business.
The Scottish Government are committed to addressing the public health issue of road traffic accidents, and they go further than the UK Government on measures to curb drink-driving and to promote safe cycling and active transport. The SNP Scottish Government have taken a wide range of actions to reduce traffic accidents in Scotland, including cutting the blood alcohol limit. We welcome figures showing a decrease in road accident injuries in 2015 in Scotland. My hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown) mentioned that in December 2014 the Scottish Government cut the limit from 80 mg per 100 ml to 50 mg per 100 ml, which is lower than the rest of the UK. There has been a reduction in drink-driving compared with the previous year. England, Wales and Northern Ireland still have the 80 mg limit, which is the joint highest in Europe. We are disappointed that the UK Government are not following suit. I look forward to hearing how the Minister will proceed.
My hon. Friend and the hon. Member for Portsmouth South (Mrs Drummond) mentioned mobile phone use at the wheel. The SNP has backed the UK Government in doubling fines for drivers who use mobiles while driving, and we call on the UK Government to take further action to prevent accidents. We welcome figures in Scotland showing a decrease in road accident injuries in 2015. More than £250 million is spent annually in Scotland on the maintenance and safe operation of the trunk road network. In 2014, road death figures were 31% lower than the 2004 to 2008 baseline, but, as the hon. Member for Huddersfield said, we know that one fatality is too many. We are pleased that casualties in Scotland have fallen to their lowest number since records began. Car casualties fell by 1.1%, pedestrian casualties by 3.4%, motorcycle casualties by 11.4% and cyclist casualties by 11.1%.
We are investing in public and sustainable transport, because we know that it can be effective in reducing road traffic accidents. As the hon. Member for Portsmouth South mentioned, it is an important subject. On 2 November 2016, the Scottish Transport Minister, Humza Yousaf, announced plans for a cycling taskforce whose main aim will be to drive forward ambitious cycling infrastructure, such as segregated cycle paths and Community Links Plus. By the end of this financial year, the Scottish Government will have spent more than £8.2 billion to improve safety on Scotland’s motorway and trunk road network, including the £3 billion upgrade of the notorious A9 in my constituency to dual carriageway status. Safety cameras, which have been deployed for the past couple of years, have reduced deaths and serious accidents dramatically from previous figures. There are lessons to be learned, and I hope that the Minister will take that into account.
Finally, on safety, many people are unaware that they are committing an offence by driving with expired MOT certificates. There is currently no automatic reminder for MOTs like the one for tax discs, for example. As a result, people drive vehicles that they may be unaware are unsafe, and they may also be committing a road traffic offence. The onus should always be on them, but I am pleased to see that an idea I put to the motor insurance industry has been picked up by Aviva insurance, which I am told will issue reminders about MOT expiry dates to its customers as of next year.
Andy McDonald (Middlesbrough) (Lab)
I congratulate my hon. Friend the Member for Huddersfield (Mr Sheerman) on securing this debate. I pay tribute to the several decades that he has committed to the campaign. While he was doing so in this place, I was on the outside looking after the families of those who had been bereaved and injured. We share that passion. This debate is particularly apposite given that we have just had road safety week.
As we have heard, the UK has a proud record of some of the safest roads in the world—I pay tribute to the work of RoadPeace, Brake and other charities committed to the cause—but of late, we have hit a standstill. Sadly, over the past three years, the number of deaths on our roads has increased; the Department for Transport estimates that there were 710,000 road casualties last year alone. The Government say that road safety is a top priority, but so far their legacy has been one of disappointment and frustration. In the last Parliament, they scrapped the road targets introduced by Labour, which successfully reduced by one third the number of those killed or seriously injured. Some argue that targets do not achieve anything, but I disagree; they focus minds and attention and hold the Government accountable.
Sadly, the Government are also failing on enforcement. A majority of police forces have recorded year-on-year falls in full-time road policing officers. There were 1,437 fewer designated officers outside London in 2015 than there were in 2010. I am sure that the Minister will take heed of this year’s road safety week campaign, which centred on the important six-point pledge that everyone here will have signed, as I did. The pledge committed both drivers and other road users to the importance of slower, sober, secure, silent, sharp and sustainable driving. We need the Government to act in all those areas.
Serious questions remain about drink and drug driving. Since 2010, progress has ground to a halt, with no reduction in the number of road traffic collisions involving drink-driving. Each year, it causes around 240 deaths. Over half of those are not the drunk drivers but passengers or other road users in the wrong place at the wrong time. We welcome the Christmas advertising campaign, but what else is being done? What discussions has the Minister had with police and crime commissioners about existing limits and enforcement?
Alan Brown
What is the hon. Gentleman’s position on the call to reduce the drink-driving limit?
Andy McDonald
We take seriously the success in Scotland, and we want that evidence base to inform us. That is exactly the right direction to be going in, but let us see the evidence rolled out. I am sure that the Minister will wish to comment on that as well. Sadly, the Government seem oblivious to the impact of their substantial cuts to road police numbers. It is worrying that a majority of forces have recorded year-on-year falls in the number of full-time road policing officers.
Many of us will have seen the consequences of mobile phone use by drivers, such as the terrible crash that killed Tracy Houghton and her children. Department for Transport figures show that in 2015, drivers impaired or distracted by their phones were a contributory factor in 440 road accidents in Britain. Although we welcome this morning’s statutory instrument increasing the number of points on a driving licence for mobile phone use, once again it is not possible to police the issue if there are no police present to enforce the law. We cannot leave that work to tabloid newspaper photographers whose campaigning we have seen in recent weeks. The Government must take the initiative and invest in roadside policing, not cut it, so that accidents can be prevented and lives saved.
When accidents do occur on our roads, it is crucial that the vehicles involved have been designed to be as safe as possible. Given that 90% of road accidents are caused by human error, the introduction of autonomous vehicles on our roads in the not-too-distant future could be an opportunity to transform road safety.
In closing, I note that the Government stated in their manifesto that they would reduce the number of cyclists and other road users killed on our roads every year. I look forward to hearing the Minister’s response to the genuine concerns about police numbers, enforcement, penalties and awareness. Without action, it is projected that a third of a million people will be killed or seriously injured on the roads in Britain over the two decades ending in 2030.
Mr Philip Hollobone (in the Chair)
If the Minister can bring his remarks to a conclusion no later than 5.27 pm, he will give time for Mr Sheerman to respond.
The Parliamentary Under-Secretary of State for Transport (Andrew Jones)
I will have to go at quite some pace to respond to all the points made. I congratulate the hon. Member for Huddersfield (Mr Sheerman), whose long and distinguished record of campaigning on this issue speaks for itself. It is impressive. This issue is a priority for all of us here; it is certainly a priority for me and the Government. We have a good record by international standards, but that does not mean that we should not work harder to go further. He mentioned the devastation that a knock on the door can bring to a family, as it was brought to 1,770 families last year. I never forget that behind each statistic is a shattered family. It spurs me on, as I am sure it spurs on all of us.
To make improvements, we need to draw on the best evidence and analysis available so that our efforts can be targeted where we can make the biggest impact in reducing road deaths and injuries. I welcome and strongly support the excellent work being done by Highways England, which is leading the way in adopting and championing a safe systems approach. It is absolutely essential that our strategic road network is as safe as possible, given that it carries such an astonishing amount of traffic. Equally important is improving safety standards for the rest of our road network. In the last few days we have published an assessment of local authorities’ most improved roads, and I congratulate all those who have made the biggest improvements.
Since I took responsibility for the road safety brief last May, one statistic has struck me vividly: 60% of road deaths take place on country roads. That proportion rises to 80% for young drivers, so it is crucial that we do more to improve the safety of our country roads. In October, we relaunched the THINK! country roads campaign, which is aimed at getting motorists, particularly younger males, to slow down, be more vigilant and brake before reaching bends rather than at them. Last year’s campaign was successful in changing behaviour and raising awareness of the unexpected hazards that can be found in rural areas.
I am pleased to be supporting the Road Safety Foundation and the Royal Automobile Club Foundation in their forthcoming work with local authorities to identify safety problems through the star rating approach, and to identify cost-effective solutions for the most high-risk roads. I hope that work can provide a model for wider adoption by local authorities.
I want to go further in investigating what more my Department can do to offer tangible support to those areas with the most dangerous roads. In the autumn statement on 23 November, more investment in roads was announced, including £1.3 billion to help to support infrastructure projects, with £1.1 billion for the local road network and £220 million for the strategic road network. Of that £1.1 billion for the local network, £175 million will be spent on upgrading the 50 highest-risk local roads. That targeted intervention will go on the engineering side. We know that there is human error, but if we can use the engineering of a road network to ensure that an accident or crash is less significant, that will be a great bit of progress.
We published our road safety statement in December last year, and I would like to update the House on the hard work we are doing to carry out its priorities. Drug-driving has been a growing problem. We have provided £1 million to police forces in England and Wales to support drug-driving enforcement. As a result, nearly 5,000 drug-drivers were convicted in the first eight months of this year, compared with just 879 in the whole of 2014. In March, we launched a THINK! campaign to educate people on the dangers of drug-driving and to send a clear message that it is unacceptable and that the consequences of doing it are very serious. Figures show that a fifth of convicted drug-drivers have previously been banned for drink-driving, so just last month I announced the launch of a new pilot impairment course, with drug-driving education being added to the existing drink-drive offenders courses in England and Wales. Around 1,000 drink-drive offenders will participate in the pilot courses and we will consult on the results next year.
Lots of colleagues mentioned mobile phones. We have consulted on increasing the penalties for those who drive while using a handheld mobile phone. In line with the view of the majority of the more than 4,000 people who responded to the consultation, we are going further than the original proposals. Only this morning an order was approved for higher penalties for people using their mobile phones while driving, whether they are texting, calling or using an app. In future, motorists will receive a fixed penalty notice of six penalty points plus a £200 fine. That is a significant change that will make a difference. Once Parliament has approved the order—it has to go to the upper House next—we expect the new regime to take effect on 1 March next year.
Handheld mobile phone use was a contributory factor in 22 fatal crashes in 2015, each one of which was a needless tragedy. We must bring that number down. One of the most challenging parts of my role is meeting some of the devastated families whose loved one has been killed by someone using a mobile phone while driving. Such families are obviously incredibly upset and angry—there is a sense of frustration, which leads to anger that they have lost a loved one because of something that could have been prevented so easily. Drivers of large goods vehicles and passenger service vehicles who commit the offence will continue to face the traffic commissioners, who regulate their conduct and have the power to review and suspend their vocational licence entitlement to drive such vehicles. Given the damage that can be done, that is proportionate; we are all aware of cases that have made the news.
When the law changes, we will be supporting it with a THINK! campaign to leave people in no doubt at all of the seriousness of the issue. It is appropriate to view this as going in the same social direction as we have managed to go in with drink-driving. We want it to be as socially unacceptable to use a mobile phone while driving as it is to drink and drive.
Several colleagues have mentioned some of the things we can do to ensure that new drivers can take the freedoms of the road equipped with the skills and knowledge to be safe. We are piloting a new driving test to reflect today’s driving conditions. It will include longer periods of independent driving, more realistic manoeuvres and a requirement for the driver to follow directions from a sat-nav. It is basically about improving the driver’s road awareness when they get the freedom ticket that a driving licence can provide.
My hon. Friend the Member for Portsmouth South (Mrs Drummond) asked whether cycling safety was still a priority. Yes, it is. The Bikeability scheme is secure, and we will be training 1 million children through it. My hon. Friend the Member for Rossendale and Darwen (Jake Berry) asked about horse awareness. We have supported the British Horse Society’s campaign and look forward to working with it more in future because I do recognise the problem. I held a meeting with my hon. Friend the Member for Castle Point (Rebecca Harris) and her constituent on the issue she raised, as a result of which the Driver and Vehicle Licensing Agency amended the licence renewal form to encourage older drivers to get their eyesight checked.
There are currently no plans to change the drink-drive limit. The key priority for us is to target those who are causing drink-driving problems, and they are not in the 50 mg to 80 mg per 100 ml category; they are in the 140 mg to 150 mg category, because that is the average blood alcohol content of people arrested for drink-driving. It is no good targeting a small group but missing the elephant in the room, which is what would happen if the legislation was changed. We have no reason to introduce targets; I do not need a target to tell me that this issue is a priority and to feel spurred on to take more action.
We want to make our roads as safe as we can. We are building on the good work of campaigners throughout the country over many years and on the work delivered by Governments of all colours. We have a good record and plans to improve on that further. It is through targeted interventions in the most difficult areas that we will make the progress we need.
Mr Sheerman
Thank you so much, Mr Hollobone, for letting me sum up the debate. I shall say only a few things. I have the greatest respect for the Minister and will continue to nudge him on targets, because the Scots have it right on alcohol. There is a worrying upward trend in women drink-drivers that we should all be aware of.
I want to finish with a bit more passion. The research into transport safety has declined over the years. Internationally, university research is not as strong as it used to be, so we have to be careful about the quality of research available worldwide. Local councils also now have much less money for road safety matters. There are some really great individuals, such as Michael Woodford, who are very interested in road safety, as is the UN now. There is increasing interest in the Inter-Parliamentary Union and Commonwealth Parliamentary Association helping us to educate other parliamentarians about what can be achieved in places like China and India. We should be making the CPA and IPU into something useful. They should not be about just going there and shaking hands and smiling at people—I have been on those trips. Let us make them more positive. We should be corresponding with those parliamentarians and saying, “This is what we’ve done in the UK. Can we help you to do something similar?”
The fact is that if someone does not have a passion for this rather unusual subject, they should not be in Parliament, because it is about our constituents and families. Let us get more people involved in pacts and in the campaign, and let us make sure that Britain is a safer place to ride on horses, on bicycles, on motorcycles and in cars. Most of all, let us make sure it is safer for families enjoying themselves and for those getting to work.
Question put and agreed to.
Resolved,
That this House has considered road traffic accident prevention.
Written Statements
(7 years, 4 months ago)
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Post-competitiveness Council
(7 years, 4 months ago)
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The Minister for Universities, Science, Research and Innovation (Joseph Johnson)
The Competitiveness Council met recently in Brussels. Baroness Neville-Rolfe represented the UK at the Council on 28 November (internal market) and I represented the UK on 29 November (research).
Day One
The Council on day one had a full agenda with key decisions concluded on geo-blocking, the single market strategy and the unified patent court.
The internal market day of the Council began with the approval of legislative and non-legislative A items. On the approval of the EU annual budget the UK abstained.
The first agenda item was a discussion on geo-blocking introduced by Commission Vice-President Andrus Ansip. Following a discussion, member states, including the UK, accepted the text of the proposed regulation and the Council agreed a general approach.
The next item was a debate on the single market strategy and start-up initiative introduced by the Commissioner for Internal Market, Industry, Entrepreneurship and SMEs Elzbiet Bienkowska. The UK intervened to strongly support the single market strategy and welcomed, alongside a number of member states, an Irish-sponsored like-minded letter calling for greater ambition on services—which we had also signed. A number of member states welcomed the Commission’s work on start-up and scale-up, highlighting in particular problems around access to finance.
In a change to the order of proceedings the Council then took two further items before lunch. Firstly, Commissioner Bienkowska presented the annual report on the work of the SME envoy network. She reported the work had been particularly useful in preparing for the Commission’s start-up and scale-up initiative published the previous week. The Council took note of the report.
The presidency then highlighted the outcome of a conference on the collaborative economy following the debate on the collaborative economy at the previous Competitiveness Council in September. Commissioner Bienkowska said the Commission was now considering various issues where national law might conflict with its recent guidance and might issue a series of pilot letters in the near future.
Over lunch, Ministers were joined by the President of the European Automobile Manufacturers’ Association (ACEA), Dieter Zetsche. Commissioners Bienkowska and Oettinger led a wide-ranging discussion on the future of the automotive industry. The UK highlighted the work being undertaken in the UK by the centre for connected and autonomous vehicles, and outlined the planned investment of £100 million which was announced by the Chancellor in the autumn statement.
The next agenda item concerned a discussion of the significance of industrial policy in the Commission’s work programme in 2017. Several member states called on the Commission to demonstrate support for European industry by producing a communication on an EU industrial strategy in 2017. The UK highlighted the importance of delivering the actions in the single market and digital single market strategies, and set out the approach being taken to deliver the UK’s own industrial strategy.
The Commission then introduced CPST check-up on skills. Member states largely agreed with the Commission on the challenges, in particular on digital skills.
The next item was a discussion on the unitary patent and unified patent court (UPC). The UK confirmed its intent to proceed with ratification, and anticipated this being completed according to the existing preparatory timetable. The UK was clear that this decision did not pre-empt our objectives in the forthcoming negotiations and is without prejudice to the UKs future position on the jurisdiction of the CJEU once we have left the EU. This news was welcomed by Commissioner Bienkowska and several member states, who all emphasised the importance of having the UK in the UPC and bringing the court into force as soon as possible in the first half of 2017.
The presidency then presented the state of play of the proposal to improve the type approval and market surveillance of motor vehicles. Commissioner Bienkowska said that further progress had not been made, despite the political commitments following the controversies around Volkswagen last year. The UK intervened to support the Commission and to push for a greater level of ambition from the Council.
The next item was a discussion on proposed regulation of consumer protection laws. The presidency highlighted the substantial work that had been undertaken on this file, and reiterated its aim to reach a negotiating mandate as soon as possible. The Commissioner for Justice Consumers and Gender equality Vera Jourová supported the presidency in seeking to reach a mandate. The UK intervened to stress that this was an important and complex file which needed to return to Competitiveness Council under the Maltese presidency for a political discussion.
The next item was a presentation of the Commission’s notice on the biotechnological directive introduced by Commissioner Bienkowska. The notice aimed to clarify the relationship between patents and plant breeders’ rights. The UK did not intervene.
Commissioner Oettinger opened a discussion of the Commission’s proposals for reforming EU copyright laws. The Commissioner explained the need to provide a modernised copyright framework for the digital age, reflecting the changes to storage, distribution and consumption of content in recent years. The UK welcomes efforts to modernise the EU copyright framework and is consulting with interested stakeholders.
The Hungarian delegation then presented information on the competitiveness aspects of the European pillar of social rights. The Commissioner for Employment, Social Affairs, Skills and Labour Mobility Marianne Thyssen noted that balanced economic growth was necessary for social progress. Some member states intervened to emphasise that the pillar should not be legally binding on member states.
The Council concluded with a presentation by the Maltese on priorities for their upcoming presidency. In relation to the Competitiveness Council, these priorities primarily concern the deepening of the single market and making progress on the digital single market.
Day Two
Day two began with a debate on the Commission’s recently published space strategy for Europe. The Commission is aiming for this to be broad and inclusive, reaffirming Europe’s place as a global space power. All member states welcomed the EU’s strategy. It is a good fit to UK priorities for growing the space sector.
A number of space issues where raised in the discussion. The Arianne 6 programme was highlighted as important, with some member states reminding the Commission of the need for cost-effectiveness to avoid unreasonable cost increases. It was felt important that the EU-ESA relationship takes advantage of their respective competences. There was also a call to assist those member states who currently have limited engagement with the sector.
The UK intervened to welcome the space strategy, recognising that EU systems could be used for defence and security objectives, but they had to remain civil systems under civilian control. The UK also highlighted the opportunities to our commercial sectors, and that space weather and the security of space systems were risk areas that needed to be properly understood.
Council conclusions on early-stage researchers were adopted without amendment.
The last substantive agenda item was the Commission’s report on the implementation of the strategy for international co-operation in research and innovation. The discussion highlighted examples of the benefits of international co-operation. The UK stressed three key points—the need for EU research funding to remain focused on excellence and open to the world; that the UK would continue to collaborate with the Commission on science diplomacy in countries where relations were strained; and third, called for the Commission to ensure that the rules were updated to address problems which had led to a reduction in third country participation—eg liability clauses. This message was echoed by several member states.
A number of member states were supportive of PRIMA, a €400 million programme that seeks to promote food security and water supply in the Mediterranean and is a priority for the incoming Maltese presidency. Bonus 2, a programme on marine research, was also raised as a positive example of potential multilateral collaboration over shared challenges.
For AOB items, the Commission discussed the launch of an open science policy platform, which will look at best practice, develop EU-wide guidelines for open science delivery and promote open science. This work may inform how the “open science” agenda is implemented in the FP9 programme—The successor to Horizon 2020. Many member states were supportive.
Next, the Commission gave an overview of their proposed €1 billion funding programme for quantum technologies. This was followed by an announcement that the “Accelerating Clean Energy” communication will be published on 1 December.
The presidency then gave a read out from a conference focused on the European bio-economy that took place in October in Bratislava.
Finally, the Commission welcomed the Portuguese delegation’s presentation on developing an infrastructure to promote north-south Atlantic research collaboration.
The meeting concluded with a presentation from the upcoming Maltese presidency on its priorities in research—including the PRIMA initiative.
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ECOFIN: 6 December 2016
(7 years, 4 months ago)
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The Chancellor of the Exchequer (Mr Philip Hammond)
A meeting of the Economic and Financial Affairs Council (ECOFIN) will be held in Brussels on 6 December 2016. EU Finance Ministers will discuss the following items:
Early morning session
Ministers will be briefed on the outcomes of the 5 December meeting of the Eurogroup and the Commission will present an update on the current economic situation.
Investment plan for Europe
Ministers will discuss proposals for the investment plan for Europe and be asked to reach a general approach on the Commission’s proposal to amend the European Fund for Strategic Investments (EFSI) legislation as part of the planned extension beyond its original 2015-18 lifetime. Ministers will also discuss draft Council conclusions on measures to tackle bottlenecks to investment identified under the third pillar of the investment plan for Europe.
Anti-tax avoidance directive 2
Ministers will be asked to agree a general approach to the EU Commission’s proposals on the anti-tax avoidance directive (ATAD2).
Enhanced co-operation in the area of financial transaction tax
Ministers will receive an update on the proposal for a council directive implementing enhanced co-operation in the area of financial transaction tax.
Banking union: risk reduction measures
The Council presidency will present its new proposals, published on November 23, to revise the capital and resolution frameworks for banks and large investment firms, which will be followed by an exchange of views.
Anti-money laundering directive
The Council presidency will provide an update on the discussions for proposal for a directive on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing.
Current financial service legislative proposals
The Council presidency will provide an update on current legislative proposals in the field of financial services.
VAT digital package
The Commission will present on the digital single market VAT package.
Deepening the economic and monetary union: follow-up on the 5 Presidents’ report
The Commission will provide information on the 5 Presidents’ report.
Improving the predictability and transparency of the stability and growth pact
Minister will endorse draft Council conclusions on improving the predictability and transparency of the stability and growth pact.
Report on strategic issues in the area of customs by the high level group of customs directors general
Ministers will be informed about the outcome of the pilot meeting of the high level group of directors general for customs policy, taxation and customs co-operation on 25 October 2016.
European semester 2017
The Commission will present to Ministers on the publication of the 2017 annual growth survey (AGS) and alert mechanism report (AMR), followed by an exchange of views.
Implementation of the banking union
Ministers discussed the current state of play regarding implementation of banking union within the eurozone.
Fight against the financing of terrorism
The Commission will give a presentation on the fight against the financing of terrorism.
Capital markets union
The Commission will provide information on the capital markets union.
[HCWS325]
Chemical Weapons Convention: Protective Programme
(7 years, 4 months ago)
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The Minister for the Armed Forces (Mike Penning)
My right hon. Friend the Minister of State in the House of Lords (Earl Howe) has made the following written statement:
The UK’s chemical protection programme is designed to protect against the use of chemical weapons. Such a programme is permitted by the chemical weapons convention, with which the United Kingdom is fully compliant. Under the terms of the convention, we are required to provide information annually to the Organisation for the Prohibition of Chemical Weapons. In accordance with the Government’s commitment to openness, a copy of the summary that has been provided to the organisation outlining the UK’s chemical protection programme in 2015 has been placed in the Library of the House.
[HCWS323]
Security Situation: Northern Ireland
(7 years, 4 months ago)
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The Secretary of State for Northern Ireland (James Brokenshire)
This is the 10th statement on the security situation in Northern Ireland and my first statement to Parliament as Secretary of State for Northern Ireland. It covers the threat from Northern Ireland-related terrorism, rather than from international terrorism, which Members will be aware is the responsibility of my right hon. Friend the Secretary of State for the Home Department, who updates the House separately.
In the six months since my predecessor’s last statement, the same small number of dissident republican terrorist groupings have continued their campaign of violence. Their support remains limited, despite their attempts to seek legitimacy in a wider society which continues to reject their use of violence. Dissident republican terrorists reject the peace process and the progress and benefits which it has brought to Northern Ireland.
The terrorist threat level in Northern Ireland from Northern Ireland-related terrorism remains unchanged at severe (an attack is highly likely). Most people are not affected by this threat, but where terrorism, paramilitary-style attacks and community attacks endure, so too will our efforts to tackle them. There will be no let-up in our efforts to ensure that terrorism never succeeds.
In Northern Ireland, these terrorists have targeted the brave people who serve the community day in, day out, including the police, prison officers and the military. Dissident republicans are relatively small, disparate and factional groupings, but they are also determined and have lethal intent. The last statement to this House highlighted the tragic death of prison officer Adrian Ismay, who was attacked and killed by dissident republicans. These attacks often also have potential to injure members of the public who live and work alongside the intended victims. There have been three further attempted attacks on security personnel since then in which, thankfully, no one was seriously injured.
Our strategic response
PSNI and MI5 are unstinting in their work to counter the threat of violence. Numerous dissident republican attacks have been prevented, often through vital support provided by members of the community. Since my predecessor last reported, PSNI has recovered a large amount of terrorist matériel in Northern Ireland including firearms, high explosives, chemicals and a range of improvised explosive devices. Continued close working with security partners in Ireland has resulted in further significant disruptions and I pay tribute to An Garda Síochána who have diligently pursued terrorists in Ireland with impressive effect. We are all safer for their efforts and because of the strong cross-border working relationship that exists on all security matters.
Similar joint working between PSNI and police in Great Britain led to the arrest and charge of an individual, living in Great Britain, with offences connected to dissident republican terrorism. This enabled the recovery of a significant amount of terrorist matériel in England linked to Northern Ireland-related terrorism. Legal proceedings are now under way. So far in Northern Ireland this year, there have been 103 arrests, 17 individuals charged under the Terrorism Act and five recent convictions linked to terrorist activity. There have been four national security attacks in comparison to 16 attacks in 2015 and 40 in 2010. Although there has been a reduction in the overall number of national security incidents so far this year, terrorist attack planning continues with lethal intent and capability as the murder of Adrian Ismay underlines. Vigilance in the face of this continuing threat remains essential.
This Government’s commitment to tackling Northern Ireland-related terrorism remains a high priority. This is supported through the provision of £160 million in this Parliament, of additional security funding to the Police Service of Northern Ireland to tackle the severe and enduring threat. On top of this, cross-Government spending on counter-terrorism will increase by 30% in real terms over this Parliament.
Great Britain threat level
The threat level to Great Britain from Northern Ireland-related terrorism was raised in May to substantial (an attack is a strong possibility). Although dissident republicans are overwhelmingly focused on carrying out attacks in Northern Ireland, there remains a need to be alert, aware and vigilant.
Paramilitary activity
Paramilitary activity continues to undermine communities in Northern Ireland. Both republican and loyalist paramilitary organisations carry out violent criminal attacks against people in their own communities. So far this year there have been six paramilitary-related deaths, 17 casualties of paramilitary-style shootings and 57 casualties of paramilitary-style assaults. These acts are cowardly, unjustified and damage communities. It is this Government’s clear view that paramilitary activity was never justified in the past and cannot be justified today.
Tackling paramilitary activity
This Government are strongly supporting efforts to tackle paramilitarism and organised crime in Northern Ireland. PSNI invests significant resources into both the prevention and investigation of paramilitary activity and we have pledged £25 million of funding through the Fresh Start agreement to help ensure that the relevant agencies are appropriately resourced to fulfil that commitment. Tackling paramilitary activity is an important step in terms of delivering Fresh Start agreement commitments and provides an opportunity to make a real difference to people’s lives.
The Northern Ireland Executive published an action plan on tackling paramilitary activity, criminality and organised crime in July 2016. This follows the paramilitary panel’s recommendations which provide for a strategic approach to the disbandment of paramilitary groups in Northern Ireland, including improving criminal justice outcomes in terrorist cases. The Government are working closely with the Northern Ireland Executive to promote progress towards ending paramilitary activity through a range of measures and securing faster and more effective outcomes in terrorism cases.
A joint agency taskforce, established under the Fresh Start agreement to enhance law enforcement co-operation, aimed at tackling organised crime and criminality including that linked to paramilitarism, brings together the expertise of law enforcement agencies involved in tackling organised crime gangs who seek to exploit the border between Northern Ireland and Ireland. UK and Irish Governments’ Ministers have recently held positive talks to discuss co-operation between the An Garda Síochána and the PSNI in relation to the progress made by the joint agency taskforce.
The Independent Reporting Commission will be charged with reporting on progress towards ending paramilitary activity, including on implementation of measures taken by the UK Government, the Northern Ireland Executive and the Irish Government. The treaty between the UK Government and the Irish Government, formally establishing the IRC, was signed on 13 September 2016. We aim to have the IRC established by early 2017.
Conclusion
The severe level of threat from violent dissident republicans remains. Good progress has been made but there are still those who wish to attack police, prison and military officers, and some of Northern Ireland’s communities live under the constant threat of paramilitarism. Through the excellent work of PSNI, MI5 and security partners including An Garda Síochána, we will continue to bring those who would damage our society to justice, and protect our infrastructure and people from harm. I would like to thank them for their service to the people of Northern Ireland. There never has been, and there never will be any place for terrorism or paramilitary activity in Northern Ireland. We must all play our part in ensuring that Northern Ireland continues to flourish, free of any such pernicious activity.
[HCWS324]
Rail Update
(7 years, 4 months ago)
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The Secretary of State for Transport (Chris Grayling)
Britain’s railways are crucial to our economic future, and we have seen significant growth in passenger numbers in the 20 years since privatisation. This growth brings challenges, and the impact of disruption can be immediate, significant and wide-ranging.
Our railways need to adapt and change in order to be able to cope with the growth that they have already experienced, and that which lies ahead. We are spending huge amounts trying to tackle the challenge—with new and longer trains and more capacity being introduced across the country. The Shaw report made a series of recommendations for change, including that Network Rail devolve responsibility to the route level. I support the principles of the Shaw report, and I support Network Rail’s reform programme, but there is much more to do.
I intend to press ahead with a recommendation put to the Department five years ago by Sir Roy McNulty, when he reported to Philip Hammond on how to make the railways run better and more cost-effectively. I will do this initially at an operational level. In order for all those involved to be incentivised to deliver the best possible service for the passenger, I expect the new franchises—starting with South Eastern and East Midlands—to have integrated operating teams between train services and infrastructure. I will also be inviting Transport for London (TfL) to be more closely involved in developing the next South Eastern franchise, through seconding a TfL representative to the franchise specification team.
We will continue to develop the model for greater alignment of track and train as further franchises are renewed—including the option of joint ventures. In the meantime, my Department is also publishing an update to the rail franchising schedule which I am placing in the Libraries of both Houses.
I also want to bring new skills into the challenge of upgrading our railways. I will begin by looking at the reopening of the link from Oxford to Cambridge, to support a range of opportunities including housing, science, technology and innovation. I am going to establish East West Rail as a new and separate organisation, to accelerate the permissions needed to reopen the route, and to secure private sector involvement to design, build and operate the route as an integrated organisation. This East West Rail organisation will be established early in the new year and chaired by the former Chief Executive of Chiltern Rail, Rob Brighouse.
Along with reform of the investment planning process to take better account of the needs of passengers and freight shippers, and extensive work across the industry to improve skills and diversity, these reforms will set the railway on a firmer footing for the future. We can and we will make sure our rail network plays its part in making this a country that works for everyone. I will bring forward a new strategy for rail in due course which will provide greater detail on our plans.
[HCWS322]