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(6 years, 1 month ago)
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Funding Higher Education
(6 years, 1 month ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Mr Gary Streeter (South West Devon) (Con)
I beg to move,
That this House has considered funding for higher education.
It is a pleasure to serve under your chairmanship, Mr Hosie, in a debate that I suspect has been slightly snow-affected. No doubt my hon. Friend the Member for Cannock Chase (Amanda Milling), who is standing in for the Minister, will say more about that in a moment. Also, I would like to thank Mr Barnaby Austin, who is a fine young man who is with me for three months. He has helped me to prepare my remarks today, so my thanks to him.
Like many Members, among my constituency duties I particularly enjoy interacting with sixth-formers in schools in my constituency, and I always feel encouraged coming away from those encounters. Not that everyone necessarily supports everything that the Government say or do, but I always feel encouraged that the coming generation is as bright, motivated and impressive as any has ever been. Looking forward, I feel that the country is in very safe hands.
Inevitably, as I am sure we have all experienced, the issue of student finance, student loans and tuition fees come up in those sessions. I have always been very happy over the last 10 years or so to support the system that we have, explaining that it is a generous system that does the job, that no one has to pay fees in advance and that it does not preclude anyone from going on to higher education. I am very happy to support the funding model that we have and always make the point that education is the best investment that any young person will ever make. A show of hands normally demonstrates pretty clearly that no one is ever deterred—or very few are—from accessing higher education as a result.
However, in the last few months I have been less sure about the fairness of the current arrangements and have been looking into some of the statistics on student finance. Therefore, I applied for this debate, to put on record a few concerns that I have and some thoughts about the future. I was both delighted and surprised that, after I had applied for this debate but before it was granted, the Prime Minister herself—perhaps picking up on my thoughts, leading wherever I go—has now announced her own review of student finance, which I greatly welcome. In particular, I support the important focus in the official terms of reference of the review, which seeks to ensure
“a funding system that provides value for money and works for students and taxpayers”.
I hope that this 90-minute debate provides us with an opportunity to explore together in a hopefully thoughtful way—it is a subject that deserves a thoughtful approach—how the system might be improved. I look forward to hearing the comments from colleagues from all parts of the House—I am sure that many have greater expertise in this area than I do—in trying to find a way forward to a system that is both fair and sustainable.
The current system of student tuition fees and loans as a means of funding higher education has achieved many positives over the years, not least an increase in the number of students from lower-income backgrounds entering higher education, which has to be a good thing.
Paul Blomfield (Sheffield Central) (Lab)
The hon. Gentleman is making a really thoughtful contribution, and I share his hope that we can have an interesting and useful debate. On the question of providing more opportunities for people from disadvantaged homes, the top-line numbers are clear. Does he recognise that there is a problem in the way that the system is limiting choice—there is substantial evidence that those from lower-income homes are seeking to minimise their financial liability by going local—and that, to give students real choice, issues relating to fees have to be wrapped up with those relating to maintenance?
Mr Streeter
I do agree with that, which is one of the reasons I am speaking today. I will talk about that in a moment, because the full-on higher education experience of going away to university and growing up during those three or four years, or however long it is, is an important part of the process. As I will set out in a moment, when a young person chooses to stay local and live with their parents or parent still, to me that is not the full-on experience, which is regrettable. I agree with the hon. Gentleman: I am beginning to see the top-line figures becoming quite a barrier to a number of people. I certainly would not want to be 24 with a debt of £40,000 hanging around my neck as I entered the workplace.
That is why we are here this morning: we have to try to find a new way forward together, and I very much welcome the Government’s review. I will briefly summarise the operation of the current system—although I know that you are an expert on it, Mr Hosie—then I will point out some of the areas in which it falls short and finally present my thoughts about the way forward.
As we know, currently universities in England can charge up to £9,250 a year for undergraduate tuition, with substantial variations in some parts of the United Kingdom, such as Northern Ireland, Wales and Scotland—that is what devolution is all about. Students can apply to Student Finance Ltd for a non-means tested loan of up to £9,250 a year to cover the tuition fees, while also taking out loans to cover the cost of living while at university.
To reflect on that point for a moment, we sometimes look back to the old days of maintenance grants. I came to King’s College in London in the 1970s, between 1974 and 1977—I cannot believe it—and had a minimum grant, based on my parents’ financial circumstances. I do not want to do a Neil Kinnock, but I was the first Streeter in a thousand generations to go to university, and my parents did not really understand that they could top the grant up, so I spent my three years in London with not very much money. It was still a wonderful experience, but it was not all gold in the old days, depending on people’s circumstances. I hope my parents never get to read the Hansard report of this debate, because they are wonderful people.
Mr Streeter
It would be a little bit late, but I thank the hon. Gentleman for the thought.
Repayment of loans is a shared responsibility between the Student Loans Company and Her Majesty’s Revenue and Customs. The Student Loans Company receives all its funding from the UK Government and the devolved Administrations. Therefore, the system is based on the student owing however much money he or she needed to borrow to get through university and gradually paying it back during their working lifetime. Perhaps not surprisingly, 93% of all students in England take up student loans.
The total amount of debt that an average student who completes a three-year undergraduate course will owe has now risen to around £50,000, according to the Institute for Fiscal Studies. That sum will include just under £6,000 in interest accrued during the period of study, at a rate of up to 6.1%. A student who has taken out a loan will begin repaying 9% of their income when they are earning higher than the repayment threshold, and any unpaid debts are written off after 30 years. Broadly, that is the system.
The Government announced in October 2017 that the repayment threshold on student debts would be raised from £21,000 to £25,000, commencing from April 2018. At the same time, the fee cap was frozen at £9,250.
Daniel Zeichner (Cambridge) (Lab)
I commend the hon. Gentleman for making a very good speech. He has just outlined the way that the system is currently working, but does he agree that what is happening now is not what people anticipated when the coalition Government introduced it? They anticipated that there would be differential fees—different amounts paid at different universities—but because the system has not worked, a whole generation has been left with enormous debts. The system is absolutely broken, and the levels of interest are unacceptable. We really have to change it quite dramatically. Does he agree?
Mr Streeter
I do agree. I am looking for change and I think the Government are looking for change, which I guess is why the review is taking place. When the level of fees was increased, we were led to believe that different universities would charge different fees. Some of us who have been around for quite a long time recognised that that might not happen, and indeed all universities went for the maximum more or less straight away. However, the reason why we are here today and why the Government are reviewing this matter is that the system is not working as planned, and we now need to see some real change. That is very much what I am calling for.
Under our current system, students in the United Kingdom are landed with the greatest amounts of student debt in the developed world—greater even than the notoriously large student debts in the United States of America, which reach an average of $36,000 on graduation. The Institute for Fiscal Studies has recently reported that 77% of UK graduates will never pay off their full debt, even if they are still repaying in their fifties, and that is projected to rise to 83% once the new figures have been introduced. This is an important point: we have a system that is almost set up to fail. Built into the system is an understanding that most of the people who participate will not repay. I do not want that system in place for the long term. When graduates immediately move abroad, that results in more unpaid debts. When a graduate’s employer is not UK-based, they are not subject to the automatic repayment system as they would be in the United Kingdom. In 2014, it was estimated that, by 2042, £90 billion of student support funded by the Treasury will remain unpaid.
It is certainly right for students to contribute to the cost of obtaining a degree. The stats still demonstrate that, over a lifetime, a graduate is likely to earn significantly more than a non-graduate. According to Universities UK:
“Official figures are clear that, on average, university graduates continue to earn substantially more than non-graduates and are more likely to be in employment.”
In debates with sixth-formers and others, I guess many of us have argued, “Why should a proverbial taxi driver who does not have a degree pay extra tax to help others improve their income?” There are pushbacks and answers to that, but it is still a compelling and important point. We must remember that the figures involved are significant, with each new crop of student loans being £13 billion a year. That is a substantial sum that we are having to find to support students going to university.
The principle of students contributing to their own higher education is surely right, but it must be sustainable. I am beginning to see that it is not sustainable for someone to have a debt of up to £50,000 around their neck when they enter the workplace.
Carol Monaghan (Glasgow North West) (SNP)
Does the hon. Gentleman share my concern that some students, particularly those from a disadvantaged background, will experience much higher debt than that because their families are unable to support them financially? Students from disadvantaged backgrounds entering the workplace will have a much higher burden of debt.
Mr Streeter
I agree that people who are not able to draw down on the bank of mum and dad have a much tougher time. The figures I am quoting presuppose that someone has taken out loans for tuition fees and support. I think they are the maximum figures. I think the point that the hon. Lady and I would agree on is that there are students who do not rack up that kind of debt because they get support. Once again, there is an issue of fairness for students from disadvantaged backgrounds.
That debt is certainly a hindrance to getting on the housing ladder, to which 85% of young people aspire. It is something that the Government are desperate to encourage. If we are to meet the aspirations of generation rent, we might have to remove some of the burden from their backs. The prospect of having such a large debt hanging over their heads inevitably leads to some mental health worries among higher education students and graduates. In 2015, a study published in the Journal of Public Health, entitled “The impact of tuition fees amount on mental health over time in British students”, found that in the UK,
“poor mental health in students has been linked to financial problems, considering dropping out for financial reasons, financial concern, being in debt and concern about debt.”
It is worth noting that countries such as Sweden, Denmark, Finland and, more recently, Germany have moved away from the tuition fee model.
There are big questions about whether universities provide proper value for money for their degrees and offer favourable returns for graduates. The National Audit Office reported that two thirds of students consider that universities do not provide decent value for money. More students—especially those from poorer backgrounds, to come back to the point we were debating a few moments ago—are choosing to stay at home and attend their local university due to fears over unsustainable debt. That is a regrettable trend, because the whole university experience is partly about moving away from home for the first time, growing up and learning independence.
Paul Blomfield
I clearly agree with the hon. Gentleman on his point about the wider university experience, but does he recognise that staying at home narrows academic choice, depending on where someone lives? If people are choosing local, that might give those in London an immense range of opportunities, but in many parts of the country it narrows the choice significantly.
Mr Streeter
That is a good point. I represent the city of Plymouth. We have an excellent university, but it is particularly strong in certain fields. If someone is minded to stay local because of cost and debt and they want to become—I had better choose my subject carefully, because I do not want to diss any of its faculties, which are all excellent—a top-notch lawyer, they might not want to choose Plymouth. They might prefer Exeter. I think I have got myself into trouble here. I thank the hon. Gentleman for leading me down that path. Plymouth is an excellent university for all subjects, but he makes a compelling point.
Moving on, what might we do? We are right to ensure that students contribute. We want universities to be properly funded, but how can we make the system fairer and more sustainable? I have welcomed the excellently timed Government review, and I very much look forward to the outcome.
Universities could do more to reduce their costs. They are slightly strange organisations. In one sense, they are neither private sector nor public sector. They are a hybrid and in many ways they are perhaps unaccountable. The salaries of vice-chancellors is just one issue—acting on them would not have a huge impact, but would be emblematic. At the University of Bath the vice-chancellor’s salary is £471,000, at the London Business School it is £448,000, and at the University of Southampton it is £424,000. How can the leader of a university earn three times more than the Prime Minister of this country? I do not understand that, and it has to be tackled. It is a bit like people wagging their fingers at us and saying, “MPs all earn so much money.” Having proper oversight of vice-chancellor salaries would not save much money, but it would send a signal, bearing in mind that students contribute 50% of the cost of those salaries. The salaries are utterly outrageous and something needs to be done. Perhaps the Minister will touch on that when he winds up.
Paul Blomfield
Given the numbers here today, there is an opportunity to have a good interactive discussion. I will try not to lead the hon. Gentleman into difficult territory with this intervention. He is absolutely right about vice-chancellors’ pay. The sector has got it wrong, and in some cases spectacularly. Does he accept that the problem is that people have said to universities, “Behave like the big businesses you are”, and are then complaining when they do? Does he think we should have the same approach to unacceptably high pay in all parts of the private and public sectors?
Mr Streeter
If an individual sets up their own business and still owns it then it is up to them what they pay themselves, but other than that I tend to agree about large salaries at the top justified by being in a marketplace and having to compete with other organisations. The charitable sector is another one where we have seen massive chief executive officer salaries. I imagine that if many people knocking on doors raising money for charities really knew what was going on, they would not be so happy. There is a job to be done in all these sectors, perhaps sparked by the Government, to have more reasonable levels of pay at the very top. The gap to those at the top must be very dispiriting for those humbly working day in, day out for not very much money. I recognise that we need to do more about that. The Government have talked about it, and I support them.
I have three specific proposals before I sit down. There are two quick ones, and one where I will go into greater depth.
Dr Roberta Blackman-Woods (City of Durham) (Lab)
Does the hon. Gentleman agree that we need the Government to look at sustainability in the sector? The briefing for this debate said that the forecast surplus for the university sector is only 1.3% this year, so it is not a bloated sector. It does not mean there is a differential outcome for various institutions. In fact, university budgets are under threat from Brexit, from the cuts in research funding, from the fall in part-time students, and from a possible fall in international students, not to mention demographic trends in our country. We have to be careful to ensure a sustainable funding system.
Mr Streeter
I agree. When the panel reports its findings, I hope the Government take action to help us put in place a system that is both fair and sustainable. We have a world-class university system in this country that we must not in any way seek to undermine. It is hugely important that, as young people increasingly compete with people from other countries, we keep our highest university standards.
Daniel Zeichner
It is important to recognise that there is a dispute going on in higher education at the moment and that staff have been out on cold picket lines. Whatever one’s view of that dispute, it is partly about how resources are allocated and ensuring we have a sustainable system. Does the hon. Gentleman agree that we need an urgent resolution to the dispute? If we are to support academics in future, they must have a pension scheme in which they can have confidence.
Mr Streeter
I must confess I do not know the details of the current dispute. I am not a huge supporter of strikes, but I agree that it would be better to have the dispute resolved as quickly as possible. All people are entitled and should aspire to a proper and decent pension settlement.
Moving on to my three points, you will be pleased to hear that the first two are very brief, Mr Hosie. I have some ideas for the Government to grapple with, although I am sure they have thought about these things in advance. One possibility to soften the blow for students could be to make the monthly repayments tax deductible, which would basically reduce the true impact of the repayments and seems both reasonable and fair. Secondly, the current interest rate of 6.1% seems almost punitive when we have interest rates so much lower. I do not think that that was ever the intention when we started off on this journey. We should consider reducing the interest rates to the amount that Her Majesty’s Revenue and Customs pays us when it has our money for any length of time. The interest calculation for overpaid tax is a lot less than 6%. If it is fair for that purpose, it would be fair for students. Again, it would encourage people to embrace the student loan system if the rate of interest was significantly lower.
Thirdly, and in a little more detail, for the first time in my life I wonder whether it is time to consider a graduate contribution system in place of the current tuition fees and student loans: in other words, what some people would call a graduate tax. We have all been involved in debates over the years in which we have said that that is an absolutely disastrous idea but, for the reasons that I am about to give, I think it should be reconsidered.
A graduate contribution tax is essentially a system sub in which the student becomes obligated to an income-related additional tax on graduating in return for Government subsidisation of higher education, resulting in low or no tuition fees to the student. The Government would in effect pay all or most of the fees directly to the university, and the student would pay a contribution over and above ordinary levels of tax for a limited period of time once they start work. That removes the burden of individual borrower accounts or balances owed. The exact percentage of earnings that graduates would be required to pay back would be up for discussion, but one option is to have a banded system in which the percentage paid back is determined by income and increases across income bands. What is the point? Two things. First, a system based on the ability to pay rather than the amount of money the student has borrowed to get through university is more reasonable and fair than the current system.
The Minister for Universities, Science, Research and Innovation (Mr Sam Gyimah)
I thank the hon. Gentleman for giving way and register the fact that I have arrived at the debate. The point about a system based on the ability to pay is important. In a sense, the current system is a hybrid between a loan and a graduate contribution system. People pay 9% of their income, so those who earn a lot more pay a lot more of the loan back, and people who earn a lot less pay less back. There is already a significant taxpayer subsidy up to about 45%. I want to put on the record that the current system is a hybrid between the graduate contribution system that he is outlining and a loan system.
Mr Streeter
The Minister is absolutely right to make that point.
The second reason why I think a fresh look might be helpful is that, under a graduate contribution scheme, students would not leave university with the worries associated with personally owing so many thousands of pounds. There would be no massive debt figure around their neck. I know the Minister was snowed in this morning, so I am not sure whether he heard me say that I am coming to the view that young people having a personal debt of £40,000 or £50,000 around their neck as they enter the workplace is becoming a massive problem that we need to think about. I hope the review will look at that.
I believe that the vast majority of graduates would be happy to pay a fair income-contingent contribution in return for the direct payment of fees by the Government, thus breaking the perceived link between the cost of tuition and repayments from students. Such a change would hopefully serve to alleviate some of the mental health worries faced by students and graduates who, on finishing university, receive the infamous letter outlining how many tens of thousands of pounds they now owe: “Congratulations on graduating. Now we want the money back.” Paying a regular, reasonable graduate contribution through tax gives far less reason to worry than the contents of those letters sent to graduates. A graduate contribution system would also provide the Treasury and higher education institutions with a long-term guaranteed stream of money as graduates pay regular instalments of additional tax in line with their incomes over a certain number of working years.
The Minister might like to reflect on this next point. It would be possible also to tailor the contribution system to change the rate of tax on degrees that the Government are keen to encourage, perhaps in science, technology, engineering and maths subjects, and nursing, as an inducement for students to pursue those degree courses and consequent careers. I can see that the Minister is not leaping to his feet to agree with me. He will no doubt deal with that point when he winds up the debate later.
Obviously, training and recruiting sufficient nurses to meet the growing needs of our NHS is becoming a huge priority for our country. The Royal College of Nursing, which I had a meeting with recently in my constituency, informs me that applications to nursing courses have fallen by 33% since tuition fees for undergraduate nursing were introduced. The Government wisely said that they would review the impact on nurse training and recruitment once the new system had been in place for a year or two. We are now approaching that moment in time. I hope the review currently being undertaken by the Government will reflect on that and make recommendations. We cannot have a system that starves our NHS of sufficient nurses for the future, because that would be short-sighted.
Carol Monaghan
Coupled with that we have the issue of the sharp decline in EU nurses applying for positions here in the UK.
Mr Streeter
Yes, I agree, and one of the many consequences of the decision made by the people of our country in June 2016—
Mr Streeter
Well, the decision was made by the majority of people in the United Kingdom. One of the consequences is that fewer doctors and nurses are coming here to work in our NHS. That is a very regrettable problem, but there we are. We are democrats and will therefore comply with the wishes of the people.
I hope my thoughts are useful to the Government—I can see the Minister nodding his head—as we try to find our way to a system that is fair and reasonable to students and taxpayers alike, and that ensures that the United Kingdom encourages the brightest and the best to reach their potential through higher education. I look forward to the rest of the debate and the Minister’s response.
Andrew Lewer (Northampton South) (Con)
It is a pleasure to serve under your chairmanship, Mr Hosie, particularly as you have experience and this is my first experience of speaking in a Westminster Hall debate. I hope you will be tolerant with me. I thank my hon. Friend the Member for South West Devon (Mr Streeter) for his excellent opening speech and the points that he made. Of his three points I wrote down the one about the 6.1% interest rate, which is almost unarguably a good point. I suppose his idea about the monthly repayments being tax deductible would be a “Yes, Minister” brave suggestion. On the concept of a graduate contribution, I think it may have been better if the present system has been not only set up slightly differently, but described differently at the time it was set up, taking into account the points that both my hon. Friend and the Minister have made about its true nature.
I welcome the fact that the Prime Minister’s speech on education and today’s debate have opened up an opportunity to discuss the reforms that we need to pursue in the funding of higher education. It is often the case, and I think it is here, that the obvious solutions are not necessarily the best. Revising education options for those over the age of 18 is, however, a welcome initiative. As a former member of the European Parliament, I was the lead member for the European Conservative and Reformists group on the Committee on Culture and Education, and therefore had a lot to do with Erasmus, Horizon 2020 and so on. We have as much to learn from other European countries as we have to teach them in showing them innovative ways of working.
I have been a governor of the University of Derby for the past eight years, so I try to keep up to date with the challenges of higher education. The point about vice-chancellors’ salaries is particularly relevant. In many cases, the solution is robust internal governance on the part of governing bodies at universities. I am pleased to say that the system at Derby is robust, but elsewhere there can sometimes be a culture of embarrassment, and of deferring to the vice-chancellor and senior executive members of the university. There can also be a concept that a governor ought to be a cheerleader for the university, rather than providing challenge and pushing back at some of the ideas of those in executive positions. That is not necessarily a call for more rules about governance; it is more a cultural point. It is for the universities to make sure that their governors are providing challenge, and are not just there to say, “You’re doing a great job; keep it up,” even if they are doing that, as is often the case.
Lowering tuition fees for higher education to, say, £6,000 may seem like a good idea in theory, but in practice it may, slightly counterintuitively, benefit only wealthier graduates. Even with that reduction, the tuition fee would remain hefty, and it would become easier for higher-income students to pay it off altogether, while lower-income graduates would still end up potentially with 30 years’ worth of debt to pay. Moreover, the immediate income of universities from the loan repayments of higher-income students would decrease. Smaller, more modern universities, such as the University of Northampton in my constituency and the University of Derby, would be affected the most, because they rely on tuition fees to survive more than the elite, more market-manageable, more international universities with various external sources of funding. Furthermore, it is newer universities that tend to recruit a high proportion of their students and graduates from lower-income families.
The problem, however, is not without a range of solutions, one of which could be the reintroduction of some kind of maintenance grant for disadvantaged students. Although cutting fees may not lead to financial support for those who need it the most, grants would be targeted specifically towards lower-income students. We also need other solutions as part of a toolkit. The format of today’s debate is useful in that respect, because we are not just standing up and saying, “This is the solution to the issue,” which would not be the right approach.
One solution might be to encourage private investment, and partnering up with private sector institutions. High-quality education leads to skills that are good for business. Revising skills and education, and adapting that to economic needs, as has been touched upon, could lead to new sources of funding in the form of grants from the private sector to university students and institutions, and to even more private investment in research—an area in which UK universities are very much world-leaders.
Only a few months ago, in November, the University of Northampton was one of six universities that contributed to an independent review of social impact investment in the UK made by the Treasury, showing that they are very much up to speed with what is going on in the sector. Part of that involves catching the eye of companies for financial partnerships. The university is moving from the constituency of my neighbour, my hon. Friend the Member for Northampton North (Michael Ellis), to an exciting new campus in my constituency of Northampton South, which is leading regeneration. Universities have a key role in that in obvious ways, such as buildings and the presence of the students, and in less obvious ways, such as changing and mixing up the culture of a neighbourhood. That brings potential problems, but if managed correctly it can bring significant benefits.
Another aspect that needs to be considered is that, although graduates can officially leave university with debts of £50,000, as my hon. Friend the Member for South West Devon began by saying—that sum of money is a key point in the debate—many never repay those sums, owing to the nature of the loan agreements, as they do not reach a certain level of income. The level of graduate contributions thus depends on the salary level that the students get after leaving university, which in turns depends partially on the skills and education that they received. However, the fact that that huge burden of debt is not, in many senses, actually there is lost on people due to the way in which the system is set up, expressed, and currently administered. There is scope in the reforms that have been put forward and the review that has been announced to look at the system not just presentationally, but in terms of how it operates.
Investing in universities is a healthy approach to getting funds into the institutions and providing opportunities for low-income students to study. The University of Derby has invested £120 million in facilities over the past five years, and graduate outcomes have improved markedly as a result, which is really the point of all such investments. Some 74.1% of students are in graduate-level roles within six months. We all know that education is the foundation of a good, productive economy and a rich, diverse society. It will always remain a top priority for the Government, and it should not be overlooked by today’s innovators and entrepreneurs, who will be the beneficiaries of it as well.
We have a terrific university sector in the UK. It is the envy of the rest of Europe and attracts huge numbers of international students. Despite changes that have taken place, which have been referred to, those numbers are still very strong. Our changes need to be forward-looking and build on that success. Although I am a great lover of nostalgia, I do not think that solutions should hark back to what was a much more elite and restricted past in the university sector.
Paul Blomfield (Sheffield Central) (Lab)
It is a pleasure to contribute with you in the Chair, Mr Hosie. I had not intended to speak today, but I was interested to hear what the hon. Member for South West Devon (Mr Streeter) had to say, and I have obviously been inspired by his contribution.
I want to make a few, probably disjointed points, the first of which is about the sustainability of the sector. As has been pointed out, we have one of the best higher education sectors in the world. At a time of uncertainty for the country, we ought to build on our strengths, and not do anything to undermine them. When the Minister winds up, I hope that he will assure us on how the review will maintain, or indeed strengthen, the sustainability of the sector.
There is a fear that, because of the way that the debate has opened up, the Government may intend simply to mitigate the costs by constraining fees without replacing them with teaching grants, rather than looking ambitiously at how the system works, as the hon. Gentleman suggested. Clearly, a move to reduce fees in certain subjects could have the perverse consequence of leading people in a contrary direction to the one suggested by the hon. Gentleman. Likewise, a fee cut that is not replaced by teaching grants across the board, or in any other way, could really bring into question the sustainability of the sector.
Dr Blackman-Woods
My hon. Friend is making a really important point, which I hope the Minister can address. There is real concern among universities that the review could result in a huge loss of income. As I said earlier, the whole of the sector is not making a huge surplus. We want our university sector to thrive, compete globally, and give our young people and others the skills that they need to compete in the workforce. My hon. Friend has raised an important point, and it is one that the Minister needs to address.
Paul Blomfield
I agree with my hon. Friend. In his introductory remarks, the hon. Member for South West Devon rightly said that when the new system was introduced in 2012, there was an expectation of a variety of fee options. I shared his scepticism at that time. There was a thinking in Government that the £6,000 to £9,000 range would mean that Oxbridge, obviously, would charge £9,000, and everybody else would neatly rank themselves in accordance with the Government’s perception of quality. Those of us who had a relationship with the sector knew that that was not viable, because it costs as much to provide a degree in Plymouth as it does in Russell Group universities. So what happened was not surprising.
Although the review should focus on value for money, as the hon. Gentleman said, we need to be careful not to reduce higher education to a crude transactional relationship. There is an element within the teaching excellence framework that does that.
I was on the Higher Education and Research Public Bill Committee. Those of us on this side of the House supported the principle of focusing on teaching quality, but were worried that some of the metrics drove the debate in the wrong direction. We are pleased that the Government moved more towards a qualitative evaluation, rather than the simple crude quantitative measures they were initially looking at, but there is still an aspect of the debate that says we should be measuring quality by crude and easily measurable standards. We might take contact hours, for example. If we are going to measure by contact hours, Oxford would be bottom of the table. Nobody would argue that Oxford is the worst university in the country, but that illustrates the danger of crude metrics.
Andrew Lewer
Although crude metrics are not helpful, would the hon. Gentleman accept that having some metrics, such as the teaching excellence framework, is helpful?
Paul Blomfield
The hon. Gentleman is right. As I said, those of us on this side of the House who were on the Bill Committee, such as my hon. Friend the Member for City of Durham (Dr Blackman-Woods), argued that a focus on teaching quality was right, but we needed to get the way that we measured that experience right.
The other metric that is problematic is employment outcomes. The current Minister’s predecessor, the hon. Member for Orpington (Joseph Johnson), acknowledged that they were crude and, in a sense, unreliable metrics, but they were being used because they were the numbers that were available. I pointed out to the Minister at the time that there is not necessarily a relationship between teaching quality and employment outcomes. If a student had been to Eton and Oxford, like he had, and were from the right family and knew the right people, that person’s employment outcome was likely to be fairly good, irrespective of teaching quality. So when looking at the funding review, my warning is that we should make sure that we look at the educational experience of universities in the round. We argued that there should have been a statement in the Higher Education and Research Act 2017 about what universities were for.
Dr Blackman-Woods
I am glad that my hon. Friend has raised the discussion we had in that Bill Committee about what universities contribute to our society in addition to teaching and education. They contribute to sports development, cultural development and social outcomes in our communities. They do a lot of voluntary work. Students from my own university, Durham, do a lot of voluntary work in the local community. If we are going to look at value for money, which I agree we should, we felt that the additional benefits that universities deliver to society should somehow be brought into the equation as well, and there was certainly a danger under that legislation of the wider benefits of universities being completely discarded in the Government’s TEF measures.
Paul Blomfield
I thank my hon. Friend for that intervention. Clearly, we are at one on that issue.
Mr Jim Cunningham (Coventry South) (Lab)
I apologise for being late for the debate, Mr Hosie. My hon. Friends make an interesting and important point. In Coventry, universities make a major contribution to the local economy, for example. Very often, we find that students are also helpful to community organisations. Sometimes, someone who is doing a law course can give unofficial advice, which is helpful, given the situation we now face with cutbacks. The other point is that further education has taken a bit of a hit as well. In Coventry, there have been 27% cuts.
Paul Blomfield
I have visited the university that my hon. Friend represents. It does particularly innovative and good work in supporting small businesses and is a leader in the sector. He makes an important point. At a time when one of the issues we face as a country is the imbalance in the economy between London and the south-east and the rest of the country, universities offer a unique asset in ensuring that economic growth is distributed across the country. They are the one asset that we have in every part of the UK, in its regions and nations. The role that they play in driving economic growth is hugely important. My hon. Friend makes that point very well.
I have three additional points. First, will the Minister answer the question—which the Education Secretary was unable to in the statement the other day—relating to widening participation and fair access funds? There is a concern that one of the ways in which the sector will be squeezed in order to hit ambitions on fees is by reducing the amount of money allocated to widening participation and fair access. Investment in that area was one of the few good things that came out of the 2012 reforms, so I would be grateful if he could give a reassurance on that.
Mr Gyimah
I would like to give the hon. Gentleman that reassurance now. He is absolutely right: the widening participation funds—£1,000 out of every £9,000 paid by students in fees—go towards access. We will not be doing anything to diminish that access project. Although many people talk about the fact that we have global, world-class institutions, one of the successes of our higher education system is actually the number of disadvantaged people who are going to university as a result of those funds being available. There is a challenge in making sure that they are successful at university and get well-paid jobs. We will not be doing anything to diminish that.[Official Report, 21 March 2018, Vol. 638, c. 2MC.]
Paul Blomfield
I thank the Minister for that intervention. As we said earlier, fairness of opportunity and the choices available depending on where a person lives are issues in the current system. The widening participation and fair access programmes are hugely important, and I am grateful for the Minister’s assurance that not one penny will be taken from those areas of funding.
I endorse the point that the hon. Member for South West Devon made about nursing, midwifery and allied health courses. When we had a debate on the Government’s proposals in this Chamber previously, some of us challenged the Government and said that taking away bursaries and introducing fees for those courses would lead to a drop in applications. The then Minister, who is no longer a Member of the House, assured us that what the Government were trying to do—you couldn’t make it up, Mr Hosie—was share the benefits of the funding system for other undergraduates with nursing and midwifery courses. Share the benefits! Some of us questioned whether a £50,000 debt was a benefit, and warned of the sort of drop in applications that we are now seeing. I hope the Minister will tell us that the decision about the funding arrangements for nursing, midwifery and allied health courses will be reconsidered as part of the funding review, and that the Government will put on hold the current proposals to extend those arrangements to other health courses that are not currently subject to fees and loans. The Minister is obviously aware of those areas. The Opposition have tabled prayers seeking a halt to those proposals.
As the hon. Member for Glasgow North West (Carol Monaghan) said, a number of things are coming together and will cause an enormous crisis in the NHS, but that is not the only issue. Nursing, midwifery and allied health courses are one of the few areas for second-chance education. They are dominated significantly by mature students, who see them as a route into a professional career and personal advancement, which is not available through the 2012 funding system. Since the 2012 funding system was introduced, there has been a significant drop in the number of mature students.
Mr Jim Cunningham
We have raised the issue of education maintenance grants many times in this place. Women often have an ambition to go into nursing when their children grow up, and they are affected because they cannot get education maintenance grants. This is a very important issue, and once again women are carrying the can.
Paul Blomfield
Again, my hon. Friend is absolutely right. From the point of view of the needs of the NHS and the opportunities for mature students, and just for the sake of justice, we need to look again at nursing, midwifery and allied health courses.
I will make my third point very briefly, because this is a much bigger topic. I raise this issue as co-chair of the all-party group on international students. Universities’ financial stability is partly based on this country’s enormous success in attracting international students to come and study here. Those numbers are flatlining as a result of measures taken by the Home Office and the inclusion of international students in the net migration numbers, which inevitably leads to policy decisions that discourage international students. The Minister will say that the numbers are holding roughly up, but holding roughly up is not good enough in a growing market, because it means a relative decline.
There is a huge risk as we leave the European Union, because some 125,000 of our 450,000 international students come from the EU, and most universities are modelling on the basis that we will lose about 80% of them. One third of non-EU students said before the referendum that if we chose to leave the European Union, they would find the UK a less attractive place to come to. The Government need to put in place measures within the framework of the strategy to actively encourage more international students. They can start by removing them from the net migration targets.
Carol Monaghan
One of the other issues with international students is that we have lost a lot of the diversity within that group. Whereas in the past, students came from India, Australia, the United States and Canada, we are more and more relying on the Chinese student population. That is problematic, because if anything happens politically to change that relationship, our universities could have difficulties.
Paul Blomfield
The hon. Lady makes a very important point. The numbers have been sustained only by the huge increase in the number of Chinese students. Of course, Chinese students are very welcome in the UK, but no business would be satisfied with becoming over-dependent on one customer. China is moving ahead in leaps and bounds in developing its own universities, and now has some of the finest universities in the world, doing some of the finest research in the world, so we cannot rely on that market. The hon. Lady is absolutely right that part of the new strategy that we need to encourage people to come from all over the world needs to be about looking at countries such as India, from which the numbers have dropped.
Carol Monaghan (Glasgow North West) (SNP)
It is a pleasure to serve under your chairmanship, Mr Hosie. I thank the hon. Member for South West Devon (Mr Streeter) for securing this debate. I listened to his speech with interest, and surprisingly I found myself nodding along to a lot of what he said. We have had an admission from the Prime Minister that the current system in England is not working for students. Admitting we have got it wrong is one thing, but actually carrying out a review and making appropriate changes is another. I worry that we might get stuck in the detail.
I will try to limit my comments about Scotland, where the Scottish National party has restored the tradition of free higher education while maintaining educational maintenance allowance for those in school or further education, and bursaries for young people from disadvantaged backgrounds in higher education. Our support package works: Scottish 18-year-olds from the most disadvantaged areas are now 67% more likely to apply to higher education institutions than they were 12 years ago. Scottish students graduate with the lowest debt in the UK. Their debt is less than £12,000, which contrasts with the astronomical figures we have heard about this morning. We believe that university education should be based on the ability to learn, and never on the ability to pay.
Mr Gyimah
To be absolutely clear, university education in England is not based on the ability to pay. On the contrary, no one has failed to get a university place in England because they cannot pay. Payment is only significant after the graduate earns more than £21,000—it will be earnings of more than £25,000 from 1 April. It is important to get the facts right.
Carol Monaghan
We also have to look at the retention rates for young people from disadvantaged backgrounds who do not have full support.
Ultimately, this debate should be about who benefits. We educate children in schools not simply for their own economic benefit, but for the benefit of society. We have got to ask whether the young people embarking on tertiary education courses will contribute economically and societally to our nations, or whether we are simply providing them with a service, for which they must pay. As legislators, we must be clear about that. Post-Brexit, the UK’s economic success will rely on a well-educated population. We have skills shortages in science, technology, engineering, healthcare, education and digital. Graduates are needed now to ensure that the UK remains competitive outside the EU.
The hon. Member for Sheffield Central (Paul Blomfield) mentioned the variance in fees. I have difficulties with that. If as has been rumoured we lower the fees for less expensive courses, how will we encourage our young people to study the more expensive science, technology, engineering and maths subjects, graduates of which are so desperately needed? EngineeringUK estimates that we have an annual shortfall of 20,000 engineering graduates alone. The hon. Member for South West Devon mentioned the impact of removing the nursing bursary. Again, who benefits? We should encourage young people to study those courses, not put additional barriers in their way.
Fees are not the only difficulty for English students. The interest on student loans has risen sharply—it is currently 6.1% for some students. Maintenance grants have been scrapped, and it is rumoured that student debt on completion has reached £50,000. Many young graduates will be left saddled with debt throughout most of their working lives.
The hon. Member for South West Devon mentioned students staying at home for their university experience, and was concerned about the impact on the whole package experienced by students at university. In Scotland and Ireland there is a cultural predisposition to stay at home. It is not necessarily financially driven—my son is staying at home during university—so there may be other factors at play. His education is not impacted. Students have opportunities for other life experiences, such as summer placements, industrial placements and travelling abroad. The hon. Member for Northampton South (Andrew Lewer) mentioned Erasmus, which is a rich experience for students even if they stay at home during university. I push the Minister to make a commitment on Erasmus, because university students and many people across the sector want that commitment as part of the Brexit process.
We are often told that our free tuition policy in Scotland prevents Scottish students from accessing available places, but since 2007, the number of Scottish-domiciled full-time degree entrants has risen by 12%. Since 2013, the total number of funded places available at Scottish universities, including additional places to widen access for students from Scotland’s most deprived communities, has also increased. The hon. Member for Sheffield Central mentioned the metrics used in the teaching excellence framework, and graduate success as an indication of our universities’ quality. Graduate salaries are a lot lower in many geographical areas in the UK, so students graduating in parts of England and Scotland will automatically have a lower salary than those in south-east England. That is a flaw in that metric.
We often talk about the number of young people going to higher education as a measure of economic success. I could not count the number of times I hear people talking about encouraging people to do high-quality apprenticeships, yet that seems to be forgotten when we talk about higher education. I would like there to be parity among apprenticeships, further education colleges and quality employment. In fact, we should look at positive destinations, not just the number of young people going to university. For many young people, a high-quality apprenticeship—degree level or otherwise—allows them to make excellent progress in the workplace without necessarily saddling themselves with debt.
Dr Blackman-Woods
The hon. Lady makes an important point. Does she agree that it is important not to talk in binary terms about university or technical education? Our universities deliver some of the best technical education in the country, and we should aim for a route to whatever form of education is best for the young person or older person retraining. We should not get stuck in the binary divide, but ensure that we make connections between them.
Carol Monaghan
We have a problem if we educate only graduates—we need a full range of different people with different skills. I usually speak about tertiary education because, in Scotland, the lines between further education and higher education are less defined than they are in other parts of the UK. In fact, a lot of our degree courses are delivered in further education colleges. The movement between FE and HE is a very important part of our educational landscape in Scotland.
Positive destinations should be a measure of success, and we should encourage young people of all backgrounds into whatever is appropriate for them. That includes those from the most advantaged backgrounds considering apprenticeships. We need to try to break down that barrier. I agree with the hon. Member for South West Devon that vice-chancellor pay has reached a ridiculous level for some. Lecturers were out on strike this week and last week because their pensions are under threat. I agree with him that perhaps the time has come to look at the pay package that we offer all staff.
Paying for education is a duty of Government, business and society, including the taxpayer. We need to ensure that we have a well-educated population that can provide economic growth in different businesses and sectors. Post-Brexit, there will be a struggle to create economic growth. We all have the duty to pay our taxes so that they fund the education of our young people, benefit society and fuel economic growth. The Scottish National party is fully committed to guaranteeing fair access to higher education, so that every young person, regardless of background, has an equal chance to go to university. My party will continue to work hard to ensure that.
Gordon Marsden (Blackpool South) (Lab)
It is a great pleasure to serve under your chairmanship, Mr Hosie. I congratulate the hon. Member for South West Devon (Mr Streeter) on securing the debate. He spoke thoughtfully. We are both of the Kinnock generation, so I understand some of his points. He talked about his experiences in schools and people going to university. We must recognise the heart of the debate is not just the people who speak about what they might be deterred from, but the people who keep silent. The people who keep silent, whether they are older or younger learners, are being put off by the current financial structure that the Government have put in place.
The hon. Gentleman made a number of interesting suggestions about graduate tax and cutting the interest rates from 6.1%. There is consensus on that across the piece. We would have more sympathy with the Government if they had not been so intensely relaxed, and indeed complacent, when the interest rates were introduced. It was very clear that the previous Universities Minister—no doubt because he was a keen remainer—did not take into account in any shape or form the implications of Brexit in that respect. Two months before the referendum, inflation stood at 0.4%, but it is now 3.1% and rising. That is one of the reasons why the interest rate is 6.1%.
I welcome the thoughtful comments made by the hon. Member for Northampton South (Andrew Lewer). He made very sensible points about governance in higher education. He rightly touched on the impact on post-1992 universities if fee aversion hits the disadvantaged students they cater for, and talked about his experiences with the two universities he is associated with—the University of Northampton and the University of Derby. I support all that, but I remind him and the House that fee aversion is an issue not simply for students but for the taxpayer. My hon. Friend the Member for Manchester Central (Lucy Powell) made exactly that point in response to last week’s statement. The Government have tried to make a virtue out of necessity by saying, “Oh, you don’t really need to repay all this money,” but we are irresponsibly laying burdens on future generations and on the tax system now. The Government should not be complacent about that in any way.
Mr Gyimah
I look forward to hearing the hon. Gentleman outline the Labour party’s policy. His concern is burden on the taxpayer, but there would be an even bigger burden on the taxpayer if higher education were made free—that is my understanding of the Labour party’s policy—unless places were rationed.
Gordon Marsden
There were several completely unproven assertions in what the Minister just said. He would do better to stick to this debate, which is about his policies rather than—
Gordon Marsden
No, I am not going to take another intervention. The Minister will have plenty of time to say what he wants to say.
My hon. Friend the Member for Sheffield Central (Paul Blomfield) rightly talked about the sustainability of the sector and some of the key issues in terms of Brexit. My hon. Friend the Member for Coventry South (Mr Cunningham), who is no longer in the Chamber, absolutely rightly drew us back to further education and nursing bursaries, and the hon. Member for Glasgow North West (Carol Monaghan) spoke about issues post-Brexit.
The point is very straightforward: since coming to office in 2010, Conservative-led Governments have repeatedly raised tuition fees. They trebled fees to £9,000 and subsequently increased them to £9,250. That agenda has hit students—particularly those from disadvantaged backgrounds—harder and harder since 2012. The cutting, one by one, of all the concessions that David Willetts introduced to temper the impact has been just as damaging. Those concessions were dismantled deliberately. The National Union of Students lists them in its briefing for the debate: the Government abolished maintenance grants, NHS bursaries, the disabled students allowance and the education maintenance allowance, and ended Aimhigher.
The Minister has inherited that. He is not responsible for it, but he would be wise to show due humility about its incremental impact on the people concerned. If he reads the “Fairer Fees” report published by the Sutton Trust late last year, he will see, as Members have already said, that the average debt for students in England is higher than the European average and twice the US average. As a result, the Government have racked up an unenviable record of nudging people away from, rather than towards, aspiration in higher education and chipping off many of the rungs of the ladder of social mobility that were designed to protect them.
The July report by London Economics for the University and College Union suggested that thousands of graduates would suffer a mid-life tax crisis, analysis undertaken last year by the Institute for Fiscal Studies shows the level of debt, and only this week the Sutton Trust gave us figures that show disadvantaged students across the UK are more than three times more likely to live at home while attending university. The hon. Member for Glasgow North West made that point, too.
The Prime Minister finally admitted last week, after months of us, the Sutton Trust and an impressive range of stakeholders all saying the same, that the current funding system leaves the most disadvantaged students with the highest debt, yet behind the warm words and soft soap that were ladled out by the Prime Minister in Derby and by her Education Secretary in the Commons, it seems that no new money is available and there is the potential for HE funding cuts. In her speech, the Prime Minister tried to talk the talk on social mobility and aspiration, but she did little to walk the walk and address either the FE sector, in which 10% of HE is delivered, or the problems with 16-to-18 provision that many colleges are suffering, including the one in which she chose to make her speech. It will take more than a brush-by in Derby one afternoon in February to remedy those issues.
The terms of reference published by the Department state that the review cannot make recommendations on tax policy and must make recommendations in keeping with the Government’s fiscal policies. Will the Minister confirm that that means there will be no new money for the policies in the review? Does it mean that savings will have to be found elsewhere in the FE budget if changes are to be made? My hon. Friend the Member for Sheffield Central challenged him and, to give him credit, he made a commitment that access and widening participation funding will not be diminished as a result of the review. I warn him that the Treasury has a long reach and he will need a stout shield to resist it in this area and others.
Dr Blackman-Woods
Does my hon. Friend agree that, unless the Government are at least prepared to put more money into the sector, it is difficult to understand how we will get a sustainable system for funding universities? The Minister needs to be clear about that.
Gordon Marsden
I absolutely agree. As the Minister is eager to explore our policies, I remind him that Labour’s policies and our message of progression were taken on board so strongly by would-be and existing students, their families and their parents during the recent election because we had a cohesive narrative. Whether we were talking about adult learning, college learning or traditional cohorts of young people going into higher education, we said that we wanted to lift barriers and financial burdens to make a step change in social mobility. The Conservatives did not put that message across, and suffered accordingly. Given the restrictions on the review, they will miss another opportunity.
The Conservatives continue to falter on the reintroduction of maintenance grants, to which we have been committed for nearly two years. The Prime Minister engaged with that tortuously last week. Our position is echoed by the education sector, Universities UK, MillionPlus, the Chair of the Education Committee, the Treasury Committee and even the vice-chancellor of the private University of Buckingham, Sir Anthony Seldon. UUK has said that there are ways in which the current system can be improved, such as by reintroducing maintenance grants, as has MillionPlus, but it is likely that colleges and universities will be expected to cover any extra costs. The Prime Minister implied that in her speech last week when she said the Government will have to look at how
“learners receive maintenance support, both from Government and universities and colleges.”
We have some idea of how that extra funding might be delivered under her policies: by robbing Peter to pay Paul. We saw the same sleight of hand from the Secretary of State in The Sunday Times, on the BBC and in his statement last week, when he talked about cutting the cost of tuition fees.
The bottom line is that those who already have a lot will be given more. Wealthy students and graduates will benefit the most, because they can pay off debt the earliest. Over the next 10 years, there will be 13 million vacancies but only 7 million school leavers to fill them, yet great swathes of our university extramural departments, institutions such as the Open University and Birkbeck, and new providers, have been swept away or at least crippled by the tripling of fees since 2012.
There is a social dimension. One in five undergraduate entrants in England from low-participation neighbourhoods chooses or has no option but to study part time. The Government need to address that. However, when the Prime Minister talked about lifelong learning last week, there were no words of contrition for what the Government have done: tripling fees, scrapping maintenance grants and introducing adult learning loans, half of which have been handed back unused to the Treasury.
What we need to know from the Minister—apart from why, curiously, there has been no reference to 16-to-18 education—is what he is going to do to reassure people. No direct grant has been available for university courses in the arts and humanities, social sciences, computer science, design, architecture or economics since 2014-15. Will there be anything in the review to support those? The Prime Minister and the Secretary of State have talked about two-year courses easing financial burdens on students, but where is the commitment to the continuous professional development that will be necessary in HE if those are to go forward correctly?
Finally, what are the principles behind the timing of the report? Of course, the report will not be independent but will have input—that is all it is—from the panel. However, that input may be quite weak. Why will there be no consideration of that? What will the Minister do to reassure us all that it is not just a PR exercise?
Henry Ford famously said that a customer can have any colour so long as it is black. If the Minister and his Government do not take proper regard of the various elements described in the debate, they will be just as guilty of that as Henry Ford.
The Minister for Universities, Science, Research and Innovation (Mr Sam Gyimah)
It is a pleasure to serve under your chairmanship, Mr Hosie. I congratulate my hon. Friend the Member for South West Devon (Mr Streeter) on securing the debate, which has been wide-ranging and stimulating in a number of ways. Higher education is a complicated policy area, and since I have been appointed to this position I have been inundated with ideas about things to do. In the debate, hon. Members have made contributions where they have not just come up with ideas but thought of knock-on consequences of some policy suggestions. I welcome that.
There were many questions about the Government’s HE review and what it seeks to do, but before I get to that I will deal with some of the myths around the current system, because it is worth clarifying that. The system does not stop disadvantaged people applying to university. Their parents’ income and their income is not a barrier to getting into university at all. In fact, they can get into university and get on, and they have to pay back only once they have completed their studies and have a job paying—from 1 April—£25,000.
Another myth is that disadvantaged people in particular do really badly. That is not true. The system is very progressive in its repayments structure. I have been going around the country, speaking directly to students, and I went to Queen Mary in London, where 42% of students are the first in their family to go to university. That is a direct result of the policies the Government have pursued. I am not saying that everything is perfect and that there are not reforms to pursue, but it is worth recognising the success we have had.
No matter how we cut it, in every league table in the world our universities come second only to those of the United States. We have four in the top 10 and 16 of the top 100 in the world, and that is because we have put them on a sustainable financial footing. Those who have read the terms of reference will know that the review must have regard to the sustainability of the university sector. An important point was made that universities are not just about the education that the individual gets; in many of our towns, universities are huge employers and a source of spreading wealth and growth. For that reason alone, ensuring the sustainability of the sector is particularly important.
This year, we will probably hit the target of one in two 18 to 30-year-olds having a university education. Such an education is not just about what is studied; it has become a rite of passage for many young people. It is the first time they move away from home. They have freedoms, and they become an adult at university. We think that is a positive thing. That aspiration was set by Tony Blair, a Labour Prime Minister, so to hear Labour Members criticising us for hitting a target set by a Labour Prime Minister is a bit rich.
Mr Gyimah
Well, the suggestion from the Opposition spokesperson, the hon. Member for Blackpool South (Gordon Marsden), was that somehow we have pursued policies that are damaging higher education and the aspiration and prospects of our young people as far as the university sector is concerned. On the contrary, we have pursued policies that have put no cap on aspiration.
Mr Gyimah
I will take the hon. Gentleman’s intervention in a second.
I will end this myth-busting section by focusing on Scotland, where controls on student numbers continue to restrict the aspiration of young people. The Sutton Trust recently stated that Scottish 18-year-olds from the most advantaged areas are still more than four times more likely to go straight to university than those from the least advantaged areas, compared with 2.4 times in England. Audit Scotland has stated:
“It has become more difficult in recent years for Scottish students to gain a place at a Scottish university as applications have increased more than the number of offers made by universities.”
That is not an example I want to copy here in England.
Carol Monaghan
Of course, as I said, the distinction between FE and HE in Scotland is far more fluid, and UCAS admits that a third of young people studying degree-level courses are doing so in further education colleges, which is not captured by Sutton Trust figures or UCAS figures. Scotland is doing extremely well in this area.
Gordon Marsden
The Minister speaks about rites of passage. Those are fine words, but fine words butter no parsnips. The truth of the matter is, he should be focusing on not just the number of people from disadvantaged backgrounds getting to university but what stops them staying there. He should also focus on the groups who never even think about getting there because of what his predecessors’ tuition fees policies have done, particularly for mature and part-time students.
Mr Gyimah
In the spirit of compromise, I agree that, yes, access should be not just about getting to university but succeeding when there and getting a well-paid job afterwards. If people do not get to university in the first place, the idea of succeeding when there and getting a well-paid job is purely academic, not to put too fine a point on it. There is clearly work to be done, but where we are now shows significant progress from where we were in 2010.
The review seeks to look at the whole higher education sector for post-18 education, including choice and competition in the market, how the funding system works and how HE and FE can be joined up, and the overlaps. That is particularly important. However, we are not waiting for the review; a significant number of reforms are under way, building on our successes.
We are in the process of implementing the Higher Education and Research Act 2017, and the new Office for Students, at whose launch I will speak later today, will be a strong voice for students and ensure minimum standards. The OFS director for fair access and participation will further drive social mobility. The teaching excellence and student outcomes framework will drive quality teaching—that is particularly important—and the reforms will facilitate further diversity, with new providers and shorter degrees delivered at lower cost. In fact, today my right hon. Friend the Secretary of State is publishing the first statement of Government priorities and guidance for the OFS. The Government are also publishing the results of recent consultations on the new regulatory approach, and the OFS is publishing the regulatory framework. That marks a key milestone in delivering our higher education reforms in that area. The review will build on all of that.
There are questions about the teaching grant, which will be looked at in the review, and whether new money will go in. As always, it is important to look at things within the constraints of the Government’s overall fiscal framework, and that will be considered alongside budget lines in wider education and our public spending.
There are issues around changing the system completely and whether we look at some kind of graduate contribution or graduate tax system. Obviously, those are all welcome suggestions. I would say they have been looked at by successive Governments over the years, but fresh thinking is welcome, and I welcome the fresh thinking that my hon. Friend the Member for South West Devon brought to the debate.
We have a higher education system that is the envy of the world, and many international students are queuing to come and study here, but the Government recognise that to deliver for students more needs to be done. My right hon. Friend the Secretary of State has said that the variability in fees that we expected has not materialised, and it is important to look at all the different ways in which universities operate. There were 534,000 students who accepted a place at university last year. They clearly do not all have the same desires, the same aspirations and the same needs, yet our university system gives all of them pretty much the same offer.
Stewart Hosie (in the Chair)
Order.
Motion lapsed (Standing Order No.10(6)).
Death by Dangerous Driving: Sentencing
(6 years, 1 month ago)
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Eddie Hughes (Walsall North) (Con)
I beg to move,
That this House has considered death by dangerous driving and sentencing.
It is a pleasure to serve under your chairmanship, Mr Hosie, and I thank the House of Commons digital team for their support in publicising this debate on social media. They put details of the debate on the House of Commons website, and I understand that 5,500 people saw that post and several hundred engaged with it. From the key themes identified, those who have lost loved ones said that they felt they were serving a life sentence, and they did not feel that the person convicted of causing death by dangerous driving received an adequate sentence.
In support of tougher sentencing, Carole said:
“Definitely. We are now a family living a life sentence. The dangerous driver that caused my 19-year-old son’s death served 22 months and is out living their life.”
Patricia said:
“My 17-year-old daughter was killed by a drunk driver. He got two years, four months, while I am doing life. I’m so angry.”
I thank those members of the public who took the time to comment, especially those personally affected by this topic.
In securing this debate I intended to support a campaign initiated recently by the Express and Star, following recent tragic cases in the black country. I therefore make no apology for borrowing from articles that that paper, and others, have published on this subject. The Express and Star’s “Stop the Speeders” campaign has attracted thousands of signatures, and it urges the Government to introduce tougher sentences for killer drivers. I am also extremely grateful for the support of Walsall Labour councillor, Doug James, who has spoken of his support for the campaign.
Support for tougher sentencing is echoed right across the country, and I pay particular tribute to my hon. Friend the Member for North East Cambridgeshire (Stephen Barclay) for his work in this area following a very sad case in his constituency. On 20 February 2011, 22-year-old Jamie Butcher was crossing at a pelican crossing in Wisbech when a speeding driver careered into him, throwing him 43 metres through the air and killing him instantly. He had been walking into town after a family dinner with his parents when the driver, who was travelling at twice the 30 mph speed limit, ran a red light and killed him. The driver was sentenced to just 43 months in prison. Following their son’s death, Steve Green and Tina Butcher joined road safety charity Brake, and campaigned relentlessly for a change in the law. Partly as a result of their hard work, in December 2016 the Government launched a consultation on driving offences and penalties relating to causing death or serious injury.
For the purpose of this debate I would like to draw attention to the summary findings in respect of the penalty for death by dangerous driving. Consultees were asked:
“Do you think that the maximum penalty for causing death by dangerous driving adequately reflects the culpability of the offending behaviour or should it be increased from 14 years’ imprisonment to life?”
Some 70% of the 8,305 respondents to that question thought that the maximum penalty for the offence of causing death by dangerous driving should be increased to life imprisonment. Only 15% of respondents thought that the current 14 years was adequate. Those who agreed with an increase in the maximum penalty commented that that would provide the courts with tougher sentencing powers in the most serious cases.
Gareth Johnson (Dartford) (Con)
I congratulate my hon. Friend on securing this debate. Does he agree that in many of these instances the charge should be manslaughter, not death by dangerous driving? If someone were to kill another person in any other circumstance through dangerous or reckless behaviour, they would be charged with manslaughter, yet it seems that that is not the case on the roads. With a charge of manslaughter the court could give a maximum of life imprisonment rather than 14 years.
Eddie Hughes
I completely concur with my hon. Friend, and I will touch partly on that issue later in my speech.
It was also argued that an increased maximum penalty would better reflect the culpability of dangerous driving behaviours and the disregard that some motorists had for others. A number of respondents also suggested that deliberate driving actions directed at other road users should be charged as murder or manslaughter. Under the current law, the Crown Prosecution Service can, and will, charge a person with manslaughter where the evidence supports that charge. However, as many of those who did not agree with an increase commented, in many driving cases the offending behaviour, which may be highly irresponsible, does not suggest that the vehicle was intentionally used as a weapon to kill or commit grievous bodily harm, so it would not amount to murder or manslaughter.
It was also suggested that causing death by dangerous driving should attract the same sentence as murder or manslaughter because the harm caused—the death of the victim—is the same in all three offences. Increasing the maximum penalty for this offence would enable the courts to impose a life sentence or any lesser sentence, including a determinate sentence of any length. However, increasing the maximum penalty does not guarantee sentence length, as decisions on sentencing remain with the independent courts and are made on a case-by-case basis.
Some also suggested that consecutive sentences should be imposed for each death caused. It is an established principle of law that sentences are served concurrently when they relate to the same course of events, and consecutively when they relate to separate incidents. The court will impose a sentence length that reflects the seriousness of the offending behaviour. Therefore, in circumstances where multiple deaths were the result of a single incident, concurrent sentences will be imposed by the court, but it will take account of the number of victims when setting the overall length of the sentence.
Where are we today, and why are we still debating this subject in Westminster Hall, rather than the Chamber of the House of Commons? Four months after the publication of the consultation findings, the law remains unchanged and, as of today, no Government time has been allocated to implement those changes. That can be of no comfort to the family of John Hickinbottom, whose killer recently received a seven-year sentence for killing John in Walsall while speeding. The court heard that on Friday 9 June 2017, Craig Edwards got behind the wheel, despite pleas from his mother to hand over the keys to his BMW because he was drunk. He travelled just a quarter of a mile before losing control of the car as it sped at almost twice the 30 mph limit along Bentley Road North in Walsall.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Gentleman on bringing up this issue for consideration by the House. In Northern Ireland, the reduction of the drink-driving limit has reduced deaths and accidents significantly. Importantly, it has also reduced the police’s workload. Does he agree that liaising with the devolved Administrations to ascertain their direction would be helpful, and that reducing the drink-driving limit to 50 mg in England and on the mainland would be a step in the right direction?
Eddie Hughes
That is an interesting suggestion. Perhaps the Minister will comment on that when he replies to the debate.
Taking a right-hand turn, Craig Edwards careered on to the pavement, hitting Mr Hickinbottom, a retired builder from Bentley, who died three days later last June. Mr Howard Searle, prosecuting, said that Edwards left the wrecked BMW clutching a bottle of Baileys and, when told by an eyewitness that he had knocked down a pedestrian, replied, “So?”
The 29-year-old defendant from Walsall had 15 previous convictions for 34 offences, including two previous cases of dangerous driving. He was jailed for just seven years after admitting causing death by dangerous driving, failing to stop at the scene of an accident, driving when disqualified, drink-driving and having no insurance. He was also banned from driving for four and a half years on release from prison.
Justin Tomlinson (North Swindon) (Con)
My hon. Friend is making a powerful case. There can be no excuse for the Government not to take the matter forward, because that example clearly shows why this should be treated like manslaughter. That driver’s disgraceful actions merit nothing short of a manslaughter punishment.
Eddie Hughes
I completely agree with my hon. Friend. People need to understand that when they are in control of a vehicle, it is a lethal weapon, and that is manslaughter.
Douglas Ross (Moray) (Con)
I thank my hon. Friend for the excellent speech he has delivered so far and the harrowing local cases he has explained. In Scotland over the last five years we have had 166 convictions for death by dangerous driving. However, many of the concerns he has raised in England are also pertinent in Scotland, where there are concerns about the overly lenient sentences. Does he agree that this is an issue that the devolved Administrations must also look at?
Eddie Hughes
I completely agree. The crime is the same, regardless of where in the United Kingdom it is committed, and the impact is felt equally.
The time has come. The Government must now make Government time available to implement the change. We must ensure not only that those who kill while speeding face the full force of the law, but that there is a new charge for those who fail to stop at the scene of an accident. On that point, I completely agree with Brake, the road safety charity, which said:
“There needs to be a new charge of ‘failing to stop following a fatal or serious injury crash’. This would not have any requirement to prove the driver who failed to stop caused the crash, as there can be an assumption that if they fled, they caused it. This is necessary because, at present, British law acts as an incentive for the worst law-breaking drivers to flee a crash if they kill someone. If a drink or drug driver kills someone and remains at the scene, they are likely to be tested for alcohol or drugs, prosecuted for ‘causing death by careless driving when under the influence of alcohol or drugs’, and face up to 14 years’ imprisonment. But if they run away and sober up, and there was no other evidence of careless or dangerous driving, they can only be prosecuted for the minor offence of ‘failing to stop or report an accident’, which carries a paltry maximum sentence of six months. If someone steals a car, kills someone and remains at the scene, they will be identified by the police as driving a stolen car. They can be prosecuted for ‘aggravated vehicle taking’ and face a maximum 14 years’ imprisonment. Much better to flee, ditch the car, and hope never to be identified. Drivers who hit and run are despicable: to escape the law, they leave behind suffering and dying victims in need of urgent medical attention. The law must be changed to remove this incentive to flee.”
This Government are on the side of those affected by atrocious crimes of that kind. We sympathise completely with the families of those affected and we understand the need to send a strong message to the public that we will come down hard on those who show total disregard for the lives of others.
I will finish by asking two things of the Minister. First, I ask him to listen to the thousands of people who have already backed the campaign by the Express and Star asking the Government to implement tougher sentences for killer drivers. Secondly, I ask him to listen to the call from Brake, the road safety charity, to create a new offence of failing to stop following a fatal or serious injury crash. Let us work together to ensure that fewer families have to grieve for the loss of loved ones. Let us stop the speeders.
The Minister of State, Ministry of Justice (Rory Stewart)
It is a great privilege to serve under your chairmanship, Mr Hosie. I begin by paying tribute to my hon. Friend the Member for Walsall North (Eddie Hughes) for bringing this extremely important debate to the House. I also pay tribute to the work of the Express and Star and to the local Labour councillor, Doug James, who has done an enormous amount of work on the issue.
This issue combines the House across different parties, linking people from Scotland, Northern Ireland and England, and I am sure that colleagues from Wales would be here too, because, as my hon. Friend pointed out in his eloquent speech, this horrifying tragedy is something that does not stop at any national border. He has provided, much more eloquently than I can, a description of what that means for a family. We have seen cases in the last week where dangerous drivers have killed a toddler and a baby in a pram by charging across a road. Those are people whose recklessness with 1.5 tonnes of metal—an incredibly dangerous weapon —is unbelievable. The loss that it means for a family is something unimaginable. The hole it leaves in somebody’s life to have lost a child or a loved one in that way is unbelievable.
That is why we as a Government have committed to increasing the penalty for causing death by dangerous driving to a life sentence, and why we are now working to find time in the legislative agenda to bring that in. That needs to happen, and the fundamental reason for that is that families feel the system is not just. They feel it is not fair to them or to their experience. That has also been brought forward clearly by my hon. Friends the Members for Dartford (Gareth Johnson), for North Swindon (Justin Tomlinson) and for Moray (Douglas Ross), by the hon. Member for Strangford (Jim Shannon), and indeed by my right hon. Friend the Member for Ruislip, Northwood and Pinner (Mr Hurd), who raised it with me yesterday in relation to his constituents.
The one area where the Government would have some disagreement with my hon. Friend the Member for Walsall North is on the question of somebody fleeing the scene. There is already an offence for fleeing the scene, and although he pointed out that that in itself is a short offence, it is a very serious aggravating circumstance when the judge comes to convict. Were the judge to find that somebody had killed someone and then fled the scene, it would significantly increase the sentence that the judge was able to give. Once the opportunity for a maximum life sentence for causing death by dangerous driving is provided, fleeing the scene is an aggravating factor that would drive the sentence up towards a life sentence.
I know that Members of Parliament have challenged that, so I will be clear about what we are talking about. It is of course true that we are dealing with an enormous number of different types of situation. Those situations range all the way from somebody who is drunk, driving at twice the speed limit in a town and speeding through a red light, to my 25-year-old constituent who overtook, sober, at 5 in the afternoon and killed somebody coming the other way because he misjudged his overtaking. All of us in this House understand the importance of the judge and jury in making those difficult decisions in different cases.
We should be in absolutely no doubt about what dangerous driving means. Dangerous driving means that all those people, whatever they were doing, fell well below the standard we would expect of a careful and competent driver. They ought to have been aware of their physical surroundings, aware of the normal laws of causation, aware of the terrible danger posed by the vehicle they were driving, and aware that their dangerousness caused the ultimate thing—a lack of life.
The disagreement over whether that should be a case of murder is around the question of intention. This House believes that there is a difference between somebody who intentionally sets out to murder someone—to stab or shoot them—and somebody who is behaving dangerously in a car, who is overtaking, who may not intend to kill the person. However, the impact on the family is exactly the same; whether the individual intended to kill their family member or accidentally killed their family member, the impact is the same. That is why we owe a huge debt of gratitude to the Members of Parliament who have campaigned tirelessly on the issue, which has been neglected by this House. That is also why we will be bringing legislation forward, and why I pay tribute again to my hon. Friend the Member for Walsall North, to the Express and Star, and to all the Members of the House who have campaigned on this important issue.
Gareth Johnson
The Minister is right to point out that there are a range of circumstances. That is why courts should be given lengthy maximum penalties, to cater for the different scenarios that can arise. We have a situation where the maximum penalty for someone charged with causing death by driving without due care and attention and then fleeing the scene is just three years. Worse than that, any unduly lenient sentence cannot even be appealed by the prosecution. Therefore, we need the matter to be reviewed right across the board.
Rory Stewart
The Government’s belief is that, by increasing the maximum sentence to a life sentence for causing death in that situation, the distinction my hon. Friend is drawing between different types of crime—in particular, the question of manslaughter that he raised in his intervention earlier—will be dealt with. The maximum penalty of life that the Government will introduce will then allow life sentences to be imposed on an individual who did that, regardless of whether it was done in a car or in some other fashion. With that, I will conclude with another tribute to my hon. Friend the Member for Walsall North.
Question put and agreed to.
Anti-Corruption Strategy: Illegal Wildlife Trade
(6 years, 1 month ago)
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Dr Rupa Huq (Ealing Central and Acton) (Lab)
I beg to move,
That this House has considered the anti-corruption strategy and the illegal wildlife trade.
It is, as always, a pleasure to serve under your chairship—not chairmanship—Mrs Moon. Right hon. and hon. Members on both sides of the Chamber know that we are all lobbied on animal issues: bees, foxhunting, which thankfully is not making a comeback, puppy smuggling and so on. Those issues are close to my heart, and as I am co-chair of the all-party parliamentary group on anti-corruption—I see that my trusty co-chair, the hon. Member for Amber Valley (Nigel Mills), is in his place—combating illegal rackets is never far from my mind, either. I see that the anti-corruption chair is also with us—sorry, champion, or is it tsar?
Dr Huq
I would have liked to see a tsarina, but we have a tsar and he is in his place.
In this debate, we are considering both the illegal wildlife trade and anti-corruption. The two are not as decoupled as one might think; the phenomena overlap more than one might imagine. We all remember the heart breaking case of Cecil the lion. He was lured out of a protected reserve to be killed and dismembered as a trophy—that is vile and revolting—as was his son. That highlights how trading in wildlife occurs worldwide. That is the case in fact, and in fiction recently. We have had the Panama papers, the Paradise papers, and “McMafia” on television on Sunday nights. That has reminded us of anti-corruption, corrupt practices—all those sorts of thing. This debate brings the two together; there is a nexus between anti-corruption strategy and the illegal wildlife trade. Drugs, human trafficking and the illegal arms trade might be the more obvious associations with the word “corruption”, and they hit the headlines more, but the illegal wildlife trade is ranked fourth globally, in terms of transnational crime networks, after those three things. It is worth more than £17 billion a year. That is the Government’s estimate. We do not know, because the trade is illegal, but it could be worth more.
This debate therefore goes further than conservation matters. One often thinks that animal issues are for the big-hearted people who are concerned about furry and cute species. That is important, but issues of sustainability, endangered species, the damage to our ecosystems and biodiversity are all implicated in animal issues. Another issue is trafficked animals. As I said, the debate goes further. For a start, the trafficked animals that we are talking about include lizards such as chameleons, rhinos for their horns, elephants for their tusks, and pangolins, which were celebrated recently on World Pangolin Day—the Foreign Secretary feted that day of the year. Pangolins are hunted for their scales. None of those animals are furry at all; they are desired for their high-value body parts. All this stuff raises questions of transnational crime and corruption.
Zac Goldsmith (Richmond Park) (Con)
I congratulate the hon. Lady on initiating this crucial debate. Given what she has said about the scale of the illegal wildlife trade and its connection to corruption, will she join me in supporting the Environmental Investigation Agency’s campaign for the UN convention against corruption to be amended to include the illegal wildlife trade? It currently does not, and no cases have been pursued by that agency. That ought to change.
Dr Huq
The hon. Gentleman, who is well known for his love of animals and has fought for many years on these issues and other environmental matters, makes a very valid point. I do not know in detail the document to which he refers, but it sounds as if a horrible loophole needs to be closed immediately, so I am grateful to him for drawing that to my attention.
I want to address the Government’s slightly lacklustre, “could do better” efforts to date at combating the illegal wildlife trade’s contribution to money laundering and organised crime. I have tabled written questions, as many hon. Members have—a lot of them are here today—and quite often the answer given is that the Government will be hosting a summit in London in October to address these matters, or they state sums of money that have been spent on this issue. To the layperson, a sum of money is a bit intangible. It is a figure; they cannot see what is actually happening. The October summit seems to be the answer to all our ills, but I have a series of questions for the end of my speech about specific things that I would like to happen.
As my co-chair of the APPG will know, the elephant in the room—ha-ha—on all this and on the anti-corruption strategy, which thankfully has now been published, is the slowness of the UK not just to encourage but to ensure that all our overseas territories adopt public registers of beneficial interest as soon as possible. I know that that issue is not quite within the Minister’s remit, but if she could pass it on to her colleagues, that would be great.
Martin Whitfield (East Lothian) (Lab)
I am grateful to my hon. Friend for securing this most important debate. Does she agree that as well as wildlife trafficking, which covers our fauna, there is also the question of flora? Illegal logging is going on. That causes huge economic and environmental damage to an area and, consequently, the flow of that illegal wood into the system causes disparities in economic value.
Dr Huq
I completely agree. Both flora and fauna are handled by the EU body that deals with these things, and there is a worry about whether, when we leave the EU, we will still be covered. My hon. Friend is absolutely right to say that the issue is not just cute, furry animals, scaly animals or whatever. Both fauna and flora are implicated in this vile trade.
The supply chains are complex. There are both poachers and traffickers. The ivory trade alone is estimated by the UN to be worth $62 million in east Asia, with approximately 75 tonnes of elephant ivory exported. It is not just, as one might imagine, one or two elephants being killed by rogue poachers. There is an industrial element to this organised crime—huge-scale shipments to foreign buyers at the other end. People get away with it because, in the words of Tom Cardamone in written testimony to the US Senate Committee on Foreign Relations, this is “Low Risks, High Profits”.
John Penrose
As one of the chairs of the anti-corruption APPG, the hon. Lady is doing an excellent job in raising the very important nexus between illegal wildlife trading and the fight against corruption. Does she agree that perhaps the simplest way to look at the question of animal trafficking and poaching is to think of it rather like an extractive industry? Many of the risks that apply to mining or illegal logging and those sorts of thing also apply to the illegal traffic in both flora and fauna. If we think about it in that way, many of the same public policy responses, both in this country and in the countries of origin, will be effective if we can put them in place.
Dr Huq
The hon. Gentleman is absolutely right. Criminal intelligence gets more and more complex as criminals find different ways to convert their ill-gotten gains. The hon. Gentleman is right to say that the risks are the same, as are the effects of this crime on communities at the other end, which are often in the developed world, so he makes an excellent point.
This trade, if we can call it such, is popular with terrorist groups and militias. That relates to what the Government’s anti-corruption champion just said. The Sudan People’s Liberation Army in South Sudan, which was a rebel group but has now overthrown the person who was in power, has been partial to elephant poaching by grenade; and ivory poaching is a means by which the Janjaweed militia funds its activities in the same region.
The illegal wildlife trade goes much wider than being simply a peripheral concern of well-meaning people concerned with the world that we will leave to the next generation. The damage done is manifold, as the anti-corruption champion just told us. The corruption that supports illegal trading in wildlife poses threats to national security, as we have seen from the terror threat. It is seen by those who deal in it, like guns and drugs, as just another commodity and part and parcel of these organised crime networks. Bribery and corruption obscure the enforcement of existing laws—if there are bendable officials, that also mucks things up—and diminish efforts to strengthen them. Not everyone has an anti-corruption champion in the same way as we do, although the post was vacant for a while; I am very glad that the hon. Member for Weston-super-Mare (John Penrose) is occupying it now.
Credit where credit is due: the UK has not completely sat on its hands when it comes to anti-corruption efforts. We all remember David Cameron’s anti-corruption summit in May 2016—the whole world came to London. The strategy he promised at the time finally saw the light of day at the end of last year, as did the long awaited champion. It was almost smuggled out in the dead of night and not everyone seems to have noticed. Ultimately, we must do more.
One of my main concerns with the anti-corruption strategy is the lack of strong action on open registers of beneficial ownership in our overseas territories. We have said that before. The criminal gangs do not simply traffic in animal parts, but in drugs and arms. They launder their money through shell corporations. Again, we are dealing with these secrecy jurisdictions and mysterious properties with questionable ownership. I think there are whole streets in London where we do not know who owns them and dirty money is parked there.
Nick Herbert (Arundel and South Downs) (Con)
I strongly support what the hon. Lady is saying about the need for transparency. I agree with her about the transparency of companies, the registers of beneficial ownership in overseas territories and the need for more enforcement. Does she agree that it is vital that we choke off demand for ivory? In the end, as with all crime, if we do not tackle demand, but only focus on enforcement, we will not be successful. It is just as important that we address the demand for ivory, as well as the vital enforcement measures, which I agree are important.
Dr Huq
I will come on to speak about demand. I agree that we need to stop these ivory products being desirable, especially in south-east Asia. The right hon. Gentleman made a very good speech the other day in the debate on the Sanctions and Anti-Money Laundering Bill, with which I agreed wholeheartedly. He has also noticed that the Government seem to have downgraded their ambition. In 2016, we were told that all countries needed to reach a gold standard of public registers of beneficial interest. David Cameron painted himself as a world leader in this and promised action. Now, the Foreign Office says that it expects UK tax havens only to adopt the public register when it becomes a global standard, so I think there has been a bit of slippage, but I know that the right hon. Gentleman has done excellent work on this. He is absolutely right that these products should not be desirable at all and people should not be clamouring for them.
The conservation community should be encouraged to work alongside anti-corruption organisations in bringing together anti-corruption strategy and environmental policy. We have an environment Minister responding today, but in a way this covers more than one Department. It is a multifarious issue.
It was good that a much-trailed document recently saw the light of day: the 25-year environment plan. That came out earlier this year and it includes a pledge to bring forward an anti-poaching taskforce. I hope that the Minister will tell us that that will happen well before 2043. We do not need 25 years to do this. We know what the issue is. That plan also includes a taskforce. Sometimes I feel that people can get consultation fatigue. I hope the taskforce has a better appointment procedure than the Office for Students. Perhaps that is something for my constituent, Toby Young, given that he is not serving on the OFS any more. I do not know how transparent the application process is.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Dr Thérèse Coffey)
A tiger never changes his stripes.
Dr Huq
Right, let us stick to the point. To stamp out poaching would cut off the source, which we need to do so that animal carcases are not exported at all, let alone the body parts. We have spoken about the products at the other end. I think there are some studies that show that only 3% to 5% of income from commercial hunting goes to local communities. The rest goes into central Government, agencies, international corporations, terrorists and all sorts of other destinations.
The consultation on the ivory ban last autumn was very welcome, but it has all gone a bit quiet since it closed last year. We are already in March, so when will the results surface? The ban needs to be more than just virtue signalling. There need to be proper measures for combating the ivory trade at source.
Zac Goldsmith
I just want to make one point and follow it up with a question. Since the summit initiated by David Cameron, there has been huge progress. Only a few weeks ago, China closed down every one of its ivory carving factories, which will have a huge impact in reducing demand in China. There have been all kinds of ripple effects across the world as a consequence of that early summit. Demand is being tackled at a very high level. As a country, we can take a lot of credit for that. Everyone expects that the consultation will result in a pretty clear position by this Government—the position that most people want the Government to take. The one concern I have is that it will not go far enough in terms of species. It is not just about elephant ivory. If the elephant ivory market is closed down, there will be a move—we are already seeing signs of this—towards other ivory bearing species, such as the walrus, the narwhal, what other species?
Zac Goldsmith
Rhinos do not produce ivory. There are other ivory-bearing species. Therefore my hope—I hope the Minister will acknowledge this later—is that the ban will be on not just elephant ivory, but all ivory.
Dr Huq
The hon. Gentleman makes a good point. China has introduced a total ban. That is what we would like from our Government. It is not often that we are following China. Usually we are leadership and not followership. He is absolutely right that this concerns other species as well. I think the famous chess set that people talk about came from walrus tusks, so it is not only elephants. I feel there has been a slowing in some of those laudable aims, perhaps because the bandwidth of the Government is being reduced by other issues—nobody foresaw Brexit at the time of that first anti-corruption summit. We can go further and faster.
Zac Goldsmith
I thought of the third species: the hippo. There are only 100,000 hippos in the world, which is extraordinary. If there is any increase in demand for hippo ivory as a replacement for elephant ivory, they are finished. I wanted to put the lovely, noble hippo on the record as well.
Dr Huq
Is the song about hippos “Mud, Mud, Glorious Mud”, or am I misremembering that from my long-ago youth? Yes, the hippos are a valiant species.
We are one of the largest countries to export ivory to south-east Asia. As the right hon. Member for Arundel and South Downs (Nick Herbert) said, this can create desire and demand for people to own these products as things with a luxury status. We need to work with China and other south-east Asian Governments to ensure that demand is dampened and even destroyed, and that ivory’s cultural cachet—that it is a cool thing to have—falls.
In this post-referendum situation, as we head towards Brexit, there is a potential opportunity to promote other British luxury goods as alternatives to ivory in this brave new world we are heading to, which not all of us wanted to go to. I want to put on record the work done by my constituent Duncan McNair of Save the Asian Elephants—he deserves praise. Perhaps the Minister would like to meet him because he has some good ideas. Although in 1975 the Asian elephant in theory became a protected species, abuses continue to this day—he can talk ad infinitum about those.
The black rhinoceros—yes, the rhino was there—is in danger of being hunted to extinction in the wild, as an hon. Member mentioned. The organised poaching gangs associated with it promote corruption and organised crime. The rhino horn shipped to Asia from Africa is often sold for more than gold and platinum on the black market. The UN figures put the annual trade in Asia at £8 million. Lion numbers declined by 43% between 1993 and 2014. As of July 2017, the continental population of African lions was estimated to be 20,000. All these wonderful species are disappearing from our planet. Across their range, lions are in decline. They face threats from loss of habitat and prey, as well as illegal poaching and hunting. Lion bones, as well as those of leopards and other big cats, are used in some east Asian medicine—there is a myth that they have medicinal properties.
There have been success stories in the fight against the organised illegal wildlife trade. Lion hunting trophies are no longer permitted in Benin, Burkina Faso, Cameroon, Djibouti, Ethiopia, Guinea, Guinea-Bissau, Mauritania and Somalia. It is not all doom and gloom. The Kenya Wildlife Service has been praised by the UN and the coalition Government because it introduced a £10 million grant to combat the trade in ivory and rhino horn. This debate was not meant to be about simply knocking the Government, but I do want to outline some areas where we could do better.
Some other good news is that, in 2017, a Chinese trader in Nanjing was arrested for what he believed to be tiger bone, but was in fact a lion bone. That illustrates how criminal gangs can use lion bones to skirt restrictions on tiger bones—there is slippage. There is a sense that the commercial farming of lions and tigers in South Africa could be fuelling rather than satiating demand for big cat bones in traditional medicines.
Clearly, aspects of the illegal wildlife trade exist in tandem with elements of legalised trade in wildlife parks. Again, the case of Cecil the lion was in a wildlife park. The Environmental Investigation Agency found that legal loopholes allowing the hunting of rhinos for live export and for trophies were being used to facilitate poaching. There is an argument in some circles for the promotion of farming certain animals to combat the illegal trade in their body parts, but some evidence shows that far from combatting the trade, it fuels demand. Again, there is that question of supply and demand.
On page 62 of the strategy, there is an eye-catching box with a border, which features discussion of the UK’s efforts to tackle the international wildlife trade. It includes references to the international meeting in October, which we are all looking forward to, sharing expertise with Vietnamese customs authorities, co-operation between Chinese and African forces and supporting follow-ups in Botswana. The message is that progress is being made, but it does not offer any concrete examples of policies or initiatives.
Nigel Mills
I congratulate the hon. Lady on securing this important debate. Does she at least recognise that the strategy, perhaps as a surprise to many, made such a prominent link between corruption and illegal wildlife sales, which reinforces the need to build capacity in countries around the world so that people cannot pay a bribe to find out where an animal is, get the body out of the country or move money around, which is an important part of tackling the problem?
Dr Huq
The hon. Gentleman, my trusty co-chair, is absolutely right. There needs to be expertise to enforce all those things—having policies is not enough. We hear about bent policemen. I do not know whether other Members were there, but just now the International Fund for Animal Welfare was in the building with a photo opportunity about ivory. The policy adviser, David, told me about a recent case in which eight policemen were heavily implicated. The hon. Gentleman is right that we need the crime-fighting mechanics as well as policies.
The charity was demonstrating a fingerprinting kit, because ivory is one of the few things that fingerprints do not leave any trace on. That cutting-edge technology can now be used 28 days after the prints were left. This is a cross-border trade where an animal is killed in one place, and the parts are exported and moved between places, but the technology will allow a month for prints to be taken. I am very encouraged by the IFAW’s work, but we need to encourage more counties to take up that fingerprinting technology and introduce it in other police forces—it was developed by University College London and the standard is used by our police.
The first question on my list for the Minister is easy and I have already said it: will she meet with Duncan McNair, the CEO of STAE, to discuss its work and how it can have an input into Government policy? He has some very good ideas. I have also mentioned last autumn’s ivory ban. We have not seen the results yet, and there are suspicions that they could be held back for a wonderful photo opportunity in October at the international conference here in London. I hope that she will tell me that is not case and we will see the consultation results sooner. Could she tell us when the consultation results will be released?
The strategy mentions
“tangible outcomes for implementation and delivery”
by October, but delivery of what? In fact, will the ivory ban be in place by then? That would be a great opportunity for that announcement, although it would be even better if the ban has long been in place.
Of the exemptions announced by the Government to a total ivory ban, I completely accept, as does the Musicians’ Union, the exemption for musical instruments —violins and cellos. I am not going to burst into Stevie Wonder and Paul McCartney’s “Ebony and Ivory” at this point.
Stephen Kerr (Stirling) (Con)
May I help the hon. Lady with that list? Some very valuable bagpipes have ivory mountings on them. In fact, as a piper, I possess such an instrument. It is beautiful, but regrettably ivory is involved.
Dr Huq
The hon. Gentleman’s skills never fail to impress me—they are increasing by the minute. Perhaps he can play the bagpipes for us at a function at some point—he could do it at the unveiling of the total ivory ban and the delivery of these promises well before 25 years’ time. Yes, bagpipes use ivory. Other songs have occurred to me: “Karma Chameleon”, which is from a similar era—I think that there is about a year or two between the two songs—and “I Am the Walrus”, which is a perennial favourite of many. I accept the musical exemption.
I accept the exemption for anything that is under 5% ivory or 200 grams because those are such tiny amounts, and the exemption for museums. Slightly more troubling is the ill-defined, woolly term “culturally artistic and historic” pieces. That could open up a legal loophole for carved, solid, luxury ivory items such as Japanese fans or cigar boxes. We need to ensure that they are not covered. What is the exact test of “culturally artistic and historic”? The Lewis chess set of 1100 AD is often mentioned, although it is actually walrus ivory, not elephant ivory. It is often said that is the kind of thing the term will cover, but what about injecting certainty with the proviso that, if it can be sold to a museum, it is allowable? It may not necessarily be in a museum, but if it is a museum-able piece, we can allow it. If it is a cigar box, it will not be covered—no thanks.
Another area where we could go further regarding the illegal wildlife trade is the lack of funding for mapping trade routes used by criminal gangs to transport animal products and carcases across continents. A glance at the UK aid development tracker shows that various Departments and agencies are involved in combating the trade: the Foreign and Commonwealth Office, the Department for International Development and the Department for Environment, Food and Rural Affairs. On top of that we have the new Joint Anti-Corruption Unit that will operate out of the Home Office. Surely they should take a joined-up look at mapping trade routes.
I have a couple more questions, and then I will end. Will the Minister confirm what “stringent tests” have been met by the lion countries? That was in a 2015 written answer from the then Minister responsible, the hon. Member for Penrith and The Border (Rory Stewart). There is a worry that things might fall through the cracks if they are not well defined. Could the UK Government send a strong message by enacting the total ban on the import of lion trophies? The numbers are not large, so hopefully this is not on an industrial scale, but the Government could seize the initiative and show leadership.
I have a couple more questions. Given that the academic literature identifies mapping transnational crimes, why does the Illegal Wildlife Trade Challenge Fund fund only one proposal that maps transnational networks? That relates to my earlier question. I have already raised another obvious question: when will the Government ensure that public registers of beneficial interests are in place for the overseas territories, so that they can better fight this type of crime?
The recent international aid scandal in the charities sector has shown that some more extreme Conservative Members will argue against any international aid. I hope the Minister will restate that the 0.7% aid target is Government policy, and that it will not be watered down.
When we leave the EU, we will no longer be bound by its scientific review group, with its high standards on the exports of live animals and high-value body parts. There is a worry that, if we crash out, we will be beholden only to the convention on international trade in endangered species. It is a global standard, but is not as stringent as the EU one. Does the Minister know what our status will be in relation to the EU scientific review group? She is a scientist herself. If it is unclear and subject to negotiation, can we add it to the list of things, such as Euratom and Erasmus+, that we are fighting to keep beyond the transition period? Otherwise, there might be a WTO-type situation where we crash to the lowest-common denominator, or the situation that we heard about over the summer where, if we do not have sufficient protections in place, chlorinated chickens could be on the menu. Can we aspire to remain in, have a close relationship with or mirror that body?
The same applies to shared intelligence and joint operations to catch perpetrators, which would be a worry if we leave Europol. The fingerprinting kit that IFAW pioneered works for 28 days after the prints are planted on the ivory. We need to catch the cross-border shifting of ill-gotten gains over time.
As a sociologist, I am all too aware that globalisation has made the world smaller. It helps us to keep in touch across the globe through social networks and environmental trade but, sadly, that can spill over into organised crime and illegal trade in exotic species. Criminal and terrorist syndicates that buy with impunity and bribe corrupt officials on their way are the stuff of “McMafia”, but they are widening their revenue streams and decimating animal populations.
Corruption is at the heart of the illegal wildlife trade, which Prince William, no less, condemned at the 2016 Hanoi conference on illegal wildlife trade. Whenever I ask parliamentary questions on this, the response is “in due course”. That is unsatisfactory and not good enough anymore. The Government have gone some way with their strategy, but they must act now.
Stephen Kerr (Stirling) (Con)
It is a pleasure to speak in the Chamber with you in the Chair, Mrs Moon. I congratulate the hon. Member for Ealing Central and Acton (Dr Huq) not only on securing the debate but on giving a comprehensive speech that sets a wonderful tone for our exchanges and lays before the Minister a range of questions, which we are all interested to hear the responses to.
I was glad to be able to add to her list of musical instruments and to disclose my hidden talent for playing the bagpipes. They are the most glorious instrument in my long-held opinion, as hon. Members can imagine. During the interventions on the hon. Lady’s speech, I was also grateful to hear references to the importance of the United Kingdom’s global aspirations post-Brexit. We should aspire to be the anti-corruption leader for the whole world and to do better than our current eighth position in the anti-corruption league table for clean societies.
Stephen Kerr
I will gratefully clarify that ivory is not now used in bagpipes. These are very old sets of bagpipes. I have a set that my father bought for me when I was 12. He paid an incredibly small amount of money for them, and they are now worth a lot more.
Stephen Kerr
Point taken.
The hon. Lady made the interesting point, with which I agree, that the Government have not exactly sat on their hands but that, ultimately, we must do more—and more than virtue signalling. As the new Member of Parliament for Stirling, one of the first places I was invited to visit was one of the top tourist attractions in my constituency, the Blair Drummond safari park. Jamie Muir and his team gave me a behind-the-scenes experience that, frankly, I would never have had if I had not been elected. I had up-close encounters with elephants, rhinos, hippos and giraffes, and it was glorious to come into such close contact with those beautiful animals. Appreciating the glory of nature makes us appreciate our own humanity. It is appropriate to talk about nature on a day when Scotland received its first ever red weather alert. We stand in awe of the power of nature, as well as its beauty.
I promise that I will make only a short contribution, but I should explain that I am speaking in this debate because of my constituents. Like me, they feel very strongly about the need for us to proactively preserve the wonders of the world we live in and to not stand idly by and, frankly, see them ruthlessly destroyed for ill-gotten gains—that does not even begin to describe the depth of cruelty that goes into this trade.
The Government have a strong record on improving animal welfare, and it is important that we not only protect animals in the United Kingdom, but work to promote animal welfare and good environmental stewardship worldwide. That involves tackling the illegal wildlife trade and the corruption that it propagates and relies on.
It is shocking that the illegal wildlife trade stands alongside human trafficking and the trafficking in drugs and arms as one of the major cross-border crimes of our time, and that it draws in as much as £17 billion per year. That only underlines the need for global action and global co-operation.
It is a trade that brutalises animals. Those criminals routinely mistreat them, transport them from country to country in absolute squalor and kill them in massive numbers—that is great cruelty. The amount of ivory being caught in large shipments alone indicates that perhaps thousands of elephants are being killed each year for their ivory. African elephants are, of course, endangered, and the trade helps to drive them towards extinction by hindering global conservation efforts. Those criminals have no regard for the environment and will destroy entire ecosystems for short-term gains.
In addition to the cost to animals and to the environment, the illegal wildlife trade has a human cost. The trade thrives on and exacerbates corruption and undermines the rule of law. It is an entire industry—and a lucrative one, as we heard from the figures quoted by the hon. Member for Ealing Central and Acton—that operates outwith the authority of any Government or the law. Ultimately, it is an insidious, destabilising force that holds back the growth of developing countries and helps to keep millions of people in poverty worldwide.
Zac Goldsmith
My hon. Friend is making a powerful and moving speech. It is known that Janjaweed, al-Shabab, Boko Haram, Joseph Kony’s Lord’s Resistance army and other organisations all derive much of their income from the illegal wildlife trade, which makes it a dangerous and ugly business. Does he agree that one of things we do well, and have done well, as a country is provide real training for people in countries that want to tackle the trade to ensure that their anti-poaching and anti-illegal wildlife trade units are up to the task? We need to see much more of that as part of our “global Britain” plans in years to come.
Stephen Kerr
I am grateful to my hon. Friend for his intervention and completely agree with him. That is one aspect of our leadership in this area that we should definitely advance. It is highly effective.
For humans, animals and the wider environment, it is imperative that we stamp out this illegal trade. The Government have rightly noted that it will require concerted international action and co-operation with nations across the world to bring the trade crashing down. It is in every country’s interest to end the illegal wildlife trade. Cracking down on it will promote sustainable growth and stability and help to preserve the future of the environment. I am grateful that the Government have set to work on addressing the issue and, as they have frequently expressed it in recent times, are devoid of any complacency in this area.
In 2014, the UK hosted an international meeting, as has been mentioned, where 40 countries agreed urgent co-ordinated action to eliminate the trade. Since then the Government have worked with authorities in China, Vietnam and across Africa, to name but a few, to help to curb the trade. International organisations play an important role too, and our support for the International Consortium for Combating Wildlife Crime, which brings together a range of institutions, makes a valuable contribution to the global fight against the trade. I welcome the publication of the new cross-Government anti-corruption strategy in December, which lays out the blueprint for further action, including against the illegal wildlife trade.
The strategy recognises the many ways in which we can work to curb the trade, including by promoting more robust law enforcement and stronger legal frameworks, encouraging alternative livelihoods and economic opportunities for people who might otherwise be tempted by the lucrative nature of the trade, and simply raising awareness. Likewise, it recognises the importance of international organisations to our future efforts. The UN, our Commonwealth friends and allies and the G20 will all be valuable partners in working to take down this trade and the corruption with which it is so intertwined.
At this point the strategy fills me with confidence that the Government will continue to strive to be a world leader in the fight against the illegal wildlife trade, but it has to be more than virtue signalling. There has to be real action. We already have a strong record—we certainly have a strong catalogue of speeches—in this area, and the strategy needs to develop. I believe we are ready to build on it as all parties in the House of Commons have an appetite for it.
I mentioned earlier that we are eighth out of 180 countries in the world for anti-corruption. I think we can do better in that area as well. Just as we should promote animal welfare around the world, we should also promote our culture of anti-corruption. As one of the least corrupt nations on earth—thankfully—it is our responsibility to help to build a world free of criminal enterprises, such as the illegal wildlife trade, where corruption touches as few lives as possible. With this strategy, I have confidence that the Government will proceed.
Several hon. Members rose—
Mrs Madeleine Moon (in the Chair)
Before I call Vernon Coaker, I must advise that I will call the Front Benchers at 3.35 pm, so please share the time between you if I call you to speak.
Vernon Coaker (Gedling) (Lab)
It is a pleasure to serve under your chairmanship, Mrs Moon. I congratulate my hon. Friend the Member for Ealing Central and Acton (Dr Huq) on securing this important debate. I do not want to speak for long, but I felt it was important to make a short contribution to the debate. To be frank, I felt somewhat guilty that I have not spoken much on this issue in my time in Parliament. Like many people, over the past year or two I have been moved by some of the things that I have seen on television and by things that I have read. I have been moved by the devastating figures that have started to emerge, thanks to the work of people such as my hon. Friend and others in the Chamber, and by organisations outside this House, some of whom are with us today.
The world—and ourselves, as a developed nation and a Parliament—is at a crossroads. It is not that the Government are not doing anything and do not care; that would clearly be ridiculous and not true. We do care, and so do a significant number of people across the world. The criminal gangs represent a very small minority, but unless we tackle them and work with other countries with a greater sense of urgency—so that the issue becomes a greater priority for our country, for the various international organisations, for the EU, for the various policing bodies, for the United Nations and for the Organisation of Africa Unity, and so on—our grandchildren will not see a wild elephant, except in a photo or perhaps in a zoo, where we really do not want to see them. They will not see a wild tiger, a wild rhinoceros or many other species of plant or tree, or whatever. Unless we wake up to this, people’s grandchildren and great-grandchildren will look back at 2018 and say, “What were you doing? You were decision makers.”
We in Parliament make the laws. We set the priorities for our Government, and our Government, through the international organisations to which we belong, can demand that priorities are set and action taken. So the question is: what did you do? Where were you? What did you say? When I found out about this debate, it made me think I had better start speaking up. It is a challenge for me, let alone the Government. We must demand that the Government make the issue a priority. It is not a case of blame; it is a case of saying, “For Christ’s sake, let’s wake up. For goodness’ sake, let’s look and see what is going on.”
The figures say billions were made here, or billions were made there. We can argue about the figures, but countless billions of pounds are made by small numbers of gangs who are ruining our planet and our future. We must tackle them. We sometimes know who they are. We sometimes fail to implement existing laws and fail to take the proceeds of crime from people who have benefited from it, but why does that happen? The Minister does not want that to happen. The Prime Minister does not want that to happen. The Prime Minister of our dreams would not want that to happen. It does not matter which party is in power; it happens, and it carries on happening. The same can be said about the international bodies we belong to.
Billions of pounds are made. The figures produced by various people are shocking. When we see the pictures it brings tears to our eyes, but crying about it does not save a single elephant, rhinoceros or tiger. That is simply the starting point—the thing that wakes each of us up, to say, “We will not stand for this any longer.” Although we cannot wave a magic wand, we want to be able to say to our grandchildren that we did everything we possibly could. At the moment, I do not think I could say that. I will let others judge whether they could, but I could not. That is why I wanted to speak in this debate.
I do not want the Government to get defensive about this, but they could do more simply by saying, “We are going to put a new shirt on, dust ourselves down, see what the laws are, bang the desk and demand that we get better action”—from ourselves, but also from the police and the international organisations that we belong to. If that happened, it would not stop these things overnight, but I bet it would start moving things along.
Can we not accelerate things a bit? Do we really want to come back here in a year, or two or three, and say, “There are still elephants being poached for their ivory”? That was the plea of my hon. Friend the Member for Ealing Central and Acton and the hon. Member for Stirling (Stephen Kerr). Whatever the difficulties, the consultation has finished. I accept that it will not be easy, given the exemptions that will have to be made; but for goodness’ sake, we have been talking about an ivory ban for years. Can we not just get on with it somehow?
Other people know far more than I do about the laws and the difficulties—some will have had to go and witness them. I came here to say this to the Government. I know they want to do as much as they can, and they are doing so. That is true of us all. But let us not be the Parliament, or the Members, or the legislators who had to tell their grandchildren, “We’re sorry that those great wild animals no longer exist. We wanted to do more, but it was difficult to get people to work together, and the exemptions were difficult.” Whatever the challenges and difficulties, we owe it to our children and grandchildren, ourselves and the planet, to do better. That is the task before us.
Jim Shannon (Strangford) (DUP)
It thank the hon. Member for Ealing Central and Acton (Dr Huq) for introducing the debate.
The hon. Member for Gedling (Vernon Coaker) issued a challenge to the House to hold wildlife in trust for those who come after us. We all have that challenge in our hearts. We must try to do it. I recently saw a video making the rounds on social media of a baby rhino in South Africa lying by the side of its dead mother, seemingly crying—it looked like that on the video. Such things are an unfortunate reality in the world we live in, but what caused that death should not be. The mother’s horns had been ripped from her body. Stats sometimes bring things home to us, because they show the enormous scale of what is happening. Rhino poaching has increased between 2007 and 2013 by 7,700% from 13 per year to 1,004 per year. That is incredible. The significance and magnitude of the figures cannot be stressed enough.
I was interested to hear about the hidden talents of the hon. Member for Stirling (Stephen Kerr) on the bagpipes. I would not have known. I am fond of the bagpipes, by the way. I love them, and they are very much part of life and tradition in Northern Ireland. Perhaps one day we will have the hon. Gentleman over to entertain us—12 July would be the day to come, but that is by the way.
The illegal wildlife trade is worth more than £15 billion a year. It is the fourth most lucrative illicit trade in the world after drugs, weapons and human trafficking. The very thought makes me ill. I have had a surprising number of emails from constituents about the debate. The more I have looked into the facts and figures, the more I have seen that, while we clearly have taken steps, we are not doing enough. We should be stepping out on the world stage, playing a greater role on behalf of those we could help, and bringing about the end of a vile trade.
I firmly concur with the aims and goals of the Worldwide Fund for Nature with respect to the end of illegal trade in animals: we must be clear, first, about adopting
“zero tolerance policy on corruption associated with the illegal wildlife trade, recognising with great concern that corruption is an important factor facilitating the criminal activities associated with the illegal wildlife trade.”
Secondly, we must urge countries where poaching, trafficking and buying take place to commit to supporting strategies that deepen understanding of corruption risks, and mitigation strategies to address the corruption that makes the illegal wildlife trade possible. We must review progress on existing high-level commitments such as those made in the London declaration of 2014 and the Kasane statement of 2015. We have made lots of statements and verbal commitments, but we need something that stops what is happening. We need to address the problem of corruption facilitating wildlife trafficking and related offences by reviewing or amending legislation as necessary, and criminalising the corruption that facilitates the trade. We should strengthen the legal framework and facilitate law enforcement to combat the illegal wildlife trade and assist with prosecution and the imposition of penalties that are an effective deterrent.
The illegal wildlife trade is made possible by corruption, and it fuels further corruption. Only if we tackle corruption can we eliminate the trade. The hon. Member for Richmond Park (Zac Goldsmith) in an intervention mentioned steps taken by China, which I hope make a difference. China sometimes says it will do something, but ivory trading seems to continue. Let us see how that works. Corruption can take place at every stage of the chain—poaching, trafficking, trading and laundering of the illegal proceeds of crime. It can be at the highest level, sanctioned for individual gain.
I had the pleasure of going on a half-day on safari in Kenya, with the armed forces parliamentary scheme. It was an opportunity for me to watch some of the creatures that God created. They must have been looking at me, as I had a white shirt on—of all the things to wear on safari. The sheer power of the lions, the beauty of the giraffes and the intelligence of the elephants is something that remains with me to this day. I thank my creator, God, who made wonders for our enjoyment—certainly not for our abuse or for the illegal animal trade. That is an abuse of God’s creation. Lions are being hunted for the thrill of the ride and as a trophy, and elephants for their ivory, with more than 100,000 killed by poachers between 2010 and 2012. Twenty thousand elephants are killed every year for the illegal ivory trade. The numbers suggest that, in the two months since the closure of the consultation at the end of December, approximately 8,300 elephants have been slaughtered, not for meat or to feed starving families, but to decorate people’s houses with ivory. That is not acceptable.
As hon. Members have said, we need to stifle the demand and end corruption and illegal killing. What help can the Minister give to countries that are trying to stop illegal poaching? The training and equipping of rangers is perhaps the sort of help needed on the ground.
Zac Goldsmith
A staggering quantity of illegal wildlife trade happens online, so one way to deal with demand would be to tackle that trade online. Will the hon. Gentleman join me in paying tribute and offering huge thanks to organisations such as the International Fund for Animal Welfare that have done so much to persuade big online retailers to weed illegal wildlife trade out of the way they do business? Taobao, Alibaba and eBay have massively changed their policies as a consequence of campaigning by groups such as IFAW. We all owe them a debt of gratitude.
Mrs Madeleine Moon (in the Chair)
Order. The hon. Gentleman has made a number of long interventions and there is one more speech to go.
Jim Shannon
It is my belief that we need to introduce legislation quickly to play our part in reducing the number of animals killed by poachers, and ensuring that narwhal, walrus and hippopotamus ivory will not be used as replacements so that those animals become next in the firing line. We must end the trade. We can up our game and do a better job of playing our part. That can begin today, with this debate. Let us set the scene. I ask the Minister and her Department to take heed and urgently implement the steps to legislation.
Angela Smith (Penistone and Stocksbridge) (Lab)
It is a pleasure to serve under your chairwomanship, Mrs Moon. I congratulate my hon. Friend the Member for Ealing Central and Acton (Dr Huq) on securing the debate. There have been some fine speeches, but that of my hon. Friend the Member for Gedling (Vernon Coaker) was particularly moving. I have been involved in the debate for a long time and have sponsored events at Parliament to draw attention to the issue. The very fact that an ex-Home Office Minister, who is a senior and respected Member of Parliament, has taken the time to show how engaged he now feels in the debate is an indication of how much movement is being made. We are now at the point at which this controversy and scandal must be addressed seriously, both nationally and internationally.
I will not go through the numbers and facts behind the size of the trade—we have heard them many times today—but suffice it to say that we still do not fully understand the full relationship between this form of organised crime and other forms, including drugs, and the way it helps to underpin international terrorism. Our attention to animal welfare and protecting the elephant and rhino, and all those other species, is often justified because of organised crime, and we have now reached a point where that is fully understood. Nevertheless, my hon. Friend the Member for Gedling brought us back to the important point: this is also about protecting some very precious and important species.
Let me provide a little detail on the issues involved. We know that there is still a great deal of work to do in the countries where poaching takes place, and there is an absence or inadequacy of measures to track performance on stopping poaching in the first place. Officials and employees are badly paid, and in some cases rangers provide information on patrols or the location of animals. On occasion they turn a blind eye to poaching. We also know that we get false documentation in the trading environment, and that a blind eye is turned to checks and inspections at borders. That is all underpinned by corruption, which illustrates the scale of the challenge.
I pay tribute to those NGOs that have worked so hard on this for many years, in particular the WWF and IFAW. They are clear about what is needed at the conference in London later this year: we want, and need, a zero-tolerance policy on corruption. The UK has a lot of soft power on this issue, and we must go out and urge those countries where poaching, trafficking and buying takes place to continue to support strategies that deepen an understanding of the risk of corruption. Mitigation strategies may also be required to address the corruption that enables that illegal trade. As an important international power—even now—we are in a position to help and support those countries.
We must strengthen the legal framework and facilitate law enforcement for illegal wildlife trade. At the event I sponsored about three years ago, Interpol was in the room. Will the Minister say to what extent we are still engaged in such international co-operation? Can she guarantee—I am sorry to bring this into the debate; I do not want to, but I have to—that post Brexit we will still have that international co-operation, particularly with Interpol and European crime agencies, to ensure that we continue to tackle the issue successfully?
Finally, I want to mention the ban. The consultation finished at the end of the year, and I have attended meetings on this issue. What I really want to hear from the Minister is when we will get detail about the outcome of the consultation. The point raised by my hon. Friend the Member for Gedling was absolutely right: now is the time to take action, so the sooner we hear from the Minister, the better. I understand the need for exemptions, and the point raised by the hon. Member for Stirling (Stephen Kerr) about musical instruments was well made. I also accept the need to get those exemptions absolutely right for the antiques trade. That will not be easy, but if we do get it right, we will gain the co-operation of that market. That will make it a lot easier for us, as a major international power, to demonstrate not only that are we legislating to do our bit to stop the illegal trade—perhaps by banning the domestic trade in antique ivory, with exemptions—but that we also have the full co-operation of those involved in that market. I will finish on that important point.
David Linden (Glasgow East) (SNP)
It is a pleasure to serve under your chairmanship, Mrs Moon, and I congratulate the hon. Member for Ealing Central and Acton (Dr Huq) on securing this debate.
I am grateful for the opportunity to sum up on behalf of the Scottish National party. It has been fairly consensual—I have taken part in debates in Westminster Hall since I was elected in June, and this has been one of the best. We heard an excellent speech from the hon. Member for Stirling (Stephen Kerr), who told us of his talent in playing the bagpipes. He spoke of his trip to Blair Drummond and about being up close to those rare animals. As a nationalist Member of Parliament from Glasgow, being here with Conservative MPs feels much the same, but in all seriousness he made an excellent speech.
The hon. Member for Gedling (Vernon Coaker) made one of the most moving speeches that I have heard in my time in this House [Hon. Members: “Hear, hear.”] It was very sincere, and as the father of a young child it struck a chord with me to think that my son, who is two years old, will one day grow up. There is an expectation and onus on us as legislators and politicians to make sure that we show leadership. I am grateful to have had the opportunity to listen to the hon. Gentleman.
The hon. Member for Strangford (Jim Shannon) was typically gracious in reducing his speaking time to allow other hon. Members to speak, and he hammered home the statistics. That 7,700% increase in rhino poaching, which I think was in the Library briefing from an exchange I had with the Foreign Secretary, reminds us that this is very serious. The hon. Member for Penistone and Stocksbridge (Angela Smith) has been a Member of the House a lot longer than I have, and has put a lot of effort into this work. She was right to pay tribute to IFAW and the WWF, and made a point about our use of soft power, for which I was grateful.
The SNP welcomes recent UK and global commitments to tackle the international ivory trade, and we hope for continued progress from the UK Government in contributing to the end of that trade. I was encouraged by the Prime Minister’s press statement after her visit to China earlier this month, and I hope the Government will respond accordingly to the DEFRA consultation. The huge public response—something like 77,000 people took part—shows that people in the UK want action, which has been demonstrated by the cross-party consensus in the Chamber.
One of the first batches of lobby emails that I received as a new MP was about attending an IFAW ivory event in Parliament. I am grateful to Justyna Gogolin, Anthony Bain, and Maria Gavienas in my constituency, who encouraged me to go along and learn more—it was probably not on my radar when I first got elected. Ms Gavienas was my teacher at Bannerman High School, so I dared not miss the event. I was grateful for her encouragement to go along, and the more that I attend such events, the more strongly I feel.
I want to speak briefly about what is happening in Scotland, but not in a parochial way because it is actually impressive. Scotland hosts the UK’s only dedicated wildlife DNA forensics lab. It is leading the way in the use of forensic science to shape wildlife law enforcement. Forensics can provide evidence that an offence has been committed, and it plays an important role in investigating trade routes and poaching.
Last year Scotland hosted a symposium at the Society for Wildlife Forensic Science to focus on how scientists can best support wildlife crime investigations at both national and international level. Scotland very much has a role to play in that. There was also a commitment to the Wildlife Forensics Development Programme, which builds on Edinburgh’s strong reputation for biosciences and takes a progressive approach that will strengthen links between enforcement, policy and forensics. Science and Advice for Scottish Agriculture—SASA—is setting up a DNA database to provide a unique identifier for individual rhinoceros horn in UK museums, and for zoo animals. That is in response to a recent increase in theft of rhino horn from museums, and an initiative by UK enforcement agencies to crack down on such illegal activity that is perpetrated by criminal gangs and thugs. Unique DNA profiles will be generated from small samples of horn, which will help to trace the origin of any stolen rhino horn intercepted by the police or customs.
This is all good and reassuring news, but the message from hon. Members today is that we want to see top-level action from the Minister and the Secretary of State. I thank the hon. Member for Ealing Central and Acton again for securing the debate and giving us the opportunity to continue to press the Government on this hugely important issue. I echo the hon. Member for Gedling: we want to be able to look back in years to come and say, “We were the Parliament, and this was the Government, that took action.” The Scottish National party is more than happy to support that action.
Dr David Drew (Stroud) (Lab/Co-op)
I am delighted to serve under your firm but fair chairship, Ms Moon. I congratulate my hon. Friend the Member for Ealing Central and Acton (Dr Huq) on her speech, which was a tour de force. I will not need to go over all the issues again, because she has covered them all.
This has been an important and thoughtful debate. I thank all hon. Members who spoke in it—particularly my hon. Friend the Member for Ealing Central and Acton, but also my hon. Friends the Members for Gedling (Vernon Coaker) and for Penistone and Stocksbridge (Angela Smith), and the hon. Members for Strangford (Jim Shannon) and for Stirling (Stephen Kerr), who all made valuable contributions. The debate’s importance was demonstrated by the rapid and regular interventions from the right hon. Member for Arundel and South Downs (Nick Herbert), the hon. Members for Richmond Park (Zac Goldsmith) and for Amber Valley (Nigel Mills), and my hon. Friend the Member for East Lothian (Martin Whitfield).
I will concentrate on the London conference, because it is something that we can contribute positively to today, but first let me make two quick observations. First, given how terrorist groups use the illegal wildlife trade to finance their activities, we need to make it clear that it is no less of a priority for us than the drugs trade or human trafficking. It is a multi-billion-pound exercise, from which many such organisations derive most of their income; we need to understand that when we consider Interpol and other matters. I will say in passing that if I manage to get into South Sudan later this year, I will have a word with the SPLA-SPLM about what they are doing to ensure that they legitimise their activities rather than drawing any money from this nefarious activity. Secondly, I do not understand how we can allow anyone in this country who goes trophy-hunting to come back with anything other than a potential prison sentence hanging over them. We need to be much firmer on that.
I have some questions about the London conference in October that the Minister may wish to take away—I do not expect her to answer them all now. I hope that at the conference we will establish a very strong legal framework against corruption and wildlife trafficking. That will be the bottom line. There are already several international laws, but we need to make them much more overt and much stronger. We need to recognise the importance of capacity-building and ensure that customs officials have discretionary powers to interdict and draw attention to what is happening in their countries. I hope we will support the World Customs Organisation’s important project GAPIN—Great Apes and Integrity—to enhance integrity in 15 African nations, because the role of Africa must not be underestimated.
We should also strengthen our international development support for enforcement, for shutting down chains, for helping frontline and subsequent investigations and for the operation of customs. We need a holistic approach; I hope that that will come out of the conference. It is no good pretending that we can address what is happening throughout the world unless we ensure we are doing all we can—whether through an ivory ban or through other measures—to stop the worst aspects of the trade affecting what happens in this country.
My penultimate point is that we need to look at import and export licences to ensure that what people bring into the country is what they say it is. We need to take a stronger approach, and we should encourage other countries to do so too.
Finally, I ask the Minister what particular action we are taking to help NGOs to ensure that they tackle the corruption and illegality associated with this terrible trade, because so much of the activity of the Department for International Development happens through the NGO community. We need to protect whistleblowers. So much of what we find out comes from people who have bravely put their head on the line and taken the risk of saying what is going on, so we must protect those people in their countries. I hope the Government will bring that up at the conference.
The conference will be very important, and it needs to be given much more attention. As my hon. Friend the Member for Gedling says, this is the end—if we do not get this right now, not many of these species will be left and we will not have done the anti-poverty work that is needed. We have to give people alternatives, because we cannot pretend that we can shut the trade down without giving people a quality of life that allows them to stop what they are doing. That is why the conference is so essential. I wish the Minister well. I do not know whether she will speak at the conference, but as we are hosting it, I hope she will send a high-level deputation to ensure that the British Government do their bit and that we get something concrete out of it.
Mrs Madeleine Moon (in the Chair)
If the Minister needs time to answer the questions that have been raised, I am mindful—given the length of the initial speech—to leave all the remaining time to her.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Dr Thérèse Coffey)
Thank you, Mrs Moon; it is a pleasure to serve under your chairmanship. I congratulate the hon. Member for Ealing Central and Acton (Dr Huq) on securing this important debate on the anti-corruption strategy and the illegal wildlife trade. I welcome the debate, which is timely because we are preparing for the illegal wildlife trade conference in London in October, as the hon. Member for Stroud (Dr Drew) pointed out.
The UK Government’s anti-corruption strategy was published in December. It provides an ambitious framework for tackling corruption to 2022 and includes significant international and domestic commitments. The strategy describes the illegal wildlife trade as the fourth most lucrative trans-boundary crime, with an estimated value of up to £17 billion a year. We recognise that it damages economic growth and undermines state institutions and the rule of law. It relies on and exacerbates corruption, cultivating discontent and undermining security. Seizures of illegally traded species have been recorded in 120 countries and include approximately 7,000 species.
I am very conscious that the illegal wildlife trade threatens some of the world’s most iconic species, such as elephants and rhinos, with extinction, but it is not just those majestic animals that are threatened; birds, flora and invertebrates are also among the thousands of species at risk from illegal trade. For example, tropical hardwoods are illegally felled and shipped around the world, with impacts on forest fauna, water quality, medicines and building materials for local people.
CITES—the convention on international trade in endangered species of wild fauna and flora—protects more than 35,000 species. The UK is fully committed to its obligations under CITES to act against unsustainable trade that threatens the survival of species in the wild. We are pressing ahead with activities inspired by the aims of CITES to ensure the sustainability of legal trade in wild flora and fauna and to protect species ranging from lions and goshawks to cacti, coral and rare orchids.
The UK chairs the CITES working group on proposals to combat illegal killing and trafficking of rhinos. We take an active role in the implementation and development of CITES controls and are actively involved in working groups on species ranging from great apes to sharks. Our aim is to ensure that the international trade in specimens of wild animals and plants does not threaten their survival.
International trade in hunting trophies is controlled under CITES. Although there are examples of negative effects from big game hunting caused by poor or inappropriate management, scientific evidence shows that in certain limited and rigorously controlled cases, trophy and big game hunting can be an effective conservation tool, supporting local livelihoods and attracting revenue for other conservation activities. That was confirmed in the report that was prepared for the Government by Oxford University. That said, we will continue to look very carefully at big game imports, to ensure that they do not impact on the sustainability of endangered species in the country of origin.
The UK anti-corruption strategy recognises that countering the illegal wildlife trade requires concerted multilateral action to raise awareness, eradicate markets, strengthen legal frameworks, strengthen law enforcement and—critically—promote alternative livelihoods. While I in no way excuse such activity, if somebody can earn in one night what it would otherwise take them five years to earn, one might understand why people commit these crimes. However, there is no excuse for doing so. We are working with global partners, including the G20 and UN, to achieve the aims that I have outlined.
Progress is being made. UN resolutions, co-sponsored by the UK, recognise the links between IWT and corruption. In 2015, the UN General Assembly called upon member states for the first time
“to prohibit, prevent and counter any form of corruption that facilitates illicit trafficking in wildlife and wildlife products.”
Last year the UK worked successfully with Germany’s G20 presidency to agree high-level principles on combating corruption related to the illegal trade in wildlife and wildlife products.
The UK has shown global leadership in tackling IWT, and I thank right hon. Members and hon. Members for their generous comments about that. We hosted the first, groundbreaking London conference in 2014, which secured ambitious agreements from more than 40 Governments to take urgent, co-ordinated action and was hailed as a turning point in global efforts to tackle these damaging activities. We also played a leading role in the subsequent conferences in Botswana and Vietnam.
Previous conferences have achieved an international consensus against IWT, but we recognise that there is more to do. The levels of poaching of many species remain unsustainably high and, as has already been pointed out, organised criminal networks continue to benefit from the proceeds of IWT. That is why urgent, united action by the international community remains vital.
Our work on IWT fits within the four strategic pillars that were agreed at the first conference in London in 2014: eradicating the market for illegal wildlife products; ensuring effective legal frameworks and deterrents; strengthening law enforcement; and providing sustainable livelihoods and economic development. These four pillars are well established and are used globally to focus on IWT.
To help to reaffirm political commitment, we are bringing global leaders back to London this October for another conference. I understand that the invitations have gone out and we want to welcome people from around the world, so that we can come together to focus on tangible outcomes for delivery. In particular, we intend to focus on law enforcement and tackling the corruption that facilitates IWT. The conference will recognise IWT as a serious organised crime that affects people as well as animals, and it will harness the power of the private sector, non-government organisations, academia and technology to strengthen global action.
To support our global leadership on tackling IWT, the UK Government are investing £26 million in practical action around the world to reduce demand, strengthen enforcement, ensure effective legal frameworks and develop sustainable livelihoods for affected communities. We are providing funding to Interpol to expand its work on tracking and intercepting illegal shipments of ivory, rhino horn and other illegal wildlife products.
Also, the four-year Waylay II project starts this year. It will improve awareness and understanding of advanced investigative techniques in Kenya, Uganda, Singapore, Vietnam and China. We have funded the British military to provide tracker training for park rangers in African states. We have also worked with China to deliver joint training to African border forces, and we have committed up to £4 million to the International Consortium on Combating Wildlife Crime—Interpol is one of the five organisations involved in the ICCWC—to help to strengthen criminal justice systems and co-ordinate support at regional, national and international levels to combat wildlife and forest crime. We have already paid £1.6 million of that money this month.
Jim Shannon
The Minister has touched on this, but I asked in my contribution what help was being given towards training and equipping the rangers. Can she confirm that she has been able to help with that?
Dr Coffey
I have already pointed out that we have funded the British military to provide tracker training. I attended a project in South Africa, where we have worked with an organisation involving the Tusk Trust to increase anti-poacher training and the techniques to do that. More than one Member has asked about this, but we are investigating, as the 25-year environment plan said, the feasibility of a more established poaching taskforce. Just last week, I was in France speaking to my opposite number and we will explore options together. This work does not need to solely involve the UK Government or the British military; there should be a collective effort to extend it.
The Crown Prosecution Service has worked with officials in key states such as Kenya and Tanzania to share its expertise and to help to strengthen the enforcement activities in those countries. Part of the UK Government’s funding is the Department for Environment, Food and Rural Affairs’ IWT Challenge Fund. It funds 47 projects around the world and has a value of just over £14 million.
Those projects include training of rangers, border force agents and prosecutors; campaigns to reduce the demand for products in key markets; supporting legislative reform; and helping communities to manage their wildlife and benefit from it, for example through tourism. It also funds projects aimed at tackling corruption, by engaging with Governments, enforcement agencies and the private sector. There is also mapping of one area, as the hon. Member for Ealing Central and Acton referred to. The next round of the IWT Challenge Fund is expected to open for applications later this year. I am sure that we will welcome any new projects, and I hope to announce the successful applicants to round four of the fund later this spring.
We are also strengthening action against IWT at home. We have consulted on proposals to introduce a total ban on UK sales of ivory, with narrowly defined and carefully targeted exemptions. It was welcome that we received more than 70,000 responses, with overwhelming support for a ban. A response to the consultation will be published shortly.
I know that hon. Members often ask, “What is ‘shortly’? When will it happen?” We want to ensure that any ban we propose will be effective and will not be open to legal challenge. That is why we need to go through, very carefully, every representation that has been made to us. If we did not do that, we would be subject to legal challenge, which could derail the legislation that is already being drafted on some of the big items, where there is no dispute about what we want to take forward. I can assure the Chamber that officials and lawyers are already actively working on this issue.
In the short time I have left, I will again mention the London conference. It will have three main themes—
Dr Coffey
Forgive me, but I want to try to get through as many of the points that Members raised as possible.
IWT is a serious organised crime, so one area that we will focus on is illicit financial flows and corruption, which is key, as well as strengthening networks of law enforcement agents and helping frontline countries to co-ordinate across the trade routes. As I referred to earlier, we will build coalitions, including with the NGOs, and we will continue to work on encouraging countries to close markets in this trade.
Quite a lot was said about bagpipes, which I am sure are a key reason why my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs recognised the need for musical instruments to have an element of exemption.
In addition, I recognise today the absolute passion shown by the hon. Members for Gedling (Vernon Coaker), for Strangford (Jim Shannon), and for Penistone and Stocksbridge (Angela Smith). The hon. Member for Penistone and Stocksbridge asked about the situation post Brexit. I can assure her that our commitment to working with Interpol, and indeed with our friends in the EU, will continue unabated. As for the scientific committee, it is fair to say that our experts from Kew and the Joint Nature Conservation Committee are well regarded. We will need to work on how we take that co-operation forward in future.
The hon. Member for Glasgow East (David Linden) was right to praise and to be proud of the specialist crime unit in Scotland. The hon. Member for Stroud asked a specific question about official development assistance. The Department for International Development already provides funding for the National Crime Agency to tackle corruption specifically; I think there is work in 29 countries around the world. That work will continue.
One thing that it is worth pointing out is that of course we want to tackle poaching but hon. Members will recognise that we also need to do a lot of work to preserve habitat, because the destruction of habitat is also a major challenge.
With regard to the beneficial ownership of overseas territories, in reality progress is happening. The UK concluded an exchange of notes with overseas territories with financial centres and with the Crown dependencies on the exchange of beneficial ownership. That work is moving on. I recognise that the hon. Member for Ealing Central and Acton may want quicker progress in that area, but I can assure her that beneficial ownership information should be available on request within 24 hours, or within one hour in urgent cases.
We are preparing for post-Brexit—the IT systems that we need to upscale and the issuing of permits to support the movement of such elements. I have already said no to meeting Duncan McNair, but I know that officials have agreed to meet him, so that is at least something. As for the historic, artistic and cultural objects test, I am afraid that the hon. Member for Ealing Central and Acton will need to wait for the response to the consultation. Overall, we are taking action.
Question put and agreed to.
Resolved,
That this House has considered the anti-corruption strategy and the illegal wildlife trade.
Equality of Voting Ages
(6 years, 1 month ago)
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Danielle Rowley (Midlothian) (Lab)
I beg to move,
That this House has considered the equality of voting ages in the UK.
It is a pleasure to serve under your chairmanship, Mr Davies. I want to begin by talking about why voting equality is an important issue for me. When I first entered this place following the election in June, it was not my first time in the Chamber. In fact, I first sat on the green Benches in October 2009. I came here as part of a Youth Parliament delegation, debating the issues of the day and calling on Members to lower the voting age to 16. I have not stopped campaigning on the issue since.
Voting equality is an extremely important issue to me and to many people—especially young people, although it is not just young people—across the UK, and it is not going away. I am here to give a voice to each and every 16 and 17-year-old in my constituency of Midlothian and across the UK until they can have their voice heard in this place through the ballot box. I spend a lot of time talking to and engaging with young people in my constituency, including young people who run a local youth radio network; who volunteer for a range of fantastic local charities; who help to collect food for their local food bank; who create fantastic items and sell them as part of a local art group in Dalkeith; who champion Scotland, Midlothian and the UK through their sporting achievements; and who represent my young constituents in the Scottish Youth Parliament. There are some remarkable young people in Midlothian and across the UK. They have informed and ambitious ideas about how their community and society as a whole should work. They meet me and tell me their thoughts on policy. They give me their honest opinion on how I am doing as their MP, yet they could not vote for me at the election, and that frustrates them deeply.
The feeling I had back then, when I sat in the Chamber, was that I was a token young person being asked to give my thoughts and opinions without being allowed to vote. I felt that was echoed a few weeks ago when Jordhi, a fantastic young woman from the Youth Parliament, was here speaking at an event with Theresa May on the centenary of some women gaining the vote. She said:
“But it’s important to remember that the Representation of the People Act, given royal assent one hundred years ago today, only allowed some women over 30 and all men over 21 to vote. Despite the journey of strife taken by passionate, principled and determined women, it was only the first step in an even longer journey to equality. It took another 10 years for women to win the same voting rights as men, and still today we face inequality at every turn. The journey is not yet complete, the vision not yet realised.”
I could not agree with Jordhi more. She spoke very eloquently. This is a journey about voting equality. We have come a long way, and we absolutely have to celebrate that. We have to celebrate our achievements on women gaining equal voting rights, but we must not allow ourselves to rest. We have overcome a great hurdle, but there are more hurdles to come.
Why must the voting age be lowered to 16 to ensure voting equality? That is the age when people can pay taxes, and I firmly believe in no taxation without representation. I find it patronising that members of the Youth Parliament, including me back then, are welcomed here for key events, but those same intelligent and vibrant young people are then not trusted to vote. The Minister for the Cabinet Office said at the Dispatch Box during Prime Minister’s questions a few weeks ago that youth organisations such as the Youth Parliament and the British Youth Council were great “training grounds” for young people. I found that an odd term and slightly patronising. He made a good point—these are great institutions—but they are not simply there to train up young people or tell them what to believe or how they must vote. They empower young people to decide what policies matter to them and then lead and run their own campaigns. It is further testament to the political awareness and ability of our young people.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
My hon. Friend is making a wonderful speech that I fully support. This week in my borough of Camden, 16 young people between the ages of 13 and 19 have launched their campaigns to become Camden’s next youth MP. The previous youth MP worked with the NHS and the police to make it a safer place to live. They reflected their views to the MP and to councillors. The irony is that the next youth MP may not be able to cast his or her vote at the forthcoming local elections. Does my hon. Friend agree that we should be following Scotland’s success by not denying our young people their civic rights?
Danielle Rowley
I absolutely agree, and I thank my hon. Friend for making that point. I will come on to the differences in voting ages across the UK in just a moment.
Let us look at what has already happened in this place on votes at 16. I am glad and grateful to have secured this debate. I also spoke during the debate on the Representation of the People (Young People’s Enfranchisement and Education) Bill secured by my hon. Friend the Member for Oldham West and Royton (Jim McMahon). There were many passionate contributions during the debate—I made a short contribution—but the Bill did not quite make it to the next stage. It was talked out by the Conservatives for fear of losing a vote in Parliament on whether to proceed. I use the word “fear” deliberately. Some say that the Government do not want young people to vote because they are scared that they do not agree with their policies. That move during the debate showed me that the Government seem scared of their own MPs, some of whom I am sure would vote to support votes at 16.
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
The hon. Lady is making a very good case as to why young people should be able to vote. My party, the Scottish Conservative and Unionist party, opposed the extension of the voting age before the 2014 referendum in Scotland, but having seen how young people in Scotland were so enthusiastically involved in our referendum and the debate about our country and Scotland’s future within the United Kingdom, on reflection we decided to change our position. We now support the extension of the voting age to include 16 and 17-year-olds. I look forward to working with her and others in a personal capacity to persuade other Members of this place that extending the voting age is something that we should try to achieve.
Danielle Rowley
I thank the hon. Gentleman for that contribution. I absolutely agree that all parties can get behind the issue and work together on it. I would very much welcome that from all parties from all parts of the House. That brings me perfectly on to my next point. Former Chancellor George Osborne has said that
“not only is extending the vote the right thing to do but…the cause is also unstoppable.”
I know that the Scottish Conservatives are supporters, with their leader, Ruth Davidson saying that she is a fully paid-up member of the votes at 16 club. We can speak and we can work together, but when can we vote on the issue in the House? Or are the Government going to block us from voting as well?
Jim McMahon (Oldham West and Royton) (Lab/Co-op)
I thank my hon. Friend for securing this important debate and congratulate her on her speech, in which she has made the case very well. If the Government are nervous about this issue, surely the best answer is to test it in elections. We have seen the impact the change had in Scotland. Young people in Wales will have the right to vote very soon. Surely by extending that to England and Northern Ireland, we can test turnout and appetite and we can provide that education in schools and then look to expand beyond that.
Danielle Rowley
I thank my hon. Friend for his contribution. As a Scottish MP, I am uncomfortable that some young people in the UK can vote in certain elections, and others cannot. I hope that we can fix that inequality in the franchise.
In Scotland, 16 and 17-year-olds can vote in local elections, Scottish elections and referendums. Our young people have shown that they have the knowledge, passion and ideas to drive forward a dynamic democracy. They showed that especially when they voted in and engaged with the Scottish independence referendum. They made politicians think differently, act differently and campaign differently. We saw some very vibrant campaigns, which were different from what we have had in the past and really reached out to all corners of society. Far from being apathetic and disengaged, more than 89% of 16 and 17-year-olds registered to vote in the Scottish independence referendum, and about 75% turned out to vote, which is much higher than the average for 18 to 24-year-olds in general elections. Even the most recent general election saw a turnout of only about 59% for 20 to 24-year-olds.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
I thank my hon. Friend for securing the debate; it is fantastic to see the pressure being kept up. Young people in Plymouth want the right to vote as well. We do not have a devolved Assembly or Parliament to lower the voting age for local elections; we are relying on this place to do it. Whether a 16 or 17-year-old lives in Perth, Penarth or Plymouth, they should have the right to vote. The message from young people in the city that I represent is that those voting rights should be equal across the UK.
Danielle Rowley
I thank my hon. Friend for his contribution and fantastic alliteration. The Scottish experience shows that lowering the voting age could be a key way to improve voter registration rates and engage younger people in politics. The political habits that we form at a young age are likely to be carried into later life, so lowering the voting age could support greater voter registration and achieve greater political engagement in our society. The voting age is not just about voting, but about supporting and broadening citizens’ political engagement and empowerment.
Martin Whitfield (East Lothian) (Lab)
I am grateful to my hon. Friend for securing the debate, and for allowing me to make an intervention. Does she agree that by extending the franchise politicians of today will be remembered in a far better light? It works successfully in Scotland. Extending the franchise to that very important part of our communities would be a relatively simple step to achieve some good news headlines.
Danielle Rowley
My hon. Friend makes a fantastic point. I would like to quote the member of the Scottish Youth Parliament for part of my constituency, Laura Adams, as she makes the point so eloquently I could not have put it better in my own words:
“In general, we face the issue of trying to get people out to the polls to vote—so why should we actively prevent engaged, informed and politically motivated young people from voting? It can only help represent a wider section of society; and it is a section of society who are working, in school and university, and living through the issues that are debated and scrutinized daily in the houses of parliament.”
She makes a fantastic point about engagement, and why it is important for 16 and 17-year-olds across the UK to have a say in Parliament.
Alison Thewliss (Glasgow Central) (SNP)
The hon. Lady is making an excellent point; I agree with all the points that she has made in her speech. Does she agree that now is a particularly good time for the UK Parliament to look at this issue? Surely the period between elections provides a good opportunity to extend the franchise. Opportunities to do so when considering Bills on devolution and the EU referendum were rejected, on the grounds that it was not the right time. Now seems the perfect time to look at the issue again.
Danielle Rowley
I absolutely agree. Looking back on the Scottish independence referendum, research showed that 16 and 17-year-olds accessed more information from a wider variety of sources than other age groups. That makes them more informed citizens and voters, disproving the notion that young people are less engaged with and informed about politics. Following the Welsh Government’s recent decision to extend the franchise in local government elections to 16 and 17-year-olds, this Parliament will be the only Parliament in Great Britain that is dragging its heels on that clear step forward in Scotland and Wales.
If we do not extend the franchise we run the risk of increasing the distance felt by young people in Scotland and Wales between them and their Members of Parliament, since they know that their voices will not be heard during elections. That is very concerning for me as a Member of Parliament.
David Linden (Glasgow East) (SNP)
I commend the hon. Lady on her excellent speech. I am in the bizarre position where I can visit one of the local high schools in my constituency with the constituency MSP, and the kids in the fifth and sixth years can vote for the MSP but not for me. Does she agree that that is absolutely perverse, and the Government must take action?
Danielle Rowley
I absolutely agree. It can be odd to turn up at an event with an MSP and a councillor whom the young people are able to vote for, and therefore know better. Young people have a greater interest in them, because they feel that they have an investment in those politicians. I recently visited Lasswade High School in my constituency, and I asked, by a show of hands, whether the pupils supported votes at 16. It was an almost unanimous yes. I asked what reasons pupils had for supporting it. They told me passionately that the future is theirs. They said, “We know that sounds cheesy, but the future is ours, and we are going to grow into a world that we cannot shape.” That is such an important part of this issue.
The current Government, if they last another year, will make decisions that will affect those pupils’ lives. Those decisions will affect their job prospects, their safety net if something should go wrong, how their money is spent, and how their society works. However, those young people in Lasswade High School will not be able to elect the Government who make such crucial decisions about their lives. In Parliament, we have debated the Budget, Brexit, housing, education and jobs, and have voted on issues that directly affect every taxpayer in the country. We will decide how much is taken from people’s wages and how that money will be spent. Sadly, 16 and 17-year-olds, even if they are married, have children, are working full time, or indeed have signed up to serve in our armed forces, do not have a say on how the Government spend their taxes.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
Does my hon. Friend agree with members of the Slough youth parliament, and students of Upton Court Grammar School in Slough, whom I discovered during a recent visit were virtually all in favour of votes at 16, that votes at 16 should be introduced in England as well?
Danielle Rowley
I absolutely agree. My hon. Friend’s constituents sound very engaged indeed. As I said, the inequality of voting ages across the UK makes me uneasy.
Those who oppose extending the franchise often cite the fact that the legal age for smoking and drinking alcohol is 18, but I find that a very odd and unfair comparison. The legal age restrictions in those circumstances are based on the related health risks, which are borne out in facts and evidence. Those arguments do not hold for the act of voting, which is clearly not bad for someone’s health—in fact, I would argue that it is very good for it. That argument also confuses public and private rights. The right to vote is a public right, but drinking alcohol, for example, is a private right. It is not contradictory for 16-years-olds to hold one right but not the other.
Things that a person can do at the age of 16 include giving full consent to medical treatment; leaving school and entering work or training; paying income tax and national insurance; obtaining tax credits and welfare benefits; consenting to a sexual relationship; getting married or entering a civil partnership; becoming a director of a company; and joining the armed forces. I am sure that everyone would agree that all those things are affected by how we vote in Parliament, so it is not right that young people can do them and their lives can be greatly affected by someone for whom they cannot vote.
There are also benefits in young people voting. Compared perhaps with older generations, younger people access more education and information digitally. They are often very aware of current issues through citizenship education. Some 85% of secondary schools have school councils, and across the UK many more than 20,000 young people are active in local youth councils and youth parliaments, which work in close collaboration with local councils. Often young people have a really acute idea of what their local services are doing, and how that is affected by Government policy.
So what are the Government scared of? If they are worried that 16 and 17-year-olds will not vote for the Conservative party, I would say that they certainly will not, once they do get to vote, if they feel that they have been disenfranchised by the Conservative party. If they do vote, 16 and 17-year-olds only make up 2.9% of the population over 16, so are unlikely to cause any huge change at an election. Nevertheless, it is critical that they have their say.
I will end with some questions for the Minister. Has the Minister met her local Youth Parliament reps and spoken about votes at 16? What are their opinions? What are the reasons for the Government refusing to extend the franchise to 16 and 17-year-olds? Are those reasons exclusive to that age group, and do they incur any health risks? Does the Minister consider that we have an equal and fair system of voting across the UK? Does she think there are any issues with young people in different regions being able to vote, and others not? Will she agree to a debate and a vote in the House of Commons on this issue? Now that 16 and 17-year-olds in Scotland and Wales can vote in some elections, it would be unacceptable if their peers elsewhere in the UK could not. I urge the Government to take action on this important issue and let us vote on it.
Geraint Davies (in the Chair)
I call the Minister, Chloe Smith. You have nine minutes.
The Parliamentary Secretary, Cabinet Office (Chloe Smith)
Thank you, Mr Davies. I wonder whether Members will bear with me and refrain from intervening to allow me to deal with the questions in the nine minutes available. I will do my very best.
First, I thank the hon. Member for Midlothian (Danielle Rowley) for raising the issue and securing today’s debate. I believe we have a few things in common, namely, being elected here in our late 20s and having started out in politics by means of youth fora—in my case, in rural Norfolk. I am delighted to be speaking with her in this debate. Her experience and passion are inspiring, and the way in which she has brought her constituents’ voices here is very important.
The franchise is important and benefits from the close consideration that we are giving it. In the time available, I will try to go through the reasons why the Government do not agree that the age of majority ought to be lowered. The hon. Lady asked whether I think it is okay to have inequality in the voting franchises. I will answer that upfront, at the outset. We ought to be clear that what is happening is a consequence of the devolution settlements. I do not in any way speak against the devolution settlements, which rightly allow the devolved Administrations to take decisions in their competences. That is why we have an inequality in the voting ages. That is how it has come about. I will not enter into what a devolution settlement ought to contain, but that is what it is and that is why the inequality exists.
The principle reason why the UK Government believe that the age ought to remain at 18 is that the latest poll on the issue, in April 2017, indicated that only a third of the public is in favour of lowering the voting age for all UK elections. It is for that reason that the Government believe the voting age should stay at 18, and why our manifesto for the recent election included the commitment to maintain it. That is also the answer to the hon. Lady’s question about whether there will be a debate and vote in Government time. No, there will not be, because our manifesto said we would retain the voting age at 18. That is the shortest and simplest answer I can give to that question.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Will the Minister give way?
Chloe Smith
I am terribly sorry. The hon. Lady has only just arrived and I have very few minutes to answer the important points put by hon. Members who were here earlier.
On the rights of young people, 18 is widely recognised as the age one becomes an adult. For example, that is why we start jury service at 18. Some things that people can do at 16, such as join the Army, get married or enter into a civil partnership, can only be done with parental consent.
The UK has seen a general shift to a higher minimum age requirement on a number of things in recent years, with cross-party support. For example, in 1997 the minimum age for buying fireworks was raised from 16 to 18. In 2005, gambling at a casino was restricted to 18-year-olds and upwards. In 2007, the legal minimum age for buying tobacco in England, Scotland and Wales was raised from 16 to 18. You get the picture, Mr Davies. There are a number of things where we have moved the age from 16 to 18.
Chloe Smith
I will, but the hon. Lady will get fewer answers to her questions.
Danielle Rowley
Does the Minister agree that the examples she gives incur a health risk or a danger, and voting does not? Perhaps she thinks it does.
Chloe Smith
The overriding point is that we do not have a single age of maturity in this country. That is what underpins what the hon. Lady sees as age inequality. We do not have a settled age at which one is thought to become an adult.
I have another important example. In England, those under the age of 18 must remain either in full or part-time education or start an apprenticeship. In other parts of the UK, individuals may start full-time work at 16. Supporters of the lower voting age thus cite the principle of no taxation without representation. Indeed, I heard the hon. Member for Ipswich (Sandy Martin) argue last week that there should be no representation without taxation. Neither expression is particularly accurate on how our country works. Many people pay various amounts of income tax, including none if they earn below the threshold, at various points throughout life.
Let us move on to research into the voting age. The Electoral Commission undertook the most comprehensive review to date. In 2004, a large consultation exercise showed mixed results. There was support for lowering the voting age, but there was also strong support for keeping it at the current minimum of 18 from the general opinion polling conducted alongside it. Crucially, young people themselves were divided on whether they felt they were ready to be given voting rights at 16. The Electoral Commission therefore concluded that the minimum age should not be changed.
In 2008, the last Labour Government established the youth citizenship commission, which similarly got mixed results. In 2013 and 2017, YouGov polls found mixed results. Only 30% were in favour of lowering the age to 16, and nearly half were against.
On international comparisons, it is important to recognise that there is variation around the world, but most democracies consider 18 to be the right age to enfranchise young people. The UK Government believe that 18 is the right age.
I have long made the argument, including when meeting youth parliamentarians—the hon. Lady asked me about that, and I am delighted to say I maintain very good relationships with the young people in my constituency— that engaging young people is a far wider question than the technical one of the age at which somebody can vote. We need to engage young people more broadly. The Government are doing that in a number of ways, including through existing measures, from supporting the Youth Parliament through to gaining the views of young people on specific legislation, such as changes in mental health provision. There is a consultation about that at this very moment. Of course, citizenship is on the curriculum in schools and there are online Government resources.
The hon. Lady began her remarks by celebrating the suffrage centenary. The Government are doing a lot more this year, including reaching out to younger voters. We have a full set of education projects. A package of resources is coming out, including in secondary schools, as well as a democracy ambassador scheme and a pack for parliamentarians to use to engage young people in their constituencies. I hope all hon. Members in the Chamber will work with me across parties on that important work.
I thank the hon. Member for Midlothian again for introducing this important debate. She has spoken well, but I do not think the public is convinced by the hon. Lady’s arguments. It is for that reason—I have cited the evidence—that the Government continue to believe that the voting age should remain at 18 and not be lowered. Given that our manifesto commitment was in line with that, we will not provide Government time for a debate. However, that does not detract from the central point that young people are part of democracy and society and that their voice matters. The Government and I will continue to work to ensure that young people take up their rightful place in politics in order to grow our vibrant democracy. That is what we ought to all be working together on, on a cross-party basis.
The hon. Lady and others have a job more broadly in the country to persuade the public at large of her arguments. The Government’s manifesto position won the day—we formed the Government after the 2017 election—and in that we said that the voting age would remain at 18.
Question put and agreed to.
Pensions Auto-enrolment
(6 years, 1 month ago)
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Michelle Donelan (Chippenham) (Con)
I beg to move,
That this House has considered pensions auto-enrolment.
It is a great pleasure to have secured this debate under your chairmanship, Mr Davies. Introducing auto-enrolment in the UK was a huge landmark, as is this debate—it is the first since the measure was introduced in legislation and since the Government review. Auto-enrolment was introduced as part of a package of policies designed to foster a saving culture and a new generation of savers whose long-term financial needs are prioritised as much as their short-term ones. It is an example of fiscally responsible policy, and paves the way to a better tomorrow by giving people greater financial security and independence in their retirement.
It is apt that we are having this debate. Just over a week ago we hit the milestone figure of 1 million employers engaged with the policy. The effect can be seen across the country including in my constituency, where 1,030 employers have introduced auto-enrolment schemes, which means that 9,000 people in Chippenham are benefiting.
To appreciate that success, it is important to consider the context. Saving for retirement has traditionally been seen as something we put off, and it was put off. In addition, it has always had connotations of being difficult, complicated and expensive to organise, especially given that a large proportion of employers did not offer a scheme. Traditionally, there have been low levels of engagement with pensions. People have relied on the state pension and, if need be, pension benefits. Given our ageing and expanding population, that is no longer tenable. Auto-enrolment helps to make the system more sustainable by, in effect, supplementing welfare payments with private provision.
Many have traditionally seen the state pension as a universal scheme that will be enough but, as I have seen in my constituency, the introduction of auto-enrolment has started to shift that mindset dramatically. The Association of British Insurers summed it up well:
“Engaging people to save adequately for their retirement is one of the biggest public challenges we face.”
The ABI believes that auto-enrolment is the best means to ensure people save adequately for their retirement. It is estimated that, by 2019-20, an extra £20 billion a year will be saved into workplace pensions as a direct result of auto-enrolment.
There are many reasons why the roll-out is proving successful. Perhaps most importantly, it is simple and is basically done for the employee. In addition, the employer contributions are a strong incentive. The rate of employer and employee contributions is going up in increments, which helps businesses to prepare and ensures that employees get into the mindset of saving for pensions. It will go up to 8% in 2019, but it is crucial that we do not leave it there. We need to ensure that pensions provide enough money for retirement and that they are fit for purpose.
The Pensions Policy Institute conducted an international comparison of auto-enrolment schemes and found that our employment contributions lag far behind those of our European partners. As higher statutory minimum contributions are phased in over 2018-19, employees will find themselves bearing more of the burden than their employers, which could drive opt-outs. The art is getting the balance right between employee and employer contributions and getting the rates right to ensure that saving does not damage business.
Being an opt-out scheme has helped auto-enrolment to be successful, and the opt-out rates have been lower than expected. The Department for Work and Pensions modelling assumed a 25% opt-out rate, but in 2017 it was just 9%. Some 23% more of the working population now participate in a pension than in 2012.
Traditionally, it has been hard to engage young people with pensions, as they tend to prioritise their disposable income over a pension in 50-plus years’ time. That means that they either never opt in or opt in later, which does not give them the time to accrue a decent pension. I am pleased to say that, since the introduction of automatic enrolment, the group that has had the largest increase in participation is young people—44% of those aged 22 to 29 now participate. We have also traditionally struggled to engage women, but since the introduction of automatic enrolment, participation rates have been catching up. Only 40% of eligible women participated in 2012, but by 2016 the number was 73%.
One concern about automatic enrolment was how the small business community would respond. However, it has not only coped with the policy, but embraced it. It is important that we thank it for its contribution. The Confederation of British Industry stated:
“Automatic enrolment is a successful policy built on sound principles—employer support is key to this”.
The main concern was about the perceived bureaucracy and the time it takes to administer the system, but 2017 Government-commissioned qualitative research found that most small and micro employers thought that the cost and time burden involved was lower than they anticipated.
On outcomes versus expectations, one of the key points in the Government’s review, published last December, was that the proposal would increase median earners’ private pension provision by more than 40% and lower earners’ provision by more than 80%. The review stated that reducing the auto-enrolment to 18 is essential to ensure that we foster a generation of savers, and will bring a further 900,00 people into pension saving. Scrapping the £5,876 lower earnings limit so that every pound of earnings is pensionable means that someone with a career-average salary of £27,000 will build up an extra £50,000 over 40 years of pension saving. The review also seeks to increase engagement to reach all, partly by building a sense of personal ownerships of pensions through initiatives such as the pension dashboard.
The review considered what to do about the self-employed pension problem. The self-employed are currently not eligible for auto-enrolment, yet the number of self-employed people in the UK is rising—in fact, it rose by 730,000 between 2008 and 2015 alone. That increase is combined with a decline in the number of self-employed people opting into pension schemes to only 19%. It is predicted that, within 20 years, a third of the employment market could be self-employed, meaning that nearly a third of the employment market could be without a pension, which is the opposite of the vision for auto-enrolment. I have developed a reputation for banging on about this over the years I have been in the House, and I have pitched an auto-enrolment scheme for the self-employed to the current and previous Chancellors. I was delighted that the 2017 manifesto contained a commitment to make auto-enrolment available to the self-employed, but I noted the valid concerns raised in the Government review, and will shortly set out my own ideas about how it can be implemented effectively.
The Government review outlined a number of pilot projects to address the problem, but today I want to focus on creating a new system. I am not alone in calling for that. In fact, the Pensions and Lifetime Savings Association has called for it to be considered, and the Taylor review stated that the Government should treat the self-employed like any other section of the labour market. That is hard to achieve without rolling out a self-employed scheme for auto-enrolment.
Creating auto-enrolment for the self-employed is not simple. The obvious problem is that there is no employer to pay the contributions, but there are no international examples and the self-employed market is diverse. However, the policy could be administered along the lines of auto-enrolment qualifications. A recent report by the Pension Policy Institute estimates that 38% of the self-employed would be eligible for auto-enrolment if they were employed. In addition, the income of the self-employed is often much more volatile, which discourages people from committing to standard pension provisions.
I want briefly to share my analysis of the four options reviewed by Aviva and Royal London. The first option was published in Royal London’s paper, “Britain’s ‘Forgotten Army’”. The option is to increase the rate of class 4 national insurance contributions by 3% for pension contributions, plus a matching pension contribution from profits. This would put all the outlay on the self-employed, offers little incentive and could appear to be a tax rise.
Under the second proposal, the Government acts as the employer by equally matching self-employed payments at 4%. Although that offers the incentive, it would be very costly and there would be no room to increase payment contributions from the self-employed unless the Government follows, which limits the long-term scope of the policy.
The third proposal is an opt-in tick box on tax returns for pension provisions, perhaps with a 1% Government contribution. It is an easy option and offers a 1% incentive, but relies on an opt-in. Many self-employed would just match the 1%, making it unfit for purpose. There was a proposal to extend lifetime individual savings accounts, but I do not believe that they could address the problem in full. The report prefers some form of default pension option as part of the annual tax return.
The Government review suggested the possibility of introducing a behavioural prompt in the accounting process. The concept has merits, which my plan builds on. I believe that linking a system to self-assessment is the best approach and would be simple—simplicity was one of the key reasons for the success of auto-enrolment. Auto-enrolment has shown us the power of the opt-out. There needs to be an incentive for the self-employed. All the research shows that their pension-saving mentality is very different, because incomes are more volatile. That was highlighted by the disparity before auto-enrolment was introduced. The self-employed need a compelling reason to commit to and prioritise pension contributions.
It is undeniable that the auto-enrolment opt-out rates are so low because the employer contribution acts as an incentive. However, I take on board the 1% drive to the bottom. We should offer a Government contribution of 1% for the self-employed who invest 3%, and 2% to those investing 5%. The rates at which the Government contributions kick in could be increased as we develop a pension saving psyche, but the Government and employee contributions would not be intrinsically linked. It would be cheaper than the 4% concept and would offer an incentive for higher savers.
A common argument used against the Government acting as the employer is that it would represent a substantial transfer of tax from the employed to the self-employed, which could be seen as unfair. To address this concern, first, I have benched this lower than the employee system will be in 2019. Secondly, our entire system is based on redistribution and acts as a giant insurance scheme, so that transfer exists in thousands of other ways. Thirdly, in the long run it will cost the state less, because otherwise a massive cohort of the population will be reliant on the state pension provision. Fourthly, we are currently in danger of the opposite. Martin Palmer of Zurich stated:
“We are creating a rapidly growing new divide between those who are employed, with access to auto-enrolment, and the self-employed. We need to ensure nobody is excluded from the chance to build up a nest egg simply because they don’t work…nine to five.”
I do not believe that a default nudge is the same thing as an auto-enrolment system, nor will it be as successful. I urge the Minister not to discount auto-enrolment for the self-employed, and to commission a detailed review into options that include the Government as the employer. In reference to the employer-employee relationship, the Taylor review stated:
“The Government could look to establish a similar principle for the self-employed”,
yet the 2017 Government review dismissed that option without even costing it.
In conclusion, automatic enrolment has reversed the decline in workplace pension saving. Total annual contributions are at their highest for a decade. Around 10 million people will be newly saving or saving more by 2018. The policy is proving successful, but the review has highlighted that there is room for improvement. I am pleased that the Government are making progress. To create a truly sustainable, long-term solution for pensions, we must ensure that we have a system that works for the self-employed, given that one in seven self-employed people in the UK are saving into a pension, versus three-quarters of employees, and the number of self-employed is rising at such a considerable rate.
Several hon. Members rose—
Geraint Davies (in the Chair)
Order. As four Members wish to speak, you each have about five minutes. I call Nigel Mills.
Nigel Mills (Amber Valley) (Con)
It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate my hon. Friend the Member for Chippenham (Michelle Donelan) on securing this important debate. I will not waste my precious five minutes by recounting the triumphant statistics on how successful auto-enrolment has been, but about 1,250 businesses in Amber Valley have been enrolled and about 13,000 of my constituents now have access to a workplace pension for the first time, which is a very important achievement.
It is important to look at where we can go in future. I have been through the important work of the auto-enrolment review. There are so many great ideas in there. My only slight frustration is that it will take so long to bring them all into force. I accept that we have not even finished the roll-out, we have not done the escalation and there is not much time in Parliament, but some of the ideas are important. Perhaps the mid-2020s is a little later than we could achieve them by.
We need to find a fix for people who have multiple jobs but are earning under £10,000 in each of them, so are not enrolled by any of their employments. There probably are not that many people with two jobs that sit perfectly under that, but bearing in mind that we have a tax coding system—we tell employers every year, via Her Majesty’s Revenue and Customs, how much personal allowance they can give each employee and how much tax to take off—it does not strike me as beyond the wit of man to put on that coding notice how much pension contribution they ought to pay. Not much data would be given away. We could just say that a person has sufficient income elsewhere, so the employer should enrol them and pay a full contribution. I hope that can be looked at.
I agree with my hon. Friend that we need to find a system for the self-employed, although I am not sure that we can force it into auto-enrolment, because the whole idea of inertia will not work. I am a little more cautious than her, because I am not sure how we could square having a much lower national insurance rate for the self-employed with giving them a pension contribution in excess of what we give people who are employed and earning the same income. That may be a step too far.
I tend towards a default from the tax system. If the Government move forward with making tax digital and requiring quarterly returns, that may take out some of the big annual bills to pay if there is just a default on the annual returns. Perhaps the way forward is having a default quarterly system where the self-employed could be encouraged to take a pension contribution of the right percentage. I am not sure how we fix choosing them a pension scheme. I suspect that, if we did that, we would have to choose NEST as the default option. The Government should be a bit cautious about defaulting people into an individual scheme. If that scheme goes wrong, they will get the blame for returns not being right.
Even if we get to the 8% that we are due to get to in a couple of years without seeing opt-out rates go far higher, that will still not be enough pension saving for most of those people to have the savings that they need for their retirement. We will have to do more to encourage people to put more into those pension schemes. The trick to that has to be greater engagement. I hope the Government will take forward the dashboard as a key part of that, so that people can understand what they have in pension saving across myriad pots.
We need clear and consistently applied savings targets so that people know how much they should have saved by the time they reach 35, 40 or 45, and understand how much they have saved for their pension, what that means and how much more they ought to save. That is the missing link. I get my annual pension statement and I have no idea whether it is good. It sounds great that I have a few thousand pounds—that sounds like a great asset—but what does it really mean in pension terms? How much more do I need? How much do my peers have? A system with clear guidance about how much people should save and what that really means would boost pensions engagement.
Stephen Crabb (Preseli Pembrokeshire) (Con)
It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate my hon. Friend the Member for Chippenham (Michelle Donelan) on securing this debate and commend her for the brilliant way she outlined some of the issues we need to think about. I commend in particular her dissection of the challenges of self-employment and the options we have for creatively addressing the lack of provision by the self-employed for their retirement incomes.
It is not often in this place that we get to debate policies we can genuinely describe as having been well executed and successful, and it is even rarer that we do so about a policy that both the Labour party and the Conservative party can claim credit for, having initiated and overseen it—the policy has been around since at least 2008, when it was first implemented. I would go further and describe auto-enrolment as transformational. It has profoundly positive effects for our society, and it was achieved with remarkably little opposition from employers or employees. We have seen a collaborative approach involving Government agencies, business, the Pensions Regulator and others. The strong sense that auto-enrolment is the responsible and right thing to do in the face of the overarching challenge of declining employer-provided pensions is one of the great strengths underpinning its success.
Auto-enrolment’s success has received remarkably little attention in the mainstream press compared with the coverage of the various strikes and protests in recent years in response to the changes we have tried to introduce to make public sector pensions more sustainable. The successes of auto-enrolment have, by and large, passed under the radars of those not immediately affected by it, but as I said, it ultimately benefits the whole of society. I will highlight a couple of points that I would like the Minister to touch on. My hon. Friend the Member for Chippenham covered the self-employed far better than I would, so I will not cover it.
Behind the success of auto-enrolment is a great recognition of people’s central behavioural trait of spending far too little time thinking about their retirement income and even less time taking positive decisions to make provision for it. By coming up with a system that automatically enrols people and puts the onus on the employee actively to opt out, we successfully increased the number of people benefiting from pensions. The system relies on inertia—passive decision making by millions of people. However, we have introduced other pension changes that will require those very same people, when they reach retirement age, to take a close interest in a complex menu of retirement options, and the last thing that we need them to be at that point in their lives is passive decision makers. That is a concern. We do not want people to take decisions that ruin the retirement income they spent decades building up.
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
My right hon. Friend makes a crystal clear point about the tipping point that we will all reach at a certain stage of our lives. Does he agree that a pensions dashboard that provides greater transparency and access, and a mid-life MOT whenever we judge our mid-life is—between our 45th birthday and our 50th birthday is the optimum time for that reassessment to take place—will address the point he rightly makes?
Stephen Crabb
I agree with everything my hon. Friend says. Pension freedoms are great, but we want people to be well informed and educated about the consequences of the choices that will be available to them, particularly when it comes to drawing down large cash lump sums from their retirement pots.
Low opt-out rates are part of the success story of auto-enrolment, but let us not be complacent about them. So far, contribution rates have been very low. Those rates will go up this April and again in April 2019. Despite all the positive effects of increasing the minimum wage and raising the personal allowance threshold for income tax, there will be people on lower incomes who feel a financial pinch in their take-home pay, and opt-out rates may increase as a result. I encourage the Minister to monitor what goes on in response to the increase in contribution rates and to be ready to reinforce the strong positive messaging about the importance of employers and employees sticking with their pension arrangements so that they do not see that increase as a reason to get energised and look at actively opting out of the system.
My hon. Friend the Member for Chippenham mentioned young people. I strongly welcome the Government’s indication that they will look to lower the minimum age threshold to 18, but why 18? If 16 and 17-year-olds are working and earning £10,000 or more, why should they not also be captured by auto-enrolment and benefit from it? No 16, 17 or 18-year-old should leave school without basic education in what auto-enrolment is all about and without being equipped to make good decisions.
Mike Amesbury (Weaver Vale) (Lab)
As an ex-careers adviser, I certainly share those concerns. Education is vital. The right hon. Gentleman talks about a tipping point. If education were given at an earlier stage, people would make more effective and informed decisions at that tipping point, which is a key transition. Too many people see a pension as an unaffordable luxury. Education would help.
Stephen Crabb
The hon. Gentleman makes an extremely important point very well.
Let me make one further point before I conclude and allow other hon. Members to speak. My hon. Friend the Member for Chippenham appeared to indicate that she supports rates increasing above those that have been set out for April 2019. I absolutely agree: both employees and employers will need to make even greater contributions. It is easy to talk about that in this place, but it is much more difficult to get it across to the businesses and individuals affected, so I would be interested to hear what the Minister has to say about that. He is a brilliant Pensions Minister. I heard him speak in another part of the Palace earlier, and he has an incredibly strong grasp of the detail, which is exactly what we need from Ministers as we get to grips with the challenges of auto-enrolment.
Jeremy Quin (Horsham) (Con)
I am grateful for the opportunity to speak, Mr Davies. I am most grateful to my hon. Friend the Member for Chippenham (Michelle Donelan) for calling this debate. Too often, we come to the Chamber to have a good moan about things, but I sincerely hope that we have cross-party agreement today. Auto-enrolment should be warmly praised on both sides of the House, because it has been a great success. Some 19 million people are now enrolled in qualifying workplace pensions, 9 million of whom came through auto-enrolment. That means that we have increased by a quarter the percentage of the population who are in qualifying schemes. That is a success on any terms.
In addition to the policy being a success, its execution has been a success. My right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) was too modest to refer to his role in that, but a succession of Secretaries of State, both Conservative and Labour, oversaw the successful introduction of a good policy. For 1 million employers to be part of the scheme—including, I am proud to say, 1,860 in my constituency—and for opt-out rates to be as low as they are is a success.
I will dwell on that success for just a second longer while I talk about the long-term implications of what we have done. It is estimated that by 2019-20 an extra £20 billion a year will be being saved in pensions, which will ensure that people have a more comfortable retirement than would otherwise have been the case. There is more success in the small print: the biggest increase in participation has been among those on lower incomes and those working for smaller employers.
Unfortunately, as we are all aware, that is not the end of the story. We have had such positive buy-in from employers that, like other Members, I am nervous about the increase in the contribution rate to 3% in April 2019, but that is clearly a risk we have to take. If we cannot take that risk and push that envelope at a time when we have record rates of employment, there will never be a time for it. Even from there, as has been alluded to by my hon. Friend the Member for Chippenham and by my right hon. Friend the Member for Preseli Pembrokeshire, a savings rate of 8% will still leave 12 million individuals undersaving for their retirement.
We all know the huge power of inertia. There is a real risk that if people are told that is what they have got to save, they believe that is what they need to save, but we in this House know that that is not the case. The evidence from Australia and elsewhere is that higher rates will be required. I welcome the scheduled review of contribution rates. It may be difficult and painful, but it is necessary. I also welcome some of the other proposed reforms over the next few years that have been alluded to, such as lowering the relevant age from 22 to 18, bringing an extra 900,000 workers into the scheme, and removing the lower earnings limit, which will add nearly £3 billion a year to benefit in particular lower earnings workers, those with a part-time job and those with a number of part-time jobs.
My hon. Friend the Member for Chippenham eloquently described the issues faced by the self-employed. I agree that a participation rate in that growing sector of 19% is far too low. That is rightly a matter of concern. She produced some interesting ideas, and I look forward to the ministerial response. She and I would agree that there needs to be a structure in place for the self-employed. Again, it comes back to default and inertia: as long as there is no structure in place, they will not feel a need to go in, participate and make the provision for retirements that they require.
Many good things are coming out of the review. Of course, I have extra questions to ask my hon. Friend the Minister. Has the Department made an estimate of the number of individuals with earnings below the trigger rate of £10,000 per annum who are opting into the scheme? That would be good to know, to work through whether the scheme can be usefully extended below that rate. Opt-out rates are particularly low, but less so for small and micro-employers. Is that a matter of concern for the Department? What is it doing to address that?
My hon. Friend the Member for Amber Valley (Nigel Mills) referred to the need to understand the position and what can be done about it. I would love to hear more from the Minister about the pensions dashboard, which he referred to in his intervention, which I want to see extended to cover not just pensions but more assets. I also want to hear more about the mid-life review. My hon. Friend the Minister is a mere spring chicken, so he may not be under any personal time pressure to implement a mid-life review, but an MOT, as recommended by John Cridland, would be an excellent way to help people, as the Minister said, understand where they stand.
Geraint Davies (in the Chair)
I call Paul Masterton— I think you have got time for your pension.
Paul Masterton (East Renfrewshire) (Con)
Thank you, Mr Davies. I am pleased to speak in the debate, and I congratulate my hon. Friend the Member for Chippenham (Michelle Donelan) on securing it. We are here to debate one of the most successful savings policies in pensions history. As a result of auto-enrolment, more than 9 million additional people are saving for their retirement, including 5,000 in East Renfrewshire and more than 63,000 in Scotland as a whole. Four in five of today’s eligible workers are saving, and those benefiting the most are the lowest earners, those aged 20 to 29, and women. Opt-out rates still sit at under 10%.
There is wide consensus in both politics and the industry that the policy is working, and that holds true even for some groups who people feared would struggle with implementation, such as small businesses. Those businesses make up a large proportion of the 990 businesses in East Renfrewshire now complying with their auto-enrolment duties.
As others have said, the utilisation of inertia to build a savings culture with a new generation of savers is the key element of the policy. As the People’s Pension—a master trust serving just under 3 million savers in auto-enrolment—said when I met it a few months ago,
“the policy was developed following a variety of failed pension saving initiatives which lacked the necessary incentives to encourage low and moderate earners to save for retirement in practice.”
I am incredibly proud of the Government and this policy, which—I do not think this is overstating it—is a savings revolution that has become the envy of Governments across the globe.
DWP analysis shows that reforms could increase median weekly private pension income by up to £261 a week by 2070—hopefully even I will be retired then. If sustained, the reforms could significantly reduce the risk of pensioner poverty over the longer term, which in turn will reduce levels of dependency on the state.
So far, auto-enrolment has been rightly heralded as a great policy success. However, it is a fragile policy. The test of its robustness will come when savers’ and employers’ contributions begin to be raised to a meaningful level. The rates of required contributions are too low and even at the final rate of escalation they will still be too low. Such contributions are also often combined with investments in a default fund that is not regularly and properly scrutinised, leading to poor investment returns.
While Pension Wise is sensible Government policy, it is predicated on individuals becoming engaged investors as they get to their 50s, so it will not mitigate the risks for most people, who do not think about pensions until six months out from retirement age. Pension providers should be tasked to establish high-quality default products, with appropriate and aligned governance. The Financial Guidance and Claims Bill, working its way through the Commons, is a good piece of legislation that can help address that.
Like others, I was delighted by the Government’s announcement before Christmas of reforms to auto-enrolment to ensure that saving was from the first pound. The system with the lower earnings limit was basically just an administrative hassle, and in many cases it was ignored by employers. It will particularly help those with multiple jobs, and expand auto-enrolment to cover those over 18 and under 22. I agree that there seems to be no good reason not to look at 16 and 17-year-olds, particularly those who have left school and are working full-time, earning more than £10,000.
Bringing a new generation into an immediate culture of pensions saving is incredibly significant and will have long-term benefits for society as a whole. That is why the Government must not slow down the escalation timetable for contributions. Yes, workers and employers need time to adjust, and we need to strike a careful balance so we do not get a sudden increase in the opt-out rate, but the current timetable is suitable, sustainable and should be stuck to.
Key to the success of auto-enrolment is a new culture of pension saving through better and more creative financial education and engagement. Again, the Financial Guidance and Claims Bill does a good deal of work on that. Although I will save default guidance for another day, the Minister has my full support for the work he is doing on that, and particularly on the pensions dashboard —an exciting development that will be hugely useful for people however much they are earning and wherever they are working.
Moving forward, the Government need to link pension provision and the next auto-enrolment review with further consideration of the Taylor report. The definition of “worker” in auto-enrolment regulations is becoming increasingly ambiguous, with employment status uncertainty growing. That needs to be addressed to determine precisely who falls within the scope of auto-enrolment so that business and individuals have certainty. Since auto-enrolment was brought in, I spent a heck of a lot of time giving legal advice on that, and it was always an absolute nightmare. We need to do some work to tighten up who falls within and outside the scope of the auto-enrolment regime.
I will not touch on self-employment, because my hon. Friend the Member for Chippenham did a good job on that. I am interested to see what she has up her sleeve, and if she ever wants any assistance in “banging on about it”, as she said, I am more than happy to help.
In 1948, a 65-year-old could expect to spend 13.5 years in the retirement phase of life. They now can expect it to be 33.6% of their life. The UK must remain one of the best places in the world to grow old, and ensuring that people have a decent income in retirement must be at the heart of that. I commend the Government, and this Pensions Minister—who is well liked in the industry and who I hope remains in place for a long time—for their work to make that a reality for everyone.
Patricia Gibson (North Ayrshire and Arran) (SNP)
We can all agree that auto-enrolment has been a positive development in helping to encourage people to save and prepare for their retirement. I have been sitting here and enjoying the unusual consensus. I thank the hon. Member for Chippenham (Michelle Donelan) for securing the debate; I agree with almost every point she made.
A good, clear pension plan is an important tool in tackling existing inequalities that need to be eradicated, with fairness at the heart of our system. If I may threaten the consensus for just a second, in all the talk about pensions and preparing for retirement, I am briefly reminded of the hardships that our WASPI women are going through. They thought they had a little security in retirement, but they found that was not the case. I know that is not the focus of the debate, but it is a reminder of the importance of pensions in people’s lives.
Auto-enrolment is to be welcomed, and everyone supports it, but a number of concerns, which hon. Members have touched on, need to be addressed. As the hon. Lady and others pointed out, progress in ensuring that self-employed people are included in auto-enrolment has been disappointing. The announcement of feasibility testing is positive, but it still risks leaving too many millions of workers behind. That matters because, as we have heard, 4.8 million people in our workforce—about 15%—are self-employed, so the numbers are not insignificant.
As far back as 2004, the Pensions Commission identified the self-employed as a group for which pension provision had always been deficient. The need to include self-employed people in attempts to improve pension provision for that group is hardly breaking news, but it simply has not been addressed. I know the Government have argued that that is a complicated issue—the hon. Member for Chippenham also set that out—but the fact that it is complicated does not mean that it should have been kicked into the long grass for as long as it has. There are too many people losing out on opportunities to build on their financial plans for retirement. The fact that something is difficult is not a reason not to do it.
It cannot be beyond the wit of Government. We have heard others, including the right hon. Member for Preseli Pembrokeshire (Stephen Crabb), tell us that we have a great Pensions Minister. I am sure that it is not beyond the wit of the Minister to try to address the issue of helping self-employed people to navigate their way through that difficulty, as set out by the hon. Member for Chippenham. I agree with her, and others, that it is imperative that those on low pay are covered and included in auto-enrolment, for exactly the same reason. As long as they are not, they are denied the chance to prepare financially for their lives after work.
The 2017 review indicated that bringing the low-paid into auto-enrolment would be of great benefit to those workers, but that will not be implemented until the mid-2020s. Given that we know that the earlier in life someone starts paying into their pension, the better their pension is, we need to make progress on that much more quickly. Those on low pay during their working life must not be denied the opportunity to build up a pension pot for their retirement.
The hon. Lady is absolutely correct that persuading young people to save for their pensions is important. The fact that the inclusion of 18-year-olds in auto-enrolment is not expected to be implemented until the 2020s is also extremely disappointing. With a pension crisis looming for younger generations, those who are now 18 years old will have lost out on precious years of potential pension savings if the issue is kicked further down the road. I agree with the right hon. Member for Preseli Pembrokeshire and the hon. Members for Chippenham, for Horsham (Jeremy Quin) and for East Renfrewshire (Paul Masterton) that that really needs to change.
I would say to the Minister that good progress has been made with pension auto-enrolment and it is right that that should be recognised, as the right hon. Member for Preseli Pembrokeshire and the hon. Member for Horsham pointed out. We have to recognise success when we find it, but there are still whole swathes of the working population who as yet are not eligible for auto-enrolment, and they are at risk of being left without enough years of pension savings if that is not urgently addressed. I know that when the Minister gets to his feet, he will tell us how he intends to do that.
I will end by saying—the Minister will have heard me say this before, if he was listening—that we need a full and independent pension commission, looking holistically at every aspect of pensions, so that we have a system that is as fair as possible for all. We all need to have a system that we can have confidence in and rely on when our working lives are over. We need a pension system that is sustainable and takes into account shifting variables such as life expectancy, which is drastically different depending where in the UK someone lives.
With 1 million pension pots accessed early since reforms enabled that to happen, with the self-employed and young people not included in auto-enrolment until the mid-2020s and with rising life expectancy, the issue of pension provision and pensioner poverty is becoming all the more urgent. That is why I am keen to hear what the Minister has to say on how he will move forward with this.
Jack Dromey (Birmingham, Erdington) (Lab)
It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate the hon. Member for Chippenham (Michelle Donelan) on initiating this debate and on a thoughtful and challenging contribution, with some ideas in it that I shall come to later.
Forgive me if I say that the right hon. Member for Preseli Pembrokeshire (Stephen Crabb) was right: auto-enrolment is a testament to what the last Labour Government did in initiating the Turner review and putting the wheels in motion for auto-enrolment to be implemented. As I have often said to the Minister, it is deeply welcome that there has been continuity of policy. He said only yesterday in his address to the TUC that, on issues such as pensions, continuity wherever possible is absolutely critical.
I was personally involved in some of the discussions with successive Secretaries of State and with Adair Turner, and the basis that was laid and the point we have reached now are both very welcome indeed. It has led to a better workplace pension landscape than before, with an additional 10 million workers estimated to be newly saving or saving more as a result of auto-enrolment. It has led to an additional £17 billion of pension savings being put away, mostly by low-income workers. We welcome the move by the Government to reduce the age of eligibility for auto-enrolment to 18, as that should lead to more people becoming aware of the importance of pensions at a younger age. The sooner that is introduced, the better.
However, for all the welcome progress that has been made, it is not a perfect system and there are issues that need to be addressed at the next stages to make the pension landscape better. First, the threshold over which workers are automatically enrolled is too high. According to the latest statistics from the Department for Work and Pensions, 37% of female workers, 33% of workers with a disability and 28% of black and minority ethnic workers are not eligible for master trust saving through auto-enrolment.
Secondly, auto-enrolment does not cover the self-employed or workers in the gig economy. The impact is felt in particular by female workers, workers with disabilities and black and minority ethnic workers, who are over-represented among low earners, the self-employed, those with multiple jobs and carers. That is why it is absolutely necessary, as the Taylor report recommended, to redefine workers in the gig economy as employees, meaning that they would be eligible for auto-enrolment. As Matthew Taylor said, if it looks like employment and smells like employment, it should be employment.
Having said that, the statistics outlined in various contributions today are stark. Self-employment, and in particular bogus self-employment, are becoming increasingly prominent in the modern economy. Figures released last year suggest that the number of self-employed workers in the UK rose by 23% between 2007 and 2017, from 3.8 million to 4.7 million. That represents a dramatic shift in the nature of the world of work and the way in which the British economy works.
Self-employed people now represent around 15% of the workforce, and 91% of businesses say that they hire contractors. The latest figures from the Office for National Statistics show that only 19% of the self-employed are saving into a personal pension. That is a worrying trend, and more needs to be done, not least because those concerned face decreased security in their current working practices and in their retirement. That is why the hon. Member for Chippenham was absolutely right—dare I say it?—to bang on about this and to call for a detailed review at the next stages. I would strongly support that. That issue needs to be tackled because of the changing nature of the workplace.
Thirdly, as stated earlier, the advent of auto-enrolment has increased the number of workers saving for retirement, with more active savers now in defined contribution pension schemes rather than defined benefit schemes. While the overall trend toward a greater number of savers is positive, we do not want to see a growing threat posed to DB schemes. It was never intended that auto-enrolment should become a bolthole for employers seeking to move away from historic DB schemes. Indeed, I thought what the Minister said yesterday to the TUC conference was absolutely right—he said that DB is working well notwithstanding a whole number of problems, and that where employers can, they should continue with their responsibilities. I strongly agree with him.
Fourthly, the rise in the number of pension savers is a step in the right direction, but DC plans must continue to evolve in order to provide savers with an adequate pension. A report by the Pensions Policy Institute in 2016 found that the median saving of DC scheme members could yield only £3,000 per year as an annuity, which is not a lot of money. That therefore demands action at the next stages and on a whole number of fronts: more work, for example, needs to be done to improve the adequacy of returns on DC savings, including looking in greater depth at costs and charges. On the 8% target, it is clear that, for the current proposed automatic contributions—I stress again that they are a welcome step in the right direction—8% should not be the summit of our ambition as we look ahead over the years to come. I take the point from the hon. Member for Chippenham that we should get the balance right so that we do not impose unreasonable burdens as we progressively move forward. However, I stress again that 8% should not be the summit of our ambitions.
On how one might have the best possible DC arrangements, there is an interesting debate going on around collective defined contribution pension schemes and what is being proposed by both Royal Mail and the Communication Workers Union. We have been engaged in constructive discussions with the Government on opening the door for such arrangements to be introduced at the next stages. However welcome it is, I stress again that 8% is not enough, and we therefore need to look at several things, including transparency, costs and all those things that would make a difference.
More workers having access to a pension pot is welcome, but I refer to what my hon. Friend the Member for Weaver Vale (Mike Amesbury) said earlier: it is vital that there is greater knowledge about pensions. To that end, the Government have the opportunity, through the Financial Guidance and Claims Bill, which is welcome, to increase the provision for financial education.
Geraint Davies (in the Chair)
I was hoping to allow the Minister about 10 minutes in which to speak.
Jack Dromey
In which case I will finish in about 90 seconds. Financial education is at the heart of that Bill, which is welcome. The role of the new single financial guidance body will also be important.
Auto-enrolment has been positive for the workplace pensions landscape in this country. It needs extending and improving—of that there is no doubt—to give workers greater security in retirement, but it is a strong and welcome step in the right direction, and it is deeply welcome that there is cross-party consensus.
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
I am delighted to respond to the important and timely debate introduced by my hon. Friend the Member for Chippenham (Michelle Donelan). She is right that this is the first time that this important issue has been debated in this Parliament since its introduction many years ago. This is an opportunity for us to air a variety of suggestions and ideas, which I will take on board. If I cannot address all the points she raised, I will definitely reply to her in writing.
It was kind of my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) to describe me in the way he did. It is a rare day that a Conservative Minister gets a good report from the Trades Union Congress, where I spoke yesterday. My only thought as I was listening to his speech was that things can only go down from here. It is also the case that, while I take all the compliments on the work we do as a Department—it is a team game, as any Minister will say—it is patently clear that the Chief Whip, should he wish to replace me at any stage, has available a number of capable personalities who have auditioned impressively today in their speeches.
We are considering auto-enrolment following the Government review in December 2017. I pay appropriate thanks to all the many people who contributed to it. It is certainly the case that we should start with unequivocal support for the hundreds of employers that have all made an amazing contribution. There are 1,250 in Amber Valley, 990 in East Renfrewshire, 1,860 in Horsham, 1,330 in Preseli Pembrokeshire and 1,590 in Chippenham. They have effectively been part of the change of the contract that exists between employee and employer. In my respectful view, that is utterly key going forward.
That new contract, much as we see in relation to the living wage, sees a change in the employee-employer relationship, and we need to make the case that the employer pays in when an individual pays in. More particularly, I believe it has led to greater staff loyalty, greater retention and greater commitment to those businesses. We should support and applaud that on an ongoing basis.
It is an amazingly exciting time for me to have been given this job. It is one that I asked for, and the Prime Minister kindly added financial inclusion to my ministerial title. It is clear that the Government are committed to all aspects of financial inclusion and addressing debt advice and pensions guidance, whether that is through making pensions simpler, more accessible and increasingly transparent through the pensions dashboard; or providing improved debt advice, pensions guidance and breathing space, and cracking down on cold calling, which we are doing through the single financial guidance body, which is being created by the Financial Guidance and Claims Bill, which will return for debate in the House in approximately 10 days; or pioneering the mid-life MOT and the developments in auto enrolments.
The hon. Member for North Ayrshire and Arran (Patricia Gibson) made several points. I briefly say that the independent review of the pensions system she requested was done by the Government in March 2017—John Cridland very kindly did it. It included looking at life expectancy. Pensioner poverty has also reduced significantly under successive Governments, to give credit where it is due. The hon. Member for Birmingham, Erdington (Jack Dromey) made the fair point that the Labour party would like a consistency of approach. This is an example of that and, with respect, the raising of the state pension age from 1993 onwards is an example of consistent pensions policy across all parties.
More than 1 million employers are now successfully providing workplace pensions. It is a good time to take stock, because we are seeing the end of the first phase of our reforms as we go forward into the second phase and bringing on board newly created businesses into our growing economy. There will be approximately 180,000 to 210,000 new employers each year that will need to comply with automatic enrolment duties. They will very much receive assistance from the Government and the independent Pensions Regulator in taking forward that process.
I make it very clear—I say this in every speech that I give—that we need to change the way in which this country views savings, pensions and investments. We need a situation in which we are unequivocally supportive of enhanced savings, pensions and investments. Auto-enrolment will clearly make a massive difference, and the rises that we will see will clearly make a massive difference to savings.
In the limited time I have, I will try to address some of the crucial points that have been raised. Much was said about why we are delaying the implementation of reforms, whether it is the lowering of the lower earnings limit or the £10,000 limit, until the mid-2020s. I take the strong view that it is my job, helping the Secretary of State and No.10, to ensure that the April 2018 and the April 2019 increases land without a hitch. They are the most important things that the auto-enrolment review identified and, more particularly, that we need to get right.
Provided we get those two increases right, we can then assess where we are. We can then allow for the lessons to be learned and push on to further phases. On phasing, it is entirely right, as everybody has said on a cross-party basis, that 8% is not sufficient to retire. We all accept and realise that. The Government are crystal clear that it is not the end of the matter. We wish to continue with the April ’18 and April ’19 increases, and once we have done those, we will assess where we go thereafter. Hon. Members should be under no doubt that there is an acceptance in all parts of Government that 8% is not sufficient for a long-term retirement. There are various examples from around the world. Australia is several years ahead of us, and has pushed into double figures. That is clearly the direction of travel in which we will go at some stage.
My hon. Friend the Member for Chippenham raised several questions, and I will try briefly to answer some of them. I have a couple of quick points on the self-employed. NEST has a public service obligation to ensure that employers always have a scheme available for automatic enrolment. That now applies to the self-employed, who can join NEST itself. The review that identified the significant number of self-employed people—4.8 million—very much made the case that we need to come up with ideas to address that. The pilot projects we are putting forward aim to do exactly that. As my hon. Friend will be aware, NEST is pioneering the sidecar product.
I meet a number of private sector providers. I will shortly meet Plum, and there are others—to use a BBC expression, alternative providers are available. Clearly, Moneybox, Plum and Chip, and all these very interesting private sector providers that give alternative savings options, can be utilised. We are looking at such companies with great interest.
More importantly than that, we are trying to be immensely proactive. There will be the self-employed hackathon. If the invite to that has not landed in colleagues’ inboxes as yet, they should come on 26 March when, working with the Association of British Insurers at its offices, we will explore ways forward and the assistance we can give to the self-employed. There is absolutely no doubt that we want to do that.