House of Commons

Wednesday 3rd November 2010 Commons Chamber

Wednesday 3 November 2010

The House met at half-past Eleven o’clock

Prayers

Wednesday 3rd November 2010 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Wednesday 3rd November 2010 Commons Chamber

The Secretary of State was asked—

[Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)]

1. Whether she has had discussions with the Secretary of State for Justice on the likely effects on Wales of her Department’s proposed programme of court closures.

[The Parliamentary Under-Secretary of State for Wales (Mr David Jones)]

My right hon. Friend the Secretary of State and I are fully engaged with our colleagues at the Ministry of Justice on these proposals. We both met the Under-Secretary of State for Justice, my hon. Friend the Member for Huntingdon (Mr Djanogly), in September and further meetings have been arranged.

[Mr Llwyd]

I thank the hon. Gentleman for that reply. Will he tell me when exactly he met his colleagues and what he discussed? Which courts did he say should not close?

[Mr Jones]

I and the Secretary of State met the Under-Secretary in September. We have another meeting arranged for 10 November. We discussed all the courts in Wales that I am sure the hon. Gentleman is concerned about.

[Mr Speaker]

I call David Davies.

[Mr Llwyd]

rose—

[Mr Speaker]

Order. I apologise. The hon. Gentleman has the right to come back.

[Mr Llwyd]

May I make the point that since the hon. Gentleman and his colleague have been in post, we have lost the investment in St Athan, we have lost the investment in the south Wales railway line, we have lost jobs in Newport and we have lost the north Wales prison? What on earth are they doing for Wales?

[Mr Jones]

It is in fact inaccurate to say that we have lost either St Athan or the north Wales prison. I would have thought, frankly, that the hon. Gentleman, as a lawyer, would be more concerned about the administration of justice. That is the primary concern of our Department and of the Ministry of Justice.

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

May I thank the Minister for all he is doing to try to right the terrible economic wrongs foisted on us by Labour Members? In doing so, will he also take account of taxpayers’ money that has been spent on Abergavenny court before making any final decision on it?

[Mr Jones]

Yes, indeed. Both the interests of justice and the interests of taxpayers’ money will be fully considered.

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

2. What discussions she has had with the Chancellor of the Exchequer on Government policy on the funding for the National Assembly for Wales determined in the comprehensive spending review.

[The Secretary of State for Wales (Mrs Cheryl Gillan)]

I have discussed the comprehensive spending review with my right hon. Friend the Chancellor of the Exchequer and other Cabinet colleagues. The spending review sets out how the Government will carry out Britain’s unavoidable deficit reduction plan. We have secured a fair settlement for Wales. It is now for the Welsh Assembly Government to decide how to manage the reductions, reflecting their own policies and priorities.

[Jonathan Edwards]

The UK Government refuse to review Wales’s funding settlement, despite four independent reports highlighting the inequity of the Barnett formula, until the proposed March referendum. Will the Secretary of State explain the link between legislative competence for the National Assembly and funding for the Welsh Government, because under the terms of the Government of Wales Act 2006 they are distinct bodies?

[Mrs Gillan]

The hon. Gentleman knows very well that there have been two recent reports to the Welsh Assembly Government by Gerald Holtham, both of which I have looked at and discussed with the First Minister. We are still waiting to see what the response is from the Welsh Assembly Government to the second report from Gerald Holtham and it is right and proper that we should wait and see what the Welsh Assembly Government say first. As the hon. Gentleman knows, the details in the coalition agreement are quite clear. We have said that the Barnett formula is coming towards the end of its time, but we have a priority to put this economy back into shape after it was left in such a disgusting mess by the outgoing Government.

[Mr Peter Hain (Neath) (Lab)]

On what date was the Secretary of State informed by the Secretary of State for Culture, Olympics, Media and Sport of his plans to change the status of S4C?

[Mrs Gillan]

The right hon. Gentleman knows that I have many meetings with the Culture Secretary on S4C. I have discussed the future of S4C on many, many occasions.

[Mr Hain]

You will have noticed that she did not answer the question, Mr Speaker. The day before the comprehensive spending review, on the evening of Tuesday 19 October, the BBC’s Nick Robinson first broke the news that S4C was to be joined with the BBC before the S4C authority had even been informed. It is not clear from her answer whether the Secretary of State knew what the Culture Secretary was planning before Nick Robinson did or whether, like the rest of us, she found out from him. It saddens me that she has absolutely no influence in the Cabinet. She failed to stand up for S4C, she failed to stand up for the defence training college, she failed to stand up for the Anglesey energy island, she failed to stand up for the Severn barrage and she got a terrible deal for Wales out of the comprehensive spending review. I am sorry to say that she is failing Wales abysmally. If she is not going to fight for Welsh jobs, she should not be in her job.

[Mrs Gillan]

I welcome the right hon. Gentleman back to his place on the Front Bench. For a brief moment during the elections for the shadow Cabinet, I thought we were going to be robbed of his charm and wit in Welsh questions, but that is not to be the case.

The Conservative party initiated the legislation on the Welsh language, which helped to put S4C on the map, and I have always supported S4C, both as the shadow Secretary of State for Wales and now as the Secretary of State. The deal for S4C is that it has firm funding for the next four years, and there will be meetings to ensure that it remains independent and continues to make a valuable contribution to Welsh language broadcasting.

[Several hon. Members]

rose—

[Mr Speaker]

Order. As I want to make some progress down the Order Paper, we must have shorter answers, so I shall cut them off if necessary.

[Hywel Williams (Arfon) (PC)]

Perhaps I can help the two Front Benchers. In a written answer to a question to the Secretary of State for Culture, Olympics, Media and Sport, I was told that he and others were informed of the S4C decision

“in the days leading up to, or at the time of, the spending review and licence fee settlement announcements.”—[Official Report, 28 October 2010; Vol. 517, c. 413W.]

Can our Secretary of State be a little more precise, or is her memory deficient—tactically or otherwise?

[Mrs Gillan]

No, my memory is not deficient. I assure the hon. Gentleman that S4C has been so important to me that I have been supporting it through its troubles. He will be well aware of the precipitate departure of the chief executive. I remember going out clearly at the Eisteddfod and backing S4C and saying that it had a great broadcasting future and was secure in our hands. It has now secured its financial deal, the details of which will come later.

[Karen Lumley (Redditch) (Con)]

3. What recent discussions she has had with ministerial colleagues on an exemption from Severn bridge toll charges for serving armed forces personnel.

[The Parliamentary Under-Secretary of State for Wales (Mr David Jones)]

I have regular meetings with ministerial colleagues regarding transport issues in Wales. I recently met the Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker), to discuss the Severn bridge tolls. In particular we discussed the possibility of offering various discounts once the concession ends.

[Karen Lumley]

Does my hon. Friend agree that we ought to honour our armed forces by giving them concessionary fares, as happens in France and the United States?

[Mr Jones]

We certainly ought to honour our armed forces. The issue with the Severn bridge is that it is currently managed by a concessionary company, Severn River Crossing plc, and that the concession is likely to continue until 2017. Until then, discounts are entirely a matter for the company, but when the concession ends the Government will be responsible for tolling and might well consider further concessions.

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

Does the Minister agree that the tolls act as a tax on the economic gateway to inward investment in Wales? Will he consider reducing the tolls for the maintenance charges when the Severn bridge comes into public ownership in 2016 to encourage inward investment and prosperity at a time when the Welsh have been hit so badly by the comprehensive spending review?

[Mr Jones]

I understand what the hon. Gentleman says. Clearly there would be more of an economic barrier if the crossing were not there, but he is right that when the concession comes to an end in 2016-17 it will be possible to review the tolls and see whether, for example, they should be charged only in one direction or both.

[Mr David Hanson (Delyn) (Lab)]

4. What plans she has for discussions with the Welsh Assembly Government on the likely effects on child poverty in Wales of the outcomes of the comprehensive spending review.

[The Secretary of State for Wales (Mrs Cheryl Gillan)]

I have regular meetings with the First Minister about a range of issues relevant to Wales. We are firmly committed to tackling poverty and improving the lives of low-income families. Through decisions we have taken in the spending review, we are demonstrating that the best way to tackle child poverty is to address the root causes of poverty—entrenched worklessness, economic dependency and educational failure.

[Mr Hanson]

What representations has the Secretary of State made to her Treasury colleagues about the child trust fund, to which the Assembly continues to contribute? Page 42 of the Conservative party manifesto committed the Government to continuing to support the child trust fund for the poorest third of families, but that commitment is being ripped up by the Bill that is currently before Parliament.

[Mrs Gillan]

The right hon. Gentleman knows that the cuts we are being forced to make are not these Government’s cuts but have arisen from his Government’s mismanagement of the economy. We certainly want to help disadvantaged children now, when they need our help, and it would simply be wrong to defer that help for 18 years. We have had to take difficult decisions regarding the child trust fund, but the record deficit has made it unaffordable. The problem with the economy at the moment is that his Government broke it and we have to fix it.

[Roger Williams (Brecon and Radnorshire) (LD)]

Does the Secretary of State agree that the substantial increase in child tax credits announced in the June Budget will do substantial work to address child poverty not only in Wales, but right across the UK?

[Mrs Gillan]

The hon. Gentleman knows that to change the prospects of all children through the new fairness premium of £7.2 billion over the spending review period is exactly what this Government want to do. It includes a £2.5 billion premium to support the educational development of the poorest pupils.

[Owen Smith (Pontypridd) (Lab)]

It is not simply in respect of child poverty that people in Wales are worried; whole towns in Wales are now worried that the Government have them in their sights. We are used to it, of course, in places such as Merthyr—in the 1930s, the Tories proposed to close it down completely and move people to the colonies—but I wonder whether Wales Office Ministers share the view of the Work and Pensions Secretary that people there, in Merthyr and in the valleys, are workshy and should simply get on a bus and find a job.

[Mrs Gillan]

The hon. Gentleman knows that, with our packages of welfare reform, we are trying to lift people out of lives of dependency. The right hon. Member for Delyn (Mr Hanson) asked about child poverty, which had been increasing under his Government since 2005. Is the hon. Gentleman not ashamed of the previous Labour Government’s record on the matter?

[Mr Speaker]

Order. I think that the Secretary of State will have intended to welcome a new occupant of the Opposition Front Bench.

[Nia Griffith (Llanelli) (Lab)]

5. What recent representations she has received on the implications for Wales of the Government’s proposals on constitutional reform.

[The Parliamentary Under-Secretary of State for Wales (Mr David Jones)]

My right hon. Friend and I have received a number of representations, and we have also discussed with the Welsh Assembly Government and other interested parties the implications for Wales of the Government’s programme of constitutional reform. Fairness throughout the United Kingdom is the underpinning principle of those reforms, and the Government have moved fast to introduce the constitutional reforms needed to restore confidence in Britain’s political system.

[Nia Griffith]

We all understand the idea of a maximum time limit of two months for responding to Select Committee reports, but we do not have to go for the maximum; we can respond earlier. Will the Minister explain why his right hon. Friend the Secretary of State did not respond to the Welsh Affairs Committee’s report on the constitutional reforms in time for those comments to be considered while the relevant Bill was being considered on the Floor of this House?

[Mr Jones]

As the hon. Lady will know, the Committee’s report was only recently received. The Wales Office will do it justice by giving it full consideration and providing a mature and considered response.

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

6. What recent discussions she has had with ministerial colleagues on the economy of seaside towns in Wales.

[The Parliamentary Under-Secretary of State for Wales (Mr David Jones)]

My right hon. Friend has had regular discussions with ministerial colleagues on all issues affecting the Welsh economy, including the vital role that the prosperity of seaside towns plays. The Government are committed to working with the Welsh Assembly Government to promote Wales as both a tourism and an investment destination, so that seaside towns prosper as we deliver sustainable economic growth.

[Chris Ruane]

What assessment has the Minister made of the effect on seaside towns, especially Welsh seaside towns such as his and mine, of what Boris Johnson calls the “Kosovo-style” clear-out of people on housing benefits in inner cities?

[Mr Jones]

I can fully understand the hon. Gentleman’s concern that after 13 years of Labour government the west ward of Rhyl became the poorest and most deprived area in the whole of Wales. In so far as benefits are concerned, the most important aspect of the matter is to ensure that housing is available in the west ward of Rhyl and in other parts of his constituency.

[Guto Bebb (Aberconwy) (Con)]

Does my hon. Friend agree that tourism is a key part of the north Wales economy, and as such is it not inexplicable that the Assembly Government’s economic renewal plan does not mention tourism at all?

[Mr Jones]

Yes. Tourism provides £4 billion per annum to the Welsh economy, and it is essential that we do as much as we can to encourage it. However, the north Wales coast regeneration area fund will also utilise private funding, and that is a Welsh Assembly Government initiative of which we approve.

[Paul Flynn (Newport West) (Lab)]

7. What recent discussions she has had with the Secretary of State for Business, Innovation and Skills on steps to increase employment opportunities in Wales.

[The Secretary of State for Wales (Mrs Cheryl Gillan)]

May I apologise, Mr Speaker, for not welcoming the hon. Member for Pontypridd (Owen Smith) to the Front Bench? I am so incensed by the previous Government’s treatment of the economy that it quite passed me by, but I would not want any impoliteness, and I welcome him warmly to the Front Bench.

I have had regular discussions regarding increasing employment opportunities in Wales with my right hon. Friend the Secretary of State for Business, Innovation and Skills, and he is as committed as I am to ensuring that the Welsh economy benefits fully from new growth in the economy.

[Paul Flynn]

Wales, and Newport in particular, have provided a successful and welcoming habitat for jobs that were relocated from London. Would it not be a great shame if the present cuts hit disproportionately Welsh areas, resulting in the reversal of that very successful process? Will the Secretary of State renew her efforts to persuade Government that a cut of 250 jobs at the Newport passport office would seem especially devastating if they understood the local situation?

[Mrs Gillan]

The hon. Gentleman knows exactly how I feel about the issues concerning the immigration and passport office, because I was delighted to welcome him and the hon. Member for Newport East (Jessica Morden) into the Department to meet the Minister for Immigration and me to discuss its future. The hon. Gentleman is absolutely right: Newport is a city that ranks third in the Lambert Smith Hampton study of the best office locations outside London. We have businesses there such as Admiral, Wales and West Utilities, and even the HM Prison Service shared service centre. I can assure him that I will make my best efforts to protect all the jobs in Newport that I can, and to promote Newport among my colleagues as a good place to which to relocate.

[Jenny Willott (Cardiff Central) (LD)]

The Driving Standards Agency is planning to close its Cardiff office, with the loss of 80 jobs, partly as a result of the cost of office rental. Since the Government own a huge office estate in south Wales, will the Secretary of State work with colleagues to undertake an audit of that office space to see if it can be better used more efficiently in order to save jobs?

[Mrs Gillan]

I would be very willing to give that undertaking to the hon. Lady. In fact, if she writes to me with any details, I will be pleased to take it up with my colleagues. She should be aware, however, that I am talking to all the Departments right across Whitehall, as I did right at the beginning when I was first appointed, to suggest that Wales is a great place for them to relocate their expensive offices from other parts of the country. [Interruption.]

[Mr Speaker]

As usual at this time on a Wednesday, there are far too many private conversations taking place in the Chamber. It is very unfair on the Member asking the question and the Minister answering it, and it is also rather discourteous to the people of Wales.

[Kevin Brennan (Cardiff West) (Lab)]

8. If she will discuss with the Leader of the House the convening of a meeting of the Welsh Grand Committee to discuss the matter of the effect on Wales of the provisions of the Parliamentary Voting System and Constituencies Bill.

[The Parliamentary Under-Secretary of State for Wales (Mr David Jones)]

As I explained to the hon. Gentleman and his colleagues yesterday, there is no need for a meeting of the Welsh Grand Committee on this issue. Hon. Members have had adequate opportunity to discuss the implications for Wales of the Parliamentary Voting System and Constituencies Bill, including five days of debate in Committee and two days on Report and Third Reading, all on the Floor of the House.

[Kevin Brennan]

I see that Ministers are not answering again. When the Secretary of State refused, in an unprecedented way, to have a meeting of the Welsh Grand Committee, was her principal reason for doing so to snub Welsh MPs or simply to sabotage the Prime Minister’s respect agenda—because she succeeded in both?

[Mr Jones]

The hon. Gentleman well knows that far from treating him and his colleagues with disrespect, there was in fact a meeting specially organised for Welsh Members of Parliament attended by the Bill Minister, the Secretary of State and me. There has been ample opportunity for discussion of this Bill on the Floor of the House, as the hon. Gentleman well knows.

[Nick Smith (Blaenau Gwent) (Lab)]

9. What recent discussions she has had with the Secretary of State for Transport on funding for cross-border rail infrastructure projects; and if she will make a statement.

[The Secretary of State for Wales (Mrs Cheryl Gillan)]

My hon. Friend the Under-Secretary and I have regular meetings with ministerial colleagues to discuss a range of issues affecting Wales, including transport. We recognise that improved rail infrastructure is a vital component for delivering a successful economic recovery in Wales, and we are working hard with the rest of Government to ensure that this is achieved.

[Nick Smith]

Given that the great western main line is one of the UK’s busiest, can the Secretary of State assure me that Labour’s commitment to electrify the line between Bristol, Cardiff and Swansea by 2017 will be honoured?

[Mrs Gillan]

The hon. Gentleman knows that we recognise the importance of enhancing railway infrastructure to meet demand, and that is why the Government are investing £14 billion of the Department for Transport’s £30 billion budget over the next four years in the maintenance of our railways. There will be further announcements on railway investment, and I very much hope that all the representations that have been made on the electrification of that part of the railway will find favour with the Secretary of State for Transport.

[Mr Mark Williams (Ceredigion) (LD)]

Will the Secretary of State turn her attentions also to the transport infrastructure in mid-Wales and the train connection between Aberystwyth and Shrewsbury? We have been waiting a long time for an hourly service and a direct service to London, which requires Assembly funding. Will she look sympathetically on the Assembly’s bids for funding for that train route?

[Mrs Gillan]

I happen to have a meeting with the First Minister tomorrow, so I can assure my colleague that I will raise the matter with him. As he knows, the Welsh Assembly Government and Network Rail have invested £13 million in enhancing the Cambrian line from Aberystwyth to Shrewsbury. That collaboration has led to a huge investment as part of the national stations improvement programme, which I hope my colleague will welcome.

[Susan Elan Jones (Clwyd South) (Lab)]

10. What discussions she has had with the Secretary of State for Culture, Olympics, Media and Sport on the future funding and management of S4C.

[The Parliamentary Under-Secretary of State for Wales (Mr David Jones)]

My right hon. Friend and I have had regular meetings with my right hon. Friend the Secretary of State for Culture, Olympics Media and Sport and with the Under-Secretary of State for Culture, Olympics, Media and Sport, my hon. Friend the Member for Wantage (Mr Vaizey), who is responsible for culture, communications and creative industries, to discuss these matters. The Government remain committed to the future of Welsh language programming and of S4C, and we regard S4C’s settlement as fair and proportionate to the cuts that the Department for Culture, Media and Sport is being asked to make.

[Susan Elan Jones]

Does the Minister agree with the leader of the Welsh Conservatives that there should be an independent review of S4C?

[Mr Jones]

The Welsh Conservatives’ proposal is, of course, that S4C should have a good, viable and vibrant future. It is for my right hon. Friend the Secretary of State to consider whether there should be an inquiry.

[Jonathan Evans (Cardiff North) (Con)]

11. What recent discussions she has had with the First Minister on proposals to decentralise powers to local communities.

[The Parliamentary Under-Secretary of State for Wales (Mr David Jones)]

My right hon. Friend has regular meetings with the First Minister on all issues affecting Wales. I will meet the Assembly Government’s Minister for Social Justice and Local Government tomorrow.

[Jonathan Evans]

As the people of Wales may shortly vote for additional powers to be devolved to Wales, and as the Government take forward their localism agenda, does my hon. Friend agree that it is essential that as many of those powers as possible are devolved down from the Assembly to local communities and councils?

[Mr Jones]

Yes, my hon. Friend is right to the extent that I find huge enthusiasm among stakeholders in Wales for the Government’s big society agenda, which seeks to devolve influence down to the lowest possible level. For that purpose, I will be having a meeting with the Minister for Social Justice and Local Government to discuss how the Welsh Assembly Government can participate in the process.

[Ian Lucas (Wrexham) (Lab)]

How will the removal of the right of local communities to appeal to the Boundary Commission through public inquiries enhance the power of local communities?

[Mr Jones]

These are matters on which the hon. Gentleman has had plenty of opportunity for debate on the Floor of the House, and he has made his full contribution. [Interruption.]

[Mr Speaker]

Order. There is far too much noise in the Chamber. It is a veritable commotion. I want to hear Mr Philip Hollobone.

[Mr Philip Hollobone (Kettering) (Con)]

12. Whether she plans to amend the administration and staff costs in her Department’s budget for 2010-11.

[The Secretary of State for Wales (Mrs Cheryl Gillan)]

My Department’s budget for 2010-11 was fixed as part of the comprehensive spending review. On costs within my Department, since taking office I have been exploring ways to find efficiency savings and have already achieved significant savings on rail travel and hotel accommodation.

[Mr Hollobone]

Does the Secretary of State have any plans to reduce the number of days taken in sick leave by staff in her Department, so that it is the best in the public sector?

[Mrs Gillan]

I am not aware that there are different rates of sick leave in my Department from any other, but I will undertake to my hon. Friend to have a look at the records in my Department and return to the point in writing to him.

[Mr Wayne David (Caerphilly) (Lab)]

Given that the Secretary of State’s Department does not stand up for Wales, what does it do?

[Mrs Gillan]

My Department stands up for Wales, unlike the previous Secretary of State, who stood back from Wales, allowed it to become the poorest nation in the UK and then compared it to Rwanda.

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

13. What recent discussions she has had with Welsh Assembly Government Ministers on Government support for the economy in Wales.

[The Secretary of State for Wales (Mrs Cheryl Gillan)]

I have had regular discussions with both the First Minister and the Deputy First Minister on a range of topics, including working together to deliver strong, sustainable growth to the Welsh economy. We will continue to have discussions on supporting home grown enterprise and looking at attracting more foreign companies to invest in Wales. I will be establishing a Wales business advisory group to ensure that I am fully apprised of issues affecting Welsh businesses and what they need to help bring about growth.

[Neil Parish]

Does the Secretary of State agree that streamlining regulation and stimulating the private economy will be essential to the Welsh economy?

[Mrs Gillan]

My hon. Friend needs very little reply except to say that I wholeheartedly agree with him and will do my best.

The Prime Minister was asked—

[John Robertson (Glasgow North West) (Lab)]

Q1. If he will list his official engagements for Wednesday 3 November.

[The Prime Minister (Mr David Cameron)]

I am sure that the whole House will wish to join me in paying tribute to Sapper William Blanchard from 101 Engineer Regiment (Explosive Ordnance Disposal), who died on Saturday. The work that our sappers do to make areas safe both for our soldiers and for local people requires unbelievable acts of personal courage and selflessness; they are the bravest of the brave. William was a talented and caring soldier who will be sorely missed by all those who knew him. Our thoughts are with his family and friends, and we will not forget what he did.

This morning, I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall have further such meetings later today.

[John Robertson]

I associate myself, as do my hon. and right hon. Friends, with the Prime Minister’s comments. Our soldiers and armed forces deserve our greatest respect, particularly at this time. They will not be forgotten.

Although it is not the Prime Minister’s fault that 555 of my constituents may lose out when the education maintenance allowance is done away with in Scotland, the fact is that he made a promise in January, at a Cameron Direct event, to support EMAs. How many more promises to this country will he and this Government break?

[The Prime Minister]

What we are having to do is deal with completely broken public finances and sort them out. On the issue of the education maintenance allowance, we are committed to ensuring that every young person remains in education and training until they are 18. Also, we will be replacing the EMA with a learner support fund which, crucially, will be administered by the schools and colleges themselves, which are far better at identifying those young people who need help to stay in education.

[Elizabeth Truss (South West Norfolk) (Con)]

Does the Prime Minister agree that RAF Marham should be retained as a base for the Tornado? It makes economic sense, as there is a strong skills base in west Norfolk. West Norfolk also has higher unemployment and higher deprivation than the area of the alternative base under consideration in Scotland.

[The Prime Minister]

My hon. Friend makes a good plea for her area, and she is absolutely right to do so. She will know that we are committed to retaining the Tornado, which has been a very effective ground-attack aircraft. We have not made the final decisions about basing, but I am sure that her remarks will be closely listened to.

[Edward Miliband (Doncaster North) (Lab)]

I first join the Prime Minister in paying tribute to Sapper William Blanchard from 101 City of London Engineer Regiment (Explosive Ordnance Disposal). As the Prime Minister said, he died doing the bravest and most heroic work, and we send our deepest condolences to his family.

We fully support the actions that the Government are taking to tackle the terrorist threat that we saw re-emerge last week. Will the Prime Minister update the House on the review of air freight and passenger security, and tell us when he believes that it is likely to be complete?

[The Prime Minister]

I am grateful for the right hon. Gentleman’s comments. As he knows, several steps have already been taken: stopping freight transport from Yemen and Somalia; suspending the carriage of toner cartridges in passenger hand luggage on flights departing the UK; and prohibiting the carriage of toner cartridges by air cargo into, via or from the UK unless they originate from a known consigner. As he said, we are reviewing all aspects of air freight security. It is a complicated and difficult issue, there is a meeting with the industry tomorrow, and we will update the House as soon as we can.

[Edward Miliband]

I thank the Prime Minister for that answer. May I take the opportunity to ask him about the wider context of the incident? Does he agree that, as well as the right measures on counter-terrorism, we need to tackle its roots? He knows that Yemen has long been one of the poorest countries in the middle east. That is why the Friends of Yemen conference was held earlier this year, and one is organised for next February. Will he update the House on the progress of the Friends of Yemen talks, and also the progress on the crucial International Monetary Fund plan for Yemen to deliver much needed economic reform?

[The Prime Minister]

What the right hon. Gentleman says is absolutely right. As well as good intelligence sharing and tough anti-terrorism legislation, we must deal with the root causes, and there is now a worrying strain of al-Qaeda terrorism coming out of the Yemen. One of the problems is that we need to ensure that that is the priority for the Yemeni Government, who are also dealing with other problems in their country. The Friends of Yemen process, which the former Prime Minister did a great deal to establish, is up and running. It is working well. The British are co-chairs of it with the Saudis, there was a meeting at the UN General Assembly, there will be further meetings, and the whole aim is to try to pressurise and work with the Yemeni Government to deal with the issues that affect the wider region and, indeed, as recent events show, us too. We will go on with that and we will continue, as we have committed, with our development budget to ensure that development aid goes to the Yemen. There is therefore a short-term issue of getting the Yemeni Government to concentrate on what matters, and a longer-term issue about economic development in the Yemen, which badly needs to improve.

[Edward Miliband]

I thank the Prime Minister for that answer, and thank him and the Home Secretary for keeping the House updated on those issues. I know that they will continue to do so.

Let me turn elsewhere. The Prime Minister has talked a lot about restoring trust in politics. What does he expect of members of his Government who gave cast-iron guarantees to their voters six months ago that they would vote against a rise in tuition fees?

[The Prime Minister]

What I would say to everyone who is part of the Government is that I think that they have all taken some courageous and difficult decisions to deal with something that, frankly, we all want. I think that every single person in the House of Commons wants strong universities that are well funded and have greater independence. We want to ensure that people from the poorest homes can go to the best universities in our country. The proposals will achieve that. They grew from a decision by the previous Government to set up the Browne report. What a pity that opportunism has overtaken principle.

[Edward Miliband]

The Prime Minister used to think that trust mattered. What did he say in his joint foreword with the Deputy Prime Minister to the coalition agreement?

“We both want a Britain where our political system is looked at with admiration, not anger”.

Does the Prime Minister not understand the anger that there will be among the constituents of all the Members on the Liberal Democrat Benches? Does he not understand the anger that will be felt in Sheffield, Twickenham, Eastleigh—all their constituencies—about promises made and about to be broken?

[The Prime Minister]

Along goes the Milibandwagon, and on we jump. The right hon. Gentleman talks about trust. What did he write in the Labour manifesto about the Browne report, which he set up? The Labour party has completely broken its word. There is a debate now in Britain about how we get strong universities and people able to go to them without being put off. That is what we propose and he opposes. He should listen to the former Labour Trade and Industry Secretary, who was part of the Browne process. He said:

“The truth is there are many tax elements to the Browne plan. You only pay when you are earning above £21,000… Browne is essentially right”.

Why not join the consensus instead of just playing political games?

[Edward Miliband]

I ask the questions at Prime Minister’s questions. The Prime Minister talks about hard choices—he claims to be making a hard choice on tuition fees. I cannot believe that he is talking about hard choices this week, because whom has he chosen to put on the civil service payroll this week? His own personal photographer. There is good news for the Prime Minister—apparently he does a nice line in airbrushing. You can picture the scene, Mr Speaker, of the Cabinet photo: “We’re all in this together; just a little bit more to the right, Nick.”

Let me ask the Prime Minister in all seriousness, is it really a wise judgment when he is telling everybody to tighten their belts to put his own personal photographer on the civil service payroll?

[The Prime Minister]

The right hon. Gentleman asks the questions because he has no answers to anything. Is this what his Opposition leadership is reduced to? Let me give the House this figure. The previous Government—[Hon. Members: “Answer!”] This is the answer. [Interruption.]

[Mr Speaker]

Order. The Prime Minister will be heard. There is far too much shouting going on, including by some very senior Members who ought to know better.

[The Prime Minister]

The last Government last year spent half a billion pounds on communications. We are cutting that by two thirds. That is what is actually happening. We will be spending a bit less on replacing mobile phones as well in No. 10 Downing street. Honestly, why not engage in the issues? We say that we need a new system to fund higher education, and that is what we are backing. The right hon. Gentleman says that he wants a graduate tax, the shadow Chancellor says, “Don’t do it,” and the shadow Trade and Industry Secretary is against it. What on earth is the Leader of the Opposition reduced to?

[Edward Miliband]

The Prime Minister cannot even defend his own decision. Is not the truth that we are learning that this Government are a Government of broken promises—broken promises on tuition fees, broken promises on VAT and broken promises on child benefit from the Prime Minister? That is what they meant by broken Britain. The Prime Minister used to say that he wanted to restore trust, but all he is doing, day by day, is destroying trust in politics.

[The Prime Minister]

The right hon. Gentleman can come here every week and have a succession of lame soundbites or engage in the substance about the future of our country. We know what he is against—he is against a housing benefit cap, against taking child benefit away from millionaires and against a benefit cap—but I think everyone is beginning to ask, “What on earth is he for?”

[Mr Matthew Offord (Hendon) (Con)]

I am sure that the Prime Minister, and indeed the whole House, will join me in sending condolences to the family and friends of Marvin Henry, a young man who was shot and killed in my constituency just last week. What practical encouragement can the Prime Minister give to organisations such as the Watling boys club in Burnt Oak, which is attempting to direct young people towards positive role models and experiences rather than the fate that befell Marvin?

[The Prime Minister]

My hon. Friend makes an extremely good point. As we are making difficult decisions about public spending, we need to make sure that we go on funding organisations that divert young people away from crime. That is one reason why we have set up a special fund of £100 million this year and next year—to make sure that those organisations that need help get it, so that we keep giving young people things to do and divert them from crime.

[Julie Hilling (Bolton West) (Lab)]

Q2. May I give the Prime Minister another opportunity to answer the question? Does he think that the 500,000 public sector workers facing the axe will be pleased to know that he has hired his own personal vanity photographer?

[The Prime Minister]

The last Government—half a billion pounds wasted on communication. That is being axed by this Government. That is what is happening. Opposition Members have a choice when they come here. They can read out the Whips’ handout or think of a good question. Try again.

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

Q3. Can I encourage the Prime Minister to work with Members on both sides of the House who recognise the need for welfare reform, starting with the shadow Health Secretary, who has broken ranks to support a housing benefit cap?

[The Prime Minister]

My hon. Friend makes a very good point. We do need a debate about how we tackle the welfare system and get it under control. One of the best places to start with housing benefit is the Labour manifesto, personally written by the right hon. Member for Doncaster North (Edward Miliband). It said clearly—[Hon. Members: “Ooh!”] Well, they all stood on it, so they should be reminded of it. It said:

“Housing Benefit will be reformed to ensure that we do not subsidise people to live in the private sector on rents that other ordinary working families could not afford.”

The level of opportunism is so great that even when we introduce their policies they oppose them.

[Hazel Blears (Salford and Eccles) (Lab)]

The Prime Minister will be aware of the horrific explosion that took place in Salford this week. Our thoughts are with Marie Burns, the elderly lady who has been severely injured and is in hospital, and with the other people in hospital. Some 200 families have had to be evacuated from their homes and I wish to pay tribute to all of the emergency services and the city council, but most of all to the ordinary men and women of that community who have stepped forward. A grandfather rescued a child from the rubble, and neighbours opened the local pub and the leisure centre to give people comfort and shelter. They have done a fabulous job.

The costs of this event will be enormous and, like every other service, our council is facing significant reductions in its budget. Will the Prime Minister seriously consider what extra help he can give to those families to ensure that they are supported? My hon. Friend the Member for Worsley and Eccles South (Barbara Keeley)—[Interruption.] My hon. Friend, in whose constituency this took place, is with the community now—

[Mr Speaker]

We get the essence of it.

[The Prime Minister]

I think that the House is being unfair to the right hon. Lady. She is speaking powerfully on behalf of her constituents on an important issue. It was a dreadful accident, and we should think of all those people who have lost their homes and are in temporary accommodation. She is right to pay tribute not just to the emergency services but to ordinary people who have gone out and done extraordinary things.

As I understand it, the City West housing trust, which owns the properties, is working closely with the local authority to ensure that residents are able to return to their homes as soon as possible. The right hon. Lady raises the issue of funding, and of course there is the Bellwin scheme, but we will ensure that we respond as we can to Salford’s needs.

[Peter Aldous (Waveney) (Con)]

Q4. The East Anglian coast has some of the highest levels of deprivation in England and an urgent need for infrastructure development, but it has huge potential for creating jobs in the offshore renewables sector. Will the Prime Minister look again at the exclusion of the East Anglian coast from the £60 million allocated to establish offshore wind manufacturing at port sites, announced under the grant for business investment scheme last week?

[The Prime Minister]

There is a great opportunity for communities, especially coastal communities, to make the most of offshore wind, and I have spoken to several leading industrialists, who are thinking of investing in Britain, to ensure that the grants are there. As my hon. Friend will know, this grant scheme applies only to assisted areas. East Anglia is not an assisted area, but that does not rule out development taking place, and other sources of funding, such as the regional growth fund, can be applied to. I hope that he will look into those as he stands up for his community.

[Mr Fabian Hamilton (Leeds North East) (Lab)]

Following the statement last week by the Secretary of State for Transport, will the Prime Minister give a commitment to the people of Leeds that the much needed new generation transport system, the trolleybus, will receive the Government funding that it has been promised for so long?

[The Prime Minister]

This issue is currently under consideration, and I am sure that the hon. Gentleman will be one of the first to find out the result.

[Mr Philip Hollobone (Kettering) (Con)]

Q5. In the year to March, more than 1,000 foreign nationals in Northamptonshire applied for indefinite leave to remain in the United Kingdom, and a massive 80% of those applications were approved. Will my right hon. Friend reassure my constituents that, in this Government’s legitimate efforts to reduce the backlog of asylum claims left by the previous Government, people will not simply be waved through and offered indefinite stays?

[The Prime Minister]

My hon. Friend makes a very good point. There is always a danger when there is a big backlog—we have been left one of 400,000 to 450,000 of asylum records—to just wave them through, but I assure him that there will be no amnesty. All cases will be considered on their individual merits. We are committed to getting immigration and asylum issues under control. We are looking at the last Government’s points system, and even under their tier 1 of highly skilled people, it turns out that around 30% of those given leave to remain are in low-skilled roles. The current system is not working, and we are going to sort it out.

[Heidi Alexander (Lewisham East) (Lab)]

I would like to return to the education maintenance allowance. In March, the Prime Minister came to Lewisham college and spoke to students about his plans. He said:

“We’ll keep it. We’ve taken a look at it. We think it’s a good idea.”

Will he explain to me and the 1,150 students at the college who are currently receiving EMA why his Government are scrapping it?

[The Prime Minister]

Because we face the biggest budget deficit of any country in the developed world. That, frankly, is the prism through which such decisions must be seen. In politics there is a choice: either confront the problems in front of you and deal with them—that is what this Government are doing—or run away from them, like the Labour party. We are putting in place something that will be more targeted and more effective, but we must deal with the mess that we were left.

[Mr Sam Gyimah (East Surrey) (Con)]

Q6. What recent representations he has received on the likely effects on small businesses of the implementation of the Government's proposals for automatic enrolment in pension schemes.

[The Prime Minister]

I thank my hon. Friend for the question. The making automatic enrolment work review, which was published last week, examined the impact on businesses of the reforms. It concluded that small businesses did need to be included in the reforms if we are to bring about the improvement in savings for retirement necessary to tackle the consequences of an ageing population and widespread under-saving for retirement. These reforms will give 1.2 million people who work for small businesses the opportunity to save for their retirement. The review made a number of recommendations to try to help small businesses to introduce those reforms. We shall look at them extremely carefully to ensure that they are not too onerous.

[Mr Gyimah]

I welcome the Government’s desire to encourage a savings culture. However, for many small businesses, every new piece of legislation, no matter how small, has a significant impact on the bottom line. Will the Prime Minister introduce a scheme that allows us to road-test all new legislation and its impact on small businesses?

[The Prime Minister]

My hon. Friend makes an extremely good point, and this policy will be road-tested on the bigger companies that must introduce it first. However, we must accept that there is a problem with only 10% of very small businesses having pension provision, so 1.2 million people will have the chance to save. We will look very carefully at the reforms, and they will not be introduced for small businesses until at least 2014.

My hon. Friend will know that I have appointed Lord Young to look at all the impacts on small businesses. We also have the one-in, one-out rule under which every new regulation must mean that another regulation is scrapped.

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

Q7. Will the Prime Minister tell the House the total overall saving from reducing the overall number of elected MPs by 50, and increasing the number of unelected Lords by up to 100?

[The Prime Minister]

Let us start with the first thing: reducing the size of the House of Commons.

[Chris Ruane]

Costs.

[The Prime Minister]

Size and costs. I remind the hon. Gentleman that his Vale of Clwyd constituency has just 55,968 people—[Interruption.] I am sorry, but my constituency has many more than that. I am afraid that I must just ask him to work a little harder.

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

Earlier this year, the Prime Minister visited Westhill in my constituency. It is a world centre of excellence in sub-sea engineering. Will he ensure that the Home Office meets concerned local companies to discuss the future of the visa system to ensure that vital inward investment is not lost to this country? It supports thousands of local jobs.

[The Prime Minister]

We will certainly do that. As I said in answer to an earlier question, as we look through the last Government’s points system and immigration policy, we really do believe that it will not be difficult to achieve much better immigration control without disadvantaging business. For example, things such as inter-company transfers should not be included in what we are looking at. I do not think we will have a problem. Given the very broken system that we inherited, there should be no problems improving it.

[Lindsay Roy (Glenrothes) (Lab)]

Q8. In almost every answer at PMQs, the Prime Minister unfairly blames the challenges facing our country on the previous Government. Will he tell us about his biggest mistake as Prime Minister?

[The Prime Minister]

I will leave others to judge the many mistakes that I am sure I will make in this office. I am sure that, as a talented former head teacher, the hon. Gentleman would always say to his pupils, “You have to accept your responsibilities”, and it is about time that that lot accepted theirs.

[Andrew Stephenson (Pendle) (Con)]

Q9. Given what the former Chief of the Defence Staff said at the weekend, will the Prime Minister undertake never to veto essential defence measures because they are politically too difficult?

[The Prime Minister]

My hon. Friend makes a very good point. Let me first pay tribute to the outgoing Chief of the Defence Staff, Sir Jock Stirrup. He was a dedicated public servant who has done an extremely good job for our country. He made an important point: it is important not that politicians agree with the chiefs of staff on every occasion—there should be a lively debate between them—but that we should not, as politicians, put off essential decisions that need to be taken. In our defence review I think we have taken the tough and difficult decisions that were necessary.

[Emma Reynolds (Wolverhampton North East) (Lab)]

Q10. It has recently been announced that there will be 300 job losses at New Cross hospital in Wolverhampton. Can the Prime Minister explain exactly how that squares with his promise to protect the NHS, or is this just another broken promise?

[The Prime Minister]

The promise that we made is a promise that has been delivered, which is to make sure that NHS spending, when we combine capital and current spending, is going to increase in real terms every year. That is not a promise that has been backed by the Opposition, so if the hon. Lady is worried about NHS cuts, she should start talking to the shadow Health Secretary.

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

Talking of photographs, we know from the Conservative party conference that the Prime Minister, like me, enjoys a pint. As he knows, this is the first ever British pub week. Will he join me in celebrating this vital cultural and social institution? Will he commit to being a pro-pub Government, and will he join the save the pub group—

[Mr Speaker]

Order. I have been very helpful to the hon. Gentleman, and he should not abuse my help by trying to ask three questions when one will suffice.

[The Prime Minister]

I very much agree with what my hon. Friend says. I am a big supporter of British pubs, and I want us to be a pub-friendly Government. And yes, I am going to a pub this week. I cannot say where it is, because otherwise it would be discontinued, but I am looking forward to it.

[Mr Ronnie Campbell (Blyth Valley) (Lab)]

It is estimated that 1.4 million people are going to lose their jobs, and it is also being said that when VAT rises in January, another 300,000 will be lost. Why is the Prime Minister picking on hard-working families? Why does he not take it out on the banks and the speculators who caused the problem in the first place?

[The Prime Minister]

This Government, unlike their predecessors, have introduced a banking levy, so the banks will be making a contribution. The hon. Gentleman cites the report that was published this week, but it has not been received with much enthusiasm by other organisations. For instance, the Institute of Directors said that it is

“dangerous for the CIPD to make headline-grabbing forecasts which are based on little more than a guess”.

Hon. Members should spend less time talking down the economy and more time working out how we can get growth.

[Gareth Johnson (Dartford) (Con)]

Does the Prime Minister agree that it would be wrong for convicted prisoners to be able to vote, as suggested by the European Court of Human Rights? The incarceration of convicted prisoners should mean a loss of rights for that individual, and that must surely include the right to vote.

[The Prime Minister]

I completely agree with my hon. Friend. It makes me physically ill even to contemplate having to give the vote to anyone who is in prison. Frankly, when people commit a crime and go to prison, they should lose their rights, including the right to vote. But we are in a situation that I am afraid we have to deal with. This is potentially costing us £160 million, so we have to come forward with proposals, because I do not want us to spend that money; it is not right. So, painful as it is, we have to sort out yet another problem that was just left to us by the last Government.

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

Q12. Following the previous question, how does the Prime Minister view the prospect of prisoners electing the new police and crime commissioners?

[The Prime Minister]

The hon. Gentleman raises yet another reason—[Interruption.]

[Mr Speaker]

Order. I am particularly anxious to hear the Prime Minister’s answer.

[The Prime Minister]

The hon. Gentleman makes an excellent point about why this proposal is so bad, but I am afraid that we have to deal with the situation in front of us. Are we going to delay and delay and waste another £160 million of taxpayers’ money, or are we going to take difficult action and explain it to the British public as best we can? I do not think that we have a choice if we are to do the right thing and save the Exchequer money.

[Sir Alan Beith (Berwick-upon-Tweed) (LD)]

Q13. Is the Prime Minister aware that the split-site buildings of the Duchess’s high school in Alnwick are in a far worse state than many of the schools included in Labour’s Building Schools for the Future programme, but the school was always excluded from that programme? Will he make sure that it gets fair consideration under a much more focused and better managed scheme of school buildings?

[The Prime Minister]

I can give that assurance—that we are going to have a new scheme and there will be £15 billion of schools capital spending in the programme going forward. That will enable us to rebuild many schools—primary as well as secondary schools. I look forward to doing that.

[Jim McGovern (Dundee West) (Lab)]

Q14. In answer to a question I put to the Prime Minister in July—and, indeed, in an answer to my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) last week—the Prime Minister said that the reason for not initiating tax breaks for the computer games industry was that they were poorly targeted. That seems to contradict talks I have had with his Ministers, who say that it is Government policy not to give tax breaks to any industry in future. Will the Prime Minister give me a definitive answer for the benefit of the House and my constituents?

[The Prime Minister]

The steps we took in the Budget, which I think were right, were to look at the tax system and try to simplify the corporation tax regime so that we could bring about one of the lowest rates of corporation tax in the developed world. That is what we have done—with cuts in corporation tax this year, next year and the year after to bring it down to 24%. That is what we are doing and we are paying for it by removing a number of allowances. I think it is a very progressive and sensible reform that will make Britain, including Scotland, one of the best places in the world to do business.

Speaker’s Statement

Wednesday 3rd November 2010 Commons Chamber

12:32

[Mr Speaker]

I have a short statement to make. Two Labour Members of the Backbench Business Committee have informed me that they wish to resign from the Committee, following their appointment to the Opposition Front Bench. Under the powers given to me by the Standing Orders, I have decided that a single by-election will be held to fill these two places on the Committee, and that the ballot will be counted under the single transferable vote method. The by-election will be held on Tuesday 9 November between 10 am and 2 pm in Committee Room 7 on the main Committee Corridor. Under the Standing Orders, I give notice that candidates must be Labour Members for their candidature to be valid in this by-election. Nominations may be submitted to the Table Office between 10 am and 5 pm on Monday 8 November.

Higher Education Funding

Wednesday 3rd November 2010 Commons Chamber

12:33

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

With permission, Mr Speaker, I would like to make a statement on higher education funding and student finance. This follows the statement made by my right hon. Friend the Secretary of State for Business, Innovation and Skills on 12 October.

Our higher education system has many strengths, but also faces challenges: the need for more focus on the student experience, the need to widen access and the need for sustained funding. These challenges led the previous Government, on a cross-party basis, to set up Lord Browne’s review. We are grateful to Lord Browne for his excellent work. I think he has made us all re-examine our positions.

On 12 October, my right hon. Friend said that the coalition endorsed the thrust of Lord Browne’s report, but was open to suggestions, before making specific recommendations, which would be radical and progressive. We have listened very carefully and with open minds, so I can now give the details of our proposals.

First, we will introduce a progressive system of graduate contributions to the cost of their university education, with nobody having to pay up-front fees. Lord Browne suggested that there should be no cap on the graduate contribution; we believe that a limit is desirable and are therefore proposing a basic threshold of £6,000 a year, and in exceptional circumstances there would be an absolute limit of £9,000. No publicly funded university will be able to charge more than that for its undergraduate courses. Because there will be a cap, we see no need for institutions to pay back a proportion of the graduate contribution as a levy to the Exchequer, as proposed by Lord Browne.

We are also proposing a more progressive repayment structure. At present, graduates start repaying when their annual incomes reach £15,000. We will increase the repayment threshold to £21,000, and will thereafter increase it periodically to reflect earnings. The repayment will be 9% of income above £21,000, and all outstanding repayments will be written off after 30 years. Raising the threshold will reduce the monthly repayments for every single graduate.

We will introduce a real interest rate on a progressive taper. For graduates earning less than £21,000, the real interest rate will remain at zero. For graduates earning between £21,000 and about £41,000, a real rate of interest will be tapered in to reach a maximum of inflation plus 3%. When graduates are earning more than £41,000, they will be making a full contribution to the costs of the system, but still incurring interest well below normal commercial rates. Under our proposals, a quarter of graduates—those on the lowest incomes—will pay less overall than they do at present.

The Government are committed to the progressive nature of the repayment system. It is therefore important for those on the highest incomes post-graduation not to be able to buy themselves out of the progressive system unfairly by paying off their loans early. We will consult on potential early repayment mechanisms similar to those paid by people who prepay their mortgages. Those mechanisms would need to ensure that graduates on modest incomes who strive to pay off their loans early through regular payments are not penalised. For example, a 5% levy might be charged on additional repayments each year over a specified amount such as £1,000 or £3,000. Alternatively, those on higher incomes—for example, over £60,000—who made an additional repayment could be required to pay a 5% levy on that sum.

Although participation in higher education has improved in recent years, there has not been enough progress in securing fair access to some of our best-known universities. We can make progress by improving the school attainment of pupils from disadvantaged backgrounds. That is why the Government are investing in a new premium for two-year-olds, and in the pupil premium. However, we want that focus on improving the life chances of those from disadvantaged backgrounds to continue to university. For that reason, as the Deputy Prime Minister has already announced, we will also establish a new £150 million national scholarships programme, which will be targeted on bright potential students from poor backgrounds to encourage them to apply to university and meet their aspirations.

All universities that want to charge a higher graduate contribution than the £6,000 threshold will be obliged to participate in the national scholarships programme. We will consult students and university organisations on the details. We will seek to increase the leverage of Government funding by securing matched funding from universities. Our current preference is for universities to offer scholarships to targeted students, including the principal beneficiaries of the pupil premium. That would mean that at least their first year at university was free. Other attractive ideas include expanding the model of a foundation year for young people with high potential but lower qualifications.

To ensure that the universities that charge tuition contributions above the £6,000 threshold take account of their particular responsibilities to widen participation and fair access, we will introduce a tougher regime of sanctions. Each institution will draw up a new access agreement with the Office for Fair Access. It would be expected to include activities such as outreach initiatives to attract more pupils to apply from disadvantaged backgrounds, and targeted scholarships and financial support for poorer students. OFFA will agree with universities a programme of defined progress each year towards their access benchmarks as calculated by the Higher Education Funding Council. If they are not making adequate progress towards those benchmarks, a mechanism will be established to allow OFFA to redirect a proportion of the income from contributions over £6,000 to specified access activities.

Our student support system is one of the most generous in the world. We will make it more progressive. Lower-income students, while studying, will get improved help with their living costs. Students from families with incomes of up to £25,000 are currently eligible for a maintenance grant, which is not repayable, of £2,900; we will increase that to £3,250. Those from families with incomes of up to £42,000 will be entitled to a partial grant. There will also be increases in maintenance loans for students from families with incomes from £42,000 to £60,000. We will also retain a higher maintenance loan for those studying in London.

All parties agree that the current system gives a raw deal to part-time students. They are particularly likely to be mature or disadvantaged students. Even the great higher education reports of the past, such as Dearing and Robbins, largely ignored them. Lord Browne has confronted the challenge head on. At last, under our proposals part-time students will be entitled to a loan for tuition on the same basis as full-timers, and this support will be available to those studying for at least a third of their time, unlike the current grants for tuition, which are only available to those studying for over half their time.

Overall therefore, this is a good deal for universities and for students. The bulk of universities’ money will not come through the block grant, but will instead follow the choices of students. It will be up to each university or college to decide what it charges, including the amounts for different courses. All universities and colleges, whatever contribution they decide to charge, will be expected to publish a standard set of information about their performance on the indicators that students and their parents value: contact hours, teaching patterns and employment outcomes. We also propose to open up higher education provision to new providers, including further education colleges. These proposals offer a thriving future for universities, with extra freedoms and less bureaucracy, and they ensure value for money and real choice for learners.

We need to act quickly so that prospective students know where they stand. We intend to implement these changes for the 2012-13 academic year. We will therefore bring to the House our proposals on changes to graduate contributions before Christmas. Both Houses will have the chance to debate the proposals before a vote is taken. I am today placing in the Libraries of both Houses additional material that explains the modelling that we have done. We will also take powers next year to set a real interest rate for graduate contributions. We will, as usual, publish the details of the university financial settlement for 2011-12 in our annual funding letter to HEFCE next month.

Later this winter, we will publish a higher education White Paper covering the wide range of long-term issues that arise from Lord Browne’s report. We will hope to bring forward legislation in due course. Given the time scales, we would not expect to be implementing those changes before the 2013-14 academic year.

Lord Browne’s report has rightly generated much debate. When the review was established exactly a year ago, it was on a cross-party basis. I hope the Opposition will feel able to maintain that spirit. From our side, the two parties in the coalition have accepted the report’s broad thrust and are today putting together a single, coherent and progressive policy. It will deliver a better deal for our students, for our graduates and for our universities. I commend it to the House.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

I am grateful to the Secretary of State for giving me an advance copy of his statement, but is not the truth that what he has announced today is a tragedy for a whole generation of young people? It makes it much more difficult to protect our world-class university system and, for the country, puts the very building blocks of our economic future at risk. Even though there has been movement since the Business Secretary’s statement, is it not the case that our students will now face some of the most expensive and worst-funded degrees of any public university system, with students paying fees that are higher than those of the average public university in the United States? Our universities will be plunged into turmoil, facing massive funding cuts just when we need them most, supporting economic growth. All this because of choices being made by the coalition. The first is the choice to make reckless cuts in public spending. The second is the choice to put a disproportionate share of those cuts on to higher education. The third is the choice to bring about the biggest and most ideological upheaval in higher education since the Robbins report in the 1960s. All this is set to be rushed through Parliament without proper consultation with the sector and without our even yet having a higher education White Paper to tell us how this brave new world is supposed to work.

Is the reason why fees will be so high not very simple? Despite the Prime Minister’s claim that he wants to see well-funded universities, is the truth not that what motivates today’s announcement is a massive cut in the funding of universities? We are talking not about a cut of 19%, 25% or even 40%, but about an almost 80% cut in the undergraduate teaching budget. Is the truth not that universities will lose millions of pounds, that the London School of Economics stands to lose all its teaching funding, that Oxford and Cambridge between them will lose almost £56 million a year in teaching funding, that Sheffield Hallam university will lose more than £63 million and that Kingston university will lose more than £44 million? The Government do not have to do this, but the Minister and his friends in the Conservative party want to do it. They believe that a crude competitive market, with the Government largely kept out of the way, is the best way forward for higher education.

Like Lord Dearing, Labour Members believe that higher education funding should be a partnership between taxpayers and graduates. It should involve the taxpayer because the whole country benefits from good higher education and graduates get a direct personal benefit. So how much extra income will our universities have as a result of the Minister’s proposals today? Our fees brought more than £1 billion extra into higher education. Most graduates will now be expected to pay for the whole cost of their degrees. Many courses vital to a growing economy, such as those in the creative arts and digital industries, will receive no public funding. Why is this country joining Romania as the only OECD country to be cutting investment in higher education and science?

Has not the right hon. Gentleman managed to produce the worst of all possible worlds? Not only will most graduates be paying off their debts for 30 years and most universities will need to charge fees of at least £7,500 just to avoid losing money, but with some universities charging £9,000 many students will feel forced to choose the cheapest course, not the one that is best for them. Why does the coalition reject any idea that universities, employers, students and the Higher Education Funding Council should work together to make sure that we have the quality higher education that we need? Everyone believes that student choice is important, but why do the Government rely entirely on the choices made by students, who have very different levels of knowledge, aspiration and confidence about what higher education can offer them?

Labour Members welcome moves to improve access for those from low-income backgrounds, but does the right hon. Gentleman recognise how unfair the system will seem to those on middle incomes, who have worked just as hard to help their sons and daughters get to university? The Business Secretary says that he is against a graduate tax. Is it not true that Lord Browne proposed a system where more than half of graduates will pay 9% of their relevant income every year for 30 years and never pay off their debts? How many more now will never pay off their debts as a result of the Minister’s proposals? Will he confirm that those who are wealthy enough to pay up-front fees will pay less than those on middle incomes, such as teachers, police officers and engineers, who have to take out a loan? He says that universities will be able to charge the most fees only if they are working to increase access for those from low-income backgrounds, but is the truth not that universities are already carrying out the very measures he says they will now have to carry out? So his comments today on access are just a meaningless fig leaf.

The right hon. Gentleman has proposed today that higher earners should pay higher interest rates. Will that raise extra money? If so, will the extra payments go back into higher education or back to the Treasury? This is the day we found out how much Liberal Democrat ministerial cars cost—£9,000 a year, for students. All those principles so boldly championed have been forgotten; all those solemn promises to students and their families up and down the country waved away. All so that the right hon. Member for Tatton (Mr Osborne) can carry on as the real Deputy Prime Minister. After weeks of being told that Liberal Democrat Back Benchers were in full rebellion, have tuition fees been reduced as a result? No, they are set to treble. What a huge success those Back Benchers have had and how they have made their leadership listen. This is not a sustainable system of university funding and it is not a fair system of student finance. We will not support it.

[Mr Willetts]

What we just heard from the hon. Member for Harrow West (Mr Thomas) was a classic old Labour attack, when all it can do is complain about cuts and make its own uncosted and indiscriminate public spending pledges. Last week we heard from the shadow Business, Innovation and Skills team that they did not approve of what we are doing on regional development agencies. They want to spend more on RDAs. Today we hear that they want to spend more through HEFCE on universities. How would they pay for it? What is the costing of that? Are we supposed to cut the science budget, which we are protecting so that we can invest in our future? Are we supposed to cut apprenticeships, which we are increasing by 50,000, or is it just a general belief that public spending can rise, from the party that brought us the fiscal crisis that we are having to tackle?

Even with the fiscal crisis that we face, we are nevertheless able to produce proposals that are progressive and recognise that there is a continuing role for Government. It remains the case that of every £100 that Government loan to students, just as with the previous Government, we accept that we will not get back £28 because it is a necessary subsidy for poorer students and people who have intermittent earnings. We have improved the maintenance package. As part of our Government’s commitment to our universities, we have secured a ring-fence for science and research spending, much of which money will go to our universities.

The hon. Gentleman asked specifically about student choice. I thought his point about student choice got to the heart of the difference between us in the coalition and the Opposition. He says, “You can’t trust students to choose.” We say, “Of course, we trust students to choose, but we are committed to more information, better information, advice and guidance, and proper careers advice because we want to see students driving the system.” That is what we believe in, and students will know that the Opposition do not trust them.

The hon. Gentleman asked about interest rates. The higher interest rate of the retail prices index plus 3% will go into financing the system as a whole, but it is a more favourable interest rate than anyone would be able to secure on the open market for a loan of the sort that is being offered—an unsecured loan that does not have to be repaid if the borrower’s income falls below £21,000.

What was missing from the hon. Gentleman’s speech was any clear Labour alternative. He announced that he was against this policy, but he did not explain what his policy was. Surely we are at least entitled to know whether he agrees with his own leader. The Leader of the Opposition—I quote from only 14 October this year—said:

“I do favour a graduate tax. I said that during the campaign and that remains my view . . . I am someone who believes in the graduate tax.”

That is the policy of the Leader of the Opposition. As for the shadow Chancellor, he has a rather different view. Also in the past few weeks he said:

“I like the two lads”—

that is, the right hon. Members for Doncaster North (Edward Miliband) and for Morley and Outwood (Ed Balls)—

“dearly, but I can’t understand why they are pushing the Graduate Tax and even going further in suggesting the introduction of tuition fees was one of the things we got wrong. It wasn’t. . . It was one of the things we got right.”

If Labour cannot even resolve a fundamental disagreement between the shadow Chancellor and the leader of their party, why should we take what it says on this subject remotely seriously?

[Stephen Williams (Bristol West) (LD)]

I thank the Minister and the Secretary of State for working constructively together to construct a graduate contribution scheme that has many progressive elements in it and is a much fairer system than was left behind by the last Labour Government, especially for students who study part-time. But the Minister knows that my concern, and that of my colleagues, has always been to make sure that students from poor backgrounds are not put off accessing the best universities in our country. Will he confirm that the access arrangements that he outlined will be rightly demanding of universities, but will be transparent and easy to understand for prospective students?

[Mr Willetts]

The hon. Gentleman makes an important point. He is correct that part of the process whereby the coalition developed these policies was a recognition of the importance of improving access to some of our most prominent universities. We are absolutely committed to what he proposes.

[Several hon. Members]

rose—

[Mr Speaker]

Order. A very large number of colleagues are seeking to catch my eye so, as usual, brevity from both Back Bench and Front Bench is vital if we are to make some decent progress.

[Mr Jack Straw (Blackburn) (Lab)]

May I first repeat to the Minister the commendation expressed by my right hon. Friend the Member for Southampton, Itchen (Mr Denham) on the statement of 12 October for the work of Lord Browne? On any basis, whatever the final view that people take, it was an extraordinary effort.

May I press the Minister on what will happen to the Exchequer contribution to universities? That is a matter for the Government, not for Lord Browne, and it seems to us in the Opposition to be the most serious defect in what the right hon. Gentleman is now proposing—almost that pound for pound, the increase in fees will be used to offset a reduction in Exchequer contribution.

[Mr Willetts]

Our proposals do, indeed, save public money, but they are not simply a matter of saving public money. They are also a reform of higher education in universities, which we believe will strengthen them and offer a fair deal for students, especially students from poor backgrounds. The overall position is that we will set out in the letter we will be sending to HEFCE at about the end of this year what the teaching grant is, but much of the money that currently reaches universities through the teaching grant and through HEFCE will in future get to universities via students and through the choices that they make. They will not have to make any up-front payment, but they will be expected to make a graduate contribution after they are earning in order to pay for the university education that they enjoy.

[Mr David Evennett (Bexleyheath and Crayford) (Con)]

I particularly welcome the statement today from my right hon. Friend as it relates to part-time students in further education colleges, which is good news for the sector. Does he agree that it is essential that we have well-financed and excellent, world-class, independent universities offering a good student experience and student choice?

[Mr Willetts]

I am grateful to my hon. Friend. He is right, and I know that he was a lecturer in an FE college before. The opportunity for the delivery of more higher education in FE colleges is an example of one of the many freedoms that we are trying to introduce.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

The Minister has rightly emphasised measures taken to improve access for low-income students. In my constituency, West Bromwich West, the education maintenance allowance, coupled with the Aimhigher project, have made significant improvements in the take-up of university places by lower-income students. Can the Minister guarantee that whatever steps are taken to replace those—if indeed they are replaced—the level of Government funding under the previous Government will be maintained?

[Mr Willetts]

What I can guarantee is that we will place on universities an obligation to achieve the things that were previously being achieved by the kind of schemes that the hon. Gentleman described. That, we think, is the best place for the obligation to fall, and we are looking carefully at the best and most effective way in which that can be done, but it should be for individual universities to come up with their proposals for how they can best improve access.

[Margot James (Stourbridge) (Con)]

I congratulate my right hon. Friends on achieving increased funding for the university sector while avoiding students having to pay anything up front and not having to start repaying their loans until they are almost on average earnings. I also welcome the impetus behind attracting students from poorer backgrounds. May I draw the attention of my right hon. Friend to the foundation course offered by King’s college London’s medical department, and the impact that that is having in getting poorer students in to study medicine? Could he comment further on initiatives to encourage universities to that course of action?

[Mr Willetts]

That is exactly the kind of initiative that we wish to encourage. It is obviously up to individual universities to come up with proposals that they wish to put forward, but I agree that that proposal is a very interesting model from which we can learn.

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

What analysis has the Minister made of his proposals on our world renowned institutions, such as the music and dance conservatoire Trinity Laban in my constituency?

[Mr Willetts]

I am not aware of the specific financing point that the right hon. Lady has in mind. I have to say that I had an interesting discussion with our drama schools and conservatoires and I felt I was able to persuade them that many of our ideas would give them the greater freedom they wished for.

[Mr Charles Kennedy (Ross, Skye and Lochaber) (LD)]

The Minister of State and our right hon. Friend the Secretary of State both well appreciate the long-established reasons why I cannot go along with this particular direction of travel. It is to do not just with the last election but with the two previous general elections, during which I had the privilege to lead the Liberal Democrats. We made a lot of this policy area, as the Minister well knows.

That being said, may I come back to what the Secretary of State said to me in the House on these matters on 14 October? He referred to

“the growing funding crisis in Scottish universities”.—[Official Report, 14 October 2010; Vol. 516, c. 469.]

We all acknowledge that whatever one’s view of this policy in England, there is an immediate knock-on financial impact on the Scottish sector, particularly on those Scottish universities in the Russell group. As the Minister is coming to visit Glasgow—we are looking forward to welcoming him—will he confirm that it is of intense importance that Ministers in London keep the communication line open with Scotland to ensure that we do not skew the playing field intellectually within the United Kingdom?

[Mr Willetts]

I accept the right hon. Gentleman’s point—it is very important that we consider the links between the English and Scottish systems while respecting the Scottish devolution settlement that means we do not have direct responsibility for the teaching settlement. Of course, research is also a UK-wide responsibility and that is an area in which we are committed to supporting Scottish universities through the research funding. Of course, as my right hon. Friend the Business Secretary made clear the other day, we accept the right hon. Gentleman’s invitation to consider the Scottish angle.

[Pete Wishart (Perth and North Perthshire) (SNP)]

Tuition fees—started by Labour and taken up with such relish by the Con-Dem Government—could, as the right hon. Member for Ross, Skye and Lochaber (Mr Kennedy) said, have a disastrous impact on Scottish universities. Will he therefore pledge not to bully and cajole further the devolved nations to follow these appalling proposals? Will he respect our tradition and culture of free education in Scotland?

[Mr Willetts]

I do respect the devolution settlement. From reading the press, it is clear that there is a growing debate in Scotland about how Scotland is to finance its universities in the longer term. I watch with interest some of the suggestions that are emerging as part of that Scottish debate.

[Mr Rob Wilson (Reading East) (Con)]

May I welcome the statement by my right hon. Friend, particularly for part-time and disadvantaged students? As a recent visitor, he knows that Reading has an excellent university whose success has been partly constrained by a central cap on student numbers. Will my right hon. Friend confirm that under his plans universities will now have the freedom to recruit students in an open market?

[Mr Willetts]

I do remember my visit to the university of Reading, which is a very impressive university. One of the chapters in Lord Browne’s report tackles the crucial question of how we can have greater freedom and flexibility in the regime on student numbers. Our proposals today do not directly touch on that, but it is one of the issues that we want to tackle as we put forward our long-term response to Lord Browne. Our belief is in greater freedom and flexibility for individual universities.

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

Does the Minister understand that this is fundamentally about trust in politics and will he confirm that all his key proposals, including the huge cuts in teaching funding, will be subject to a vote in this House so that those on the Government Benches—including the Business Secretary—who are so shamefully breaking their promises can be held to account?

[Mr Willetts]

I thought that my right hon. Friend the Business Secretary, in his statement on 12 October, set out very powerfully the reasons why we offered this broad endorsement of Lord Browne’s proposals. We are of course bound by the coalition agreement and we believe that these proposals meet the criteria set out in the coalition agreement. Of course there will be an opportunity for the House of Commons to vote on them.

[Conor Burns (Bournemouth West) (Con)]

On Friday, I will be attending the graduation ceremony of Bournemouth university, voted Britain’s No. 1 new university. Future graduates of Bournemouth and other universities will welcome the Minister’s proposal to increase the repayment threshold to £21,000. Is he in a position to give the House more detail on how that will be reviewed in coming years so that the threshold goes up along with average earnings?

[Mr Willetts]

It clearly will be important to uprate that figure periodically on the basis that my hon. Friend suggests, and we will consider that. He is absolutely right that one of the most progressive features of these proposals is the fact that the repayment threshold, which is currently £15,000, will increase to £21,000— different from a graduate tax, which would have meant people making higher payments as soon as their incomes went above £6,500.

[Andrew Miller (Ellesmere Port and Neston) (Lab)]

What analysis has been undertaken to consider the differential impact on different universities, different types of universities and different faculties? Will the Minister publish any such analysis, because it is quite clear from discussions with some vice-chancellors that some institutes are at risk as a result of the proposals?

[Mr Willetts]

The crucial decisions will be taken by students. It will be the universities that win the students that also win the funding that comes with the students. It is right that we must expect a diversity of responses from universities. When it comes to individual departments, universities will wish to consider whether they have a single charge at an agreed rate across all their departments or whether they want to propose different charges for different departments. That will be a decision for them.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

Can the Minister tell the House which categories of future part-time or full-time students in Southwark and everywhere else in England will be financially better off under these proposals than under the current arrangements?

[Mr Willetts]

We believe that people will be assisted in several ways. The increase in the maintenance grant for the poorest students at university is a clear gain for them—an improvement in the current system. In fact, we believe that more than half a million students will be eligible to get more non-repayable grant for living costs than they do now. We believe that about a quarter of graduates will contribute less than they do now, and indeed around half will have some of the balance written off. We have tried to rise to the challenge of ensuring that this is a progressive settlement.

The hon. Gentleman asked about part-timers. We estimate that about 60,000 part-timers are currently eligible for a tuition grant, and under our proposals about 150,000 may be eligible for loans on a more extensive basis than at present.

[Mr David Lammy (Tottenham) (Lab)]

The decision to withdraw state funding from arts and the humanities entirely—from politics, geography and history—is a huge constitutional decision that cuts to the heart of what it means to be a democratic country. Will the Minister confirm that there will be a vote on the Floor of the House, not in a Committee room, and that the entirety of his proposals—widening participation and the fee levels—will be debated together?

[Mr Willetts]

There will be a vote on the changes that are necessary in the regulations for fees that are in the legislation that we inherited from when the right hon. Gentleman’s party was in government. Yes, I fully recognise that this is a matter of great interest to Members on both sides of the House and we undertake that that debate should take place on the Floor of the House. The exact amount of time will of course be for the usual channels and party managers to decide.

[Paul Uppal (Wolverhampton South West) (Con)]

Is the Minister aware of the words of Michael Arthur, chairman of the Russell group of universities, this morning? He said of the coalition’s funding initiative that it sends a signal that the Government recognise

“the importance of higher education to the future of our country, its economy and our ability as universities to help the country out of recession.”

[Mr Willetts]

I did hear that interview and I thought that the leader of the Russell group made the point very well. We are backing our universities. The combination of the new freedoms we are offering them today and the excellent settlement for research and science in the comprehensive spending review enables them to go forward on a solid footing.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

Many of the students at Liverpool’s three fantastic universities have been helped by the Aimhigher programme. Across the UK, the programme has helped more than 2,500 schools and 300 colleges and has provided summer schools at which young people can stay for three to five days. It has provided impartial workshops and bespoke programmes, particularly for people with disabilities as well as for looked-after children. Will the Minister guarantee that all the activities currently provided by the Aimhigher programme will continue under his plans?

[Mr Willetts]

It will be for individual universities to put forward their proposals on what they believe to be the most effective way of widening participation and access. It will then be for the Office for Fair Access to set, with them, benchmarks for their progress. We think that trusting universities to come forward with initiatives and then rigorously assessing their performance against them is the right way forward.

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

I, too, warmly welcome the announcement regarding part-time students; it will do much to help the Open university, which is much cherished on both sides of the House. On making higher education more flexible, may I urge the Minister to look closely at the model being pioneered by University Centre Milton Keynes in partnership with local FE colleges?

[Mr Willetts]

My hon. Friend is a very powerful champion of the Open university, which I have enjoyed visiting in his constituency. The aim is to have much more flexibility, and the models he describes are the kind that we wish to flourish in a more diverse university system.

[Sammy Wilson (East Antrim) (DUP)]

The Minister has described his proposals as delivering

“a better deal for our students,”

but given that costs might go up by 100%, many people will not see them as a good deal. What steps is he taking to ensure that universities do not simply increase fees for students rather than considering the costs of the degrees they are supplying, which seem excessive in many cases?

[Mr Willetts]

The hon. Gentleman is absolutely right. We need to have tough pressures on universities to hold down their costs in times such as these. That is why the £6,000 threshold we propose will act as a discipline on universities and will ensure that they have to hold down their costs. We expect universities to respond to that pressure, and the Secretary of State and I have made it clear to universities on many occasions that we expect greater efficiencies and the holding down of costs as a result of the proposals.

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

Some of the best and brightest students and researchers in the country come through Oxford universities and contribute enormously to our economy and society. I welcome much of the report as progressive and I believe it can offer as sustainable a funding solution as possible in the current economic climate, but can the Minister assure me that the proposals will not compromise our universities’ international competitiveness? Also, will he explain how he intends to improve careers and financial advice for students as we expect them to make greater contributions?

[Mr Willetts]

It is very important that our internationally competitive universities are able to compete with the best in the world. That is why we understand their arguments about the need to recruit and retain staff of the highest quality. My hon. Friend is absolutely right about information, advice and guidance and I know that the Minister for Further Education, Skills and Lifelong Learning is working very hard in the Departments for Business, Innovation and Skills and for Education to ensure that we have a significant improvement in those areas. The destruction of the professional careers advice function under the previous Government has been a disaster for social mobility.

[Helen Goodman (Bishop Auckland) (Lab)]

A couple of months ago, the Minister published a book about the unfair advantages that the baby boomers had. Will he explain why he has now come to the House with a proposal that will burden the next generation instead of following the example of my hon. Friend the Member for Harrow West (Mr Thomas) in placing the burden, through our taxes, on those of us who had such an excellent free education?

[Mr Willetts]

I am grateful to the hon. Lady for the plug for my book—that was very good of her. It is available in all good bookshops. I do not accept the way that she characterises our policies, which will offer a better deal for students because universities will have to focus on the quality of the teaching experience they offer. Graduates, not students, will have to pay the costs only when they are earning £21,000 or more, which is close to median earnings.

[Dr Julian Huppert (Cambridge) (LD)]

I welcome some of the changes. They are more progressive than the Conservatives would have achieved on their own, more progressive than Browne and more progressive than the Labour party intended—the same Labour party that introduced both fees and top-up fees having promised not to. However, I do not support an increase in the cap, as the Minister well knows. Does he share my concern that the increased level of student debt will provide a disincentive to students entering university and will make it harder for them to get mortgages and loans after they leave?

[Mr Willetts]

I hope that the hon. Gentleman recognises that the proposals clearly offer a progressive way forward whereby graduates will have to start repayments only when they earn more than £21,000 a year. That will have a crucial implication for the issue he raises because their monthly repayments will be lower than they otherwise would have been. They will be paying at the rate the previous Government fixed, at 9%, but they will be paying 9% of their earnings over £21,000 rather than those over £15,000. When many building societies and lenders assess young people and graduates for mortgages, they will see lower monthly outgoings under our proposals than they would under the system that we inherited from the previous Government. I hope that the hon. Gentleman will consider that important point.

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

Why does the Minister think that the Lib Dems in coalition with Labour in Scotland stuck to their promise to students whereas those in this coalition are so willing to break their pledge?

[Mr Willetts]

When I follow from the sidelines the debate in Scotland about financing its universities, it is clear to me that many universities in Scotland are concerned that they are not on a secure, long-term financing basis and that they are looking at a wider range of options. They might even be reading Lord Browne’s report with interest.

[Gavin Barwell (Croydon Central) (Con)]

Croydon college has recently started offering degrees from the university of Sussex. Does my right hon. Friend agree that there is huge potential for a much more diverse higher education sector in which people can study degrees from our top universities closer to home, potentially over two years rather than three?

[Mr Willetts]

A cause to which my right hon. Friend the Secretary of State attaches particular importance is having a more diverse range of degree courses, particularly two-year courses. We need the kind of freedoms we are putting forward and the incentives we are describing today to encourage that type of provision in future.

[Mr Nick Raynsford (Greenwich and Woolwich) (Lab)]

The Minister referred to the interest rate that will be reclaimed as 3% plus inflation without being precise about which measure of inflation he was adopting. I think I detected from a subsequent answer that he was proposing to use the retail prices index. Given that the Government propose to substitute the consumer prices index for the RPI in relation to a huge range of benefit payments that involve the Government paying out, why is he proposing to adopt the RPI in this regard, particularly considering that he has talked about trying to minimise repayment costs for students?

[Mr Willetts]

We are, of course, following the precedent set by the previous Labour Government.

[Amber Rudd (Hastings and Rye) (Con)]

In January 2010, it was estimated that 18.5% of school-age children in Hastings were on free school meals, against the national average of 14%. Can the Minister reassure me that the national scholarship scheme will particularly help the young people in my constituency, some of whom come from very low-income families?

[Mr Willetts]

My hon. Friend makes a very important point. The ambition is to tie together a coherent package of support going through the different stages of childhood and on into adulthood. There is more help for early years, we have the assistance in the pupil premium for children on free school meals and we are using those sorts of criteria to continue to assist those young people through into university. That is absolutely our aim; there is a lot more work to do on the detail of the national scholarship scheme, and her thoughts and those of Members on both sides of the House will be very welcome as we develop our proposals.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

The Government’s policy represents a major shift in all sorts of ways, not least because it is based on a massive 80% reduction in public sector funding for higher education teaching. Surely, therefore, it is crucial that the Government ensure a proper debate on those changes by publishing a White Paper as soon as possible.

[Mr Willetts]

We are going to produce a White Paper, and I have also made it clear that there will be a proper opportunity for debate in this House.

[Mr Robin Walker (Worcester) (Con)]

I congratulate the Minister on delivering what the Secretary of State promised, something even more progressive than the Browne review, and I reassure my hon. Friend the Member for Cambridge (Dr Huppert) that plenty of progressive Conservative Members have been pushing for just that. However, the great step forward in support for part-time students will benefit a great number of mature students, and my local university, the university of Worcester, looks after many of them. Does the Minister accept that many of those people are concerned about the suggestion in the Browne report of a UCAS points threshold? As his statement does not address that issue, can he assure me that the White Paper will?

[Mr Willetts]

Those are exactly the kind of long-term issues in Lord Browne’s report, and my hon. Friend is quite right: we were not able to cover them in the statement. A lot more consideration is required, and that will lead into the White Paper that we will publish over the winter. My hon. Friend was also quite right in that this is absolutely a coherent, single, coalition proposal, in which we have worked together as a coalition and come up with a set of proposals that will probably be better than either party could have come up with on its own .

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

The Minister suggests that the proposals are good for universities, so will he explain how it is good for them to have 80% of their teaching income withdrawn? Why is he not making it clear that the money from additional fees will largely be replacement income, not the additional investment that our universities need to be internationally competitive?

[Mr Willetts]

The money will reach universities in a different way; it will come via the choices of students. Students will not have to pay out of their back pocket—they will not have to pay directly—but eventually the money will reach universities. When graduates benefit from higher earnings as a result of their study at university, their graduate contribution will pay for the system. A graduate contribution is the right way—an equitable way—of paying for that system, because it empowers students and, at the same time, secures progressive access to universities.

[Andrew George (St Ives) (LD)]

The lobby for university students is particularly powerful, but for those studying for vocational qualifications less so. In that light, can the Minister reassure me that today’s proposal will not have a detrimental impact on those students from low-income backgrounds who study for such qualifications?

[Mr Willetts]

All Ministers in the Department for Business, Innovation and Skills are very strongly committed to the vocational route. One thing that has gone wrong with this country has been the creation of a bottleneck owing to the belief that university is the only route into a career and a well-paid job. We will put forward our skills strategy in the very near future, and I hope the hon. Gentleman will recognise that it addresses absolutely the point that he rightly raises.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

I am in no way a nationalist, but there is clearly an impact on Scotland, even under the current fees structure, with many English students moving to cheaper education in Scottish universities. If the fee is a graduate fee, would it not be appropriate for the Minister to say that his minimum charge of £6,000 should follow every student who leaves England for cheaper education in Scotland?

[Mr Willetts]

We will be in close touch with the Scottish Administration, and of course we will continue to have our arrangements for funding English students when they go to Scotland.

[Matthew Hancock (West Suffolk) (Con)]

I detect widespread support for the proposals to improve access to universities, which is an extremely important issue. Does the Minister think, therefore, that it is incumbent on all of us, whether or not we support the whole package, to make sure that we explain to students and to people thinking of going to university that they will not pay anything until they earn £21,000 and that access will be broader?

[Mr Willetts]

My hon. Friend is absolutely right, and the crucial thing is the number of young people who are anxious because they think that they somehow have to pay fees up-front, when that is not the case. [Interruption.] During the Labour leadership contest over the summer, it became clear that at least one candidate seemed to believe that students paid fees up-front. That is not the system, and our proposals, with our new graduate contribution, are a fairer, more progressive way, because the point at which graduates start repaying will be so much higher than it is at the moment.

[Liz Kendall (Leicester West) (Lab)]

As well as giving extra support to those on low incomes, a genuinely progressive student finance system would ensure that those who ended up on a middle income, let us say of £21,000 to £41,000, paid proportionately less of their income and lifetime earnings than higher earners. Can the Minister guarantee that that will be the case?

[Mr Willetts]

Yes. On the estimates that we have done—and we are placing some of our figures in the Library, not least because of the request from the shadow Secretary of State—it is clear, contrary to the rather misleading report in The Guardian the other week, which in turn drew on some work by the Social Market Foundation, that as graduates go through each stage on the earnings scale, they will be expected to pay more.

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

I accept and welcome the fact that this proposal is more progressive than the current system, but I cannot accept that it has to be tied to an increase in fees. That is something that I cannot and will not accept. Will the Minister acknowledge some perversities within the idea of increasing fees? First, increasing fees to £6,000 leads to the possibility that students going into lower-entry courses and institutions will subsidise those on higher-entry courses. Secondly—

[Mr Speaker]

Order. The hon. Gentleman will resume his seat. I am sorry but this is the second—[Interruption]. Order. This is the second time that this has happened today. There are lots of Members trying to get in. I want to help the hon. Gentleman and other Members, but we cannot have twin-hatted questions. It will not do.

[Mr Willetts]

I am not aware of any feature of the proposals which would lead to the cross-subsidy that concerns the hon. Gentleman.

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

Considering that higher education funding structures in Wales are more or less tied to those in England, following our adoption of top-up fees, what discussions has the Minister had with the Welsh Assembly Government concerning today’s announcement?

[Mr Willetts]

I have had discussions over the months with Leighton Andrews, who has described to me his proposals for Wales, where I know there is an ongoing debate about university financing. I hope to be able also to have a quick phone conversation with him about our proposals today and, of course, to keep in close touch.

[Damian Hinds (East Hampshire) (Con)]

Does my right hon. Friend agree that, although it is undeniably true that earlier generations of students, including most of us, got a much more generous deal, it was always based on a very restrictive formula for exactly to whom it could be generous? We all benefited. In future, if we want to have wider access, improve social mobility and protect the high quality of our university education, which does carry a cost, exactly this sort of measure, which ties contribution more closely to cost, will be necessary—

[Mr Speaker]

I am grateful. I call the Minister.

[Mr Willetts]

My hon. Friend is absolutely right. Many of us in this House benefited from a higher education system that was funded in a very different way from today’s system, and we were able to enjoy that system only because such a small proportion of young people went to university. As we see so many more people going to university nowadays, which is a trend that we welcome, it is right and necessary to put university financing on a better basis.

[Several hon. Members]

rose—

[Mr Speaker]

Order. I would like to accommodate a few more, but I really do appeal to Members to help each other.

[Lilian Greenwood (Nottingham South) (Lab)]

Does the Minister not understand that many talented young people will simply feel unable to choose to go to university because they will be terrified of leaving with debts hanging over them of more than £20,000, which they might never be able to pay off?

[Mr Willetts]

I hope that the hon. Lady will join me in sending the very clear message to young people that the system is not like having a credit card debt of £20,000. It is a graduate contribution scheme in which there is no repayment unless someone earns more than £21,000, and, if for whatever reason, they become unemployed or withdraw from the work force during that time, they will not have to make any repayments. It is far better than conventional debt, and it is important for all of us in all parts of the House to make that clear.

[Andrew Stephenson (Pendle) (Con)]

How does today’s announcement sit with the Government’s wider approach to higher education, such as the funding of the science and research budget and other university income streams?

[Mr Willetts]

In the comprehensive spending review, we were able to secure a very good settlement for science and research, protected with a ring fence. The combination of that ring-fenced support and these reforms offers a very good, strong prospect for our universities.

[Chris Williamson (Derby North) (Lab)]

Will the Minister stop referring to his policy as progressive and fair, because it is no such thing? What assurance can he give me that the university of Derby, which is one of the institutions that could be adversely affected by his proposals, will still be in business in 10 years’ time?

[Mr Willetts]

Our proposals are progressive, because they help to encourage people from poorer backgrounds to go to university, because of the higher education maintenance grant, and because of the higher repayment threshold. That crucial commitment to taking progressive measures is one of the reasons we commend these proposals to the House.

[Mary Macleod (Brentford and Isleworth) (Con)]

I welcome the progressive and fair announcements that my right hon. Friend has made. How can we ensure that we still get enough science, engineering and technology graduates, and how will this measure help?

[Mr Willetts]

This relates to the mechanisms whereby the teaching grant is allocated. For the more expensive, lab-based courses, there will of course continue to be teaching grant to recognise the extra costs involved in delivering those courses. We believe that that will maintain a continuing level playing field for STEM—science, technology, engineering and mathematics—subjects.

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

The right hon. Member for Ross, Skye and Lochaber (Mr Kennedy) has already detailed some of the implications for Scotland. May I ask the Minister specifically about the impact of the RAB—resource accounting and budgeting—payments, which will have a direct impact in Scotland? My hon. Friend the Member for Glasgow North (Ann McKechin) wrote to the Secretary of State on 12 October asking for a meeting with Scottish MPs, but despite continual chasing up, that meeting has not yet happened. Will he undertake that it will happen as soon as possible so that we can discuss these issues with Scottish MPs?

[Mr Willetts]

We have to respect the devolution settlement, and I am very aware that we are talking about higher education finance for England. However, I keep in close contact with Scottish colleagues, and I am sure that the Secretary of State or I will be very happy to have such a meeting.

[Christopher Pincher (Tamworth) (Con)]

Does my right hon. Friend agree that these welcome proposals will begin to even up the opportunity for British students who, when competing for places at our best universities, compete with overseas students with bigger cheque books?

[Mr Willetts]

I hope that these proposals will ensure that British students have a very fair deal at our universities; indeed, that is a key feature of our proposals.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

The Minister will no doubt be pleased that in the past fortnight the six-point timetable for scrapping tuition fees has been deleted from the section of the Liberal Democrat website called “What we stand for”. Strangely enough, however, it does not mention any rise in fees. My question is another book plug. In his recent memoirs, the Secretary of State described himself as a “free radical”, but in reality has not he, and every single Lib Dem Minister, now become a £9k Conservative?

[Mr Willetts]

I think that “free radical” captures very well the enormous contribution that the Secretary of State makes—and what a pleasure it is to work alongside him.

[Duncan Hames (Chippenham) (LD)]

If raising the repayment threshold is to benefit every single graduate, in the Minister’s words, can he confirm that current students—and indeed, current graduates—will see their repayment threshold raised also?

[Mr Willetts]

The hon. Gentleman makes a very important point. These are proposals for the future, which come in for 2012. They are not retrospective changes, and for current graduates the existing regime will not be changed. This is only for the future from 2012 onwards. I am grateful for this opportunity to make that clear.

[Nic Dakin (Scunthorpe) (Lab)]

My question rather follows on from that point. Young people who are in their final year of a level 3 course—say, doing A-levels—might choose to take a gap year next year and therefore apply to UCAS through deferred entry for a 2012 start. Will they be affected by these changes, or will they go to university under the current rules?

[Mr Willetts]

All students going to university in 2012 will do so under the regime that I have proposed to the House. Some young people—this is a very important practical point—may already have applied for deferred entry as part of not going to university in 2011-12. Admissions procedures are the responsibility of individual universities, but we hope that universities and UCAS, working together, will open a window to enable those young people, if they wish, to have the opportunity of going to university in 2011.

[Mr James Clappison (Hertsmere) (Con)]

May I warmly welcome my right hon. Friend’s statement and this package, which is a good deal for students and universities? Can he give me an assurance that while universities will rightly be under an onus to attract applicants, and to give appropriate financial support in certain cases, admissions to university will remain a matter entirely for individual universities judging on individual merit and academic potential?

[Mr Willetts]

My hon. Friend is absolutely right. Universities must maintain control of their individual admissions procedures; of course, we respect that freedom. Although we are absolutely committed to broadening access, the reports in the press this morning about so-called quotas were completely misleading. Neither the Secretary of State nor I believes in quotas.

[Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)]

Everything that the Minister has said about student choice suggests that we are moving towards a market in higher education. When I asked the Secretary of State about this when we discussed the Browne report, he gave a categorical assurance that we are not moving towards a market. Which one of them is right?

[Mr Willetts]

We are in a system where there will be a continuing and very important role for the Government, through providing financial support and through the new regulatory regime that emerges as we think through the proposals from Lord Browne, and where there is a very clear cap—a threshold of £6,000, and in exceptional circumstances, up to £9,000. That is the right way of combining freedom of choice for students and the legitimate role of public policy.

[Andrew Percy (Brigg and Goole) (Con)]

I have never liked tuition fees; I did not like them when the Labour party introduced them. My concern is for people going into our public services who will most likely be just above the £21,000 threshold but will then be faced with having to pay down tens of thousands of pounds-worth of debt. What can we do to encourage the very best graduates to continue to go into our public services rather than to take the possible route of going for a dash for cash as they attempt to pay off these huge fees?

[Mr Willetts]

I hope that the careers advice and guidance function will be very important in this respect, because those are indeed very satisfying careers to which many young people aspire. I hope that my hon. Friend agrees that, with the new threshold of £21,000, people in the circumstances he describes will face lower monthly repayments than they do under the current system.

[Mark Hendrick (Preston) (Lab/Co-op)]

Prior to the general election, the Government parties rubbished Labour’s proposals to get more than 50% of young people into higher education. Now they are talking about widening access. What effect does the Minister think that the abolition of the education maintenance allowance will have on wider access, and what effect will the £6,000 to £9,000 cap have? Is it not a huge disincentive?

[Mr Willetts]

We believe in broadening access, but we do not believe in artificial targets for the number of people going to university. The 50% target was a suspiciously round number—it did not sound like a carefully thought through proposal. We believe that the number of people going to university should emerge as a consequence of the choices of those who have the aptitude to do so.

[Julian Smith (Skipton and Ripon) (Con)]

The £150 million scholarship fund is great news for low-income students, but many young people tell me that they are unclear about what bursaries and scholarships are available to them. May I urge my right hon. Friend to promote this fund so that every young person is aware of the great opportunities that exist to get free education if they need it?

[Mr Willetts]

My hon. Friend is right. Some evaluations sadly show that bursaries, despite a large amount of money going into them, have not been very effective in broadening access to university. That is why we want to give universities much greater freedom to design schemes that actually work. A single £150 million national scholarship scheme is a great opportunity to communicate the fact that support will be available.

[Gavin Shuker (Luton South) (Lab/Co-op)]

Many Members will have heard about the tripling of tuition fees this morning on Radio 4, and the Minister has given further details from the Dispatch Box. Given that these are the biggest changes to student funding in a generation, why does he believe that the Business Secretary has been struck mute today?

[Mr Willetts]

The Secretary of State and I work so closely together that we are, for all practical purposes, interchangeable.

[Rehman Chishti (Gillingham and Rainham) (Con)]

I welcome the Minister’s statement as a constructive and progressive way forward. Will he clarify whether students from my constituency who go to university in London will receive a London weighting with their maintenance grant?

[Mr Willetts]

My hon. Friend is quite right to raise that matter. We are indeed committed to keeping the special arrangements for London maintenance.

[Alex Cunningham (Stockton North) (Lab)]

Medical students face many extra years of learning and could end up with debts in excess of £70,000, enough to buy a small house in the north-east of England. We need many more home-grown doctors. What will the Government do to help reduce the burden on such students and encourage them?

[Mr Willetts]

I do not recognise the figure of £70,000, and of course there is continuing support from the Department of Health towards the costs of medical education.

[Mr Sam Gyimah (East Surrey) (Con)]

Does the Minister agree that one purpose of higher education is to equip our students for the workplace, and that by allowing the money to follow the students, we can put real pressure on universities and force them to up their game?

[Mr Willetts]

One of the big sources of frustration for students at the moment is that they do not feel that they get enough practical experience of the world of work while they are at university, and they do not think they are properly prepared for it. That is why we are asking all universities to produce a statement of what they are doing to ensure employability for their students. We want much more, and much more precise, information to be available in future so that prospective students can see the graduate employment prospects of individual courses at individual universities.

[Sheila Gilmore (Edinburgh East) (Lab)]

The Minister’s boss said in the House when he last spoke on the matter that the reason why he and his colleagues had swallowed these proposals, and indeed their pledge, was the need to pay down the deficit within five years. If the change is about deficit reduction in such a short period, why is it necessary to invent a system that will burden several generations of students?

[Mr Willetts]

We have been completely frank with the House throughout in saying that of course there are public expenditure savings here, which are necessary because of the mess that we inherited from the previous Government. However, this is not simply a matter of saving public money. We are also using the challenge of doing that to propose what we believe is an improved and progressive system. We are delivering reform as well as saving public money.

[Mr Philip Hollobone (Kettering) (Con)]

I understand that there is now no target for the proportion of young people who go into higher education. Will my right hon. Friend tell the House what proportion of young people do so today, and what his central estimate is of the proportion who will do so in 10 years’ time, after the new scheme has come in?

[Mr Willetts]

Slightly over 40% of people now go to university. We envisage the absolute number of students remaining broadly flat, although we cannot be sure exactly. To ensure that the vocational route is available, we are also investing in 50,000 extra apprenticeships this year, rising to 75,000 by the end of the public expenditure period, as an alternative route into well paid work for many young people.

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

The Minister is a very honest man. Does he genuinely believe that the next generation of middle England will be gainers rather than losers as a result of the debt that he is loading on to them?

[Mr Willetts]

I hope that the experience of young people at university will improve as a result of these reforms. Under successive Governments, we have ended up with a system that has sharp incentives for research but not comparable incentives to focus on teaching. These changes will lead universities to focus much more on the quality of the academic experience and the teaching that goes on at university, and young people will be the beneficiaries of that.

[Julie Hilling (Bolton West) (Lab)]

I am really concerned about the effect of these proposals on universities such as Bolton, which draw their students largely from poorer backgrounds. Specifically, has the Minister considered the effect of raising the fees so high on students from Islamic backgrounds, who for religious reasons are reluctant to take interest-bearing loans, or are prohibited from doing so?

[Mr Willetts]

We have indeed considered that carefully, and we are very happy to meet representatives from the Islamic community to discuss it with them further. Our belief is that the terms on which the money is being lent are so much more favourable than the commercial terms available in the market that they would not be covered by Islamic rules, but we are happy to discuss the matter further with the Islamic community.

[Paul Blomfield (Sheffield Central) (Lab)]

The Minister has admitted that this is not simply about saving money and is in fact a fundamental and deeply ideological remodelling of our university system, with the withdrawal of public funding from the majority of courses and the introduction of a market in which the best courses will cost up to 50% more than the basic fee level proposed. There was no mandate for either governing party introducing those changes. We know about the worthless pledges that the Liberal Democrats made, but the Conservative party did not have anything about the changes in its manifesto. Is it right, therefore, that these proposals should be rushed through, or should we wait for a full debate when the White Paper is published, about what sort of higher education system we want?

[Mr Willetts]

Many of the proposals emerged from the report of an inquiry that the previous Government set up, which Labour Ministers endorsed. The previous Government set out the terms of reference, and I was consulted, which I appreciated. They were agreed and made public, and the proposals are within the terms of reference of the cross-party inquiry.

[Chris Bryant (Rhondda) (Lab)]

The bottom line is that for a three-year course, fees will cost £27,000. Adding on the costs of going to university, accommodation and so on, especially for students living away from home, the cost could be £45,000. That is double the average wage in my constituency and the cost of a small house. I passionately believe in choice and in the ability of every young person in my patch to choose the course that they want to study at the university of their choice. How will the Minister ensure that that choice is available to them, particularly as many of them might otherwise feel that they have to go to a university in Wales rather than having the freedom to go anywhere across the UK?

[Mr Willetts]

I do not recognise the hon. Gentleman’s figure of £45,000. The crucial point, which Members of all parties should get across, is that this is a graduate contribution scheme, and people will have to start paying back only if they are earning more than £21,000 a year, which I suspect is higher than median earnings in his constituency.

[Tessa Munt (Wells) (LD)]

rose—

[Mr Speaker]

Order. I will let her off on this occasion, but let me just say to the hon. Lady, who is a new Member, that although she is not the only offender, Members really should not wait until virtually the end of a statement and then suddenly start popping up when I am about to move on. I will let her have her say today.

[Tessa Munt]

Sorry, Sir, and thank you.

I have discovered that £19 million of bursary money was apparently not spent last year. Does the Minister believe that is correct, and will there be some way of preventing that appalling situation from ever happening again?

[Mr Willetts]

I was not aware of that specific sum of money, but I would be interested in looking into the matter further. There is certainly a wider problem that bursary spending does not appear to be influencing access and participation by prospective students. That is why we believe there should be initiatives by individual universities, and that their performance should be monitored externally. That will be a far more effective way of spreading participation and broadening access to our universities.

[Mr Speaker]

I am grateful to the Minister and to other colleagues for their co-operation.

Point of Order

Wednesday 3rd November 2010 Commons Chamber

13:48

[Valerie Vaz (Walsall South) (Lab)]

On a point of order, Mr Speaker. On 15 September I raised with the Prime Minister the case of Sakineh Ashtiani. Reports suggest that she will be executed today. Almost 190 Members across parties have signed a letter to the President of Iran asking for her to be saved. Are you aware of an urgent statement by the Prime Minister in respect of discussions with the President to stop that barbaric execution?

[Mr Speaker]

I am grateful to the hon. Lady for her point of order. The short answer is no, I am not aware of any intention on the part of either the Prime Minister or the Foreign Secretary to make a statement on that matter. I appreciate the urgency of the situation that the hon. Lady has described, but my hands are tied. I say to her that she should as a matter of urgency, that is immediately after these exchanges, consult the Table Office about other opportunities to raise the matter sooner rather than later. If it can further help, although I appreciate that it may be too late—I hope not—she should look to Foreign and Commonwealth Office questions next Tuesday, when she might seek to catch my eye.

If there are no further points of order, we come to the ten-minute rule motion, for which the hon. Member for Walthamstow (Stella Creasy) has been waiting patiently.

Consumer Credit (Regulation and Advice)

Wednesday 3rd November 2010 Commons Chamber

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

13:49

[Stella Creasy (Walthamstow) (Lab/Co-op)]

I beg to move,

That leave be given to bring in a Bill to impose certain limits on consumer credit interest rates and charges; to establish a levy on credit and debit card providers to fund the provision of debt advice services; to give powers to local authorities to restrict the provision of premises for licensed consumer credit agencies within a local area; to make provision regarding the availability of certain financial services products at branches of the Post Office; to make other measures relating to the regulation of, and availability of advice on, consumer credit; and for connected purposes.

This Bill is intended to address the needs of the poorest consumers in Britain. In presenting this Bill to the House, I hope to show how the Government can and must do more to support those who face financial hardship as a direct result of this Government’s Budget. Opposition Members have already set out their concerns about the spending review and the economic policies of this Government. We know that half a million people in the public sector will lose their jobs in the coming years. Experts predict that a further half a million or more jobs will be lost in the private sector as investment is wrung out of our economy.

Recent research from the university of Cambridge highlights the fact that personal debt is related to economic growth. As our economy stumbles under the weight of cuts, we know that more people will be forced to borrow to keep their families financially afloat. However, my Bill is not about public spending, but about a less widely publicised consequence of the Budget.

Loan sharks are now circling Britain’s poorest families, watching them struggle financially and sensing a business opportunity. The chief executive of one of them has stated that as a direct consequence of the spending review, he expects to see a growth in his target market. Indeed, following 20 October, his share price has already risen 5%, dependent as it is on unemployment and poverty. Such companies offer loans to those for whom credit cards and banks are out of reach—mainly women, the low-paid and those with a poor credit history. Research suggests that approximately 6 million people in Britain are in that position, some 1.5 million of whom are currently indebted to these pay-day lenders.

My Bill reflects my experience of working in Walthamstow with the Movement for Change and local campaigners. It also supports work being done nationally by the Better Banking coalition, Compass and Citizens UK as well as other Labour MPs. We have seen first hand how this is a market without competition. Just six companies control 90% of the loans made, which means that they can set the terms of trade. Such companies make money by locking people into cycles of debt, with interest rates starting at around 272%, and rising up to 2,500% or more. If people miss a payment by a day, they incur a charge, on which interest is added, and then there are the administration fees and fines, on which more interest is added. If they get into problems, they can always borrow more, thus starting the cycle of debt again.

Debt destroys not just bank balances, but the lives of those who live with the fear of the bailiff or the panic of repossession hanging over their families. A recent survey found that a third of British parents are arguing about debts with their partners, and suffering the stress of sleepless nights. I know that I do not need to tell hon. Members about these issues, because many of them, like me, will have had constituents asking them what to do about these problems.

The previous Government understood such problems well. They introduced the Consumer Credit Act 2006, took action on loan sharks and supported the development of credit unions in communities as an alternative source of loans and financial services. The new Government have announced a review of the provision of consumer credit, yet they commit only to action on store cards and credit cards, so they ignore millions of people in our country for whom access to those sources of credit is not available and for whom these companies are their only option.

Within a monopoly market that generates massive profits, it is vital that the Government make a clear pledge to intervene to protect the poorest consumers. Opposition Members believe that the ones who will end up shouldering the brunt of the comprehensive spending review need our help, and this Bill seeks to do just that.

First, the Bill proposes to regulate the total cost of borrowing. Mr Speaker, if I lend you £20 and say, “Pay me back next week and buy me a drink at the same time,” depending on where we went for our pint, in practice that could be an annual interest rate of 2,000 or 3,000%. Thus, if we focus only on interest rates, we miss a trick. Capping only those, and, to the same extent, all types of loan, may prevent small-scale lending and leave some consumers with no choice but to go back to illegal loan sharks. It would also do nothing to address the impact of compound interest on the costs or late-repayment fees.

This Bill would give the Government powers to intervene where the total cost of borrowing is excessive, and also to regulate how much interest different financial products—be they credit cards, short-term emergency loans or hire-purchase agreements—can carry. Such forms of regulation have already been successfully implemented in places such as America and Canada. That is why it is disappointing that the UK Government have made no firm commitment to consider such regulation in the current credit review.

Secondly, this Bill seeks to impose a levy on those who sell credit to pay for debt counselling and advice services. Just as the drinks industry came together to recognise its responsibilities through instigating Drinkaware, so it is right that these companies do the same for those who get into financial difficulties. What I am talking about is specialist debt-management counselling. Counsellors can give one-on-one sessions to families to help them get back on their feet by negotiating with creditors, helping families to navigate what support they are entitled to and identifying how best they can live within their means.

I welcome the Government’s continued support for the previous Administration’s work on a levy on banks for this matter, but I hope that they recognise the need both for financial advice services and advocacy and for the excellent and expert organisations, such as Consumer Credit Counselling Service, Citizens Advice and Christians Against Poverty.

Thirdly, the Bill aims to help local communities manage the presence of such organisations within their localities. My own local authority has been creative in using planning laws to manage the proliferation of fast-food outlets near our schools. This Bill would give local authorities clearer powers to regulate the numbers of credit-selling agencies operating within their locality, thus helping communities to choose how to manage the presence of such organisations in their neighbourhoods.

Finally, this Bill contains proposals to improve access to affordable credit, particularly through the credit unions, and I pay tribute to the excellent work of the Waltham Forest Community credit union that helps more than 4,000 people in my local area. Such proposals would build on the work done by the previous Administration to support the development of credit unions. The Bill requires the integration of the back-office technology of the Post Office network with the credit unions, so that many more people can access credit union services, including small loans, in any post office in the country at a much lower rate of interest than the legal loan sharks offer.

I have asked repeatedly for meetings with Ministers to discuss these proposals and seek their support. I know that they agree that tackling such problems is something that Governments should do—or at least many of their Front Bench did in 2005 when they signed an early-day motion calling for an interest rate ceiling. I hope now, in 2010, that I can help them to rediscover their consciences, and so I ask again for them to meet me and other campaigners to talk through the proposals in this Bill and how we can help the poorest consumers in Britain.

If the Government are intent on pushing their Budget on Britain, they will raise the number of families in our communities who are living with the daily misery of debt. They must therefore take responsibility for their actions. They must give the same consideration to the needs of those for whom the never-never is a fact of life as they do for those with an Amex card or a trust fund. I ask the House to support this Bill and help stop the legal loan sharks who now circle our local communities sensing blood.

Question put and agreed to.

Ordered,

That Stella Creasy, Tom Blenkinsop, Liz Kendall, Heidi Alexander, Mr Dennis Skinner, John McDonnell, Jon Cruddas, Yvonne Fovargue, Alex Cunningham, Sheila Gilmore, Natascha Engel and Fiona O’Donnell present the Bill.

Stella Creasy accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 4 February and to be printed (Bill 103).

Bloody Sunday Inquiry (Report)

Wednesday 3rd November 2010 Commons Chamber

13:58

[The Secretary of State for Northern Ireland (Mr Owen Paterson)]

I beg to move,

That this House has considered the matter of the Report of the Bloody Sunday Inquiry.

This debate follows the publication of the report on 15 June and my right hon. Friend the Prime Minister’s statement in this House in response. I should like to thank the tribunal for its report. I have read it in full, and it is clearly a remarkable piece of work.

Let me reiterate the Government’s clear position on the report. Lord Saville’s conclusions are shocking. What happened on Bloody Sunday was both unjustified and unjustifiable. As my right hon. Friend the Prime Minister said, we do not honour all those members of the armed forces who bravely upheld the rule of law in Northern Ireland by hiding from the truth.

I am sure that hon. Members are familiar with many of the conclusions in the report, but I should put on record again some of the tribunal’s key findings. Lord Saville found a

“serious and widespread loss of fire discipline”

by members of support company of the Parachute Regiment who entered the Bogside,

“as a result of an order...which should not have been given.”

He found that

“despite the contrary evidence given by the soldiers...none of them fired in response to attacks or threatened attacks by nail or petrol bombers.”

He also found that many of the soldiers

“knowingly put forward false accounts in order to seek to justify their firing”.

In some of the most shocking sections of the report, Lord Saville concludes that some of those killed or injured were fleeing or going to the assistance of others. The report says that Patrick Doherty was shot while

“crawling…away from the soldiers”.

It refers to Alexander Nash, who was

“hit and injured by Army gunfire after he had gone to...tend his son”.

Lord Saville records that James Wray was shot, in all probability,

“when he was lying mortally wounded on the ground.”

For those looking for statements of innocence, the report is clear that

“none of the casualties was posing a threat of causing death or serious injury, or indeed was doing anything else that could on any view justify their shooting.”

As my right hon. Friend the Prime Minister said, we do not defend the British Army by defending the indefensible. It is clear from the tribunal’s unequivocal conclusions that some members of our armed forces acted wrongly.

I reiterate the Government’s apology for the events of that day. The Government are deeply sorry for what happened.

Just as the report is clear in its conclusions on the unjustifiable actions that took place in Londonderry on Bloody Sunday, so, too, is it clear in its other findings. There is no suggestion in the report that there was any premeditation or conspiracy by the UK Government, the Northern Ireland Government or senior members of the armed forces. Lord Saville said that there was no evidence that the authorities tolerated or encouraged

“the use of unjustified lethal force.”

The process surrounding the report has been the subject of much controversy. None of us could have anticipated that the inquiry would take 12 years or cost nearly £192 million. Our views on that are well documented, but I firmly believe that it is right that our main focus now is not on the controversies surrounding the process, but on the substance of the report’s conclusions.

[Mr John Baron (Basildon and Billericay) (Con)]

I concur with my right hon. Friend’s points. I have seen at first hand the sacrifice of our security forces when serving in Northern Ireland, and their excellent work in preventing a difficult situation from getting much worse. Does my right hon. Friend agree that he should do everything in his power to stop the report being used by one side against another? It is more important to move forward and make progress in the Province in future.

[Mr Paterson]

I thank my hon. Friend for his comments, which I endorse. Lord Saville and his colleagues go to some length in the report to say that they do not pass judgment and that the inquiry was not a court of law. They were simply trying to establish the facts. My hon. Friend is right that we should use the facts in the report to see how we can move forward and look to a better future. I will deal with that later.

[Lady Hermon (North Down) (Ind)]

I am most grateful to the Secretary of State for taking a second intervention so quickly. Why on earth was the advice of the most senior Royal Ulster Constabulary officer in the Londonderry area, Chief Superintendent Frank Lagan, ignored? Does the Secretary of State believe, or is there evidence to show, that if his wise counsel had been followed, the appalling events of that day could have been avoided?

[Mr Paterson]

The hon. Lady touches on one of the many terrible “what ifs”. The report shows so many turns, where, if decisions had gone the other way, the event might not have happened. She refers to Chief Superintendent Frank Lagan, who was the local senior RUC commander. She knows from her close family experience the huge debt that we owe all those in the RUC. Interestingly, Chief Superintendent Lagan said that, despite the ban on all parades and marches at that time, he thought that the march should go ahead all the way through to Guildhall square. He was overruled by Sir Graham Shillington in discussion, as the report states, with senior Army officers, who decided that it would be better if the march was turned down Rossville street. The hon. Lady touches on a poignant moment, when perhaps, if the advice had been taken, events could have been different. Of course, the advice could have been wrong. All we can do is accept the facts as they are presented by Lord Saville, and see what we can learn for the future.

We should reflect not just on the report, but on the reaction to Lord Saville’s conclusions and the Prime Minister’s statement. The whole House will have seen the memorable pictures broadcast around the world showing the response of the families and crowds in the Guildhall square in Derry. The families of those killed and those injured had fought a long and determined campaign over 38 years to prove the innocence of their loved ones.

[Paul Goggins (Wythenshawe and Sale East) (Lab)]

I am sure that the whole House wants to join the Secretary of State in paying tribute to the families for the dignity and resilience that they have shown over so many years. I first met them officially to discuss the publication of the Saville report in April 2008—some two-and-a-half years ago. I promised them then that, although the report had to come to Parliament first, they would not be disadvantaged in gaining access to it or being able to comment on it on the day. I thank the Secretary of State and the Minister of State for honouring the many complex arrangements that my right hon. Friend the Member for St Helens South and Whiston (Mr Woodward) and I drew up at the time to ensure that the families could have the benefit of as much access as possible to the report on the day. I thank him for honouring those commitments when he took up his position.

[Mr Paterson]

I thank the right hon. Gentleman very much for his kind comments. I pay tribute to his work over the years as Minister of State for Northern Ireland. He is still fondly remembered by the people there for all his good work.

I would like to take the opportunity to record my gratitude for the hard work of my officials and the Department in successfully managing the report’s publication. As the right hon. Member for Wythenshawe and Sale East (Paul Goggins) said, we built on some of the plans left by my predecessor. I met the families and discussed the matter in detail. The publication was a major international event, with 419 press passes issued for the Guildhall square alone. It is also right to draw hon. Members’ attention to other responses to the report that received less coverage, but which are none the less important in illustrating the broad acceptance that Lord Saville’s report received.

The leaders of the three main Protestant churches in Ireland made a symbolically important visit to the Bogside shortly after publication. The First Minister, Peter Robinson, publicly indicated his acceptance of Lord Saville’s findings. Senior military figures, including the Chief of the Defence Staff, General Sir David Richards, and the former Chief of the General Staff, General Sir Mike Jackson, joined the Prime Minister in his apology for the events of Bloody Sunday.

I want to make it absolutely clear, as my right hon. Friend the Prime Minister did, that Bloody Sunday was not the defining story of the Army’s service in Northern Ireland. Between 1969 and 2007, more than 250,000 people served in Operation Banner—the longest continuous operation in British military history.

Our armed forces displayed immense courage, dedication and restraint in upholding democracy and the rule of law in Northern Ireland. We should not forget that more than 1,000 members of the security forces lost their lives, and many thousands more were injured, for that cause. Nor should we forget that the security situation in Northern Ireland had been deteriorating steadily since 1969. As Lord Saville outlines in volume I of the report, those who lost their lives included two RUC officers—Sergeant Peter Gilgunn and Constable David Montgomery were killed by the IRA three days before Bloody Sunday. They were the first police officers killed in the city during the troubles.

[Mr Nigel Dodds (Belfast North) (DUP)]

The point that the right hon. Gentleman is highlighting is extremely important. It is right to put on record our remembrance of, and gratitude for, the service and sacrifice of so many in the armed forces and police who served over the years in Northern Ireland and who continue to serve. That is why most of us are today wearing the poppy with pride.

May I ask the Secretary of State to reflect on this? Many people in Northern Ireland feel that while there is a very close focus on this one major incident, for the reasons he has outlined, they have received no justice and no attention for the murder of their loved one by the IRA or paramilitaries on all sides. They want to know what the Government will do to address that.

[Mr Paterson]

I thank the right hon. Gentleman for supporting my comments on the service of those in the security services. He is quite right that without them, the peace process would not have happened. We owe an enormous debt of gratitude to those who served in Northern Ireland. I will turn to the problems of resolving the past in a few moments, but I should point out now that the Historical Enquiries Team is working its way through 3,268 cases, which is valuable work.

The hurt and suffering that victims of the troubles from all parts of the community continue to feel must be recognised and acknowledged. Finding a way of dealing with the painful legacy of the past is one of the great challenges facing Northern Ireland today, as the right hon. Gentleman says. Our approach to the conclusions of reviews and reports on individual cases is clear. Where wrongdoing or failings by the state are clearly identified, the Government will accept responsibility and apologise. We have demonstrated that in our rapid responses to this report, the police ombudsman’s report on Claudy published in August, and to the Billy Wright inquiry report published in September.

More widely, there cannot, of course, be a Saville-type inquiry for each person killed during the troubles, but there are ongoing processes that are helping to provide some answers. As I just mentioned, the HET is investigating all 3,268 deaths during the troubles, including soldiers and police officers who lost their lives. The 86% satisfaction rate that the HET achieves among families who have received reports demonstrates the success it is having in helping to bring a measure of resolution.

The police ombudsman continues to investigate legacy cases and there are a number of ongoing inquests relating to deaths from the troubles. I welcome the very important work that the Northern Ireland Executive, the victims commissioners and many voluntary organisations are doing in providing health care and practical support to victims.

The future of those processes is in the hands of the devolved Administration, and for my part, I am fully supportive of the important and difficult work that the Independent Commission for the Location of Victims’ Remains continues to carry out. The Government’s views on new public inquiries are, of course, well known. As my right hon. Friend the Prime Minister made clear, there will be no more open-ended and costly inquiries. That policy is based not solely on financial calculation. Continuing to pick out selective cases to subject to a lengthy public inquiry is not a viable approach to dealing with the legacy of a conflict in which thousands of people from all parts of the community were killed.

Nor should we be under any illusion that public inquiries provide any guarantee of satisfaction for victims’ families. The Billy Wright inquiry report showed that even an inquiry lasting six years and costing £30 million can be accused of not having answered critical questions. Many commentators pointed out that that report recorded the panel’s regret that it had no explanation of how the guns used to murder Billy Wright were smuggled into the high security Maze prison.

Our position on new inquiries is clear, but we cannot simply shut down the past. I recognise that there are no easy answers. The previous Government’s consultation on the Eames-Bradley report ended in October 2009, and this Government swiftly published the responses to that consultation in July this year. The responses clearly showed that there is little consensus currently on a wider mechanism to address the past, but we have not let that stop us continuing to listen to the views of people in Northern Ireland and to find a way forward.

My hon. Friend the Northern Ireland Minister and I have met victims groups, community organisations, academics and politicians from all parts of the community to move forward the debate on this important issue. We will continue to do so. Many different views have been expressed, but one clear theme emerges from those discussions and from the experience of existing mechanisms such as the HET—namely, the desire of the families of victims of the troubles to understand those traumatic events better. Helping families and wider society to achieve that greater understanding and closure is vital, however difficult it may be. It will require leadership from all those involved in the events of the past 40 years in Westminster, Northern Ireland and the Republic of Ireland.

I plan to continue exploring ideas on the contentious issues of the past over the coming months. Our approach will remain measured, sensitive and realistic. Lord Saville’s report closes a painful chapter in Northern Ireland’s troubled history. In so doing, it makes an important contribution to helping Northern Ireland to move forward to a genuinely shared future.

14:16

[Mr Shaun Woodward (St Helens South and Whiston) (Lab)]

First, I pay tribute to the men and women who were killed on 30 January 1972. While honouring them, I also want to pay tribute to those who were injured and, indeed, to all the families whose lives have been so painfully damaged by the events of Bloody Sunday. Few of us can ever begin to know the pain that they have endured, but on 15 June this year, we could all see from the relief and celebration on the streets of Derry the powerful impact of Lord Saville’s inquiry, as the reputations of those whose lives were lost and those who were injured were fully exonerated.

When the Prime Minister gave his unreserved apology, he truly spoke for us all. For nearly four decades, despite enormous resistance from some, those brave families have waged their campaign for justice. Their conduct and their dignity have been exemplary, both before and since publication of the inquiry. The inquiry stands in stark contrast to the travesty of truth in the Widgery report. The Saville report did what it was intended to do—it established the truth.

There are many lessons to be learned from Bloody Sunday, and many lessons for those who for too long clung to the Widgery report as truth revealed and justice served—for truth Widgery was not and, in the name of justice, Widgery gave none. For a generation to come, the inquiry that Lord Widgery was asked to conduct will be synonymous with whitewashing the truth—for, at best, its wholly inadequate terms of reference and for being conducted too quickly. Perhaps more damningly, is the greater indictment of all those who preferred to continue to cling ever more desperately to the wreckage of Lord Widgery’s findings. They did so when the evidence increasingly suggested that his report was fundamentally flawed and misleading, and when its conclusions were increasingly shown to be unsafe and wrong.

The House owes a debt to all those who campaigned for the truth to be established, and I pay tribute to those in the then British Government, and the Irish and American Governments, who would not settle for what increasingly looked like a whitewash, and to all those who never gave up and who campaigned for new evidence to be considered.

Over the past few months great praise has rightly been given to the work and honesty of Lord Saville’s inquiry. There was nothing inevitable about the inquiry. A few short years ago, in 1998, establishing such an inquiry was a bold and courageous step. Without that step, it would have been so much harder to have established the bona fides for a peace process to succeed. In the 5,000 pages of his report, Lord Saville has finally established the truth. Yes, there are undoubtedly rightful questions to be asked about the time taken to produce the report and indeed, at £200 million, its cost, but let those of us entrusted with authority never confuse the price of truth with the value of truth. What we learn from the inquiry is shocking truth.

[Mr Dodds]

On the issue of costs, the right hon. Gentleman was Secretary of State in charge of the Northern Ireland Office for part of the time when these costs were run up, as they were under his predecessors. Does he take any responsibility for the overrun of time and costs? Does he believe that the NIO could have done more to curtail costs and make the inquiry more efficient in terms of time, or does he believe that nothing could have been done?

[Mr Woodward]

The right hon. Gentleman will know that the Government brought forward what would become the Inquiries Act 2005. The purpose of that was to try to control costs. The issue of Lord Saville’s report touches on the crucial issue of the independence of inquiries. The House must seriously consider whether it would wish to compromise the independence of a judicial inquiry by saying, for example, that witnesses would not be allowed legal representation. That would have saved half the cost of Lord Saville’s report, but would we have got the truth if legal representation had not been allowed? By the same token, if we were to say to judges in future inquiries that we wanted to limit the number of witnesses and the amount of evidence that they could take, would that compromise their independence? It is a proper question for the right hon. Gentleman to ask and I take my share of responsibility for allowing this inquiry to go ahead as it did so that its independence was not compromised. That is why I make the careful distinction between the price and the value of the inquiry.

[Sammy Wilson (East Antrim) (DUP)]

I appreciate the right hon. Gentleman’s explanation on that issue, but if the principles that he has outlined are followed in future inquiries—and there are already calls for inquiries on Murphy and other issues—the danger is that we could face huge bills in the future. Do not we need some means of curtailing costs and to put aside the argument that including any restriction will impinge on the independence of inquiries?

[Mr Woodward]

The hon. Gentleman makes a fair point and I may address it specifically a little later in my remarks.

What we have learned from this inquiry is shocking truth, and it is all the more shocking because what Lord Saville uncovered—and we are speaking of uncovering—runs so counter to what we would all want to believe of our armed forces. Hon. Members may have a difficult dilemma this afternoon, because they may feel that they have to make a choice between being supportive of the British Army or of the families. That is a false choice. The Prime Minister was right to assert that Bloody Sunday is not the defining story of the service that more than 250,000 men and women of the British Army gave during the 38 years of Operation Banner. Their courage, dedication and commitment to public service for every community in Northern Ireland saved countless lives.

However, as the Secretary of State said, the Prime Minister was equally right to say that

“we do not defend the British Army by defending the indefensible.”

What happened on Bloody Sunday was and remains indefensible. With no ambiguity, we know that the consequences of an order, which should not have been given, was the

“serious and widespread loss of fire discipline”

by members of Support Company of the 1st Battalion, the Parachute Regiment, who entered the Bogside.

The Prime Minister informed the House on 15 June that decisions on what would happen next would be for the Director of Public Prosecutions in Northern Ireland. That was five months ago. In fairness to the families whose loved ones lost their lives, and to the soldiers named in Lord Saville’s report, it is unfortunate that the Secretary of State has not been able to update the House today on progress on the issue of prosecution. When he was in opposition, the Secretary of State was quick to criticise the time taken by Lord Saville to produce his report. Can I gently remind him that he should hold himself to the same standards in government as he set for others when he was in opposition? Perhaps he will take an early opportunity to share with the House a progress report, not least for the families and for the soldiers.

The Prime Minister also told the House on 15 June that he would want to take some time

“to digest the report’s full findings and understand all the implications.”

He told the House that he would ask the Secretaries of State for Northern Ireland and Defence to

“report back…on all the issues that arise from it.”

Given that five months have now elapsed, would the Secretary of State and the Secretary of State for Defence now agree to place their reports in the Library, if they have been concluded?

The Secretary of State will know that the implications of Saville go much further than the events of Bloody Sunday. They are not just relevant to the past of Northern Ireland, but to its present and to its future. The Prime Minister quoted from Lord Saville:

“What happened on Bloody Sunday strengthened the Provisional IRA, increased nationalist resentment and hostility towards the Army and exacerbated the violent conflict of the years that followed.”

What now happens in how we respond to this report, and in how we deal with the legacy issues of the past, also has the capacity to strengthen the peace process. The Secretary of State referred earlier to the “what if” factors in the report. His response today is also one of those factors. He should recognise that he is holding a very precious object in his hands. If we handle this wrongly, it also has the capacity to weaken the peace process.

There are those who will watch genuinely to see how the British Government responds to Saville because they too have lost loved ones. They too still seek the truth. Their cause is genuine. Their loss is genuine. Their grief is all too real. But they still understandably seek justice for their loss. Those families respect the truth that this inquiry has revealed. But they too now will seek their truth. This inquiry may, in their eyes, have answered the questions of the families whose lives were devastated by Bloody Sunday, but their questions about their loss remain. Indeed their expectations have been heightened by this report.

For some, this is genuinely about reconciliation. For others—only a small number—this inquiry and others like it may become a means to keep old hatreds and antagonisms going. I recognise that. Most worrying, there are those—the so-called dissidents—whose only wish is to bring chaos and violence back to the streets of Northern Ireland, and who will watch very carefully how the British Government now respond to the Saville report. Those people wish to see how the grief of others can be exploited, and how justice can be turned to injustice. Their wish is to pervert the outcome and to twist the truth into a perverted logic that can be used to build community support for a violent struggle for the years ahead. The response of the Government today must ensure that this group have no opportunity, no chance to make cause from a grievance or a sense of justice denied. Likewise, the Government should ensure that the resources and means are available, should the buck be passed, to enable the Executive and the institutions of the political process in Northern Ireland to respond appropriately.

There are two essential issues here. The first is to ensure that how we handle the past is fair. The second is to ensure that the response is appropriate, adequate and proportionate. For as we think of the families affected by Bloody Sunday, so too we must think of so many others whose lives were altered irrevocably by the troubles. Lord Saville may have offered the beginning of peace of mind to those affected by that terrible day, but what of others, as the right hon. Member for Belfast North (Mr Dodds) asked. How can this process be fair for others? What of the other families of the more than 3,500 men, women and children who also lost their lives?

One example—and I am sure that all hon. Members will have been moved each time they have heard it—comes from the hon. Member for South Antrim (Dr McCrea), who asked:

“How do we get closure, how do we get justice, and how do we get the truth?”

Justice cannot be the possession of one community, but not another. Justice can no more be the province of a nationalist than of a Unionist. The process must be felt to belong to all. The search for truth loses its value if it may be owned by one community, but not another. The Government must be very careful in how they tread.

The Prime Minister said:

“It is right to pursue the truth with vigour and thoroughness, but let me reassure the House that there will be no more open-ended and costly inquiries into the past.”

I understand what led the Prime Minister to these remarks. Indeed, the whole House shares the concern about the cost of the inquiry, but to state unequivocally that

“there will be no more open-ended and costly inquiries into the past”

is in my judgment rash, and it is a huge risk. It is a risk not just to the political process, but one that could yet shake the foundations of the peace process itself. The House will know the importance that Justice Cory attached to the inquiries that he recommended to the British and Irish Governments should be set up.

Given what the Prime Minister said in this House on 15 June and given the Secretary of State’s comments in the House, where does this leave the Finucane inquiry to which the British Government committed themselves? The family were promised an inquiry. The House will recall that delay in its establishment was occasioned by a disagreement over such an inquiry proceeding under the terms of the 2005 Act. However, I made it clear when I was Secretary of State that if the difficulties continued once Lord Saville had published his report, we would as a matter of urgency make it clear how we would proceed.

Of course the cost of an inquiry would be relevant to weighing up the public interest, but the public interest would crucially also be weighed by the good faith established by the promise itself—faith that drew strength both from and to the stability of the political process and the stability of the peace process. The Secretary of State has kept us all waiting for nearly six months. He knows that he must be straight with Mr Finucane’s family, the people of Northern Ireland and this House, and he must be straight with the Irish and American Governments. I remind the right hon. Gentleman that as recently as 2008, during the presidential elections, the then Senator Obama made very clear his unequivocal support for an independent judicial inquiry, as recommended by Judge Cory.

In the words of the Prime Minister about Lord Saville’s report, these inquiries

“demonstrate how a state should hold itself to account and how we should be determined at all times—no matter how difficult—to judge ourselves against the highest standards.”

Perhaps the Secretary of State will explain and make it clear what has so changed that today the state need no longer hold itself to account on these issues? Indeed, if he has decided not to go ahead with an inquiry, when will he tell the House, and why the further delay? At the very least, will he take this opportunity to tell the House whether, as he promised, he has met Pat Finucane’s family? It is, after all, several months since he said he would.

The peace process is built on trust and fairness. The institutions that have grown out of the peace process have many parents. The process is undoubtedly less than perfect—sometimes carefully planned, sometimes a response to circumstance, sometimes a mechanism to find a way forward when roadblocks lie ahead. Let us imagine that the Secretary of State has taken the decision that, regardless of circumstance, there will be no more inquiries, and let us give the benefit of the doubt about why he has not yet been able to convey that to Pat Finucane’s family or to tell the families of those who lost loved ones at Balllymurphy, Omagh or Claudy that they will have no inquiry.

What are the Secretary of State’s alternative proposals? What is the mechanism he truly proposes for them to seek the truth, to seek justice? We must all hope he understands that he cannot leave nothing in its place. Others have tried to tempt an answer from him. Let me again acknowledge the hon. Member for South Antrim, who I am sorry is not in his place today. Although I do not share his particular prescription, he asked the Secretary of State to consider whether he would use the resources of individual inquiries, and put them at the disposal of the Historical Enquiries Team. The Secretary of State replied that he was “absolutely right”, but absolutely right about what? The Secretary of State may correct me, but I am not entirely sure that in saying that he was proposing to hand over the money, resources and additional funding that the British Government has used to fund judicial inquiries.

The House will rightly acknowledge the work of the Historical Enquiries Team. It is charged with examining the facts behind the deaths of more than 3,000 people in the troubles, and it has indeed done amazing work. It continues to bring closure to so many families who were denied for so many decades even the most basic information about how their loved ones may have died. But the Secretary of State must understand both what it is and what it is not, both what it has the means to do and what, given its limited resources, it cannot do. Its budget was set at £34 million over seven years to handle the 3,000-plus cases. That budget is virtually spent and it is half way through its case load, so it will need more money. However, its task and purpose are not to be compared, in any shape or form, with the work of a judicial inquiry.

Of course not every family wants a judicial inquiry, or a judicial-style tribunal. Indeed, most families—let us be frank—do not want any kind of inquiry. They simply want to leave the past where it is—in the past. They want an end, no more. Others just want the available facts, and, having been given them, they want to bring closure to their loss. That is what the HET does so well, and why its £34 million is appropriate for the work that it was asked to do, although clearly it will need more.

Complex or multiple cases that are linked by circumstances and need investigation are hugely time-consuming and sometimes very difficult to investigate. Even with the resources of a fully funded legal inquiry, the truth may remain evasive. The Secretary of State gave the very good example of Billy Wright. The inquiry answered many questions, but it left some unanswered—not least, how were guns smuggled into a prison regarded at the time as having the highest security in the whole of Europe? Some may say the inability ultimately to provide satisfactory answers to these questions throws into doubt the integrity of the inquiry system itself. Again, however, we should be very careful of reaching such a conclusion. Sometimes we may not get answers, but that does not invalidate the reason for asking the questions, and it does not invalidate the creation of a process that allows those questions to be asked.

The Billy Wright inquiry was complex. Its work cost more than £30 million, much of it on legal fees. Perhaps—I say this to the right hon. Member for Belfast North—we could find ways of doing that without some of the cost, but if a judicial inquiry could not find the answers to the questions posed by Bill Wright’s family, how would the HET have fared better? It is an institution whose overall budget is less than that spent by this single inquiry.

I do not question the Prime Minister’s motives when he told the House on 15 June

“I think that it is right to use, as far as possible, the Historical Enquires Team to deal with the problems of the past”—[Official Report, 15 June 2010; Vol. 511, c.740-55.]

but perhaps the Secretary of State should be a little more candid with his right hon. Friend. Is he really wise to suggest to the Prime Minister that the HET is the appropriate vehicle, adequately resourced, to handle such a complex inquiry, and to ask the HET to take on the work of a Billy Wright investigation, or complex investigations into, for example, Pat Finucane’s death or, as it touches on 1 Para, the death of those who died at Ballymurphy in August 1971? To ask that of the HET is, frankly, as burdensome and as impossible as it borders on being incredulous. With present resources, some things can be done, but some cannot. Even if resources were made available, some investigations, such as that into the death of Pat Finucane, could not be carried by a body such as the HET. Although it is fair and works impartially, it is clearly not as fully independent as a public inquiry, and it is not, as Justice Cory would want, international.

The HET is currently the subject of approval and admiration from all communities in Northern Ireland, but asking it to carry out such investigations might risk damaging its reputation in its other crucial and vital work. The Secretary of State must be very careful how he proceeds with changing the HET’s remit, if that is what he proposes.

The Secretary of State must also be careful to avoid suspicion about his motives. We cannot maintain a peace process on the cheap. We all want to save money, but some savings risk being false economies, and some are cleverly disguised, being more about passing on the bill while still expecting it to be drawn from someone else’s cheque book and account. At present, it is the Government here in Westminster who pay for inquiries into the past. The funding for the HET comes directly from the Executive and the Northern Ireland block grant. Unless the Secretary of State specifically intends to make additional financial support available from Westminster to the HET, it is little short of disingenuous to ask it to take on these hugely onerous responsibilities, even if that were the right thing to do, without significant additional funding. Again I remind the Secretary of State that good faith is as vital in ensuring the peace today as it was in building its foundations.

So what are the Government to do if they wish to keep faith? The Secretary of State has at his disposal the advice and work of the Consultative Group on the Past. The work of Lord Eames and Denis Bradley was extremely important. Their different, but collective, experiences drawn from the years of the troubles made them absolutely the right people to co-chair the consultative group. However, although the Prime Minister referred to their work in his statement of 15 June, I fear that he was directed at only one part of their report. The Secretary of State will know that we share the view that the idea of universal recognition payments should be completely rejected, so that is not a reason to ignore their report. I remind him that it contains nearly 30 other proposals that are very much worth considering and developing.

The Secretary of State has described the impasse in which he finds himself, given the absence of a consensus in the public consultation to the report. I really think he is going to have to do better than that. Yes, it is difficult, but that is what government is all about: making difficult choices, being determined and taking responsibility for finding consensus, even when it eludes everyone else. Building the peace process in Northern Ireland was difficult. There was no consensus, no prescription for a peace process and no route map to a political process. That is the responsibility of the Government. Their job is to find consensus, not to despair or wave a white flag in a declaration of defeat. For it is now that Northern Ireland needs to develop a process for reconciliation. Just as it built a peace process, and then a political process, so now it must establish and develop a comprehensive reconciliation process to deal with the legacy issues. This does not have to be by judicial inquiry, but we cannot leave nothing in place of that. Of course, such a process, and such a determination, will meet opposition, and some of it will be truly genuine, truly felt and deeply sincere. We can respect that, but the job of the British Government, and the Secretary of State, is to help to build and nurture such a process.

Northern Ireland is devolved, but the problems of the past are not. They are not cast off simply because policing and justice have been devolved by this House. Northern Ireland is, after all, part of the Union, until it becomes otherwise by consent. It is our responsibility; it is part of the family. We cannot walk by on the other side of the street. For the past, we all bear the burdens of responsibility and accountability. For the future, we all bear the responsibility to ensure the success of the future shared.

This inquiry speaks not just to those whose lives were changed for ever by Bloody Sunday. The lessons today are for us all. As Lord Eames observed in another place, it is a mark of real hope for the long term that the inquiry has been genuinely embraced, and embraced beyond sectarian lines. This hope is like a window: it is open now, but we should not presume that it will be open indefinitely. The duty of the Government now is to capture this hope, and use it as a resource to marshal and foster reconciliation. The past is not another country; it is as much our country. The past cannot be painted out of history; nor can it be wished away.

Saville reveals that the opportunity for reconciliation has truly come. Let the authors of this process be drawn from the communities of Northern Ireland, but let the Government give leadership. Out of the terrible loss and pain of these Derry families, let the Government seize the challenge. Let us not just say that we are sorry; let us mean that we are sorry. Let us provide the leadership, establish a due process for reconciliation, resource the present and meet the legacy of the past. We must take that next step and help to release Northern Ireland from the grip of its deeply troubled and continuingly painful past.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Before I call the next speaker, may I remind everyone that there is a 10-minute limit on Back-Bench speeches?

14:45

[Mr Ben Wallace (Wyre and Preston North) (Con)]

Thank you for calling me to speak so early in the debate, Mr Deputy Speaker. It is a privilege to follow not only my right hon. Friend the Secretary of State but his predecessor in Northern Ireland, the right hon. Member for St Helens South and Whiston (Mr Woodward), who worked tirelessly to try to resolve the issues there. I want to contribute to the debate not because I was an adult or serving in the armed forces at the time of Bloody Sunday; I was not even one-year old at the time. In a sense, it is just a memory. However, I confronted its legacy on the streets of Northern Ireland as a platoon commander and as an intelligence officer in the 1990s. I witnessed the pressures as a platoon commander on the streets of west Belfast, and I also witnessed the embryonic stages of the peace process in 1994, under the Conservative Government of the time. That does not seem to be mentioned much these days, but it was an important turning point for Northern Ireland, because of the steps taken not only by the Government but by the Provisional IRA, which did not come easy to that organisation at the time.

I want to put the Bloody Sunday inquiry into context, because it is important to remember that there were deaths before Bloody Sunday. The troubles in Northern Ireland did not begin and end on 30 January 1972. There were 215 deaths during the troubles leading up to Bloody Sunday, and we cannot forget that there were violent deaths in the Irish civil war and the border campaigns of the 1950s. Violent deaths were characteristic of Ireland, not just in the north, for perhaps hundreds of years. We should not forget that they did not start and stop with Bloody Sunday.

I also want to remember the victims of Northern Ireland. There were 1,855 civilian deaths and 1,123 security forces deaths, of which 2,057 were caused by republican paramilitary groups, and 363 by British security forces, as well as 1,000 by loyalist terror groups. All had a part to play in the troubles in Northern Ireland, and all had a part to play in the tragedies that have been left behind after those events.

I listened to the shadow Secretary of State’s call for perhaps never-ending inquiries. We should not forget that the death of each of those victims is as important to their family members as those of the Bloody Sunday victims. Their loss and suffering count as much to them as Bloody Sunday counts to the media and to the wider strategic goals of the political parties in Northern Ireland. Many of those people might want an inquiry, although perhaps not a sophisticated, expensive one. They might not yet have all the answers. They might not know why their loved one was singled out to be murdered. They want to know why their innocent brother or sister went out shopping one day and did not come back. They want to know who perpetrated those atrocities, and why they have never been held to account.

There are plenty of famous atrocities—dare I link the two words?—in Northern Ireland that probably mean nothing to most people. Bloody Sunday is one of the most memorable ones to people outside the Northern Irish and Irish struggle bubble, but there was also Claudy, Bloody Friday and Warrenpoint. They are famous incidents that all Northern Ireland Members will never forget. It is a characteristic of the Irish troubles that we have these great tragic events throughout history, and it has gone on for many years.

[Mark Durkan (Foyle) (SDLP)]

The hon. Gentleman rightly refers to many of the landmark atrocities in Northern Ireland. Does he agree that four of them have a particular link: Bloody Sunday, Ballymurphy, Springhill and Shankill? The link is that they were all perpetrated by the Parachute Regiment. Should not somebody be looking at that?

[Mr Wallace]

I recognise the hon. Gentleman’s points. Regiments are always living things: they come and go; different leaders take over and different soldiers join. The Scots Guards, of which I was a member, is a very different regiment from the Scots Guards when it was founded in 1642—ironically, to go to Northern Ireland. Regiments come and go, and it is too easy to put a beret on the problem and say that it is all due to the Parachute Regiment. I know my own prejudices, but they are not factual prejudices. It is too easy to link the problem to one regiment or another. I say that it was mainly a problem of ethos—ethos in our politicians, who sometimes sent the wrong messages; ethos in paramilitary units, or even in political parties that often chose to manipulate the people they were supposed to represent.

As I said earlier, I was not serving in the armed forces on Bloody Sunday, as I was just one-year old, but I have met people on the streets of Northern Ireland who were inspired by it—inspired to defend their communities, inspired to take up arms or, indeed, inspired to enter into terrorist organisations. I have met people who were manipulated by what happened and manipulated by some political parties that used every atrocity to feed another atrocity. Murder begets murder; injustice begets injustice.

This inquiry is about one atrocity, but if it is about drawing a line in the sand, it is about saying that an injustice took place. People in the armed forces, particularly its members on that day, are sorry for what they did. We as a Government are sorry about how we dealt with the troubles in the past. However, we must also remember that there were attacks after attacks after attacks. That is why we should put Bloody Sunday in context. The report says that paramilitary activities were taking place on that day. The official IRA fired the second shot and the Provisional IRA was active with weapons in the city on that day. That does not excuse at all or in any way the behaviour of the soldiers on that day, but we should not forget that, in the end, this was an environment into which many people came untrained, ill aware of what they were being asked to do and perhaps led by the wrong leaders. That might be a criticism that we can strongly lay at the door of the Parachute Regiment on that day.

It is not for me, nearly 40 years later, to judge individual soldiers. What we should not forget—this is why the activity of paramilitaries on that day does not detract from what is right or wrong—is that every soldier is responsible for what he or she does down the end of a barrel of a gun. It is their responsibility—the individual’s responsibility and that of the junior ranks of local leaders—to realise that, in the end, their actions have consequences.

Having been a platoon commander in Iraq, I have been frightened. I know what it is like to sit behind barbed wire and concrete bunkers. It very quickly becomes “them and us”. It is easy to dehumanise the community outside the front gate. It is very easy if you are spat at, shouted at and abused, to go back with your men, your soldiers and your team and describe the situation as them and us. That is not an excuse for a platoon commander, a company commander or a commanding officer to say, “All bets are off; all rules can be ignored”. That is simply not right. We are there as officers and leaders of men to protect the weak, to uphold discipline and ensure decency on the street—irrespective of whether the communities are Catholic or Protestant. That is our job.

I could not go to Northern Ireland and undo history. That was not my job at 20 years of age. I was not going to allow myself to be blamed for history—something about which we need to be careful when it comes to the Saville inquiry. We cannot blame other generations and undo it as if it were an easy thing to do on “The X Factor”, for example. I knew, however, that if I stood by decency on the streets and did what was right by the people I was there to protect, we would go some way to ensuring peace.

What is very important from my point of view is that we carried the yellow card, which set out the rules of engagement on the streets of Northern Ireland. It is a good document; it has been finessed over the years, but remains a good document. It is interesting that the Saville report clearly says that no soldier involved in the shootings on that day would have had the authority to open fire if they had followed the yellow card issued to them for dealing with the troubles even at that time. These are good rules of engagement: they are clear and fair and require every soldier to take aimed shots. We should not ignore or excuse the facts by claiming that the environment or the context detracts from the responsibility of our soldiers. It is also the case that the same does not detract from the responsibility of paramilitaries. Every terrorist in Northern Ireland must take responsibility for what they did with a bomb, what they did with a rifle and what they did when they intimidated their communities.

I would like to pay tribute to the Social Democratic and Labour party in Northern Ireland, which throughout the troubles recognised the consequence of violence. Throughout it all, its members spoke up in communities where they themselves were intimidated by other republican parties that felt that they could use peace on the one hand, but could use violence on the other. We should not neglect to pay tribute to the parties that pursued peace on both sides throughout the peace agreement.

The real issue is the future. The former Secretary of State came to the Dispatch Box today to speak about the past. That is interesting, as when he was Secretary of State he rarely mentioned the Finucane or other inquiries and rarely raised issues about the past, which now seems to have come to the forefront. The real challenge is for the future and it revolves around whether we are going to move forward and accept devolution. Will Northern Ireland one day be prepared for a Sinn Fein First Minister? Other real questions are how to deal with dissidents and when we will say goodbye to the past.

We can argue about whether we should have one more inquiry, or two more, or four more, or five more or 10 more, but at the end of the day it will come down to three or four main points: paramilitaries killed innocent people; soldiers sometimes got involved in unlawful killings; and the innocent people of Northern Ireland suffered. How many more inquiries are just going to repeat the same points? The future is what counts—and that means peace, which is the only thing that will wash away the blood.

14:49

[Paul Murphy (Torfaen) (Lab)]

Lord Saville’s final sentence is:

“Bloody Sunday was a tragedy for the wounded and the bereaved, and a catastrophe for the people of Northern Ireland.”

I think Members on both sides of the House would heartily agree with that. I pay tribute to Lord Saville and his colleagues for the thoroughness of their work on the inquiry. I pay tribute to the Prime Minister and the Secretary of State for Northern Ireland for the way in which they have presented the inquiry publicly in the House of Commons. I also pay tribute to my hon. Friend the Member for Foyle (Mark Durkan) who, together with his predecessor, John Hume, fought tirelessly for justice in this very important case. We all pay tribute, of course, to the families of the victims who were killed all those years ago.

In 1998, when the decision was taken to call this inquiry, I was the Minister of State at the Northern Ireland Office with responsibility for political development. I did not then and have not even for one second since had any regrets, as it was the right thing to do. It was right in the first instance because we wanted to see that justice was done and we wanted the truth to come out. Secondly, it was right because it was part of the wider political picture in dealing with the peace process at that time and since. I have not the slightest doubt that, had we not tackled the issue of Bloody Sunday as we did, there would not have been a successful peace process. I have no doubt at all in mind about that.

[Mr Gregory Campbell (East Londonderry) (DUP)]

The right hon. Gentleman has, perhaps inadvertently, touched on some of the problems with the Saville report. Many in the Unionist community believe exactly what he has just said—that it was a political decision taken for political reasons with a premeditated outcome in mind that determined the announcement on Saville.

[Paul Murphy]

It depends what the hon. Gentleman means by political. I am not saying for a moment that it was a party political issue. I used the term “political” in the sense that it was part of the bigger picture to achieve peace. Both things together were important. Clearly, the nationalist community, the Irish Government, the American Government and people generally believed that we had to deal with this particular issue in the way that we did. That does not mean for one second that we did not have to deal with the other issues as well—I shall touch on them in a few moments—but Bloody Sunday was part of the problem.

There was a time some years later, after I had become Secretary of State, when I was troubled about the costs. At that time, it fell to me to deal with the direct government of Northern Ireland as well as the peace process, and £200 million is a great deal of money. Money was needed for hospitals, schools and other services to run a society in Northern Ireland, and of course those costs troubled me. They troubled me to such an extent that when some years later I agreed with the Canadian Judge Cory that there should be four public inquiries—into the cases of Wright, Hamill, Nelson and Finucane—we decided to use a different mechanism, through the 2005 Act and other Acts of Parliament, in the hope of making the process cheaper. In fact, the cost of those inquiries turned out to be £30-odd million.

I agree with my right hon. Friend the Member for St Helens South and Whiston (Mr Woodward) about Finucane. I gave an undertaking on behalf of the Government that there would be some form of judicial inquiry into the Finucane case. None of that means that we undervalue the loss of the lives of people who served in the armed forces, the security forces or the Royal Ulster Constabulary. Thousands upon thousands of members of the armed forces and the RUC died as a consequence of the troubles, and we must never forget the sacrifice that they made. However, the Army is an organ of the state. In a liberal democracy the state has a responsibility to ensure that the Army does the right thing, and that is why the Saville inquiry turned out as it did.

[Sammy Wilson]

Does the right hon. Gentleman not see where his argument is leading? It appears that, for political reasons and, he says, to advance the peace process, it was considered necessary to hold an inquiry into what had happened in Londonderry, but it was not considered necessary to hold an inquiry into the deaths of many RUC soldiers and innocent civilians who had been killed by terrorists.

[Paul Murphy]

All that took place over a period of 15 years or so. One of the purposes of the Historical Enquiries Team, in which I was involved, was to enable us to satisfy all parts of the community that we were dealing with the past.

Let me repeat that the primary purpose of the Bloody Sunday inquiry was to establish the truth: to find out what had happened, and whether the Army was culpable. The inquiry found that it was culpable. However, another purpose of the inquiry and, indeed, of Judge Cory’s recommendations, was to maintain the process of bringing peace to Northern Ireland. Ensuring that the peace process continues is a noble cause, not an ignoble one, and if it means that we must deal with the past in whatever form, it is right and proper for that to happen.

The fact that 3,500 people have died over 30 years and tens of thousands have been injured in one way or another must be addressed, and the savagery and wickedness experienced by Northern Ireland in those 30 years was not confined to one side. How should that be dealt with? Let me draw the Secretary of State’s attention to two issues. The first is cost. Of course these are difficult times, but, although this may seem a truism, Northern Ireland is a special case. When Senator George Mitchell concluded the Good Friday agreement on Good Friday 1998, he said that it was the beginning, not the end, of a process. He was right. Since then there have been tremendous developments, in which the DUP and other parties in Northern Ireland have played a huge part, but the process will not end overnight. We must have a system that involves spending money, because we must ensure that if the Northern Ireland Executive have to take on certain responsibilities, their funding must be adequate.

[Kris Hopkins (Keighley) (Con)]

The right hon. Gentleman said that the Army was an instrument of Government and must therefore be accountable. Individuals who were certainly active historically are now part of Government. Should they not now be accountable for their historical actions?

[Paul Murphy]

My right hon. Friend raised that issue with the Director of Public Prosecutions. If there are indications that those people must be prosecuted, that is not a matter for Government, but for an independent body. My point is that if there are any further developments on dealing with the past, the Northern Ireland Executive should not be asked to pay for it.

My second point is this. The Secretary of State mentioned the Eames-Bradley report. Mr Eames and Mr Bradley know perhaps better than anyone else of what happened in the past in Northern Ireland, and I think it unfortunate that the press dealt with only one recommendation in their report. There were other valuable recommendations on issues such as the legacy commission, the reconciliation forum and the role of the Churches, and the Government ought to consider them.

When I was Secretary of State, I went to South Africa to see whether the process of truth and reconciliation there could be applied to Northern Ireland. I concluded that it could not—that there could not be a one-size-fits-all solution, and that Northern Ireland must decide for itself how to deal with the past. However, I also concluded that if the problem was the absence of consensus, nothing would happen. We could not wait for a consensus, but we must seek one.

The position of the current Secretary of State is very different from mine, and that of my successors, when we had to deal with such matters as housing and education. He is in a position to work with the Executive to deal with the issues that reflect the past. I have no doubt that a consensus can be reached, I have no doubt that we will have to deal with it, and I have no doubt that the Executive must address other huge, pressing issues, such as the problem of schools and of dealing with the impact of the comprehensive spending review on the Northern Ireland budget. Those are vastly important issues which must exercise the minds of my right hon. Friends and others in Northern Ireland, but that does not mean that it is not possible to deal with the past as well.

I believe that we cannot face the future unless we deal with the past. The two must be dealt with in parallel. The issue is how they are dealt with, and how consensus is achieved so that people, whether they are Catholic, Protestant, Unionist or nationalist, republican or loyalist, can ensure that we have a peaceful and a prosperous Northern Ireland.

15:07

[Mr Laurence Robertson (Tewkesbury) (Con)]

It is an honour to follow the right hon. Member for Torfaen (Paul Murphy). He ended his speech by drawing attention to the need to bring people together and to allow Northern Ireland to move on. Last night, he and I—along with one or two other Members, including the Secretary of State—attended a dinner held by the Integrated Education Fund, whose aim is to bring people together and educate them regardless of their religion. Like the right hon. Gentleman and many other Members, I fully endorse that aim, because the future must be important.

On 15 June, the Prime Minister said that the killings on Bloody Sunday were unjustified and unjustifiable, and the Secretary of State repeated that today. I know that the way in which the Prime Minister dealt with the report in his statement has brought closure to many, though not all, of the families involved. It has brought a degree of comfort, and a degree of solace. The Prime Minister should be congratulated on that. The fact that some of us may have questions to raise about the way in which the report was conducted does not in any way compromise the words of the Prime Minister: he spoke them, and he spoke them very effectively. However, some questions do remain about the way in which the report was conducted.

I have the privilege of being Chairman of the Northern Ireland Affairs Committee. One or two concerns have been expressed in the Committee, particularly about the time that it took for the report to be compiled and about the costs associated with it. It was estimated in the then Northern Ireland Office that the process might take a couple of years. Lord Saville referred to that when he appeared before the Committee on 13 October. In answer to a question about the time scale, he said:

“We did not have one. I am told that the Northern Ireland Office thought it might last a year or two, or something, but on what basis they made that estimate, I have no idea.”

There was obviously something of a disjoin between the Northern Ireland Office and Lord Saville on that point. The prolonged time that it took to complete the report must have been very frustrating for the families and, indeed, the soldiers involved. A further problem is that memories would have already faded by the time the inquiry began, and would have become even weaker by the time it ended.

There is also, of course, a great deal of concern about the cost. In reply to a question about setting limits for the number of hours the inquiry could sit or the amount per hour lawyers could be paid, Lord Saville said in evidence:

“I just do not see how you can, in advance, put down any sort of time or cost estimate”,

but the Government at the time did that. He also said:

“I do not see how you can”

set limits, yet limits were set. My point is that there seemed to be a lack of co-ordination between the Northern Ireland Office and Lord Saville, and a lack of control over some aspects of the inquiry.

The point could be made that if the inquiry were to be independent, it should have nothing to do with, and be in no way the responsibility of, the NIO, but it troubles me that it is reported that Lord Saville refused to meet the NIO permanent secretary to discuss the report, and I know that that troubles some Committee members as well.

The original estimated cost of the inquiry and then the report was £11 million, with lawyers fees estimated at £1 million, yet the overall costs were £191.4 million, with lawyers’ fees of £100 million. I know that public contracts often run somewhat over-budget, but I think that is stretching that to the absolute limit. Again, I do not in any way wish to compromise the words of the Prime Minister on 15 June, but as taxpayers’ money was involved here, we are entitled to ask these questions.

The fact that the process took so long poses certain questions about exactly how accurate some of the evidence given could have been. We all have memories of the past, and if we are remembering a particularly important incident, we will remember it very vividly, but when we look back—or when, perhaps, television extracts are replayed or we read a book on the subject—our memories might not be quite as things were. Therefore, the fact that the inquiry went on for so long will have resulted in something being taken away from the memories of the events.

It should also be noted that we are looking back at a different era—we are looking back to January 1972—and I want now to read out some comments by Lord Saville that have not been given a great deal of airing in previous debates. In paragraph 2.6 of chapter 2 of the summary, he says:

“Parts of the city to the west of the Foyle lay in ruins, as the result of the activities of the IRA…A large part of the nationalist area of the city was a ‘no go’ area, which was dominated by the IRA, where ordinary policing could not be conducted and where even the Army ventured only by using large numbers of soldiers.”

In paragraph 2.7 he says:

“There had been numerous clashes between the security forces and the IRA in which firearms had been used on both sides”.

That is the background to the events.

[Mr Gregory Campbell]

The hon. Gentleman is accurately explaining what Lord Saville said in that section of the conclusion, but does the hon. Gentleman not share my amazement that, having come to that conclusion, Lord Saville did not investigate any of that destruction or any of the context that led to the events of 30 January?

[Mr Robertson]

I am quoting from the summary, but I am well aware that there is a mass of further information behind that summary, and I know that Lord Saville has looked into quite a lot of it. The particular point I have highlighted has troubled me, however.

I was in Londonderry about three years ago—the hon. Member for Foyle (Mark Durkan) kindly welcomed me. I am not sure whether I have told him this, but on the next day I visited the police, who were doing an excellent job. At the end of our meeting, at about lunchtime, I asked whether it would be okay if I, as an Englishman, went into the Bogside Inn. The police froze for a moment, and then replied: “Only if you don’t say anything.” That was three years ago, when we had relative peace, so what must the circumstances and atmosphere have been like in January 1972?

Again, I am not trying to suggest that what the soldiers are accused of having done was right in any way, and I am not in any way trying to play down or underestimate the pain the families involved must have felt, but I think there is an issue here. It is very difficult to look back so far, partly because memories fade, and partly because we, in the safety of our lives, are judging the actions of people who must have been extremely frightened. I do not know how I would have felt in that situation; it is very difficult to assess that accurately.

My hon. Friend the Member for Wyre and Preston North (Mr Wallace) made a point about that background atmosphere and what created it. Again, I am not trying to excuse what was done but, as was said in our Committee, people who are or were paramilitaries refer to that period as the war. I wish they would not call it that, because there are casualties in wars, and quite often there are many innocent casualties. I do not know whether any paramilitary commanders had machine guns with them that day, or if they did, whether they used them, but if they did have machine guns that day, they share some of the responsibility for what happened.

We should pay tribute to Lord Saville for the detailed work he has carried out, and we should support the Prime Minister in what he has said, but I agree with what a number of Members have said so far: we must now look to move to the future. I have read through a lot of this report, and I also read through a lot of the Billy Wright report a few weeks ago, and what strikes me is the waste involved in paramilitary activity, with Catholics hating Protestants and Protestants hating Catholics. That literally wastes lives, and it wastes opportunities too. Some of that still exists. Recruitment to the police is still done on the basis of recruits’ religion. I want Northern Ireland to move towards normal politics, but that is not normal politics.

We have to move to the future; we have to put the past behind us. There are serious questions about how we do that, however. Just last week, I welcomed a number of MPs from Rwanda to my constituency. We talked about how to reconcile the past with the future and they visited Belfast to discuss those issues. Last night, I had a meeting with two members of the families who were bereaved at Ballymurphy. All of that is very difficult and painful and I do not have an easy answer, but what I do know is that we have got to keep searching for those answers so that the present and future generations do not lose out in the way that past generations have.

15:18

[Mr Gregory Campbell (East Londonderry) (DUP)]

Lord Saville and his team carried out public hearings beginning in March 2000, and the final witness was heard in January 2005. In total, 2,500 statements were taken, as a result of which 922 people were called to give direct evidence. Some 610 soldiers, 729 civilians, 30 journalists and photographers, 20 Government officials and 53 police officers gave evidence in some form. As we have heard on numerous occasions, the total cost was in excess of £191 million. Some of the families of those killed in Londonderry on 30 January 1972 have received some form of closure.

As I alluded to in my recent intervention, Saville concentrated almost exclusively on the events of the day in question. However, I and others have repeatedly stressed the need to examine the background and context of the events. After the Saville report was published in June, I spoke out saying it was simply not possible to declare the absolute truth about what happened some 30 years after the event. Because of what I said I was subjected to a vicious hate campaign, not least of which included a Facebook site where a number of contributors indicated that I should be shot dead; a Nazi poster showing a bullet hole through my forehead was put on the site. I went to the police and, that fact having become public knowledge, it was pleasing to see on Monday 21 June that hundreds of people who had signed up to supporting the aims of that site—wanting me murdered—had withdrawn their names within hours of the story breaking on that day. It would appear that supporting violence in secret is quite a good thing for some people but when it becomes public knowledge, they are not so keen. I understand from the police that the prosecution service is studying the evidence and that the police and prosecution service are deciding whether a prosecution is warranted—I await the outcome in due course.

Whatever is found about the attacks or the consequences, the truth about Saville, the context and the background must and will be told. Some try to insinuate that Bloody Sunday was the origin of the troubles, while others attempt to rewrite history by saying that if Bloody Sunday had not happened, the IRA would have been a footnote and a mere minor problem, but Northern Ireland was subjected to frequent attacks. The campaign between 1956 and 1962 was very fresh when the troubles, as they became known, broke out in 1968. Internment had been brought in just before Bloody Sunday to deal with the worsening problems. Widespread violence, right across Northern Ireland, was endemic.

Twenty-one people were murdered in three days of rioting in August 1971. On 10 August 1971, some six months before Bloody Sunday, Bombardier Paul Challenor became the first soldier to be killed by the Provisional IRA in Londonderry, when he was shot by a sniper close to the route of the fateful march on Bloody Sunday. A further six soldiers had been killed in Londonderry by mid-December 1971, five weeks before Bloody Sunday occurred. Almost 2,000 rounds were fired by the IRA at the British Army, which was patrolling the streets, and 211 explosions and 180 nail bombs were aimed at the Army, civilians and ordinary civilian properties, shops and homes in the vicinity, so Provisional IRA activity was rife before Bloody Sunday occurred. Thirty British soldiers were killed in the remaining months of 1971.

Both the Official IRA and the Provisional IRA had established no-go areas for the Army and the Royal Ulster Constabulary through the use of barricades. At the end of 1971, 29 barricades were in place to prevent access to parts of the Bogside where the march was to take place, 16 of which were impassable, even to the British Army’s one-tonne armoured vehicles. IRA members openly mounted roadblocks in front of the media, and daily clashes occurred between nationalist youths and the British Army. Rioting and incendiary devices aimed at shops caused a then estimated total—this was 40 years ago—of £4 million-worth of damage to commercial property.

I say all this to lay out the context, which Lord Saville did not lay out—£191 million was spent and he did not lay out the context of why the soldiers were there in the first place. I shall tell hon. Members why they were there. The central element of any comprehensive investigation into the events is that the soldiers were going into an area that was extremely hostile and where they were likely to encounter violence. But did Lord Saville—did the report—indicate that that was the factual premise from which to conduct the investigation? No, I am afraid he did not.

The fact that the soldiers met with violence only reinforced their view that they were in for a heavy concentration of fire. Such a concerted level of terror was not unique to Londonderry; as I have said, it was endemic in other parts of Northern Ireland. The truth is that murder, mayhem and terror were rife. In the weeks before the day, there were nine separate bomb attacks on commercial premises, six separate shooting incidents and an 80-minute gun battle, and gelignite and nail bomb attacks were prevalent. Reference has been made to the despicable and cowardly murder of two policemen that then took place three days before the parade and on the very route of the parade. One was a Protestant and the other a Catholic, and one was buried on the day of Bloody Sunday.

It remains the case that we will probably never know the truth of all that transpired on that day. Lord Saville can give his conclusions, and the Front-Bench teams of the Government and the Opposition can concur with those, but we will never know the truth. One participant in the Saville inquiry revelled in the thought that he would not engage in open-ended dialogue about what he was doing in the run-up to Bloody Sunday or on that day. He said that he was the 2IC of the Provisional IRA on that day and in that era; he is now the Deputy First Minister, Martin McGuinness. I welcome his move away from violence and endorse the move towards embracing peace, but unfortunately he refused to go into any detail about his involvement in the IRA on that day. Lord Saville concluded that he “probably” had in his possession a machine gun on that day.

As has been alluded to in the debate, it would appear that some people are demanding prosecutions of soldiers who complied with the Saville inquiry and answered all the questions posed to them throughout the inquiry, but there does not appear to be the same eagerness or intensity of purpose to say that we should also look at the prosecution of someone who “probably” had a machine gun on that day. We have to ask what he was doing with the machine gun on that day. The conclusion is that we will never know.

Saville fell well short of analysing what happened before and during the events of that fateful day. We will not know the truth of all that happened. The one lesson that we can learn from the Saville report and the inquiry is that inquiries, however intense and however long, however protracted and however costly and expensive, seldom, if ever, bring progress towards the future. Let us move forward and not back to the past.

15:28

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

I shall make a brief contribution. In the Chamber today there are many experts on this subject, some of whom have spoken already and others who, I see, seek to contribute later. That is why I will keep my remarks brief.

The Saville inquiry was clearly necessary. There is no doubt about that. I do not have personal experience of what happened in Northern Ireland or of its history, but I recall as a teenager thinking that there was something about what happened on Bloody Sunday that I, as a British citizen, needed to be worried about in terms of the human rights implications. It was there—something that I was aware of as I was growing up—so I certainly believe that the inquiry was necessary.

In extremely difficult circumstances, the inquiry has done a very good job of finding out what happened on that day. A couple of months ago I went to the Independent Police Complaints Commission to try to corroborate a piece of information I had received when I was attending the G20 protest as a legal observer. Notwithstanding the level of CCTV coverage of that event, it was incredibly difficult to corroborate one piece of information I had received from a couple of demonstrators about the alleged activities of plain-clothes police officers in that demonstration.

That took place on 1 April 2009, with a considerable police presence, observers and CCTV coverage, and it was very difficult to pin down the information that I sought. The work that was done on events that happened many decades ago sets a standard for us in the UK and for other countries, indicating what a Government can do if they want to.

It was clearly right for the Secretary of State to reiterate the apology that has been given previously for what happened on that day. It was right also for him to recognise the sacrifice of many, many people who defended the lives of others in Northern Ireland, often at the cost of their own lives. Good progress has been made, but the work is clearly not yet complete.

I hope the Minister will respond to points made by the official spokesman for the Opposition, the previous Secretary of State, the right hon. Member for St Helens South and Whiston (Mr Woodward), on issues relating to public inquiries and his undertaking that there will be no others, and what the alternative will be. I hope also that the Minister will respond to the point about the funding for the Historical Enquiries Team. It has much more work to do and the funding issue needs to be addressed.

Coincidentally, today in Westminster Hall, I initiated a debate on consular services and the support available to British citizens when their loved ones are murdered or killed abroad. One thing that came out of that was the importance of ensuring that people had a clear understanding of the support they could get in such cases, from which agencies and from which Departments. I hope that out of this tragic affair—not that we anticipate a similar event occurring ever again on the same scale, but there may be individual incidents—the process will at least have clarified what support should be available for people if ever they find themselves in similar circumstances again, or if new families find themselves in a similar situation in the near future.

Finally, the right hon. Member for St Helens South and Whiston and others have spoken about reconciliation and the importance of moving the agenda forward. I know that the Government will provide leadership on reconciliation, and will engage with the devolved Administration to ensure that we move things forward in Northern Ireland. I am sure the Minister, the Opposition parties and the parties from Northern Ireland will want to work constructively on that in future months.

15:33

[Ms Margaret Ritchie (South Down) (SDLP)]

On 30 January 1972, the day known as Bloody Sunday, I was 13 years old, growing up in Northern Ireland, when 13 men lost their lives on the streets of Derry, and another man subsequently died some time later from his injuries. I can still recall vividly the events of that day as they unfolded on TV screens.

I can also recall the major impact of those events on the political landscape not only of Northern Ireland but of the island of Ireland—how these events acted as a catalyst for further years of pointless violence, death, destruction and political sterility, as well as further creating deep fissures of sectarianism and division within our community.

I welcome this debate and the fact that the former Prime Minister, John Major, opened the way for the inquiry, that Prime Minister Blair announced the inquiry in 1998, that Lord Saville was appointed to undertake the inquiry, that it took place and that it reported the events of that day in such an analytical and humane way, thus repudiating the Widgery report and vindicating those who died. I welcome the fact that the current Prime Minister, in his statement to the House on 15 June, stated:

“ What happened on Bloody Sunday was both unjustified and unjustifiable.”

He also said, “It was wrong.” He added that

“what happened should never, ever have happened…The Government are ultimately responsible for the conduct of the armed forces, and for that, on behalf of the Government—indeed, on behalf of our country—I am deeply sorry.”—[Official Report, 15 June 2010; Vol. 511, c. 739-40.]

I further note that that was echoed today by the Secretary of State.

There is no doubt that the Saville report and its findings, and the Prime Minister’s statement, dealt with all this in a very sensitive way and helped to bring solace, relief, vindication and comfort to the families of the Bloody Sunday victims and their friends. We in the Social Democratic and Labour party are still looking for some answers, and I hope that today’s debate and others will help to bring further closure and give answers to the people of Derry. There is no doubt that those people must be commended for being so joyous on 15 June as they showed their enjoyment in Guildhall square.

Saville’s report and the statement from the Prime Minister were welcomed the length and breadth of Ireland in political institutions. My colleagues in the SDLP, particularly my hon. Friend the Member for Foyle (Mark Durkan) and his predecessor John Hume, along with the local community in Derry, campaigned for truth and justice for the victims of Bloody Sunday and other atrocities.

Questions now arise. Where do we go from here? There has been much positive debate today, and there have been other comments, too. I simply urge that we speak about these events with a certain level of humility and generosity. There have been various debates, including in the other place, as well as statements and questions in the Northern Ireland Assembly and the Dail Eireann. I believe that we need to seek full clarification from the Secretary of State regarding the deliberations with the Ministry of Defence and the Secretary of State for Defence, and I want to refer to the question I asked the Prime Minister on 15 June, reported in column 752 of Hansard.

I asked when the report would be made available and whether its contents would be made available to the House. The shadow Secretary of State has asked whether it would be made available in the Library, as there are questions that need to be answered. What levels of redress will be made available to the families? What methods or apparatus will be put in place to deal with all the outstanding cases that have been plagued by indecision and the need for truth and justice? Reference has already been made to Finucane, but what about Rosemary Nelson and Robert Hamill? Outstanding cases are being dealt with by the Police Ombudsman for Northern Ireland, such as those of McGurk’s bar and the Loughinisland atrocity, in my constituency.

There is one overriding feature of all this. We are joined today in the Public Gallery by relatives of the families from Ballymurphy, who lost their loved ones in August 1971 after internment was announced. Those families lost loved ones, and the connection is that they were all shot by members of the Parachute Regiment. It is also believed—I put it like that—that some of those soldiers could have been involved in Bloody Sunday on the streets in Derry. Those families in Ballymurphy need truth. Ways must be found to relieve their immeasurable burden and grief. They require redress and compassion from the state; they require the stigma to be removed from them and for the innocence of the people who were killed to be declared. They require an inquiry to do that. I urge the Government to listen and to pay heed to their pleas. Mercy and compassion must be displayed. Many people in Northern Ireland and throughout the island and this country have lost loved ones because of what happened. Many families, not least my own, have been tinged by violence, destruction and death. A mechanism needs to be found to deal with all this in a very sensitive way.

We politicians—I mean all politicians, but particularly those who represent constituencies in Northern Ireland—need to build a truly shared, reconciled pluralistic society that has respect for political difference. It should have political institutions that are truly embedded and centred on the principles of partnership. The principles of social justice and equality should be allowed to prevail, thus enabling a new society to emerge and grow—a society in which violence and sectarianism are not allowed to fester and in which they belong to the past. We want a society in which it is possible to learn from the past and not to live in it and in which it is possible to show respect and provide truth to those who have lost loved ones no matter which part of the community they come from or what their political affiliation. We must ensure that conditions are laid down in which violence of the kind perpetrated in this instance by officers of the state, as well as the violence perpetrated by paramilitarism and the dissidents whom we totally deplore and repudiate, is never allowed to reign again on the island of Ireland.

15:41

[Bob Stewart (Beckenham) (Con)]

The events of 30 January 1972 are a hideous stain on the British Army’s reputation. It was a bloody day and a catastrophe. No soldiers were killed but 14 civilians were. Let us be quite clear that it was a total failure of leadership by 1st Battalion, the Parachute Regiment. I fully endorse the Prime Minister’s profound apology and the Secretary of State’s apology earlier today for what happened on Bloody Sunday. I was serving in the British Army at the time—as, I suspect, were a few other Members of the House—and I shall try to explain what we felt then. We in the British Army knew that a great wrong had been done; we did not need any Widgery or Saville to know that.

I was a young officer then. I joined my battalion, 1st Battalion the Cheshire Regiment, in January 1970 and the first thing I was told was that I was going to Northern Ireland on operations—my own country. That came as a huge shock. I had been brought up by my father and gone to boarding school, with my father fundamentally serving his country abroad on operations. I had spent most of my time in the middle east, so hon. Members can imagine my shock when I was warned that I was going to Londonderry within a couple of weeks of arriving in my battalion.

We started our training immediately, but we did not know what to do. We watched parts 1 and 2 of the film, “Keeping the Peace,” which was made by my battalion in the 1950s. We were being trained to go into Northern Ireland as though we were going into somewhere like Singapore, Palestine or Amritsar. It was dreadful. We did not know what we were doing. We practised dealing with riots at Weeton camp in Lancashire using formations that the British Army had so often used in the past. In the formation, we had snipers, cameramen, diarists and banner-men, and the banner that I was issued said, on one side “Anyone crossing the white line is liable to be shot” and on the other, “Disperse or we fire”. We took that banner to Londonderry, but what was farcical was that the second language on it was Arabic. We sought guidance from an officer with 1st Battalion, the Gloucestershire Regiment, Lieutenant Vince Hazlewood, and he suggested that we practise dispersing crowds by pushing concertina wire down the road. He said that this would work. It did not.

We deployed by car ferry to Belfast from Liverpool. I could not believe that. We were there with school trips and cars; it was just astonishing. When we got to Londonderry, we went to a place called HMS Sea Eagle, now Ebrington barracks, and from there we deployed into the city. We did small patrols of two men—I often went out with two or three people—and we made absolutely certain that our rifles were pointing skywards. The idea of us opening fire at our own people was just out of line. Out of line.

When the riots came, we were totally surprised. We went down Rossville street and William street in a sort of box formation à la Malaya or Aden. Immediately, we realised that we had made a mistake. About one third of my platoon were hurt, either with broken legs or with burns from petrol bombs. Do you know what? My goodness, we were frightened. I have been under fire quite a lot since then, but I want to tell the House how fearful it was being on the streets in those days and not having an answer as to how to behave. People were banging planks against walls to make it sound like we were under fire.

We did not use CS gas, we certainly did not open fire and we were not even allowed to draw our batons. We took to putting newspaper down the front of our trousers in wads to try to stop our legs being broken by the incoming bricks. I was in 6 Platoon, and my fellow platoon commander, Nigel Hine, in 4 Platoon, was caught by the crowd and had his jaw broken in three places. He bandaged it up and kept going through the night. He was the first officer to receive the MBE for gallantry in Northern Ireland. We were grossly inadequately prepared, and I suspect that that continued all the way through the early ’70s. We did our best, and the last thing that we wanted to do was to open fire. We had the yellow card, and we understood the rules of the yellow card absolutely.

The day of 30 January 1972 was a disgrace. It was also an aberration. One bad event can destroy thousands of good ones, and that was a bad event. Huge numbers of soldiers went through Northern Ireland. The House has already heard that 250,000 did so, and I pay great tribute to those who acted properly, did their duty and cared about the people of Northern Ireland. I remember them today, because more than 700 of them lost their lives—some of them, trying to protect people.

I end by simply saying, as so many Government and Opposition Members know, and as we knew at the time, that 30 January 1972 was an aberration. It should never have happened. It was a total failure of leadership, from battalion command down, and my goodness I hope that it never happens again. But I ask hon. Members, please to remember how well the British Army, the Royal Ulster Constabulary and all those concerned about what happened in Northern Ireland behaved right the way through the 38 years of the troubles.

15:50

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

I am very grateful for the opportunity to speak in this important and significant debate and to be able to follow a number of very powerful contributions, most recently from the hon. Member for Beckenham (Bob Stewart). I commend the Government for ensuring that there is this opportunity to debate the Saville inquiry report, its consequences and the related issues—and also, importantly, to do so at this juncture, there having been some four and half to five months since its publication, a period which has given many people an opportunity to read, consider and reflect on its contents before we discuss it in detail.

The publication of the report was a significant event for all of us with an interest in, connection to, or direct involvement in issues relating to Northern Ireland. As other right hon. and hon. Members have made clear, the time and financial cost involved in the inquiry was considerable. As has been powerfully advocated by other Members—I am sure that others will do so later—many families of those who lost their lives on 30 January 1972, and indeed the family of the victim who died some time later in hospital, have expressed their relief at having received some kind of justice. I use the term “justice” very tentatively. As Lord Eames said in the debate on this issue in the other place, there can be widely differing interpretations of justice. For some, the very publication of truth is sufficient for them to be able to move on. For others, quite understandably, justice is a much more complex issue that may require the progress on prosecution to which my right hon. Friend the Secretary of State referred.

Many in this House, several of whom we have heard from this afternoon, have much greater personal experience and detailed knowledge of the events of January 1972 than I do. There are now many Members of this House, including me, who were not born at the time of those events. Our experience has perhaps been limited to the footage or photographs of Father Daly with which we are all so familiar. However, I think it is without question that the events of that day had an impact on all parts of the United Kingdom, directly and indirectly, for many years afterwards. That is why it is crucial to deal with the report in the right way.

I understand and appreciate the reticence of many right hon. and hon. Members for there to be, in the words of the Prime Minister,

“no more open-ended and costly inquiries into the past.”—[Official Report, 15 June 2010; Vol. 511, c. 741.]

Given the time and financial cost involved, that call for an end to such inquiries appears, on the face of it, to be reasonable. However, it would be a mistake to measure the success—if I can use that term in this context—or otherwise of the inquiry purely on the basis of time and money, and a graver error still to use the experience of Saville to rule out any inquiries into other events to which we have heard reference. It is simply not possible to put a price on what the report has done, and will do, for the family of Jim Wray, who for years had a stain on his reputation. As one noble Lord put it in the debate in the other place, the report has allowed one victim’s family to get a proper night’s sleep for the first time in close to 30 years.

Removing suspicion from the events surrounding 30 January 1972, confirming the inadequacy of the Widgery report and providing the opportunity for many people to move on have all been results of the thorough and detailed nature of the Saville report, at least for some people. It has enabled all parts of the community in Derry to begin to take steps—perhaps tentative steps at first, but steps none the less—towards focusing on current issues of importance such as the economy, housing and education, which quite rightly preoccupy people and politics throughout the UK and beyond. We cannot put a price on that.

That is why a call to end future inquiries appears to many to be an injustice towards families of the people involved in Ballymurphy, Omagh and so on. The opportunity to provide access to the truth, and to the hope and potential that that truth provides, is something that we must not give away lightly.

Many Members have spoken of the work of the Historical Enquiries Team, and I am sure that Members will want to put on record their appreciation of the team’s valuable work to seek answers in individual cases. However, it is not reasonable to expect it to provide all the answers. It has exhausted, or come close to exhausting, its budget, despite being only somewhere near to halfway through its case load. I am not convinced that it is the right body to deal comprehensively with the large-scale and complex issues arising from some of the incidents that have been referred to this afternoon.

My view is that the Saville inquiry was the right thing to have initiated, and I commend those involved in the detailed decisions that were taken before it could take place. However, despite the Government’s positive and commendable response to the inquiry, particularly on 15 June, they have so far given scant detail about how exactly they intend to proceed. It is important that they do so, as I hope the Minister will in his closing remarks. I am sure that many people both here and elsewhere will be listening carefully to his words. The opportunity to cement devolution, and to anchor the lasting peace in Northern Ireland that so many people have worked so hard to promote for so many years, must not be lost.

15:58

[Patrick Mercer (Newark) (Con)]

It is a pleasure and a privilege to follow the hon. Member for Rutherglen and Hamilton West (Tom Greatrex). He made an extremely perceptive speech, and, with respect, a modest one given his level of experience. It was extremely informative, and I am grateful to him.

I am surrounded by a clutch of hon. and gallant Members, and we heard an extremely powerful speech from my hon. and gallant Friend the Member for Beckenham (Bob Stewart), a colleague and friend whom I have known for many years. I believe that he and I are the only two Members who have had the privilege of commanding infantry battalions. Before I come on to that, I thank the hon. Member for East Londonderry (Mr Campbell)—I am sorry that he is no longer in his place—for his speech, which put the whole Saville inquiry in context and was extremely important.

I suspect that the business of commanding a battalion is like no other. At one’s hand are 600 or 700 men, who are impressionable and not necessarily easily led, but who are looking to one individual in the battalion not just to lead them but to set the tone for the battalion, and to ensure that things go right, but that when things go wrong they are dealt with.

Curiously, I ended up as the defence reporter for the “Today” programme. In 1999, my editor requested me to try to find Colonel Derek Wilford, the commanding officer of the 1st Battalion the Parachute Regiment, who had not had a chance to speak on the radio about what had happened on that morning in January 1972. I eventually tracked him down and asked him whether he would like to come on the radio and put the perspective of 1 Para across to the British public, and he did so. I do not know how many hon. Members here heard that interview, but his testimony was jaw-droppingly embarrassing. He ended up being sued by the brother of one of the victims, who he suggested, quite clearly, was an active terrorist when he was not. It is interesting that the inquiry said that Colonel Wilford’s failure

“to comply with his orders”

set

“in train the very thing his Brigadier had prohibited him from doing”

and could not be justified. Colonel Wilford should not have launched an incursion into the Bogside.

It would be very simple to damn the Parachute Regiment—heaven knows it has enough enemies—but it is a fine regiment with a record that is unblemished in so many ways. None the less, that day there was a failure of leadership from one man, who had months before failed to provide leadership in west Belfast.

Worse than that, this involved not the whole battalion, but one support company that took its directions from one misguided individual who believed that he had some God-given right to put straight the situation in Northern Ireland. As a result, the names of the British Army and, to a certain extent, the Royal Ulster Constabulary and all the security forces in Northern Ireland were tarnished by the actions of a small number of maverick soldiers, who got it wrong, behaved badly and who were badly led. When I joined my battalion in 1975 in Ballykelly, my commanding officer repeated an old aphorism. He said, “There are no good regiments and no bad regiments. There are just good officers and bad officers.” How right he was.

I was extremely interested to hear the hon. Member for East Londonderry talk about the historical perspective. So far, he is the only hon. Member to have mentioned the broad spread of the history of violence in the island of Ireland. When I joined my regiment, I was conscious that the old Sherwood Foresters had been fighting in Ireland—or policing in Ireland—for two centuries.

Every time I go to the cemetery in Balderton outside Newark, I am conscious that three soldiers from the Sherwood Foresters, who were killed in Dublin in 1916, are buried there. Anybody who fails to understand the historical perspective of the 30 years of violence that we suffered in the latest set of troubles is, as Derek Wilford said, “horribly naive”. How do we deal with that? If we accept that this is an aberration and that honourable men and women have had their names besmirched on both sides of the argument, how do we deal with it?

Having listened to the comments from the Opposition Benches, particularly from the shadow Secretary of State for Northern Ireland, I suggest that if we are to proceed, we should do so even-handedly. We have to understand that there is a spirit of amnesty abroad. We cannot take out of retirement men who served 38 years ago and who were involved in this—for heaven’s sake, many of them are dead. We cannot bring these men in front of courts and say to them, “You did wrong. You are now being prosecuted.” We might have been able to do so 12 months or even 24 months after the incident—it might have been the right thing to do then—but we cannot do it now, particularly because in the interim we have had the Good Friday agreement, in which convicted terrorists, who have, in some cases, served their time, have had their sentences quashed or vastly reduced. There would be no justice in that, and it would be wrong in those circumstances for former soldiers now to be prosecuted, whatever the rights and wrongs.

We must not again have the length, cost and expense of first the Widgery inquiry and then the Saville inquiry. Great grief has been caused, particularly by the former inquiry, to the families of the dead and injured, who were besmirched for many years as being sympathetic to or even active in the republican cause. Soldiers’ actions were lied about, and men were able to shield behind deceit because of the length of the inquiry.

The spirit of amnesty has been mentioned. In the past 38 years, the various inquiries have provided an opportunity for violence and confrontation every time they reached a crossing point. For example, in June, I listened with great interest to a Sinn Fein councillor from Londonderry, who told me that everything would be brightness, sunshine and quiet, that closure had been reached and that people could now be forgiven. I said, “You’re wrong. This will beget violence.” The next day, a 200 lb bomb was delivered outside Aughnacloy police station. It did not go off, but anybody who has failed to notice what is going on in Northern Ireland needs to have their eyes opened.

We are again involved in a campaign by Irish dissidents. It should come as no surprise to anybody who can open a history book—one could start from Wolf Tone or wherever one wishes. However, approximately every 25 years, there is another pulse of violence and we are in the middle—or perhaps at the start—of one now.

Inquiries such as those that we are discussing do not help. If we must inquire—if we are to use the Historical Enquiries Team—it must be done quickly, effectively and with the utmost application of justice.

In the past few days, we have been absorbed by the threat of being killed or injured by Islamist fundamentalists. However, I know that, exactly as the Chief Constable of the Police Service of Northern Ireland has told us, we stand on the verge of another serious bout of bloodletting in the north, and the mainland will certainly be attacked.

If we are not to descend into another spiral of violence, we must learn the lessons of Bloody Sunday. We must ensure that our security services always operate within the letter of the law. Above and beyond everything else, we must ensure that justice and the rule of law are applied properly, quickly and effectively.

16:08

[Dr Alasdair McDonnell (Belfast South) (SDLP)]

I begin my brief contribution by extending a welcome to some of the family members of those who died on Bloody Sunday, and also to family members of those who died some months earlier in Ballymurphy. Their valiant efforts in the face of a great injustice have set the truth free. The courage and fortitude that they demonstrated to the world over many years as they fought for justice and truth are remarkable.

I commend and thank Lord Saville for his superb job in delivering an excellent report in difficult circumstances. He carried out his work admirably in those difficult circumstances. His conclusions are unambiguous and distinct. Any effort by any Member of this House to detract directly or indirectly from the integrity of Lord Saville’s report does a great disservice to both themselves and the House.

I want to commend the remarks of the two Conservative Members who served in the Army for the honesty and integrity of their comments, which flesh out the discussion and do nothing to distract from Saville.

The most important and crucial aspect for me was the generous and unequivocal nature of the Prime Minister’s bold and courageous statement and apology on the day that the report was published. That was a watershed. It was a tremendous statement, and it offered tremendous comfort to the families of those who were killed or injured and those who had suffered.

The understanding and sensitivity with which the Prime Minister treated this matter are a lesson for those who might wish to close their eyes and ignore the truth. We require truth, honesty and clarity in our relationships if they are to be worth while. Nowhere is that more necessary than in the relationship between the people of Britain and Ireland. Right hon. and hon. Members discussed some of the backdrop and spoke of the recurrent violence, but if we intend to break with the past and move forward to a stable and peaceful future, we must be honest and open in all such relationships, so that we can co-operate for mutual benefit.

We now have a political framework in place, but we did not have one in January 1972. Those of us who have a spirit of reconciliation and are mindful that ambiguity and lack of clarity creates space in which malevolence flourishes, are committed to ensuring that the circumstances of Northern Ireland in January 1972 never recur. Lord Saville’s inquiry is a tremendous antidote to the malevolent and malign influences that are out there. In discussing Saville and supporting the relatives and families of those innocent people who were killed, in no way do I or any of my colleagues give any consolation, support or justification to the Provisional IRA or those who orchestrated violence over many years; nor do we support the various dissidents.

It is important in this House and other places of authority that the truth is recognised and worked at. Comment has been made on the backdrop of the Saville inquiry, but I was drawn by a note that was taken a few days after Bloody Sunday. The Prime Minister, the Lord Chancellor and Lord Widgery held a discussion, of which a minute was taken. The Prime Minister thought it right to draw a number of issues to the Lord Chief Justice’s attention, including that

“It had to be remembered that we were in Northern Ireland fighting not only a military war but a propaganda war.”

For many of us, that propaganda war was taken a bit too far with Widgery—a great deal too far. That did the British Army and the British Government of the time a tremendous injustice. If I could appeal for one thing, it would be this. Let us be honest and open, as hon. Members are today. Let us tell it as it is and as it was. Let us deal with the truth. The state should never allow itself or its agents, whether military or otherwise, to descend to the level of the paramilitary thuggery in Northern Ireland. That thuggery is not a justification for misbehaviour on the part of official organs of the state. They cannot somehow or other justify themselves by saying, “The thugs were out there behaving in a similar way.” It is important that the state behaves within the law that it sets. That has worried me since I read the Widgery report, but let us move on.

The truth is that the 14 men and young boys who were murdered that day were innocent. That they were wrongfully killed is presented in a transparent and lucid way by Lord Saville. It is important that we now begin to heal the wounds that were created on that day. As I suggested, Widgery poured salt on to those wounds, but the families and the rest of us have put that into the past. People will move forward with confidence now that the truth is established.

Some question the cost involved in finding the truth. Those questions are reasonable, particularly in today’s difficult economic climate, and I fully understand that they are asked. It is incumbent on all of us who ask such questions to analyse how the costs were amplified. For me, the decision to relocate the inquiry to London in order to hear some testimony perhaps doubled—it at least significantly increased—the cost. A further multiplier was the continual obstruction, legal and otherwise, by Ministry of Defence lawyers and others acting on behalf of some of the witnesses. I say that with no malice: it was a factor in increasing the cost. The cost should not be laid at the feet of Lord Saville, who did his best in almost impossible circumstances. If some people had been prepared to tell the whole truth, the cost would have been cut probably by two thirds.

It is important to reiterate that Lord Saville’s inquiry was necessitated by the sheer dishonesty of the Widgery tribunal—I cannot emphasise that enough. That deception added insult to the injury that families suffered and further poisoned relationships between the Irish Republic and Britain. It was a lesson in how things should not be done and, in future, we have to ensure that the relationships within these islands work dynamically and co-operatively to our mutual benefit.

The Saville inquiry was ultimately borne out of the events that unfolded in Derry. I have no intention of dissecting those or going into them in any detail. Nor do I want to second-guess Saville. I urge hon. Members to accept the findings. Regrettably, the Parachute Regiment had—in my opinion, although I understand that others may not agree—to some extent been running amok in west Belfast, inflicting gratuitous violence and death on innocent people for some months previously, especially in the early weeks of August 1971 at the time of internment, when 11 people were killed within 48 hours. Their victims included a Catholic priest, who was trying to tend to someone who had been shot and lay dying, and a mother who was out gathering food for her children’s breakfast. There was no justification for many of those deaths and the families are justified in seeking the truth. They are not looking for a big scene: they are looking for clarity. Their brothers, fathers and mothers were described as gunmen, and that accusation has never been withdrawn.

The financial cost is important, but pales into insignificance when compared with the suffering of the families. Michael Kelly was 17 years old when he was killed on Bloody Sunday. The soldier who killed him tried to smear his name, claiming that Michael was in possession of a nail bomb. That lie was utterly refuted by Lord Saville. Michael’s brother, John, captured the essence of the inquiry when he said that

“anyone attacking the inquiry is attacking the families. Michael was walking on a peaceful civil rights march when his life was taken from him…This is a non-political, purely civil rights issue.”

16:18

[Kris Hopkins (Keighley) (Con)]

I reiterate my support for the Prime Minister’s comments and the apology that he made back in June. At the time, I said that it was difficult for me, as an ex-soldier, to hear the words that were said and their context. I watched the television that evening and I was shocked—it had quite an impact on me—by the response from the crowds in Londonderry, the huge relief that they felt and the applause that they gave the Prime Minister for his stance. That reinforced my view that the Prime Minister had made the right decision.

As a former soldier, I was one of the 250,000, but rather than being a gallant officer, I was a private. I have never been to Londonderry, but my views and opinions have been formed by the experiences that I went through. The IRA tried to shoot me on the New Lodge road, and tried to blow me up in a 16-round mortar attack in Bessbrook. That fossilised my view of the organisation.

I stood on a cordon in Newry when the bodies of those who were shot in Gibraltar were brought through from the south, and saw the huge response from the town. In the days following that, Milltown cemetery was attacked by a lunatic throwing grenades and shooting members of the congregation who were trying to bury their loved ones. That had a massive impact on me and my colleagues, as well as on the people and communities there. In the days after that, I was about to go on patrol when I saw what I discovered later to be two young corporals being dragged from their car. Later, I saw a video of them being executed on the ground in Springfield road. That was grossly horrific to watch.

We have talked about soldiers and some of the ways of interpreting what they did. I was out on patrol with a group of colleagues when we came across a Catholic fireman who had been shot in the head, chest and arm. We tried to save his life, but we failed. His only sin was to be a Catholic in a taxi in a Protestant area. We saw it as our job to try to save him; it was not a bolt-on. It was part of our role to try to save that person’s life, and I was saddened that we did not.

Two members of my unit committed suicide while they were over there, and one lad lost his leg. My regiment, and those before and after, served with great honour and courage. I have worked with the Parachute Regiment, which is fantastic. It consists of men of great honour and courage, and goes back a long time. I had the privilege, as leader of the council, of offering the 4th Battalion the freedom of the city of Bradford just six months ago. It is a privilege to be in their presence. What was done on that day was wrong and horrific, and badly damaged its name, but I tell the House it is a good regiment with good people.

I am not sure whether what I have just said offers any comfort to the families who lost loved ones, and the people who were injured on that day, but I am trying to explain the context as I see it. I am sure that as many people as served in the Army saw the Saville report, and had the toe-curling experience as a soldier of hearing the Prime Minister’s words.

Since leaving the Army, I have done a lot of photography, and I taught it at university. Because of my experiences, I have examined a lot of war photography, including Capa’s photograph of D-day, the girl burnt by napalm in Vietnam, and the recent horrific photographs from Iraq of the abuse of prisoners. One that had a huge impact on me is that of Father Daly, a priest in the United Kingdom, begging for safe passage for injured people. What a terrible situation to have in our country.

The damage that was done by Bloody Sunday can be seen in an historical context. I was given a piece of paper when I first went over there. It talked about the Romans invading Britain. We had to understand our place, as we went into Northern Ireland, in the context of those few scraps of paper. Bloody Sunday was hugely damaging, and the responsibility on those individuals who failed is great, when we remember the damage that they did to the populace and to the country.

However, some individuals did try to find a different place. I pay tribute to John Hume, Lord Trimble and former President Clinton, as well as to the combatants who chose a different path. I experienced a sense of disbelief when I saw some of the players coming together to shake hands and try to find a solution. I honestly did not believe some of the imagery that I was seeing, because it was so heart-warming; it was a tremendous place to be. I remember watching people arguing the toss about water rates, and thinking how great it was that they were not trying to kill each other.

Having said all that, and having thought how wonderful it was that such a great effort had been made to find peace, I was at a meeting at the Tory party conference recently with Mr McGuinness and I felt absolute revulsion and anger when he walked into the room. So it is great for politicians it, but, that moment involved a huge journey and a massive leap for me. But as he spieled his spiel, and as the media and the Secretary of State challenged him, I realised that that was the place where we needed to be. That is why those Members should be in this Chamber, where they can be held to account. That is the politics of the future.

In a couple of weeks’ time, we shall be celebrating and commemorating the lives of the individuals who have died. Another event that occurred when I was over there was the bomb at Enniskillen. I do not know how Gordon Wilson found the strength to say that he would not hold a grudge, and that he did not want to use “dirty” words at a time like that. That was tremendous. In answer to my own question about whether we should drag people back into inquiries, I believe that we need to grasp the moment now. The ground has been set for political debates about water rates, and this is not the moment to go back over all the issues of the 3,000-plus, including the 1,000-plus soldiers, who were killed, and of the brutal events that took place. We need to argue about water rates. We need to hold the Government to account about the comprehensive spending review. Those are the things that need to be sorted now. Northern Ireland needs to be a normal place, and that is the future that I want to see.

16:28

[Jim Shannon (Strangford) (DUP)]

I wish to make a contribution to the debate. Much was said at the Bloody Sunday inquiry about how British paratroopers fought to control the streets of the “maiden city” of Londonderry. The inquiry lasted 12 years and cost almost £195 million, and I would like to focus on that, as well as on some of those who have not been mentioned in the Chamber today.

People ask whether the inquiry was cost effective, whether it lasted too long, whether its conclusion was honest and whether it delivered all the answers. The question that many people ask me is whether it will be the last of the nationalists’ demands for an inquiry. We suspect not. Was the Bloody Sunday inquiry value for money? Did it help Northern Ireland to move away from the past and to move forward? Should £195 million have been spent to prove what some people feel was turned into a political point?

I want to focus on the money for a moment. Some of those involved in the inquiry have consistently said that they could have earned more elsewhere. Indeed, one of the inquiry’s leading defence barristers said of the criticism made against him that his earning of £4.8 million was unjust, as he could have earned up to three times that amount by doing work elsewhere. Many of us feel that that is untrue; we do not believe it.

Speaking as a Unionist, I am sick, sore and tired of being told that we must forget the past by those who refuse to forget it and of being told that we must move forward. I am all for moving forward—and fully, totally and absolutely support the political process in Northern Ireland. I am 100% behind that; I believe it is the correct way to go. It is good that those who were once involved in activities that are abhorrent to me and the Unionist people I represent have accepted that democracy and a democratic system are the way forward. That is what I want to see. I fully support that.

I want to be able to focus on the economy and jobs and on opportunities for my children, my grandchildren and everyone else’s. The hon. Member for Keighley (Kris Hopkins) is right that we should be focusing and it is good that we are able to. Some people, however, still want to hold on to the past and still want to bring up inquiries, talk about things of the past and spend even more money on stirring up and creating division.

Lord Saville spent some five years writing up his 5,000-word submission and report. At the same time, the information technology for the inquiry cost some £34 million. I would ask whether all these costs were absolutely necessary. Was it necessary for it to go on for such a long period? I understand that Lord Saville spent £175 each night on his hotel. For the record, I point out that the Independent Parliamentary Standards Authority allows us only £135 a night. I make that point as a small comparison, but it is worth making. The rent of the Guildhall in Londonderry was £500,000 a month. Where was all this money going? Was it absolutely necessary? Flights totalled up millions. Some aircraft companies made a small fortune out of people flying to and fro between Northern Ireland and the mainland.

What the inquiry did not do was deliver an apology to the law-abiding people of Northern Ireland, particularly the Unionist people I represent, who daily faced death. It also failed to apologise to those who wore the Royal Ulster Constabulary uniform or the British Army uniform. I want to say clearly, honestly and frankly here today that the British Army needs to know that the politicians will support it wholeheartedly, both in word and deed. I do and I will, and many other Members will do the same.

Some Members have spoken about other incidents in Northern Ireland and it is worth focusing on some of them. Has there been any talk about having an inquiry into those who were burned alive La Mon? They were attending a dinner, but were brutally murdered. Has there been any talk about inquiring into a person—my hon. Friend the Member for East Londonderry (Mr Campbell) referred to him—who has apparently walked away from his past and joined the democratic process? According to the inquiry, this person said he was carrying a machine gun on the day of the incident. One thing I can tell anyone for sure—he certainly was not using it to shoot rabbits. Has there been an inquiry into the Remembrance day atrocity at Enniskillen, which the hon. Member for Keighley mentioned? No, there has not been. Has there been justice for those people? No there has not.

Have we seen justice for the people involved in the Darkley Hall massacre? For those who may not know what took place there, men, women and children were attending a church service. They were worshipping God, yet some were killed and some were injured. Has there been justice for them? I do not believe so. What about the 10 workmen murdered on their way back home after work at Kingsmill near Bessbrook in South Armagh? Can we have justice for them? I think we should. What of the four Ulster Defence Regiment men murdered outside Ballydugan, Downpatrick, three of whom I grew up with and one of whom I knew exceptionally well? Is there justice for them? Is there justice for my cousin, Kenneth Smyth, a former B-special man and UDR sergeant, and his Roman Catholic friend who were murdered by the IRA? I do not see it.

I commend the good work done by the Historical Enquiries Team and I commend how it is trying to help people come to terms with their past. It is good that that is being done.

I hope you will forgive me, Mr Deputy Speaker, if I become agitated and perhaps a wee bit annoyed when I hear republicans ask for an inquiry into what happened at Ballymurphy when £195 million has just been spent on another inquiry. Is it necessary? Will it help us to move forward? Will it create a better future in Northern Ireland? Will it help communities to gel, to work together, and to focus on the things that matter—the things that were mentioned by the hon. Member for Keighley? I do not think that it will. Do we want another inquiry into Ballymurphy?

[Dr Alasdair McDonnell]

The families in Ballymurphy have asked for a withdrawal of the slur on their loved ones. By referring to some political activists who are exploiting them, the hon. Gentleman is distorting the facts. The families are just looking for the truth: the simple truth. If there is another way of getting the truth, let us have it.

[Jim Shannon]

I am all for getting the truth—I am the first person to put my hand up for that—but I want truth for other people as well. I want truth for the people at Darkley Hall, the people at La Mon, the people who were at Enniskillen on Remembrance Sunday, and the people who were murdered at Ballydugan. I want the truth for all those people. If we are to have truth, we must have it for everyone, not just for selected people. The fact that this process seems to be trying to obtain the truth for selected people is what annoys me.

Let us be honest: that £195 million could have been spent on things that we should all like to see. It could have built schools, hospitals and bypasses. It could have paid for hundreds of operations, and enabled the elderly to be looked after. It could have provided services from which everyone could have benefited. The legacy that we have is a legacy of tears. I cry in my heart, and other Members cry in their hearts, every day. We shall have that legacy with us all our lives: it will never leave us. When it comes to tears, when it comes to hurt, when it comes to pain, we have that as well.

I want to see the people whom I represent being looked after, and receiving an adequate response from the Government. I do not want to see barristers living off the fat of the land and receiving large wages as a result of inquiries. I never want to see another inquiry that drags up the past and, by its very nature, does not help us to move forward. I want to see a future for my children and grandchildren, and I want to see fairness for everyone in Northern Ireland. I want to see that happen for the Unionist people whom I represent, and it is my duty to say that in the Chamber today.

16:37

[Mel Stride (Central Devon) (Con)]

I welcome the opportunity to speak, although I recognise that I do not possess as intimate a knowledge and involvement in Northern Irish politics, or the troubles, as some other speakers—including my hon. Friend the Member for Keighley (Kris Hopkins), who spoke particularly movingly about his experience in Northern Ireland—and I therefore speak with some humility.

Any armed conflict that continues over many years and arrives at the point at which it has arrived in Northern Ireland—where it can be said that we are at least in the arena of peace—is likely to involve many significant and often critical events along the way. The hon. Member for East Londonderry (Mr Campbell) rightly reminded us of the turmoil, both political and in terms of the violence in Northern Ireland, that was occurring at the time of the beginning of the troubles and the establishment of the civil rights movement. We saw internment in 1971 and the creation of the Provisional IRA in 1970; in political terms, we saw the rise and false dawn of Sunningdale and its collapse early in 1974.

However, it seems to me that, for better or worse, there is no getting away from the fact that Bloody Sunday, 30 January 1972, sits as a fatal day, a fatal moment in Northern Irish history. It was a recruiting sergeant for the provisional IRA, and, as was stressed by the hon. Member for South Down (Ms Ritchie), that in itself led to the inexorable rise of violence. I also believe that the publication of the Saville report on 15 June this year marked another of those critical moments in the journey towards peace, not just because the report pursued the truth for the individuals who lost their lives that day and their families, but because, as many Members have said, righting the wrongs of Widgery was such an important part of the mix. In my view, it has helped to restore confidence in British justice, not just here and on the island of Ireland but further afield. It is also a critical moment in the journey to peace because of the reconciliation it has brought between the various communities in the north of Ireland.

The hon. Member for Belfast South (Dr McDonnell) spoke of the response to the Prime Minister’s statement from the Guildhall square in Londonderry. Who would ever have imagined that a British Prime Minister would have been applauded and cheered there at that time? The Prime Minister said that the actions of the soldiers on that day were unjustified and unjustifiable, and the Taoiseach described his words as brave and honest. These are all important moments that we need to take into account when considering Saville.

The hon. Member for South Down said that we should consider the report with humility. That is a good word. In the debate on Saville in the other place, Lord Eames used the phrase “very sombre”, explaining:

“I use the word sombre because I can think of no other appropriate word which would remove triumphalism, or any other equivalent word, from that occasion.”—[Official Report, House of Lords, 13 October 2010; Vol. 721, c. 524.]

It is important that we go forward from Saville bearing in mind that no triumphalism should be associated with any aspect of either what happened on Bloody Sunday or as a consequence of the Saville report.

The report’s conclusions were, in part, extremely damning. I do not intend to rehearse them now as many speakers have talked about the actions of the soldiers on the day, but some more sympathetic comments were also made which I think should be given an airing in this Chamber. Lord Saville said the acts on that day were the acts of some, not of all, and he commended the restraint shown by many soldiers. He also pointed out the difficulty in separating the rioters from the ordinary marchers and, as we have heard from the Secretary of State, he rejected the idea that there was some kind of intentional plot to set out to kill people that day. He noted, too, that there was paramilitary activity that day. Martin McGuinness was probably armed with a Thompson sub-machine gun, and it is probable that he fired his weapon.

I have read the Saville report—not every word, but a substantial portion of it—and the following extract is one of the most poignant and important passages:

“It is a well-known phenomenon that, particularly when under stress or when events are moving fast, people often erroneously come to believe that they are or might be hearing or seeing what they were expecting to hear or see.”

I am very thankful that I have never been a young man of 19 with my finger on the trigger of a gun and having to take a split-second decision as to whether a failure to fire might cost me my life.

It is important that we recognise, as some speakers have, the sacrifice and service of our security forces, intelligence services and the Royal Ulster Constabulary—and the Police Service of Northern Ireland today—for all they have done to try to bring peace and a better quality of life to Northern Ireland. More than 600 service personnel have died and more than 6,000 have been wounded since the troubles began. We owe them a very great deal.

I wish to talk briefly about the costs, an important topic about which we have, perhaps, not heard enough this afternoon. The figures speak for themselves: Saville has cost £191 million and taken 12 years even though we were initially told it might last for only two years. One reason for that is that the scope of the inquiry was very broad—a decision taken by Lord Saville himself, I believe. Also, all the details were drilled down into—every single soldier who fired every shot, and all the other evidence surrounding the incident—instead of a more general view being taken which might have come to just the same conclusions and made the whole process quicker.

[Stephen Phillips (Sleaford and North Hykeham) (Con)]

One of the criticisms rightly levelled at the Widgery inquiry and report was that the scope had been too narrow. Does my hon. Friend agree that Lord Saville was right to go into all of the circumstances surrounding the events of that dreadful Sunday?

[Mel Stride]

My hon. and learned Friend makes an important point, and I am certainly not here to defend the Widgery inquiry, which sat for just three weeks directly after Bloody Sunday and came out with what most of us now accept was a complete whitewash. However, there is a balance to be struck and on the point that my hon. and learned Friend raises, Sir Louis Blom-Cooper, writing in The Guardian on 17 June, said:

“The overriding factor in the expansiveness of the oral hearings was a misjudgment about the nature and scope of public inquiries. The purpose of an inquiry is not primarily to apportion blame on any individual participant in the event under inquiry. Specifically, the tribunal positively may not determine civil or criminal liability; that is for the courts.

The aim is to find out what happened and how it happened, and to learn lessons.”

So one aspect that we need to examine closely is the scope that Saville chose.

We also need to take into account the fact that this happened 38 years ago; the interested-party status that was afforded to a number of people and the legal bills that went with that as a consequence of the wide scope; the various appeals from the Ministry of Defence; the fact that the case was not heard entirely in Londonderry—for a period of 13 months it was heard in London, which alone apparently had a price tag of £10 million—and the use of technology, with the virtual reality reconstruction of Londonderry as it was on that day. All that, bit by bit, incremented the cost to the level that we have heard.

I believe that there was an overarching dynamic at work on the costs, and we have heard about it from the Secretary of State and others. Given the history of Widgery, for the Saville inquiry to be seen as effective, valid and uncompromised it had to be left alone to do its work. The problem is that when that situation is arrived at, and with a judge who is not a business man, the control of the costs is let go. I shall quote one example in this regard. It is very important because, wherever the control of costs might be expected to have lain, the reality is that because of the sensitivities of the peace process and the historical context of Widgery, they inevitably could have lain only with Lord Saville and the tribunal.

I shall quote part of the question that I asked Lord Saville during the Select Committee hearing. I asked:

“would you not accept that, if you have a process––an inquiry––that lasts 12 years and costs over £190 million, it is inevitable that there would have been efficiencies that could be applied––maybe only discovered with hindsight––that could have delivered the same quality of result but at less money and less time? And if you do accept that, what, with hindsight, would those changes have been that would have delivered it quicker and at less expense?

He replied:

“I am not sure I can accept your premise”—

that being the idea that something could have been saved. He continued:

“I strongly suspect that you could have gone and got 10 quid a night off the hotel accommodation costs or something like that, or you might have been able to, but if you are talking about really substantial sums, I am not aware of anything, looking back, where we could…have done better.”

That illustrates the point more powerfully than any other I could make that we had a judge in charge who was not a business man—of course we should never have expected him to have been that. He was a good judge, and he has produced a very thorough and detailed report, but he and his tribunal would never be expected to control costs.

I wish to talk briefly about future inquiries. As the Prime Minister has suggested, we have to draw a line under future inquiries of this nature. If we do not, we will get into the business of some kind of hierarchy of victimhood, involving those who should be given this kind of opportunity and those who should not. We must not go down that road. It is time for Northern Ireland to move on. It is time for Northern Ireland to start focusing on the big issues, such as the economy, rather than the past.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. I find myself in the position of being able to extend the time limit for the remaining speakers who are here to 15 minutes.

16:44

[Mark Durkan (Foyle) (SDLP)]

Thank you, Mr Deputy Speaker. As the MP for Foyle, for the city of Derry, I welcome the fact that we are having this debate on the Saville report, as was promised. I appreciate the many contributions that we have heard. I do not agree with some of what has been said, but it is important that this House, having established the inquiry, should take the proper time to debate and reflect on the report.

It is important, even on this day, to remember that we are talking about an event that took the lives of 13 people on the day and one more later. We should remember them by name: Gerald Donaghey, 17; John Young, 17; Michael Kelly, 17; Kevin McElhinney, 17; Jack Duddy, 17; Hugh Gilmour, 17; William Nash, 19; Michael McDaid, 20; James Wray, 22; William McKinney, 26; Gerard McKinney, 35; Patrick Doherty, 32; Bernard McGuigan, 41; and John Johnston, 55, who died later.

We should also remember that people were injured that day—again, innocent people. They were Damien Donaghey, Michael Bridge, Alana Burke, Michael Quinn, Patrick O’Donnell, Patrick McDaid, Alexander Nash, Margaret Deery, Michael Bradley, Patrick Campbell, Joseph Mahon, Joseph Friel, Daniel Gillespie and Daniel McGowan.

When we talk about these events, it is important that we do not talk just about an inquiry and a process of reports. It is important that we remember other victims, as hon. Members have reminded us. It should be recalled that on 15 June the Bloody Sunday families, as well as celebrating the verdict in the Saville report of the innocence of their loved ones, and as well as celebrating the articulate and compelling apology that was given by the Prime Minister in the House, took time to remember all the victims of the troubles. They did not think just of themselves. They did not think that they were the only ones who had been denied justice and truth, or that they were the only ones who had suffered in the bitter troubles that we have gone through. That needs to be remembered, in case some of us in the political arena turn this, unfairly and falsely, into an occasion for “what-aboutery”.

Many people have offered assessments of the Saville inquiry. I commend to Members an assessment of the Saville report—that is what it is called—produced last week by the International League for Human Rights. In particular, I commend the work of two respected human rights lawyers, Bob Muse and Jack Bray. Interestingly, back in 1972 the league did an assessment of the Widgery report as well. The assessments examined both in their time, and examined the evidence that was available then and now. They are not very long reports but they make compelling reading.

It is important for the House to remember that there are many other questions arising from the Saville report, so I join my hon. Friend the Member for South Down (Ms Ritchie) in asking the Minister, when he replies, to tell us what has become of the report that was to be prepared by the Secretary of State for Northern Ireland and the Secretary of State for Defence and given to the Prime Minister. Has that report been prepared? Are there other reports and will they be shared with the House and the wider public?

It is not enough for the present Government to say, “A lot of the questions that arise from Saville are not questions for us.” People might say that the question of prosecutions will fall to the prosecuting authorities in Northern Ireland—to the police and the Public Prosecution Service. There is also the issue of whether there are to be prosecutions here in relation to any perjury that may have been committed when the inquiry took evidence here in London.

The question of the inquests is now a devolved matter. Many years ago the inquests that took place could deliver only an open verdict. That was all they could do. Now, in the light of what has become available by means of the Saville report, the families are clear that they want to see that issue addressed. I know that that will have to be followed through other channels, not just here in the House.

I have listened carefully to what other Members said, and I noted that the hon. Member for Tewkesbury (Mr Robertson) made the point that one of the problems with an inquiry into events so long ago was the difficulty of memories failing. I do not know whether, when he said that, he had in mind the case of General Sir Mike Jackson, who gave evidence twice at the inquiry. The first time he was in the witness box, in April 2003, he failed to mention that within hours of the shooting he was the person who wrote the account that became the received state version—effectively, the official version—of what happened. When he was back in October 2003, he agreed that he had provided such an account. He also said that he had written out the accounts of the shooting by the commander of 1 Para, Derek Wilford, of the commanders of each of the three companies deployed and of the battalion intelligence officer. He said that he wrote their accounts—that that was what he prepared—but in evidence, none of those officers remembered any such thing happening. The question arises whether he came up with the whole narrative himself. Was he the webmaster at the heart of a syndicated deceit that became the propaganda version—to use the words of the Prime Minister in his conversation with Lord Widgery—that went out through British embassies and the British media on the night of Bloody Sunday and in the days after, and again in the Widgery tribunal?

What happened with Widgery and with that relentless misrepresentation of the events of Bloody Sunday, which involved not just the Army and the soldiers who were there on the day but all sorts of agents of the British Government and the British state, was that lies were erected on stilts and they strutted the world to crush the innocent name of the victims of Bloody Sunday, who died marching for justice in their own streets and offering no violence.

When lies are erected on stilts in that way, dismantling them unfortunately means that a judicial inquiry, a proper, thorough judicial inquiry, was needed. Given all the circumstances, that was going to take time and money. I wish it did not take as much money and that it did not take as long, and I know that many of the families do, too, so let us get some of these things into perspective.

Questions also arise for the Government regarding the Saville report. If they are taking full responsibility—we have heard that phrase used—what are the consequences of that responsibility? Is it just a case of the articulate apology in this Chamber that was so well received in the Guildhall square in Derry? Was that enough? Does that mean that it is over? Are there other questions to be asked?

What of the position of the Parachute Regiment? They were not just involved in Bloody Sunday; as other hon. Members have mentioned, there was Ballymurphy and Springhill. Let us remember that in September 1972 there was Shankill, where the paratroopers again killed two innocent Protestant men. In a poignant irony, one was called McKinnie and one was called Johnston—names that appear in the list of the innocent dead in Derry as well.

Is anybody going to look at what was going on with the Parachute Regiment and its use and deployment? Many of us, when we look at the Saville report, welcome the clear findings on the events of that day and the detailed findings on each and every one of the shootings that took place. We feel that Saville left other questions perhaps not fully accounted for. Should people have known what was going to happen as a consequence of the deployment of the paratroopers that day? If John Hume—and, as evidence now shows, officers of the British Army at the time—had serious worries about the paratroopers, given what had happened in Magilligan, should nobody in charge in government and no commanding officers have had any worries or anxieties about their deployment?

It is quite clear that the RUC senior officer in Derry at the time had serious qualms not just about the Paras being brought in but about the tactics and approach that were being used. His concerns were brushed aside. In the debate in the other place, one noble Lord suggested that part of the problem that day was that unfortunately the RUC local commander was not available as he had the day off. The concerns and position of the RUC commander, Frank Lagan, whom I knew personally, were dismissed on that day.

Wider questions should be asked about the thinking of the Government and others in command that day. People find it hard to believe that this aberration, as some hon. Members have called it, just boiled down to a lack of fire discipline on the day by some squaddies and to the madness and irresponsibility of one officer, namely Colonel Wilford. Let us remember that in the aftermath of Bloody Sunday—little more than a year later—Colonel Wilford received an OBE in the Queen’s honours list. I understand that there is an Honours Forfeiture Committee; is it considering the honour that was given to him? It came as a huge insult to people not just in Derry but throughout Ireland because they saw it as his reward for what had happened on Bloody Sunday—for the injustice and murder of that day and for the lies that were concocted and propagated thereafter. What is being done in that regard?

In the years after Bloody Sunday, the families of those victims, like so many of the grieving families of the troubles, received pretty insulting ex gratia payments. They were told in December 1974 that they would receive those very small amounts of money and negligible compensation was awarded in the name of so many of the young dead who were unemployed or who had no dependants. Those families had to suffer not only the level and terms of those payments, most of which they did not take themselves but passed on to charities or gave away because that is how they felt about them, but being caricatured, besmirched and traduced by a cartoon in a British newspaper—The Sun, I think. Because the news came on 18 December 1974, The Sun did a cartoon showing Santa with £250 notes coming out of his sack.

Let us remember what the Bloody Sunday families have been through. In trying to correct the injustice of that day, they have faced insults, injustice and indifference and they have put up with prevarication and provocation. Let us be clear that they have achieved something not only for themselves but for those who search and thirst for justice in other parts of the world where people face the violations of unaccountable power.

May I correct the suggestion by some hon. Members that Lord Saville’s report deals only with the events of Bloody Sunday? It deals also with the context in which Bloody Sunday happened: there are nearly 1,000 pages dealing with events before and leading up to that day. It deals with other deaths, including the murder of the two policemen in the days before. I was at the funeral mass of one of those policemen on the day before Bloody Sunday. That morning, I heard Father Anthony Mulvey condemn the murder by the Provisional IRA; he condemned the IRA, its efforts and its effects not just for what it did to those policemen but for the threat it represented to everyone else. I then heard Father Mulvey again, on the Sunday night, condemn the murder by the paratroopers. He was right about the Provos and he was right about the Paras. Some of us have always held to that line and we welcome the fact that the Saville report has at least released many people from the burden of the wrong verdict on Bloody Sunday—but unfortunately not all.

15:47

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

Mr Deputy Speaker, may I thank you very much indeed for giving me the opportunity to speak in this debate? I am not going to pretend for one moment that I am a great expert on Northern Ireland, but I am beginning to get better at it as I continue on the Northern Ireland Committee.

Before I go any further, however, may I pay tribute in my role as vice-chairman of the all-party group on the armed forces, with special responsibility for the Royal Marines, and as the Member for Plymouth, Sutton and Devonport, to those Royal Marines and royal naval sailors who also ended up losing their lives during the troubles in Northern Ireland? They left behind families and wives who also needed, no doubt, to grieve, and it is important that we pay tribute to the service personnel who lost their lives during those times.

I shall try to keep my contribution brief. I had a great-grandfather who told me that he did not mind his congregation looking at their watches, it was when they started shaking them that he became quite concerned, so I shall try to ensure that nobody—I hope—shakes their watch during my speech.

I am pretty sure that Tony Blair did exactly the right thing in setting up the inquiry, and that Lord Saville has made an incredibly good job—a very thorough job—of the whole process. Most certainly, the people of Northern Ireland now have to try to move on, and I suspect that that means ensuring that they have a grieving process that they can work their way through, so that they can come out the other side. I hope very much that what happened during the inquiry has helped somewhat towards that. I suspect that the reason why it took a large amount of time and effort to ensure that the Saville inquiry was so thorough, and why it answered many of the questions that many people had, was that the previous inquiry, the Widgery inquiry, was such a botched job.

I shall concentrate on the process, because, although I do not know Northern Ireland particularly well, in my short time on the Northern Ireland Committee I have become quite concerned about how the process was gone through. The inquiry cost £190 million, a shed-load of money, and if we were not in difficult times and suffering as far as the public finances are concerned, that might not have been taken into consideration, but in places such as Plymouth, people will most certainly be very concerned about it. Others have spoken about that issue, however.

I am also concerned about the fact that when Lord Saville talked to the Committee during its investigation of his inquiry, he seemed to disregard the idea of having any budgetary control. He said that he needed to ensure that he did the job thoroughly and well, which he most certainly did, but he did not seem to grasp the issue of the public finances. I do not blame him, because that was not necessarily his job, but somewhere in the process a problem occurred, and we have to take cognisance of it and take action to ensure that something similar does not happen should we decide to undertake another public inquiry, whether it be on Northern Ireland, a train crash or a terrorist attack. We need to ensure that we learn from the process in a big way.

I was obviously not a Member when the inquiry was set up, so I come to the issue with a certain amount of hindsight, which is lucky for me, but the lesson that we have to learn is that the process has to be handled much better. I should like to ask a number of questions, and the Northern Ireland Committee might need to ask some more people to come along and have a conversation. Indeed, I may suggest to the Committee’s Chairman, my hon. Friend the Member for Tewkesbury (Mr Robertson), that we invite the former Secretary of State for Northern Ireland, the right hon. Member for St Helens South and Whiston (Mr Woodward), to explain the process that he ended up going through and how that process occurred.

Was it right, for instance, for the Northern Ireland Office to be responsible for the process? Should it not have been the Lord Chancellor’s department or the Department that was then responsible for justice? Perhaps they should have had a role. After all, they have to deal with judges and lawyers on a regular basis and find out whether they can do a financial deal. I am sure that many of the legal firms that were engaged in the process have done and will do a lot of work for the Government, so perhaps we need to make sure that they did not charge the full hourly rate.

We must then ensure that there is some form of budget and that the Public Accounts Committee has a regular report made to it about how everything is going so that there is much more of a spotlight on it. We had a conversation with someone from the Northern Ireland Office who said that they had invited Lord Saville to talk to them about the budgetary constraints and so on, and he was rather dismissive and said no, he was not going to do that because it could have impugned his independence. I was slightly concerned about that. We are talking about public money—money which, as taxpayers, we end up paying our taxes for. It is very important that there is greater accountability and transparency in this regard.

Furthermore, is it right and proper that a judge, who is part of the legal profession, should be responsible for recruiting these people and deciding who should be handling some of the legal issues? There has to be more transparency in that regard as well.

This has been a very useful debate, and I am delighted to have had the opportunity to take part in it. I am sure that there is more yet to be teased out in this whole process. I look forward to talking to those at the Northern Ireland Office to ensure that they have understood some of the lessons on having a greater ability to control how expenditure takes place and controlling the process so that it does not go on for 12 years and we do not spend some £190 million on it.

17:11

[David Simpson (Upper Bann) (DUP)]

This has been a good debate. We are dealing primarily with the Saville inquiry, which of course leads us on to Bloody Sunday. However, may I again remind hon. Members that in Northern Ireland, for a period heading on for 40 years, there has been Bloody Sunday, Monday, Tuesday, Wednesday, Thursday, Friday and Saturday? With the greatest respect to right hon. and hon. Members of this House, apart from those who have served in the forces and those of us who live in Northern Ireland, they have absolutely no idea what it was like to live through the very worst of the troubles and the hell on earth that the population in Northern Ireland had to live through. It was horrific—absolutely horrific.

We know that a lot of families lost loved ones. In my own family, I lost four who were butchered by the provos. The only crime they had committed was that they had the guts to put on the uniform of the Crown forces. Because they did that, the provos took them out. They did not murder them—they butchered them. For some families in Northern Ireland, the Saville report provided a form of conclusion that they sought. For many more families, it served only to perpetuate the ongoing denial of the truth about the deaths of loved ones. Many hundreds of families in Northern Ireland do not know, and are not allowed to know, the truth about the deaths of their loved ones. I shall move on to that later.

As the Chairman of the Northern Ireland Affairs Committee said, the report itself points out:

“The situation in Londonderry in January 1972 was serious. By this stage the nationalist community had largely turned against the soldiers...Parts of the city to the west of the Foyle lay in ruins, as the result of the activities of the IRA and of rioting young men (some members of the IRA or its junior wing)...A large part of the nationalist area of the city was a ‘no go’ area, which was dominated by the IRA, where ordinary policing could not be conducted and where even the Army ventured only by using large numbers of soldiers.”

That in itself is very revealing.

According to the Saville report, the nationalist community—that must mean the majority of the community in Londonderry—had turned against the Army, and that hostility had been translated into violence, wreckage and devastation. The IRA was active, and indeed it dominated a large part of the city. The report further points out that

“the armed violence had led to many casualties. There had been numerous clashes between the security forces and the IRA in which firearms had been used on both sides and in which the IRA had thrown nail and petrol bombs. Over the months and years before Bloody Sunday civilians, soldiers, policemen and IRA gunmen and bombers had been killed and wounded; and at least in Londonderry, in January 1972 the violence showed few signs of abating.”

It also confirms that Martin McGuinness was pivotal in that orgy of economic and community destruction.

That provides some of the context around the events of that day. Now we have had the report, which has been welcomed by the families and by many politicians and political commentators. It has led to the Prime Minister’s apology, but it has also had other outcomes. It has raised important questions regarding the role and behaviour of Martin McGuinness, who was a committed terrorist at that time. When he gave evidence to the tribunal, he refused to be open and full in his comments and preferred to fall back on his oath of allegiance to the Provisional IRA. We now need to know the truth about Martin McGuinness, not solely in relation to Bloody Sunday but in relation to Frank Hegarty, Patsy Gillespie, Father James Chesney and a host of other atrocities. We also need to know about Martin McGuinness’s party colleague and fellow IRA commander, Gerry Adams.

The Saville report has also now created a fresh campaign and demand regarding events in Ballymurphy. It is clear that there is now to be an attempt to repeat the entire inquiry cycle all over again. Yet at the very time when that is going on, many people in Northern Ireland continue to live with their sorrow and loss, and with the bitter legacy of the long years of the troubles.

We have had an apology from the Prime Minister for the failings of that day in 1972, and if my recollection serves me right, there has also been an apology from the Secretary of State for Northern Ireland in relation to Claudy. Yet all across this United Kingdom, whether it be in Aldershot, Birmingham, London, Warrington or all over Northern Ireland, many people—UK citizens— have been abandoned for decades by successive UK Governments. The direct role played by the Irish Republic in the formation, training, financing and arming of the Provisional IRA is a matter of public record. It is a thorny issue, but it is fact. Yet successive UK governments have said nothing and done less than nothing.

Those who campaigned for the Saville Inquiry did so partly on the grounds that the involvement of the state set it apart from all other events and atrocities. However, here is a case in which the direct involvement of a neighbouring state led directly to the deaths of UK citizens, and the UK Government have simply sat on their hands.

Let me again make an appeal to the Government. If Bloody Sunday was different because of the involvement of the state, then so too were the deaths of many UK citizens because of the involvement of the Irish Republic. Without any cost to the UK Treasury, the new coalition Government could press for an inquiry in the Irish Republic. Yet both the Secretary of State and the Minister have yet to make that call. I have to ask why. Why is it that they will not demand the truth? If Bloody Sunday families deserve the truth, then so, too, do all of those other victims in Northern Ireland and on the mainland.

If the Taoiseach was to come to the Dispatch Box in the Dail and apologise for the role that the Irish Republic played for all those years, it would start the healing process in Northern Ireland.

17:21

[Gavin Williamson (South Staffordshire) (Con)]

Thank you, Mr Deputy Speaker, for giving me the opportunity to speak in the Chamber on such a significant and important matter. I have been moved by many of the speeches today. Hon. Members spoke about their personal experiences and their efforts in trying to bring about an end to the troubles. I was particularly moved by the contribution of the hon. Member for Foyle (Mark Durkan), who spoke about the issues that have affected so many people in Derry.

No Member of this House could doubt the thoroughness and the lengths to which Lord Saville has gone to produce such a substantive inquiry into the incidents that happened on 30 January 1972. We have all been overwhelmed by the depth of the inquiry. However, we should not forget to put the incidents into the much wider context of the troubles that were happening beforehand and those that continued for an awful long time after.

I hope that the Saville inquiry will provide answers to many of the victims of that dreadful day, and by so doing, bring peace and closure for them. I am pleased that the inquiry has laid to rest some of the more outlandish and ridiculous accusations of British Government involvement.

We must not forget the price that has been paid by so many. The Prime Minister quite rightly accepted the role that the British armed forces played in the events that happened on 30 January. He took responsibility and acknowledged the Army’s failings, and gave a full and true apology. I am proud and glad that our Prime Minister did that. I have always believed that where wrong is done, the person responsible should own up to it. I wish that many more people who have been involved in the conflict would also do the same.

We must not forget that more than 1,000 British service personnel and RUC officers laid down their lives to try to bring peace to Northern Ireland. We are—I am—ashamed of the incidents on 30 January 1972, but we cannot forget the sacrifice of so many. I urge all hon. Members, whatever their personal views, not to forget that sacrifice.

Let me consider cost. Perhaps it sounds a little cheap to talk about money when we have been considering people’s lives, but we cannot ignore the fact that almost £200 million has been spent on the inquiry and that it dragged on for so long. As my hon. Friend the Member for Tewkesbury (Mr Robertson) said, the chairman, at the start of the inquiry, expected it to cost £11 million and to last for two years. That was either woefully optimistic or incredibly misleading.

Lord Saville did everything he could to get at the truth and to ensure that he prepared a thorough and proper report, but he was in charge of the inquiry and he must therefore accept responsibility for its management and for the fact that, under his guidance, it went from £11 million and two years to not 10 times but almost 20 times that amount. As a member of the Northern Ireland Committee, I was struck by almost a disconnect when we interviewed Lord Saville: he had to manage the inquiry, yet he seemed to feel no responsibility for protecting the public purse as well as getting at the truth. I think that he would almost have gone so far as to say that the two were incompatible. I do not believe that that is the case. I have the perhaps slightly old-fashioned view that any public servant has a responsibility for public money. Lord Saville unfortunately disregarded that somewhat as he went through the many years before reaching the inquiry’s conclusion.

Much of the debate since the publication of the Bloody Sunday inquiry has focused on the cost and the length of time. However, we must not forget that it hopefully answered many questions for the many victims who suffered—unfortunately, 14 people died—as a result of Bloody Sunday. We must not lose sight of the fact that so many people paid such a horrendous price for peace. It is not just the responsibility of the Government to apologise for what has been done in the past, but that of all those who have done wrong and committed injustices.

An Irish friend once said to me, “The problem in Northern Ireland is that the Irish never forget and the British never remember.” I do not know whether that is true, but it is incredibly important to look forward, not constantly backwards.

17:29

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

Forty-eight hours after Bloody Sunday, I was on the ground in Derry with a team of lawyers from the then National Council for Civil Liberties, of which I became chairman. I have never been in a city so silent, traumatised by the death of its fathers, brothers and sons. The following Sunday, with 200,000 others, I marched in Newry. The march was characterised by total silence. Yet four years earlier in Northern Ireland, there were high hopes that a broad-based civil rights movement would end the second-class status of Catholics, and there were high hopes of tackling the problems of high unemployment and deprivation across the sectarian divide. If there was high unemployment on the Falls road and in Strabane, Newry and Derry, so too was there high unemployment on the Shankill road, and in north and east Belfast. I remember the optimism of that time, but it tragically gave way. It was broken at Burntollet and shattered by the burning of 400 homes in the summer of 1969, which also saw the emergence of the Provisional IRA. A fire that was fuelled by the mistakes of successive British Governments put the British Army in an impossible situation.

I want to make this absolutely clear: I was, often including in the most difficult circumstances, an implacable opponent of the Provisional IRA. The Provisional IRA murdered hon. Members of this House, such as the admirable Airey Neave, a war hero who escaped from Colditz and who died a terrible death but yards from the Chamber, and Ian Gow. It also murdered workers from my union. The victims at Kingsmill, to whom others have referred, were members of the Transport and General Workers Union. Let me tell the House what happened. Their bus was stopped when they were going home after a late shift. They were ordered out. Hooded gunmen asked, “Is there a Catholic among you?” and the Protestant workers gathered around the Catholic to protect him—they would not surrender him. In the end, he stepped forward and was told to go down the road, and the provo gunmen mowed down those innocent Protestant workers.

I am a profound opponent of violence by the Provisional IRA. Let us not confuse that with the Saville inquiry. What happened on Bloody Sunday was a uniquely awful crime in the history of the troubles of Northern Ireland. The murder was made worse by a cover-up—a shameful whitewash—that caused bitterness for a generation. Only now, as a consequence of the Saville report, can Northern Ireland finally move on.

Profound lessons need to be learned, first by the Government. Our first duty is the security of our country, and there can be no truck with terrorism—there is no excuse for the bomb or the bullet. I think of the global situation. There was an intelligent exchange today between the Prime Minister and the Leader of the Opposition, who said the solution to the problem of Yemen being used as a base for terrorism was in part economic development. There are also lessons to be learned from our own country. We must always seek properly to strike the balance between security and liberty.

The second lesson is for the Army. We have today heard outstanding, moving testaments of all that is best in the British armed forces from the hon. Members for Beckenham (Bob Stewart) and for Keighley (Kris Hopkins). I know that from my own experience, because for 15 years, I was chairman of the defence trade unions. Three times a year, I would address seminars of senior representatives of the armed forces at Greenwich defence college. I was deeply impressed by the sophistication of the modern armed forces and their leadership, and by those who said time and again that they had learned terrible lessons from what happened in Northern Ireland, particularly from Bloody Sunday. It is to the great credit of the Army that it has done that. Rightly, it now deserves its worldwide reputation as the finest peacekeeping force on the globe, which it earned from Kosovo to Sierra Leone.

The third lesson that we can draw is that the cover-up makes the crime worse. Widgery caused enduring bitterness in Northern Ireland. I have to pay tribute to the Prime Minister. His statement in the summer was brave and right. He did not equivocate for a moment, which led to the deeply moving sight of the families in Derry saying that their sons, brothers and fathers were innocent. What happened that day was this House at its best, and it was a landmark contribution to the peace process in Northern Ireland.

If painful lessons have been learned, it is also right that today we should celebrate remarkable achievements, including the triumph of the peace process and the historic accommodation of the two great traditions of Unionism and nationalism in Northern Ireland. I know from personal experience how tough that can be. Yes, there was remorse from people such as Gusty Spence from the Ulster Volunteer Force, and I remember talking to a shop steward from the old TGWU, a provo gunman who had served 14 years for killing two innocent Protestants and who was racked with remorse for what he had done. However, there are also enduring problems of division and the consequences of the troubles, both economic and social. We also face the threat of renewed terrorism in Northern Ireland, to which every Member of this House will stand in opposition.

The final lesson to learn is the need to stand by the people of Northern Ireland. The House is entitled to say to our friends from all political parties in Northern Ireland that there can be no looking back and no going back. The peace process is a remarkable achievement for the good of the people of Northern Ireland that successive Governments, Conservative and Labour, have worked hard to cement. Contributions from all political parties in Northern Ireland have made the point about the need for continuing public investment, and I strongly agree.

Ireland is truly the emerald isle. However, for two centuries it was racked by division and ruined by poverty. Generations of people left Ireland for economic exile. My father came here from County Cork to dig roads in 1939, and he was followed by my mother in 1940, who came to work in a hospital in London. My father and his brothers then joined the British Army to fight in the great war against fascism. Following those two centuries of division and poverty, we now have—if we can look beyond the immediate problems that confront the island of Ireland and Northern Ireland in particular—the prospect of the next generation finally seeing this great island move on to enduring peace and prosperity. That is an immense prize, and I like to believe that Saville and how it has been handled by this Parliament, will be a landmark in that process.

17:39

[Stephen Phillips (Sleaford and North Hykeham) (Con)]

I wish to associate myself not only with the statement that my right hon. Friend the Prime Minister made to the House earlier this year, but with those by both Front Benchers at the outset of this debate. The Saville report is a unique and valuable report, not only in the life of Northern Ireland, but in that of the whole United Kingdom. Like my right hon. Friend, I am deeply patriotic and I never want to believe anything bad about my country, but from the conclusions reached by Lord Saville and his colleagues, it is clear that something went badly wrong on that Sunday in January 1972. It is my belief that the Prime Minister was entirely right to deliver an apology on behalf of the Government and the nation to the families of those who lost loved ones on that dreadful Sunday.

Where I perhaps part company with my right hon. Friend the Prime Minister and some hon. Members who have spoken in this debate is on the clarity that has been ascribed to some of the conclusions that the inquiry reached, at least in the minds of some people. I do not for one moment dispute the tribunal’s findings, and they are clear; nor for one moment would I defend the indefensible. With one exception, the tribunal was clear. The firing by the British Army that day was entirely unjustified, and indeed contravened the rules of engagement applying at the time.

However, it is right for the House to bear in mind the fact that Lord Saville’s deliberations with his colleagues and his conclusions took place a considerable time after the events with which he and the tribunal were concerned. He started three decades after those events, and he ended his task nearly 40 years after them. It was a tall order to ask any judge, even one of the standing of Lord Saville, who was so ably assisted by Mr Hoyt and Mr Toohey, to reach wholly unimpeachable conclusions on the events that underpin the tragedy that we are discussing this afternoon. It is more than a tall order to ask a judge to do so some 30 or 40 years after the events in question, often unassisted by evidence owing to the death of those who were present. When a judge in such an inquiry is assisted by evidence, that evidence will be less valuable than it would have been without the passage of time.

[Mr Gregory Campbell]

The hon. Gentleman is elaborating succinctly on the tall order of expecting a judge to remember clearly what happened so many years before, but is it not an equally tall order to expect all the witnesses to have a clear recollection of all the events of so long ago?

[Stephen Phillips]

Indeed it is, and perhaps I was expressing myself unclearly. The difficulty for anyone who presides over such an inquiry so long after the event is that when the evidence is oral—that was principally the evidence that was directly relevant to the matters that the tribunal had to consider—it is undoubtedly weakened by the passage of time. The oral evidence was less satisfactory than it would have been much closer to the events in question.

That brings me to Lord Widgery’s report back in 1972. He was able to consider the events much closer to the time, but having read his report on several occasions and for this debate, I have always had, as I have today and as many hon. Members have, a feeling of considerable unease, even if it does not rise to the same level as that in the mind of the hon. Member for Birmingham, Erdington (Jack Dromey).

The report was produced in a different era by a judge of a different mettle from Lord Saville, who had served in the Army during the second world war and who, in the 10 weeks available to him to deal with the matter, was deprived of much of the evidence that subsequently emerged. It is not my function on this or any other occasion to defend Lord Widgery, great judge as he was in many respects. I suspect that he was hindered by the absence of evidence before him, and by his training, but I also suspect that he was hindered by his outlook. Constitutionally, it was impossible for judges at that time to accept that soldiers from the Parachute Regiment, like policemen, who gave evidence would not be telling the truth when they said that they were fired upon before they fired.

We shall never know the truth of who fired first, but even with the passage of time and having read the report in its entirety, I have little doubt, given the evidence that supports its conclusions, that Lord Saville came much closer to the truth, even on the balance of probabilities, in finding, as he clearly does, that the first shots were fired by the British Army. I suspect, however, that neither we in this House nor anyone else will ever know for sure who fired the first shot. I accept entirely, as do the whole House and the Government, the conclusions that Lord Saville reached, but I have regretted some of the things that have been said about them by some in Northern Ireland, whatever hurt and anguish they might have carried to this day as a result of the events of Bloody Sunday.

I want to say a little about the position in which 1 Para found itself in Derry on that day. The situation was, in a sense, unprecedented in modern British history, and that should not be forgotten when we consider the report and the motion on the Order Paper. It was a situation in part of the United Kingdom in which the civilian authorities had effectively lost control of a British city and had not the means to regain it, even if they had been willing to make the effort. The Official IRA and the Provisional IRA were both active in the area, and there was real concern that there might be violence between the communities on either side of the sectarian divide during the march planned for that day.

That was all taking place against a background of the nationalist anger directed at the Army and the Government that had previously given rise to the many other incidents of violence that Lord Saville dealt with in his report. Referring to the so-called Saturday matinées—the regular incidents of rioting that took place at the corner of Rossville street and William street, a junction known to British soldiers as “aggro corner”—the report said:

“We have little doubt that had the crowd isolated a soldier, it is likely that he would have been killed.”

The British Army was facing such regular instances of rioting at the time in Derry and elsewhere in that part of the world.

In this country, we expect a lot of our young soldiers. We expect their bravery, their loyalty and their obedience, and we are right to do so. Yet soldiers are no more superhuman than the rest of us, as my hon. Friend the Member for Beckenham (Bob Stewart) can tell us. The stress under which they must have found themselves day after day on the streets of Northern Ireland must not be forgotten or underestimated. Their lives were at risk, and no one should doubt that to have been the case. That said, however, following the Saville report, I cannot associate myself with what my hon. Friend the Member for Newark (Patrick Mercer) said earlier. If criminal acts were committed that day, the passage of time should not be seen to exculpate those responsible, and the course of the law will have to follow.

In a very real sense, given these facts, Bloody Sunday was a catastrophe waiting to happen. Whoever fired the first shot, and whatever actually happened on that day, all sides involved in the troubles must shoulder some of the blame. This long-awaited report—perhaps too long-awaited, and certainly too expensive—offers the House, the people of Northern Ireland and the country the ability to draw a line under this awful chapter in our history. The truth is now out, and I hope that this opportunity will be taken, so that we can finally ensure that there is peace in Northern Ireland.

17:48

[Eric Joyce (Falkirk) (Lab)]

I should like to begin by thanking colleagues and Members of the House for their friendly comments and advice in the past few days since I took up this new job. It is a great privilege to be winding up in a debate of such historical importance.

We have heard many powerful contributions today, and a great deal of moving personal testimony that has reflected the experience of many Members present, as well as their constituents and comrades. As the Secretary of State and the shadow Secretary of State, my right hon. Friend the Member for St Helens South and Whiston (Mr Woodward), said in their opening remarks, when the Prime Minister used the words “unjustified” and “unjustifiable” in respect of Bloody Sunday, he spoke for all Members here. As my right hon. Friend said earlier, the inquiry is not just about the past; it is about the present and the future. We have heard that, although some question the eventual cost and time over-run of the Saville inquiry, in terms of what my right hon. Friend referred to as its value—its human value—Lord Saville and his team have done us all and the people of Northern Ireland a great service.

We have heard many first-class and moving contributions, and I think I have time to cover them all. The hon. Member for Wyre and Preston North (Mr Wallace) who served in the Scots Guards reminded us that the tragedies of the troubles extended well beyond the day of Bloody Sunday itself. He counselled against having never-ending inquiries and referred to Claudy, Warrenpoint and Bloody Friday. He took the view that the Saville report should represent a line in the sand, whereby we recognise that wider injustices happened in Northern Ireland, but view them as “once and for all”. Clearly, Labour Members see a question mark over that. The hon. Gentleman also stressed the rules of engagement for individual soldiers and the responsibility that each soldier has.

My right hon. Friend the Member for Torfaen (Paul Murphy) was the Minister for Political Development at the Northern Ireland Office in 1988 and subsequently became a fine Secretary of State for Northern Ireland. He made an immense personal contribution to peace in Northern Ireland. He said that the Saville inquiry was central to progress and agreed with my right hon. Friend the Member for St Helens South and Whiston that there remains a palpable need for a Finucane inquiry, as recommended by the Cory report. My right hon. Friend also argued that the cost of future inquiries—notwithstanding the excellent work done by the Historical Enquiries Team—should be met by the UK Government, not the Northern Ireland Administration. He noted the powerful point that we cannot move into the future until we have dealt properly with the past.

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

I apologise for my late intervention; I wanted to speak earlier, but did not manage to catch Mr Speaker’s eye. Does my hon. Friend agree that the role played by my right hon. Friend the Member for Torfaen (Paul Murphy) in Northern Ireland was exemplary? Does he also agree with my right hon. Friend that the Government should look seriously at the Eames-Bradley suggestions for proper inquiries to look back at past tragedies and outrages during the troubles? If we can gain the confidence of both communities and if this can be achieved without the expense of the Saville inquiry, we should view it as a worthy object to pursue?

[Eric Joyce]

I thank my hon. Friend and take note of what he says. I take pleasure in agreeing with his comments about our right hon. Friend the Member for Torfaen. Much has been said during the debate about future inquiries. Labour Members recognise that there will be a demand for them, although we have to bear in mind the important cost implications. Of course, we think that the Government should come back to us on this issue. I think that many people take that general view. Although some want to move ahead without inquiries, Labour Members do not fully agree with that, although we understand the sentiment of the argument.

The Select Committee Chairman, the hon. Member for Tewkesbury (Mr Robertson), was the Opposition spokesman when the present Government were in opposition. He noted that many people assumed in the first instance that the Saville inquiry would take only a year or two. He also noted that the original assumption was that it would cost about £11 million, of which £1 million would be for lawyers. I do not know exactly how much of a lawyer we get for £1 million, but it was certainly not as much as proved necessary for the Saville inquiry. The hon. Gentleman rightly drew attention to the eventual cost for lawyers as more than £100 million. He reminded us of the tragic dimension of the waste of human lives on all sides, and noted how wider lessons can be learned by other parts of the world. He referred to the visit last week by Rwandan politicians to his constituency and then to Belfast. I had the privilege of meeting those very same people. This is indicative of the fact that, at some stage, people can learn wider lessons from what happened in Northern Ireland.

The hon. Member for East Londonderry (Mr Campbell) told the House about what I view, frankly, as a shocking experience; it is certainly outwith the experience of most Members, other than those representing Northern Ireland. He mentioned what happened through a Facebook site. He reminded us of some of the IRA’s early victims, including the first soldier to die in Derry. The hon. Gentleman complained that Lord Saville did not fully contextualise the circumstances of the day. He told us that “murder, mayhem and terror” were “rife” and referred to the fact that two police officers were murdered only days before one was buried on the day of Bloody Sunday itself. He took the view that further inquiries would not lead to progress.

The hon. Member for South Down (Ms Ritchie) praised the former Prime Ministers John Major and Tony Blair for their role in establishing the inquiry. She welcomed the Prime Minister’s statement of apology, which she described as a great comfort to the families, to people throughout Northern Ireland, and to people in the south. I believe that it was also a comfort to people in Scotland, England and Wales. The hon. Lady mentioned other cases, including those of Rosemary Nelson, McGurk’s bar and Ballymurphy, and called for the innocence of those killed unlawfully to be properly declared in future. She supported the call of many other Members for further inquiries where appropriate.

The hon. Member for Beckenham (Bob Stewart) is probably the only Member who was serving in Northern Ireland at the time. He has a prestigious military record and has commanded a regiment, which is important in the context of today’s debate. For that reason, his words bore a particular significance. He described the shortcomings of kit and training in the early years of British Army deployment in Northern Ireland. He praised his regimental colleagues, and said that Bloody Sunday was both a disgrace and an aberration. He rightly described it as a terrible failure at the level of battalion command.

My hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex) made the important point that justice would be seen and interpreted in different ways by different people. He counselled against measuring the success or otherwise of inquiries simply in terms of time or money.

The hon. Member for Newark (Patrick Mercer)—like his hon. Friend the Member for Beckenham—has a long and prestigious military record, and, crucially, has also commanded a regiment. He had some specific comments to make about the commanding officer on Bloody Sunday. He made particular criticism of Colonel Derek Wilford, the commanding officer of the 1st Battalion, the Parachute Regiment, and referred to an interview that he conducted with him on the BBC’s “Today” programme. I remember that interview very well. I believe it took place in 1999.

[The Minister of State, Northern Ireland Office (Mr Hugo Swire)]

The hon. Gentleman is too young to remember it.

[Eric Joyce]

I think that I am slightly older than the hon. Gentleman, so that is very nice of him.

I recall the interview vividly. The hon. Member for Newark, who was working as a journalist on “Today”, had persuaded Colonel Wilford to appear on the programme. It was staggering that, after all those years and after everyone’s questions about Widgery, he did not regret anything for a moment. That was the most astonishing and disgraceful thing that one could possibly imagine, and it has stuck in my mind through the years. It is true that we did not know then what we know now, but it was a remarkable interview none the less, and I remember the hon. Member for Newark’s part in it very well.

The hon. Member for Belfast South (Dr McDonnell) strongly welcomed the outcome of the report on behalf of all the families affected. He condemned the Widgery report as essentially part of a propaganda war. He also condemned those who had been guilty of paramilitary violence over the years. He criticised the Saville cost overrun, and, like other Members, referred particularly to lawyers’ fees. He also echoed other Members in saying that something was amiss—I am putting it mildly—in respect of command and control in the Parachute Regiment. I believe that that is widely accepted today.

The hon. Member for Keighley (Kris Hopkins) made a moving speech describing his own experience of serving in Northern Ireland as a private soldier with the Duke of Wellington’s Regiment. He reminded us of the sacrifice made by British Army troops over the years, and stressed that although Bloody Sunday besmirched the reputation of the Army, Support Company of the Parachute Regiment on that day did not represent the standards of the Army as a whole then or, in particular, since then. I think that we can all agree with that.

The hon. Member for Strangford (Jim Shannon) said that he strongly supported the peace process, but criticised the cost of the inquiry. He felt that many would think the outcome a political gesture, and said that there had been no justice for the workmen killed at Bessbrook, or for his cousin, a serving UDR officer, and his colleague, who were killed on the same day and at the same time by the Provisional IRA. I think it fair to say that the essence of the hon. Gentleman’s argument was that the inquiry process as a whole—including the Saville inquiry and any putative future inquiries—was one-sided by its very nature.

The hon. Member for Foyle (Mark Durkan) read, memorably, a sombre roll-call of those who were injured and killed on Bloody Sunday, and asked what would happen in terms of follow-through in relation to issues such as possible perjury, other possible prosecutions, and lessons learned at the Northern Ireland Office and the Ministry of Defence. He specifically spoke about the Parachute Regiment at the time of Bloody Sunday. He said the Saville report left questions unanswered and he asked if Colonel Wilford could be stripped of his OBE. I have heard serving officers ask the same question, although it is not necessarily what everyone would want; different people have different opinions, and these events seem a long time ago now. I had understood until very recently—yesterday in fact—that Colonel Wilford had died. That was reported on the BBC, but apparently when he died he only went to Belgium. I have been to Belgium and it is not such a bad place. He is still alive and well therefore, and he can readily be stripped of his OBE if people think that is appropriate. That is a matter for others, however.

The hon. Member for South Staffordshire (Gavin Williamson) noted the sacrifices made by British troops in Northern Ireland over the years, and the hon. Member for Plymouth, Sutton and Devonport (Oliver Colvile) felt lawyers should not charge full fees and we should keep down the costs of such inquiries. The hon. and learned Member for Sleaford and North Hykeham (Stephen Phillips) felt the Widgery inquiry had been profoundly weak because of Widgery’s own experiences at the time and the assumptions he would have had and would have brought with him to his inquiry. He also praised the Saville inquiry unreservedly, apart from a technical reservation or two.

My right hon. Friend the Member for St Helens South and Whiston and others asked a number of questions. Those questions do not raise doubts about the great value of the Saville inquiry report; that goes without saying. I think we all agree about its great value; the families certainly do, as do the people of Northern Ireland and the rest of the United Kingdom. However, some important matters follow on from the report. Perhaps chief among them are questions about holding other inquiries, including on Finucane. I hope the Minister will be able to say in his reply to the debate when progress will be made in coming to decisions on those matters.

17:59

[The Minister of State, Northern Ireland Office (Mr Hugo Swire)]

This has been an extremely welcome and well-informed debate, which has honoured the commitment given by my right hon. Friend the Prime Minister that the House would have an opportunity to debate this important report in detail. I would like to start by recording my gratitude for the supportive words of the shadow Secretary of State, the right hon. Member for St Helens South and Whiston (Mr Woodward), and the new shadow Minister, the hon. Member for Falkirk (Eric Joyce), on the Government’s response to this report. I also welcome the right hon. Gentleman back to his role, and in particular I congratulate the hon. Gentleman on his appointment as shadow Minister, a post which I am sure he will enjoy very much.

It is important that we approach these very sensitive issues in a bipartisan manner, and I am sure we can rely on the Opposition spokesmen to continue to do so. Having said that, however, their words this afternoon might have carried greater generosity if they had acknowledged the work done in the peace process by John Major and the Conservative party. Next week is, of course, the 25th anniversary of the signing of the Anglo-Irish agreement.

[Chris Ruane]

rose—

[Mr Swire]

I will not give way to the hon. Gentleman as he did not speak in the debate and I must make progress.

The right hon. Member for St Helens South and Whiston and the hon. Members for Rutherglen and Hamilton West (Tom Greatrex) and for Foyle (Mark Durkan) raised the issue of prosecutions. I remind them that prosecutions are not a matter for government. It is for the independent prosecution authorities to consider such issues. It would be completely inappropriate for the Government to intervene by pressurising the prosecution service to provide a deadline. That would clearly compromise the independence of the process.

The right hon. Gentleman also asked about the lessons learned by the Army. As the Chief of the Defence Staff said in the light of Lord Saville’s report, the way the Army is trained, the way it works and the way it operates have all changed significantly, and we should not forget that during the 38 years of Operation Banner in Northern Ireland the majority of the military who took part in that operation, often on several tours, did so with professionalism and restraint.

In response to comments by the right hon. Gentleman and the hon. Members for South Down (Ms Ritchie) and for Foyle, I can confirm that, having considered the views expressed in this debate and the debate in the other place, my right hon. Friends the Secretaries of State for Northern Ireland and for Defence will shortly write to the Prime Minister on issues arising from the report. A copy of the letter will be placed in the Library of the House.

The right hon. Members for St Helens South and Whiston and for Torfaen (Paul Murphy), and the hon. Member for Rutherglen and Hamilton West raised the issue of dealing with the past. This Government promptly published the summary of responses to the Eames-Bradley report in July this year—if I may say so, that was perhaps in contrast to the previous Secretary of State, who now criticises us for inaction despite sitting on the responses for many months prior to the general election. I wish to put on the record my thanks to the noble and right reverend Lord Eames, to Denis Bradley and to the other members of the group.

[Mr Woodward]

Just for the record, I would advise the Minister to look a little more closely at the reasons why we did not publish the responses to the public consultation. We did not do so precisely because it was more sensible to await the publication of Lord Saville’s report, as it would then be possible to make a sensible decision on how to proceed when one can hold the two together. If the Minister pleads for bipartisan support, he should avoid cheap political point scoring in this debate.

[Mr Swire]

The shadow Secretary of State is at least consistent in so much as he received the responses back in October 2009. I was perhaps trying to draw attention to the rapid progress we have made on many fronts since taking office, given that we were accused earlier in the debate of stalling on so many of these issues.

The Eames-Bradley report was a significant piece of work that has made an important contribution to the debate on dealing with the past. The responses to the report we published did, however, show the current lack of consensus on any wider process. But we have continued to listen to the views of victims and organisations from across the community to find a way forward. There is no question of the Government attempting to close down the past. We will continue to be measured and sensitive in our approach. As we continue to engage on the potential for wider mechanisms, we should also acknowledge the ongoing work to address the legacy of the past. I pay tribute in particular to the work of the Historical Enquiries Team, which has achieved very high satisfaction rates among families who have received reports. I say to the right hon. Member for St Helens South and Whiston and to the hon. Member for Carshalton and Wallington (Tom Brake) that it is not for the Government to alter the HET’s remit.

The right hon. Member for St Helens South and Whiston and the right hon. Member for Torfaen, himself a distinguished former Secretary of State for Northern Ireland, raised the Finucane case. My right hon. Friend the Secretary of State will be meeting the Finucane family very shortly, and it is right that we talk to the family in the first instance, before commenting publicly.

A number of hon. Members made important points about the distinguished service of the vast majority of soldiers who served in Northern Ireland. My hon. Friends the Members for Wyre and Preston North (Mr Wallace) and for Beckenham (Bob Stewart), and my hon. Friend the Member for Keighley (Kris Hopkins), in a particularly passionate and moving speech, made their personal experiences come to life. They described the difficult and often frightening circumstances in which we asked our young soldiers—some very young—to serve, sometimes woefully underprepared, in Northern Ireland during the troubles. The hon. Member for Birmingham, Erdington (Jack Dromey), in a very good speech, was right to remind us of the tragic murders by terrorists of two Members of this House, Airey Neave and Ian Gow.

The Government are clear that Bloody Sunday is not the defining story of the Army’s service in Northern Ireland. We should not forget, and we will never forget, that more than 1,000 members of the security forces lost their lives, and many thousands more were injured, in upholding democracy and the rule of law in Northern Ireland. I recently met a number of ex-servicemen and heard for myself their continuing trauma and suffering. As my right hon. Friend the Secretary of State said in his opening statement and as was reiterated by my neighbour, my hon. Friend the Member for Central Devon (Mel Stride), we owe an immense debt of gratitude to all those who served in the security forces.

My hon. Friend the Member for Wyre and Preston North and the hon. Member for Strangford (Jim Shannon) highlighted the importance of bringing closure to the families of those killed by terrorists. The HET is investigating all 3,268 cases from the troubles, including the deaths of police officers and soldiers killed by terrorists. The Government strongly support the HET’s important work and the vital work of community and victims’ groups in providing help and support to the victims of the troubles.

A number of hon. Members, notably my hon. Friend the Member for Tewkesbury (Mr Robertson), the distinguished Chairman of the Northern Ireland Affairs Committee, on which I once had the honour to serve, and perhaps coincidentally, other members of his Committee, were critical of the cost of the report. Of course, as we heard this afternoon, no one could have anticipated that the inquiry would take 12 years or cost more than £191 million. Our views on that are by now well known and well documented.

The Government have been clear that there will be no more open-ended and costly inquiries, but on taking office we separated our views on the process from the substance of the report’s findings. It was right that my right hon. Friend the Prime Minister took responsibility, on behalf of the Government, in responding to Lord Saville’s clear and shocking findings.

The hon. Member for South Down mentioned public inquiries. The Government have been clear, as I said, that there will be no more open-ended and costly inquiries. This is not an issue solely about public finances. Selecting a small number of legacy cases to be the subject of public inquiries creates an uneven process that cannot adequately address the legacy of a conflict that resulted in more than 3,500 deaths.

With reference to the report, the state must always be determined to hold itself to account. We should never judge ourselves by the same standards as terrorists. The Government are clear that we do not uphold the honour of all those who served with such bravery and professionalism in Northern Ireland by hiding from the truth or by defending the indefensible.

The hon. Member for East Londonderry (Mr Campbell) spoke about the context of the events of Bloody Sunday. I was slightly perplexed by this point. I should point out to him that Lord Saville covers the events leading up to Bloody Sunday in great detail in volume 1 of the report. I recommend reading those chapters, if right hon. and hon. Members are not tempted to read the rest, because they provide the clearest insight to the events in Northern Ireland surrounding internment and the events on Bloody Sunday. That was well précised by my hon. and learned Friend the Member for Sleaford and North Hykeham (Stephen Phillips).

The hon. Members for East Londonderry, for Strangford and for Upper Bann (David Simpson) raised the conclusions relating to Martin McGuinness. It is for Mr McGuinness to answer questions about the findings relating to him. The report is clear in its conclusions about him. It specifically finds that he was present and probably armed with a

“sub-machine gun”,

but states that

“we are sure that he did not engage in any activity that provided any of the soldiers with any justification for opening fire.”

The Government are clear that there was never any justification for the brutal campaigns waged by terrorists. As the right hon. Member for St Helens South and Whiston and my hon. Friend the Member for Newark (Patrick Mercer) said, there is no justification, nor can there be, for the actions of residual terrorist groups trying to drag Northern Ireland back to the past.

The hon. Members for South Down and for Strangford were among those who mentioned Ballymurphy. My right hon. Friend the Secretary of State and I met the Ballymurphy families last month. Their stories were powerful and moving, and we both expressed our sympathy for their loss. We continue to encourage the families to co-operate with the ongoing HET investigation into the case. The HET is completely independent of the Government. I understand that the families recently made representations to the Attorney-General for Northern Ireland on the re-opening of inquests.

The hon. Member for Foyle made a typically powerful, solemn and heartfelt speech in which he paid solemn tribute to those who were killed and injured on Bloody Sunday. I thank him again for his comments on my right hon. Friend the Prime Minister’s statement and pay tribute to him for the support and encouragement that he has provided to the families over the years as a hard-working constituency MP.

The hon. Gentleman is absolutely correct to point out the shocking conclusions in the report. Lord Saville’s report speaks for itself. In relation to the hon. Gentleman’s point about the victims, let me reiterate what Lord Saville concluded. He said that

“none of the casualties was posing a threat of causing death or serious injury, or indeed was doing anything else that could on any view justify their shooting.”

The hon. Gentleman raised the matter of the removal of an honour given to Lieutenant Colonel Wilford. That would be a matter for the Ministry of Defence in the first instance and ultimately for the honours forfeiture committee, but I understand that honours are not normally rescinded unless the person concerned has been sentenced to imprisonment after conviction in a criminal court or formally censured by a regulatory body.

The hon. Gentleman also raised the issue of compensation. I know that there are a range of different views among victims of the troubles about financial payments. I understand that the victims commissioners are conducting a wide examination of victims’ needs and how best to address them, including the issue of compensation.

The hon. Member for Upper Bann raised the role of the Irish Government. The actions of the Irish Government are of course a matter for them, but I would draw hon. Members’ attention to the Taoiseach’s commitment to contribute to a reconciliation process. I welcome that commitment, as I do the very close relationship that we have with the Government in Dublin.

[Mark Durkan]

Will the Minister acknowledge that Irish Governments have successively, no matter what party was in government—not just the current Taoiseach but previous Taoisigh and Ministers for Foreign Affairs—provided particular support to the Bloody Sunday families? A dossier submitted by the Irish Government helped to lead to the establishment of the inquiry and the current Minister for Foreign Affairs has been particularly supportive. He is particularly in the thoughts of the families this week given the personal and family grief that he is going through, as he buried his young daughter yesterday.

[Mr Swire]

The hon. Gentleman is right, and our heart goes out to him. The Secretary of State and I have written to him at this ghastly time.

Let me conclude by reiterating the Government’s unambiguous position on this report. What happened on Bloody Sunday was unjustified and unjustifiable. The Government are deeply sorry for what happened. The wider challenge that we all face is to ensure that the past is dealt with in a sensitive manner that allows Northern Ireland to move forward to a genuinely shared future.

I am sure the whole House will join me in acknowledging the enormous strides forward that Northern Ireland has taken. As we look back on the terrible events of 38 years ago, we must be thankful that Northern Ireland is now a very different place, but, as some right hon. and hon. Members pointed out, challenges still remain. The Government are determined to play our part in helping to ensure that the future for Northern Ireland is one which is peaceful and based on trust and confidence across the community.

I hope that Lord Saville’s report has, to use a quote adopted by the families, set the truth free. In doing so, it has helped to bring to a close a painful chapter in Northern Ireland’s troubled past. Let me finish by reiterating the words of my right hon. Friend the Prime Minister:

“Northern Ireland has been transformed over the past 20 years and all of us in Westminster and Stormont must continue that work of change, coming together with all the people of Northern Ireland, to build a stable, peaceful, prosperous and shared future.”—[Official Report, 15 June 2010; Vol. 511, c. 742.]

Question put and agreed to.

Resolved,

That this House has considered the matter of the Report of the Bloody Sunday Inquiry.

Employment Law (Businesses)

Wednesday 3rd November 2010 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Mr Randall.)

18:19

[Julian Smith (Skipton and Ripon) (Con)]

I am delighted to have secured this debate on the effect on businesses of proposed changes in employment law. I am particularly delighted that it will be conducted under your chairmanship, Mr Speaker, as I still have my L-plates on: this is only my second speech to Parliament.

When I was a small business owner, dealing with employment law took more time than any other management responsibility—literally hundreds of hours. Since the election of the Labour Government in 1997, employment laws and regulations, ranging from enhanced maternity and paternity rights to the minimum wage, have been piled on to British business. For the employer, particularly for the many small to medium-sized businesses that create the majority of jobs in my constituency, that has meant major additional cost in both time and money. The intense focus on employee rights has ended up with the employer spending a huge amount of time ensuring that he is abiding by the law; it has made him wary of the consequences of even the most innocent error.

Under the previous Government the cumulative effect of employment law was to change the playing field fundamentally, leaving employers feeling defensive rather than confident about hiring people and managing their staff. I remember, a few years ago, having a quiet chat with a young member of my staff who had been playing on the internet for days on end. The following day, I had a call from her mother saying that if I did not follow correct disciplinary procedures the family barrister would be in touch. The quiet chat and the informal word of warning became formalised under Labour. Employment became a transaction.

Even John Hutton, the former Business Secretary, admitted that things had gone too far. In 2008, he said:

“Exercising the right to work ultimately depends on getting the right balance in employment law. Having a multiplicity of employment rights won’t amount to a great deal if you can’t get a job in the first place.”

[Gavin Williamson (South Staffordshire) (Con)]

Having employed people in the past, I know that there is often a real fear of taking on new staff because if one does not get it right first time, the consequences of trying to get rid of a member of staff can be costly to the business. Does my hon. Friend agree that this puts lots of small and medium-sized businesses off expanding?

[Julian Smith]

My hon. Friend is absolutely right. A close friend of mine is starting a new business and she told me the other day that her business adviser suggested she should hire people on short-term contracts to avoid the pitfalls of having permanent staff. At the key moment when we need hundreds of thousands of new jobs, the advice to a budding entrepreneur is to avoid permanent staff if they can.

According to the World Bank’s “Doing Business” report, employing workers in the UK has become harder every year since 2007. The report shows that UK labour market flexibility has slipped down the international league table from 17th in 2007 to 35th in 2010. The UK is now behind many European countries, including Switzerland and Denmark, as well as Australia, Canada, the United States and others, on labour market flexibility.

Even those figures do not take into account the effect on small businesses of the sheer worry about these burdens or of the realities of a world in which Britain will be under increasing pressure to compete for internationally mobile business jobs. Small business owners worry about this stuff. That is why they are good at what they do—because they are worriers. By putting so many worries and concerns around the key assets of their business—staff and people—Governments have forced them to spend less time on their businesses. Tom Bannister, who runs the Coniston hotel near Skipton, does not have an HR department, so each employment change that comes from this House takes him away from running his hotel and outdoor centre. We need hard-pressed owner-managers such as Tom to be lying in bed at night worrying about things like the spa development he is currently considering rather than whether they have dealt adequately with the “protected characteristics” of their employees as determined by the Equalities Act 2010.

[Julian Sturdy (York Outer) (Con)]

Like my hon. Friend, I have a number of businesses in my constituency who have contacted me with similar concerns. They want to grow their businesses and create jobs, which is surely what we want in these difficult times, but if we continue to tie businesses down with red tape and bureaucracy, we will prevent that. It is important to get away from that approach.

[Julian Smith]

I thank my hon. Friend for those comments. It is not just small companies that are affected: the cumulative effect of the measures is also significant for bigger businesses. Before I came to the House I was a head-hunter who worked with some of the biggest companies in the world. I saw how easy it was to put a senior employee in an international location rather than in the UK. I have a long list of examples whereby, when it came to choosing between London, New York or Asia, London came last. The cost of managing and getting rid of staff often tipped the balance in favour of another location. That just happens without fanfare or fuss, and that is why, like our tax and immigration policies, our employment policy must be ruthlessly competitive. The competition that the UK faces is becoming intense. Over the next few years we desperately need people to take the risk, set up businesses, invest in existing ones and create jobs here in Britain.

Labour increased its depressing legacy of employment law in its dying days, with measures on agency workers, the Equalities Act 2010 and additional paternity leave. Each measure will have a major effect on British business. For example, the new dual discrimination laws, with limitless liability, mean that employers will have to focus even more on protecting themselves, and, with discrimination law changing so often and widening to include more and more employees, is it any wonder that entrepreneurs fear taking on their first member of staff?

[Nigel Adams (Selby and Ainsty) (Con)]

I concur entirely with what has been said. Like many others now in the Chamber, I ran a small business for a number of years, but employment legislation is not the only thing holding back small businesses. In North Yorkshire, as my hon. Friend will be aware, the county council has stopped traders placing advertising boards outside their premises. We have just been through—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. This is an Adjournment debate about employment law, so if the hon. Gentleman intervenes again perhaps he will keep to the point.

[Julian Smith]

I agree with my hon. Friend. That is all part of the same burden.

The second piece of legislation that we are going to acquire from Labour is the measure on additional paternity leave. The time spent learning about and then administering the process of additional paternity leave will have a huge impact. From early next year, rather than focusing on job creation, business will be administering how best to let dads go off. Business was not even consulted properly. In a recent written answer, the Government admitted that only 111 companies—111 throughout Britain—had been involved in the consultation on that policy. Why did Labour create those laws with such little consideration for the risk-takers whom they affect?

With all that legislation rolling over from the previous Government, we surely need a pause—a break—in employment law. The coalition is doing many positive things to create the conditions for growth, such as scrapping Labour’s jobs tax, introducing the national insurance holiday for businesses in Yorkshire and outside the south-east, and cutting corporation tax, but at a time when we need to let business focus on growth, the coalition is pushing forward with more legislation on employment law.

First, there is the removal of the default retirement age, with no offsetting measures to assist companies in managing out their staff.

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

My hon. Friend is absolutely right that the default retirement age removal is causing problems. In my constituency, many businesses, including Centrax, a very large employer, have come to me and said, “The challenge is that it will be harder to negotiate different packages for older workers.” The budget for recruiting new young people will inevitably shrink, too, and businesses will incur legal costs when they have to justify a default retirement age for a particular job.

[Julian Smith]

My hon. Friend makes a very important point, and I have heard of similar examples. I spoke to the representatives of a local business last week, and they were frustrated because their poorly performing older manager, whom they assumed would retire next year, is digging in—potentially for life—following the announcement of this law.

Then there is the commitment to flexible working rights for all employees, and the sharing of parental leave for mothers and fathers. Consultation on those measures is about to start.

Finally, the Government are considering whether to include small and medium-sized businesses in Labour’s right-to-request-training laws, or repeal the law altogether. That law will create the crazy situation in which, even though most companies cover training in their employee appraisals, employees will have the right to disregard the appraisal discussion and ask for a separate discussion on training. At a time when British businesses are being encouraged to create more jobs than ever, they will have to deal with the hefty employment legislation of the previous Government and several chunky pieces of legislation from the coalition, taking up the valuable time that they could be spending on creating more jobs and more wealth.

I have asked for this debate to urge the Minister to look again at these issues in light of the Government’s forthcoming growth White Paper and the urgent need that we have for jobs in our country today. I am keen to receive from the Minister answers to a number of fairly detailed questions. First, what steps are the Government taking on their pledge in the coalition agreement to review employment and workplace laws for employers and employees? The decisions so far seem to have been employee-led. Secondly, why was the decision made to introduce additional paternity leave provided by the previous Government given that the coalition plans to consult and then introduce its own shared parental leave in this Parliament? Thirdly, when will the Minister confirm whether small and medium-sized enterprises are going to be exempted permanently from Labour’s right-to-request-training legislation, and is he considering full repeal? Fourthly, why was the decision made to introduce flexible working for parents of children up to age 17 given that the Government are planning to offer flexible working to all employees during this Parliament?

Fifthly, I understand that the Institute of Directors has presented a case to the Minister saying that 90 to 95% of private sector companies would be exempted from the scope of the agency workers directive if the Government followed advice provided to the IOD by a senior member of the European Commission. Why have not the Government taken this dispensation? Will the Minister publish any advice that he has received that contradicts that received by the IOD? As Britain will now no longer have a default retirement age, unlike many other European countries, what steps is the Minister taking to ensure that this does not result in a less competitive employment environment in Britain, and what offsetting measures is he considering to develop other mechanisms by which companies can manage out staff?

I apologise to the Minister for such a long list of questions, but I passionately believe that we need to address these issues. With limited fiscal levers to attract business in the UK, we can use competitive employment law to attract the growth that we need. I urge the Minister to lead the charge in playing his role in the Government’s growth White Paper. He should commit today to a holiday from new employment law in 2011, pausing his plans for the sake of jobs. I also urge him to give British business light at the end of the tunnel by strengthening the Government’s commitment to a thorough review of employment legislation and engaging all parts of business, and lots of businesses, in that review—they will be happy to help. We should consult companies of all shapes and sizes from all parts of the country. I am particularly able to supply some frank Yorkshire business people to engage in that process.

During the review, we need to ask some tough questions. For small businesses, what have been the cumulative effects of all these employment laws? How do we make it easier for small businesses to hire and to fire? How do we ensure that the “doers and grafters” of whom the Prime Minister spoke in his conference speech are freed up to take on staff? For larger companies, what is the impact of our employment regime on their costs? How do we ensure that we are truly competitive with other locations for global business? How negative are the effects of our employment law regime on attracting foreign investment?

A holiday from new employment law in 2011 should take pride of place in the Government’s growth White Paper. I would be grateful for the Minister’s support in my campaign to make this happen. Along with the other positive enterprise proposals from the coalition, grasping the employment law nettle will be a big boost for growth.

18:29

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey)]

I congratulate the hon. Member for Skipton and Ripon (Julian Smith) on securing this debate, which is very timely in the light of the ongoing debate on growth strategy. It gives me an opportunity to reassure him that since taking office as a Minister, I have spent quite a large amount of time on beginning the employment law review. I think he will understand that I am not able to give the details of that review until we publish the consultation document, which I expect to happen early in the new year. Obviously, we have to discuss this with colleagues around Government. When we do publish it, he will see that it is the first stage in reviewing employment law, but that we are tackling one of the key concerns of employers, particularly in small and medium-sized enterprises, in a balanced and pro-growth way.

I assure the hon. Gentleman that this Government have an absolute commitment to creating the best possible business environment, so that the UK economy can recover and grow and the private sector can prosper in the long term. We have made it very clear that private sector jobs are where we see the big growth happening as we tackle the budget deficit.

[Gavin Williamson]

Does my hon. Friend agree with the words of Lord Young this week? He said that fewer employment regulations would always stimulate more employment.

[Mr Davey]

I had the pleasure of meeting Lord Young in my office earlier this week to begin our work together. I said many things to him, but I did not say that when I was studying economics at night school at Birkbeck, I had the pleasure of studying under Professor Snower, who, as I am sure the hon. Gentleman is aware, developed the theory of insider-outsider analysis. That states that when we are thinking about employment creation, we should always remember the outsiders—the people who are unemployed. One of the great things about taking a more robust approach to employment law is that it will help job creation. That is good for businesses, of course, but it is also good for the unemployed. Those who are elected to this House to represent the unemployed must remember that ensuring that they have work is an important part of what this Government are about.

A flexible labour market that strikes the right balance between the rights of individuals and the needs of business is an essential part of our economic framework. The hon. Member for Skipton and Ripon rightly said that things have slipped in recent years, but we still compare favourably with our international competitors. However, more can be done, particularly given what has happened in recent years.

I am aware that many business people are wondering about possible changes to employment legislation. I offer them this reassurance: the coalition understands how tough it has been for them over the past two years, as companies of all sizes have had to fight their way from the deepest recession in 60 years. We will not do anything that makes that continuing task more difficult. We are certainly not in the business of weighing companies down with more regulation and higher costs.

Achieving lasting economic growth is a core priority in the years ahead, and that can come only from the private sector, so we want to make this country one of the best places in the world to start and expand a business. That means dismantling the barriers to growth and improving the regulatory and legal frameworks for business, including employment law.

Good workplace relations improve productivity and help businesses run more efficiently, which enables them to stay competitive and boosts long-term resilience. I am sure that as the hon. Gentleman runs a small business, he is very much aware of that. In our review of employment law, we are trying to see how we can offer maximum flexibility for employers and employees in a competitive business environment. We want to ensure that we have the balance right, so that employment laws do not inhibit businesses from growing.

As part of that review, we are reflecting on what business groups have said to us about the cost and complexity of employment legislation, including on resolving workplace disputes and the employment tribunal system. Where we can make legislation easier to understand, improve efficiency and reduce unnecessary burdens, we will. I am very keen to meet some businesses from the hon. Gentleman’s constituency in due course. I have met a number of business representative organisations, which have given me an awful lot of ideas to mull over, and I assure him that we have been listening to them.

Getting people back into work and helping them stay there is at the heart of our plans for Britain’s economic renewal. That is why we are committed to creating a more flexible employment system that allows people to balance their work and family commitments. Millions of people have responsibilities outside work, whether raising a family, caring for an elderly or sick partner or serving their community. If we help people manage their lives and stay in employment, we can avoid losing the skills, talents and energy of millions of people from the UK economy. There is good evidence from companies already operating flexible working patterns that they deliver real benefits to the bottom line. Those benefits include increased productivity because staff are focused on the job; lower turnover because workers feel valued by their employers; and reduced absenteeism because people can reorganise their day when the unexpected happens.

The coalition agreement raises the possibility of extending to all employees the right to request flexible working. I have been talking about the coalition agreement to employers and their representative organisations. The hon. Gentleman asked why we had extended the practice to include parents with children up to the age of 18 before the wider review, on which we shall consult, and the wider implementation of the coalition policy. When we considered the matter, we found that the cost to business was nil. In fact, it made things simpler.

The way in which the previous Government introduced the right to request flexible working, with different rules for different employees, confused business. So, simplifying the system was just a small step. When we talked to businesses, they seemed to understand and appreciate that. Clearly, one reason why many business organisations are ready to engage in the debate about extending to all employees the right to request flexible working is that it would simplify the system. We want to do that in a way that responds to practical experience of that right to request.

During the recession, it was interesting to see—this also came out in some recent CBI evidence—that there was a greater acceptance of flexible working by employees. A number of firms found that their employees were more willing to take pay cuts and operate on reduced hours and so stay in work, thus keeping the business afloat. We saw a much better engagement at the work place. That is why a number of employers and their organisations are saying that flexible working is one of the better things that came out of the previous Government.

[Craig Whittaker (Calder Valley) (Con)]

Does the Minister not agree that while the right to request flexible working is great for business, what inhibits them from implementing such things is the huge cost, the red tape and the bureaucracy that have been created around employment law? When I met two business men from my constituency today, I was alarmed to hear how a large corporate company—not a small and medium-sized enterprise or a sole trader—had instructed its managers to manage out people from the bottom of the business, because they were inflexible at times when they needed their work force to be flexible. Is the Minister aware of the practices that are starting to occur because of the huge cost of bureaucracy and burden on business?

[Mr Davey]

One of the objectives of the employment law review—I hope that the hon. Gentleman will see this when we publish it—is to try to begin to turn that tide. I hope, as I continue with my remarks, that the hon. Gentleman will begin to see that sense of direction.

In the coalition agreement, we have tried to ensure that we can assist families and employers to get the right balance between work and home. Quite rightly, child care is no longer seen as just the mother’s responsibility. Fathers are playing an increasingly significant role in caring for their children, with more than 90% of fathers taking time off around the births. The hon. Gentleman will know how important that is for families and for the development of children. The Prime Minister is particularly keen to encourage such a practice.

We are planning to introduce a new system of flexible parental leave. The current system of 52 weeks ‘maternity leave and two weeks’ paternity leave is completely unbalanced and does not meet the needs of modern families. Additional paternity leave goes some way to providing parents with greater room for manoeuvre over how they balance their working and caring responsibilities, but it still constrains parents’ choices and reduces employers’ flexibility. We believe that our proposals will be more welcome to employers because of the increased flexibility that they provide.

The hon. Member for Skipton and Ripon asked why we were introducing the additional paternity leave now, when we plan to introduce shared parental leave later. That is a fair question, which I considered carefully. However, when we examined the matter, we noted that the regulatory regime was not quite as burdensome as he implied in his speech. Employers do not have to implement the system unless and until someone applies for additional paternity leave. The regulatory impact assessment that accompanies the measure suggests that that would affect under 1% of employers a year. Although that might be a burden on those employers, the way in which we propose to introduce the measure means that it will be relatively light, even for the small number of employers who have to use additional paternity leave before the shared parental system that we plan to bring in is introduced.

Another reason that weighed heavily on my decision to proceed with the measure is that its passage through the House and removing the regulation would entail some cost to businesses. However, more important, it will provide some serious lessons from employers who have to administer additional paternity leave, enabling us to get shared parental leave right. It is a sort of pilot, and without it, we would lose the lessons from it, creating a danger that, when we implemented shared parental leave, we would not do it in an optimal way. I therefore hope that the hon. Gentleman understands that, although it was a difficult decision, it made sense for employers, and that is why we went ahead.

[Julian Smith]

I thank the Minister for his detailed response. Does that mean that he might buy my idea of a holiday in 2011 so that the pilot can happen and the new law is not introduced during a crucial period for British business?

[Mr Davey]

I can confirm that I want a holiday next year, but although I have some sympathy for the hon. Gentleman’s suggestion of a holiday for employment law, it would be impossible. Under EU legal obligations, we must implement some employment law next year. For example, the agency workers regulations come into force in October 2011. We would contravene our obligations under EU law if we did not implement them. Of course, additional paternity leave also comes into effect.

Although we are committed to ensuring that we review employment laws and take businesses’ considerations into account, as the hon. Gentleman said in his speech, some items are legacies from the previous Government. We had to think carefully about them, but our judgment was that we could not not introduce them.

The hon. Gentleman mentioned the claim by the Institute of Directors that we are gold-plating the agency workers directive. I met representatives of the Institute of Directors and discussed the matter in detail. I asked for the reason why they thought that and for their legal advice. We fundamentally disagree with the organisation on the matter. I assure the hon. Gentleman that we have no intention of gold-plating the agency workers regulations. We inherited them. He knows that the directive finds its legal basis in the social partner agreement between the CBI and the TUC. He also knows that that agreement, to which the CBI signed up on behalf of British business, introduced a 12-week exemption. When I discussed with businesses how we could look at implementing the agency workers regulations, I asked whether, if the social partners did not like what we were doing, they would be prepared to risk losing the 12-week exemption. Businesses made it absolutely clear that the 12-week exemption was critical to them above anything else. We therefore decided that, to ensure that we did not lose the exemption that the CBI had won, we had to proceed to implement the agency workers regulations.

I had hoped, in discussions with the CBI and the TUC, that we could reach an agreement on ameliorating some of those regulations in a way that would benefit workers and employees as well as employers. I tried very hard to achieve that, but I was unfortunately unable to do so. However, I can reassure my hon. Friend that we worked very hard. If he reads my ministerial statement on the issue carefully, he will get the flavour of the frustration that I felt in being unable to go further, but as he said, we inherited that measure. We tried our best to ensure that it is not as damaging as it could otherwise be. We will now engage with employers and trade unions on the guidance for the implementation of the regulations, which is an important step.

[Gavin Williamson]

In a former life as a potter, I remember talking to my German colleagues who were porcelain manufacturers. They said that their Government, who were very enthusiastic to introduce regulations, would always sit down with them and talk about how they would minimise the effect of European regulations.

I should like to point out what a disgrace it is that Opposition Members care so little about creating jobs. We are dealing with their legacies. I urge the Minister to do all he can to resist the urge of the European Union to stifle our creativity in business.

[Mr Davey]

My hon. Friend is very prescient, because I was about to talk about the European dimension of employment law. As hon. Members know, that is the genesis of a lot of employment law in Britain. In particular, I wanted to focus on a short-term issue with which I am dealing. The hon. Member for Skipton and Ripon did not mention it, but it speaks very much to the thrust of his remarks.

What problems would British business and Britain face if the amendments to the pregnant workers directive passed in the European Parliament on 20 October were implemented? British MEPs from all parties voted against the amendments, but unfortunately and slightly unexpectedly, there was a small majority in favour of them. The amendments would impose considerable additional costs on many member states when their economies can least afford them. For the UK, the bill would be at least £2.4 billion a year, doubling current spending in that area. That is simply unacceptable. The European requirement for full pay during maternity leave that results from the European Parliament amendment is a red line for the Government. We will now work hard in the Council and with member states that share our views to oppose the Parliament’s proposal. That may not give the hon. Gentleman the holiday he wants, but it will hopefully give him some reassurance that we will work hard to stop the system getting worse.

I should stress that the Government are committed to playing a strong and positive role with our European partners, so that we are equipped to deal with the challenges and opportunities thrown up by an increasingly open and competitive global economy, but the EU must adapt to those challenges and opportunities. The priority needs to be growth and global competitiveness, not introducing more employment regulation. In future, UK Ministers will get involved earlier and more strategically in EU policy development, and we will push to embed smart regulation within the policies of the European Commission, Parliament and Council.

By that, I mean that we want to ensure that proper impact assessments are made of new proposals for regulations by the Council, the Commission and the Parliament. No such assessments are made by the Council at the moment, despite an inter-institutional agreement in 2004; the Parliament’s impact assessment are poor, to say the least; and the Commission’s are only just improving. I am determined that we push hard on that, because the decision to try to stop over-burdensome regulation has already been taken by the EU but not implemented.

We will make it a priority to challenge restrictive practices and strive to ensure that the employment law framework is flexible, proportionate and based on the principle of subsidiarity. As I said, the framework needs to take into account the whole labour market—not only those who already have jobs, but people who are trying to get back into work. To do that effectively, it is important that we move beyond stale debates on issues such as the working time directive and the opt-out, and instead recognise, and respond to, the changing nature of work and the structural economic problems that exist across Europe. The Government will defend our opt-out, because we believe that it is an essential protection for many employers and employees throughout the country. However, the agenda of the working time directive is an agenda from the past, and we need to get real about the challenges facing Europe’s economy. Against the backdrop of the problems facing Europe’s economy, it is neither fair nor sensible to force people to work less than they would choose if the decision were left up to them. It is time that we all recognised that fact across Europe.

The EU has talked the language of better regulation for a few years now, but it has not been translated into action. We have to ensure that EU institutions put this into practice, take impact assessments more seriously and consider other smart regulatory options, including effective screening of proposals for their impact on businesses to ensure that their growth is not stunted. Our job is to help companies start up and grow, by working with our partners in Europe and creating the right business conditions here at home.

On the issue of the default retirement age, which the hon. Gentleman raised—and which was raised with him in an intervention—it was a coalition agreement, entered into willingly and enthusiastically by both sides. We are now consulting on it and I urge him and businesses that are concerned about the abolition of the default retirement age, to respond to that consultation. We will listen, but when the Chancellor made his Budget statement earlier this year he said that we would go ahead with abolition. When we implement that, we want to ensure that we do so in a way that businesses find easy to manage, given the need to performance-manage employees. I sometimes get a little frustrated when businesses say that they use the default retirement age to get rid of people who, in their opinion, are not very good. That is not good management of staff and they should performance-manage more effectively. Many employers have campaigned for the abolition of the default retirement age, and no longer have one in their policy, because they believe in better performance-management of their staff. That is better for their businesses, because staff are more productive as a result. I will probably have to disagree with the hon. Gentleman on the default retirement age and pray in aid the Chancellor in support of my case.

A carefully calibrated framework of employment law, which balances the needs of employers with the rights of individuals, is an important part of the picture. As we work on the detail of our proposals in the months ahead, we will come up with a blueprint that gets that balance right. We are not about to make life more difficult for companies, especially small firms, still feeling the aftershocks of the worst recession in 60 years, so we will not tie them up in red tape or weigh them down with new regulations.

I recognise that we still have a way to go before we achieve our ambition of making Britain one of the best places in the world to start and grow a business, but we will get there, and we will do it by working in partnership with employers—getting our economy growing again to create jobs and secure prosperity in the years ahead.

Question put and agreed to.

18:58

House adjourned.

Westminster Hall

Wednesday 3rd November 2010 Westminster Hall

Wednesday 3 November 2010

[Mr Gary Streeter in the Chair]

Speech Therapy Services (Children)

Wednesday 3rd November 2010 Westminster Hall

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

09:30

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

Thank you for calling me to speak in this important debate, Mr Streeter. It is important because of the very large number of children in this country who require speech therapy to make the most of their lives. I am delighted that the Minister is able to join us today and apologise for dragging her away from the important work of putting together the Green Paper that we anticipate. I pay tribute to the personal interest she has shown in the matter not only since getting her job in government, but when she was in opposition.

I will not start by reciting the usual litany of depressing statistics associated with speech and language therapy as my opening gambit, which would be a little predictable. Instead, I will start by paying tribute to the work of some of the charities involved and to the previous Government. What we have today is the end result of a process. It started with a charity called I CAN, which ran the campaign, “Make Chatter Matter”, and spent three years building awareness among politicians, such as us, about the importance of speech and language communication. That led to the Bercow review, the better communication action plan—brought forward by the previous Government—the appointment of Jean Gross as communications champion and the designation of 2011 as the year of speech, language and communication.

We are part way along an important journey that was initiated by the previous Government and then taken up by the current Government. That is why it is really important to pay tribute to the fact that a Green Paper is now coming forward. Among all the organisational changes that we are planning in public services, I am delighted that the Government have found space in their schedule for a Green Paper on the important issue of special educational needs. It is a welcome opportunity to entrench greater choice for parents, earlier identification of the needs of those with speech and language difficulties, more tailored support and improved transition services, which I believe are so important.

Clearly, there is still work to be done. There is an organisation in the north-west called speechbubble.co.uk —why they have to add “.co.uk” to everything these days, I do not know—which works in my constituency and many others in the region to encourage better quality speech and language provision. In its survey of SEN co-ordinators, it found that more than half had never heard of the Bercow report and were not even aware of that ongoing process.

Members must forgive me, for I will now embark on a bit of a shopping list of issues that I think still need to be considered in the Green Paper. Given the time available and the number of Members who wish to speak, they will have to forgive me if it turns into something like an episode of “Supermarket Sweep”, rather than a shopping list. I will do my best not to lose coherence.

It is crucially important that I pay tribute to my own speech therapist, Mrs Williams, who saw me for four years, between the ages of five and nine, to help me learn to communicate better. It was only when I was preparing for the debate that I began to think about what she had taught me, as I never really thought about it at the time. She was not teaching me to make a noise or how to speak, but how to communicate and get my message across. There is often a misconception that speech and language therapy is about putting stuff into people’s minds so that they have something to say. There was plenty going on in my mind—far too much, actually—so my mouth could not keep up when I was trying to express it all. She taught me to slow down and not to panic, stammer or trip over myself. Although that is not always ideal within a parliamentary setting, when one might have a six-minute speech limit, it is still a useful lesson today. There is no need to rush. Just because one has things to say, one does not need to get them all out in 30 seconds.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

I congratulate the hon. Gentleman on securing the debate. Unfortunately, I will have to leave before the end to attend a meeting, which I apologise for. He rightly paid tribute to the work of his speech and language therapist. Does he agree with me that it is important that all levels of the Government work with the Royal College of Speech and Language when developing their policies in that area so as to maximise the potential benefit they can get from it?

[Paul Maynard]

I thank the hon. Gentleman for his intervention and agree entirely. Our speech and language therapists are a much underused resource, and as time moves on they will be in much more demand. A report shortly to be published by the International Longevity Centre will tell us how, with the growing incidence of Alzheimer’s and the difficulties that adults with communication problems will face, the pressure on speech and language therapists will increase far more.

[David Simpson (Upper Bann) (DUP)]

I, too, congratulate the hon. Gentleman on securing the debate, and I congratulate the work of speech therapists. One issue that we have found in Northern Ireland relates to recruitment; perhaps he will comment on it. We find that of the 15 or so young ladies—it is predominantly young women—who start the course in college, only four or five are left trying to finish the course at the end of the year. The therapists do fantastic work, but there is a concern about the provision, and I would be interested to hear his comments on that.

[Paul Maynard]

I thank the hon. Gentleman for an interesting contribution, which highlights a problem that covers so many areas of medical training: what comes in at the beginning does not always come out at the end. We have to support those who are making a commitment to public service.

It is worth noting that speech and language therapists play an immensely important role across a wide range of areas. In the youth justice system, for example, the offenders are children, although we often do not think of them as such. The work that speech and language therapists do within young offender institutions is vital in reducing reoffending rates and crucial for improving life chances. The Children’s Communication Coalition made an interesting comment in its June 2010 report:

“The true costs of not supporting children with speech, language and communication needs—above and beyond those that are measurable in direct financial terms—are very great indeed. The personal and familial costs of poor educational attainment, descent into criminality and long-term exclusion from the mainstream are hugely significant and potentially corrosive to society at large. Poor educational outcomes often lead to poorly paid jobs or unemployment. In turn, this can lead to a perpetuation of the poverty trap and a vicious cycle of health problems and health inequalities”.

In a sense, that could sum up the entire debate in 30 seconds, and I could just sit down. It covers everything we need to be concerned about.

[Nick Smith (Blaenau Gwent) (Lab)]

I congratulate the hon. Gentleman on securing the debate. Does he agree that communication competency needs to be a key performance indicator, along with literacy and numeracy, in our schools?

[Paul Maynard]

I agree entirely. The hon. Gentleman has anticipated my next point. Speech and language therapists are there not just to help children, but to help the entire children’s work force understand that communication needs to be the golden thread running through everything they do. They need to be equipped to train staff, teachers and others who work with children, as well as the children themselves. I ask the Minister to confirm that she will do all she can to ensure that we recruit more speech and language therapists to meet the unmet needs that are out there.

The better communication action plan made a specific commitment to universal screening as part of the healthy child programme. Many major bodies, including the Royal College of Speech and Language Therapists, which I suspect has managed to get many supporters to attend the debate, wants to see that occur at age two and five, in advance of the reading assessment. What steps will the Minister take to ensure that that aspect of the action plan is taken into account?

Another important aspect that is often overlooked is that when we discuss children’s speech therapy we often think of those aspects that are what I describe as being high incidence, but low need. In other words, many children face communication difficulties, such as language delay, but their support needs are actually quite low. There is a much smaller group, which has much more complex needs, but the incidence of that need is relatively low. That poses a particular problem in commissioning. I wonder what the Minister’s views are on how we balance those two competing aspects, because where there is low incidence but high need, it is often more of a health intervention, rather than an educational intervention, that is required.

[Jim Shannon (Strangford) (DUP)]

Just this last year, I witnessed what I can only describe as the transformation of a young boy from being unable to communicate to being able to talk quite clearly within a matter of months, so I have seen at first hand the work that can be done. One of our concerns, which is shared by many people who look after young boys and who try to train them, relates to the financial provision. In relation to the comprehensive spending review cuts that have been made and how they will affect provision, does the hon. Gentleman agree that the front-line service of speech therapy should be retained and that people should know that the moneys are there for young people?

[Paul Maynard]

I thank the hon. Gentleman for his intervention. I agree entirely. That is why we say continually that the most vulnerable are those that really should be protected, and front-line services will be protected.

Whenever we try to abolish quangos in particular, we can always find one saving grace in every quango that gives us a justification for keeping it. With Becta, which provides educational technical equipment, one of the saving graces was the work that it did in the augmentative and assistive communication sector—AAC for short, to save me a bit of time. Can the Minister confirm whether the funding that was originally to go through Becta to the AAC sector will still go to it to fund not just the specialist provision of AAC equipment, but the leadership roles in the sector? That is another part of the better communication action plan that I hope will be continued throughout the year of speech, learning and communication in 2011. Will she also commit to re-examining the issues of provision in the AAC sector? She may not be aware of the problems facing the ACE—Aiding Communication in Education—centre in Oxford, which faces closure as a result of some of the changes in that charity and the funding of the wider sector.

Will the Minister support the proposals from the communication champion, Jean Gross, for a new AAC commissioning model that reflects the differences between high incidence, low need, and low incidence, higher need, which are crucial to a proper appreciation of the sector’s needs?

I said that I did not want continually to go in for shocking statistics, but let me give just one, which is that 55% of children in the more deprived areas arrive at primary school with some form of language delay. That does not necessarily mean that there is anything going on; it just means that they are delayed in the formation of basic skills. That happens for a range of reasons, but often it can be something as simple as mum and dad not talking to them when they were babies.

Booktrust, a charity of which many hon. Members may be aware, does fantastic work in more deprived areas just by handing out bags of books to young mums to encourage them to read and by saying to young dads, “It’s a good thing to sit down with your young child and read them a story. Don’t just watch the football match. Read “Peppa Pig” or whatever children’s literature you happen to have to hand; it helps your children.”

Can the Minister confirm, in light of the CSR, that the very important funding that Booktrust receives from the Government, which allows it to access £4 of private funding for every £1 of Government funding, will continue in order to help us to deal with that language delay and gap in the most deprived areas? That is just one example of the philosophy of early intervention, which is gradually receiving unanimous, all-party support as a principle. What it means in policy terms often varies greatly, but the principle of early intervention is now accepted by all in the House, I hope. It allows us to escape the departmental silo thinking that has bedevilled public policy formation in this country for far too long.

How does the Minister think that the pupil premium, which both coalition parties advocated pre-election, will benefit children requiring speech and language therapy at the moment? In particular, does she agree on the importance of appropriate diagnosis and that improving the quality of diagnosis might lead to fewer children being diagnosed as having special educational needs? Does she recognise that one goal of speech, language and communication therapy must be to take pupils off the SEN register because their language delay has been dealt with, the gaps have been filled and they are now able to participate fully in society? I ask that because there is a particular problem with stigmatisation.

Even 30 years ago, when I had speech therapy, I was taken out of my primary school and transported down to the village health centre. I was regarded as different—special—because I had to be taken out. That was 30 years ago; one would like to think that things had moved on. Unfortunately, the stigma is still there. I urge the Minister to ensure that more and more services can be delivered in the school setting and do not require the pupil to be stigmatised, or made to look different or special.

Let me explain one way of doing what I have described. At Fleetwood high school, in the constituency of Lancaster and Fleetwood, which neighbours mine, children with special educational needs are dealt with under the same umbrella as those who come under the gifted and talented scheme. There is not such a difference between them as one might think, because very many people with special educational needs, and in particular speech and language needs, are also very gifted and talented young men and women. The two are very often the same group. I urge the Minister to consider how such an approach can reduce stigmatisation.

I warmly welcome the ambition of the forthcoming Green Paper to equip parents to have more choice in and more say over how their children are treated by the “system”. One of the grave frustrations of so many parents whom I meet in my advice surgeries—and, I am sure, those whom other hon. Members meet in their surgeries—is that when they take their children to the office of the relevant public organisation and sit down to have a discussion about their child’s needs, they immediately find that there is a form before the public servant in front of them and they are then forced somehow to adjust their child’s needs to fit the existing boxes on the form. If their child’s needs do not quite fit, there is a problem; they do not quite get the tailored support that they need.

Can the Minister make any suggestions about how we start to change the tick-box culture? I think that this is the most crucial question in public policy at the moment: how do we get away from a situation in which services are designed for people to fit into and move to a situation in which services are designed to fit around the needs of the individual? That is important.

[Alun Cairns (Vale of Glamorgan) (Con)]

I congratulate my hon. Friend on securing the debate and on the contribution that he is making. He refers to the Green Paper. Does he share my concern about the risk to the statementing procedures posed by the potential withdrawal of the rights that currently apply under those procedures? An example of the importance to the statementing procedures of speech and language therapy is that 10% of cases at the special educational needs tribunal arise as a result of deficiency in speech and language therapy provision in schools.

[Paul Maynard]

That is a very important statistic and I thank my hon. Friend for making his intervention. I hope that it will be borne in mind that we have to get the process of diagnosis right. There is no point in merely diagnosing children with special educational needs as a shortcut to fulfilling some target in a back office somewhere. The system must be designed around the needs of each individual child.

Finally—as I am sure everyone will be pleased to hear—and most importantly, my biggest concern about the Green Paper is the fact that so much of what we shall require will have to come from the Department of Health as well as the Department for Education. My big fear, based on observing 20 years of public policy in this country, is that getting Departments to talk to each other, to sing from the same hymn sheet and to work to the same agenda is perhaps the hardest task in government. It is not enough just to have the smiling, happy faces of two Cabinet Ministers at the bottom of the introduction page of a Government document. There needs to be an alignment of strategic priorities, close partnership working and agreement. Can the Minister confirm what joint working is occurring with the Department of Health and how the plans for NHS reform, academies and special educational needs will coalesce seamlessly? That is the real challenge.

I do not want to go back into the statistics, but so many children are struggling at school through no fault of their own but merely because their needs have either not been identified or not catered for adequately. Too many children are trapped. It is a form of social exclusion that they are not able to participate fully in society. I strongly welcome all that the Minister is doing in this field, and I urge her to continue her work. I look forward to seeing the Green Paper, as I am sure many other people in the sector do, and I look forward to hearing the Minister’s answers to my questions today.

09:49

[Pat Glass (North West Durham) (Lab)]

I congratulate the hon. Member for Blackpool North and Cleveleys (Paul Maynard) on securing this important debate, which is really important to me and to thousands of children and their families across the country.

The ability to communicate effectively is a key life skill. It underpins our ability to learn and to understand, to express our views and knowledge to others, and to understand their views and knowledge in return. Without good communication skills, we are not able to take our place alongside our peers in an increasingly complex world, in which good interpersonal communication skills are now as important—sometimes more so—than good qualifications.

I apologise for stating the obvious: communication is not just about being able to speak properly. It includes receptive language skills, which is the ability to understand and make sense of what is said to us, expressive language skills, which is the ability to speak clearly and make ourselves understood, and higher-order language skills, which is the ability to use and interpret humour, inference, scepticism, irony and other non-direct language.

There are many reasons why a child might fail to develop age-appropriate communication and language. For some children, there might be a link to a neurological or physiological problem, for instance oral dyspraxia, cerebral palsy or autism, but many more of them simply do not have access to the good language and stimulation that they need from an early age, and therefore enter our schools and nurseries with few, if any, information-carrying words.

In many children, communication disorders are complex and largely hidden. The child can speak, albeit with a limited vocabulary. He—it usually is a he—can go on to learn mechanically and by rote. On any crude measure of progress, such as reading age, the child might seem to be making good progress, but careful and specialist assessment by people such as speech therapists can identify that their grasp and understanding of what they have learned by rote is limited. They might appear to read well, but that reading is mechanical, with little or no understanding. As they have limited language and vocabulary, and their reading is mechanical rather than conscious and creative, their language-into-literacy skills do not develop as they should. That is largely why we have so many children failing to get good reading skills and go on to gain good skills in other areas. They do not have the basic understanding that they need to learn more complex concepts. That can lead to frustration in the classroom, and as a result a child can either become withdrawn, which can be misdiagnosed as a learning difficulty, or have tantrums and difficult behaviour, which can be misdiagnosed as a conduct or a behavioural disorder.

There are more than a million children in this country with speech, language and communication needs that are not the result of language neglect, lack of stimulation or other external factors. That means that in the average classroom there can be two or three children with such communication difficulties. Of that group, a large cohort has specific language impairment, meaning that their difficulty is not related to other general issues such as learning difficulties, hearing impairment, autism or cerebral palsy.

A child with a specific language impairment might well be cognitively able, which is a point made by the hon. Member for Blackpool North and Cleveleys. They will struggle, however, to understand the vocabulary used in the average classroom. A significantly greater number of children have speech, language and communication needs that could be classified as caused by language neglect and lack of stimulation in their early years. Those children need early and appropriate intervention. They and their needs cannot be ignored, nor can they be treated as less deserving simply because their needs are, in a sense, acquired rather than organic. Without appropriate intervention, those children will be diagnosed as conduct disordered or delinquent and will go on into a self-fulfilling prophecy, which will cost this country millions and millions of pounds.

We know from very clear evidence what happens to children with speech, language and communication disorders who do not get appropriate intervention and support. Youth offending services identify that 70% of young offenders have an underlying speech, language or communication disorder. The chief inspector of prisons tells us that more than 60% of prisoners have an underlying speech, language or communication disorder, as do a significant proportion of adults accessing our mental health services.

[Nick Smith]

Is it not astonishing that 70% of people in our criminal justice system have a communication disability or disorder? Should not the Government invest in specific speech and language therapy support, particularly for the young people in our criminal justice system, so that they have a chance to get back into proper life?

[Pat Glass]

I absolutely agree, and I can go on from that.

The National Autistic Society has identified that 70% of young people with autism, the vast majority of whom have an underlying language and/or communication disorder even if that is restricted to higher-order language difficulties, also have a mental health difficulty. Shelter tells us that a significant proportion of people classified as homeless have an underlying language and communication disorder. I could go on and on.

However, those issues are not limited to language and communication disorders; they are seen across many areas of children’s health, such as physiotherapy, occupational health and, one of the huge ones for me, child and adolescent mental health services. Review after review has identified that, to address the issues, diagnosis needs to be timely and carefully carried out by specialists—speech and language therapists—and services need to be appropriate to need and easily accessible, a point made by the hon. Member for Blackpool North and Cleveleys. Specialists in education and health need to work in partnership with the child and the family at the centre, not separately, and not, in the case of health, in a clinic far removed from the day-to-day life of the child in the classroom.

Unlike, I suspect, many other Members here, I do not see more and more speech and language therapists as the only answer. Although I want to add my thanks to specialist speech therapists for the incredible work that they do, and although I consider them part of the way forward, they are not the only answer. In my view and experience, early intervention and appropriate provision include four fundamental necessities. The first is better training for all early years education staff—teachers and support staff. Given that we know that in some cases there will be up to five children with a significant speech, language and communication disorder in an early years classroom, it seems reasonable that every such classroom should have within it one adult—a teacher or a specialist support assistant—who has additional experience or qualifications in this area. I was an assistant director of education in the constituency of my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) a number of years ago, and we made that a requirement of our accessibility strategy. As a result, we saw a shift in the language-into-literacy issues—in the communication difficulties that were preventing children from learning to read and to progress in other areas.

Secondly, language development needs to be an integral part of the whole curriculum. The hon. Member for Blackpool North and Cleveleys talked about pulling children out of lessons and classrooms for one-to-one speech therapy sessions. Such sessions are isolated from what is going on in the child’s classroom, lessons and life, and are much less valuable than ensuring that the child is surrounded by a rich and appropriate vocabulary each and every day, and that lessons are planned and delivered to include language development as key steps.

Thirdly, specialist speech and language therapists need to be actively involved in curriculum design and delivery and in-service training for staff in schools. Finally, we need an accountability framework that understands the importance of language development in learning, and holds not only head teachers and governors, but those who commission children’s health services, to account for the training of staff and the outcomes of children with speech and language difficulties. By not intervening in an appropriate, timely and systemic manner we stand aside and allow generations of children to be labelled behaviourally disordered, conduct-disordered or odd and difficult, or as having learning difficulties. That is wrong and unnecessary, and too often it blights the lives of those children and their families.

As the Minister is here, I want to make a further plea to her to consider transferring the funding for children’s heath services to local authorities alongside funding for public health. It will not be sufficient funding, but at least it and the bulk of the responsibility will be in the same place, which will give parents a little more to hang their hats on when arguing for services.

Again, I congratulate the hon. Member for Blackpool North and Cleveleys on securing this important debate. I will work positively with anyone, on either side of the Chamber, who highlights these matters and is prepared to work with me to address them.

[Mr Gary Streeter (in the Chair)]

We have 14 minutes until wind-ups begin, and six colleagues are trying to catch my eye, so contributions of around seven or eight minutes would be most welcome.

10:00

[Annette Brooke (Mid Dorset and North Poole) (LD)]

It is a pleasure to serve under your chairmanship, Mr Streeter. I apologise that I will have to leave before the end of the debate; one of my constituents has organised a big rally in Old Palace yard for park home owners, and I should be standing alongside the banners that will, inevitably, be there.

I officially start by congratulating the hon. Member for Blackpool North and Cleveleys (Paul Maynard), who spoke elegantly and passionately. He brought the debate alive for us this morning. It is a timely debate because we are at a crossroads; we can look back over the excellent work that came out of the Bercow review, but we are at a point where we need to look forward, learn what we can from the past and take some steps forward. I appreciate the fact that the previous Government commissioned the Bercow report, committed resources—never enough, of course, but the resources were considerable—developed an action plan, appointed a communication champion and designated next year as the national year of speech, language and communication. Those were important steps forward.

As the hon. Gentleman and the hon. Member for North West Durham (Pat Glass) pointed out, there is a spectrum of needs, which is why the matter is complex to debate. At one end, there is high need, low incidence, which needs highly specialised skills and technology, some of which comes in very expensive packages, but what an enormous difference it can make to the quality of life of the child and whole family. I want to touch on the whole family throughout the debate because it is important. At the other end of the spectrum, there are issues that we know can be addressed through simple interventions, which I shall touch on.

It is highly significant that speech, language and communication needs feature in statements of special educational needs for 26.5% of mainstream educated children. How significant the problems are is absolutely staggering. Other Members have dwelt on the fact that if there is a communication problem, a behavioural problem often emerges. That is natural; for a three or four-year-old who cannot express themselves, with adults not responding in the way the child wishes, what else do they do? Inevitably, we will have behavioural problems; and that, of course, identifies the necessity of early intervention. Not intervening early means that problems escalate to widespread exclusions at secondary schools and the concerning percentage of young offenders who have speech and language difficulties. Obviously, we must emphasise that it is not a straight one to one causal relationship, but there is a significant link.

I was interested in the comments by Jean Gross because we are concerned about people thinking, “Oh, the child’s just lazy. There are lots of very clever people who didn’t start to speak until three or four. Do we need early intervention?” I passionately believe that we do. A mother came to me with a boy of four. He could not speak and his behaviour was getting out of control. I suggested that the mother went to the GP to ask for a specialist referral, and the GP came back at me and said, “How dare you tell me how to do my job?” I was rather pleased that I stirred that up. When we talk about training the whole work force in these needs, we need to include health workers, health visitors and GPs, as well as those in education.

I want to be brief, so I shall go over the key issues quickly. I recall that the Bercow report said that provision and joint working is patchy across the country. There were 16 pilots announced in 2009 to look at best practice in working together in health and education. I do not know if there has been a chance to evaluate them, but it is important to look at everything that has been initiated and evaluate it as soon as is timely. We have to learn from all of this, but it is difficult to come up with a national framework because the solutions have to be local.

I am concerned about health provision. We have speech therapists and we have teachers trained by specialist speech therapists, which is good but it must not be a substitute—it is an add-on. Too many authorities are using it as a substitute, but it is not. We must have sufficient qualified speech therapists. I cannot get a grip on what the shortage is. As the Minister is aware, I am always asking parliamentary questions about numbers of specialist workers, but I cannot home in on what the shortage is, and we must have a grasp of what the needs are. I can think of fantastic situations in which specialists trained up pre-school workers, for example, in children’s centres to work with children identified as having language delay. That is good for low-level speech and language problems, but we are not getting a grip on the exact size of the work force needed to address the issues, on how it is all pulled together and on where working together comes forth and provides an add-on. Simply saying, “All we’re doing is perfectly satisfactory,” when it is a substitute, is not good enough.

I emphasise the point the hon. Member for Blackpool North and Cleveleys made about the importance of an individual solution, particularly for a family. A mother who came to see me had six children including five-month-old twins, and one child in the middle had speech and language difficulties. A package was drawn up for her to give an amount of assistance a day. Of course involving parents and carers in the package is important, but, somewhere along the line, the family circumstances have to be taken on board.

Due to time, I shall end there. I endorse all the points made already, and I look to the Minister to focus on getting a grip on how all the services come together to give the best possible start to communication in a child’s life.

10:08

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

I join the tributes to the hon. Member for Blackpool North and Cleveleys (Paul Maynard) for his comprehensive and well informed speech. I congratulate him on securing this important debate. We are debating these matters when the economy could be in better shape. The hon. Gentleman and I were at a meeting in a Committee Room of the House of Lords last week, where the organisations of and for people with disabilities, particularly children with learning disabilities, got together to discuss what is happening, what might happen and what the problems might be given the current situation.

Lord Rix, who is my co-chair of the all-party disability group—perhaps I should put that the other way round—made an outstanding speech. The next day, he followed it up by reading a letter to the Minister responsible for disabled people, the hon. Member for Basingstoke (Maria Miller). Being the gentleman that he is, he apologised for the passion that he had shown the night before, although I do not think that he needed to apologise. Like his speech, his letter was profound, and I will quote an important paragraph from it:

“If support is adequately financed and provided for by all schools, children could remain in a setting in the heart of their local community. Placing this responsibility on parents in terms of their child’s education could be an additional burden in their already complex lives, if the right levels of support, information and advice are not adequately provided. This could also potentially lead to parents having to prioritise aspects of their child’s development—i.e. speech and language therapy over in-class support—which could have significant legal ramifications on issues concerning the responsibility of educating children with special educational needs.”

I am glad that Lord Rix made that point; it is repeated again and again.

Some of us—perhaps all of us—received representations this morning from the Royal College of Speech and Language Therapists, to which the hon. Member for Blackpool North and Cleveleys referred. In the hope of a reply, questions were put to the Minister that included:

“Will communication competency be seen as critical to the forthcoming Schools Paper and will the Minister consider mainstreaming communication competency as a measurable outcome within the school curriculum?”

Other questions raised may emerge during the debate. That underlines how vital education is to the problems that we are discussing—education, education, education.

In the time available, I would like to refer to the work carried out by the hon. Gentleman’s predecessor, Mrs Joan Humble. We were asked by the then Secretary of State for the Department of Children, Schools and Families to set up a review looking at the needs of disabled children and their families. I led that review and inevitably, based on evidence from parents, children, carers and those who work in social services, we had to focus on the importance of funding. If funding was important when things seemed to be affluent, it is much more important today given the financial outlook that we face.

My one regret is not about the findings of the group that I had the privilege to chair. The Department was funded through the allocation of an additional £340 million to look at issues such as early identification, which was one of the points raised by my hon. Friend the Member for North West Durham (Pat Glass). That included £34 million for Scottish children. My one regret is that, as far as I can see, not a penny reached children with special needs in Scotland. Without any consideration for ring-fencing, the Scottish Government allocated the money to local authorities to spend however they wished. All local authorities decided to keep council tax at the present level. There is not a shred of evidence to suggest that the priorities that we presented to the Department were taken on board by any local authority.

Given the comprehensive spending review and the issues that follow from that, my regret today is that the same issue might apply not only to education authorities but to health boards. I thought for a time that the problem applied only to Scotland, but when we examined where the money went in England, sadly in Wales and also in Northern Ireland, we saw that it did not go to where it was intended. Vulnerable children found that their needs were not being met, and other issues such as those discussed today, and those raised by Mencap and other bodies, are not being addressed.

Mencap has noted that certificated training in this area is not mandatory, and that few schools have sufficient professional development funding to sponsor staff who are doing certificated or master courses. That is one issue, but there are more. What goes on in the classroom, the environment and the community is hugely important to children with profound and multiple learning disabilities.

In view of the time, I will conclude by saying that we all want to see the problems that have been identified addressed. We want Parliament to be better informed, and we recognise the work of the various Select Committees. Yesterday, during Health questions, I put a question to the Minister of State, the hon. Member for Sutton and Cheam (Paul Burstow). I asked whether

“the confidential inquiry and the learning disabilities public health observatory will go beyond March and until the work is concluded”.

The Minister of State replied that

“we had a good debate in Westminster Hall earlier this year on this matter, in which I indicated the Government’s support for those observatories. We believe they play a very important role in our understanding of the issues.”—[Official Report, 2 November 2010; Vol. 517, c. 750.]

I welcome that, but I wonder whether the Minister will respond specifically to my question, and provide reassurance to those who support the work that is going on.

10:17

[Rehman Chishti (Gillingham and Rainham) (Con)]

It is a pleasure to serve under your chairmanship, Mr Streeter. I congratulate my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) on securing this debate on an important issue. I will apply the principle that brevity is a virtue and not a vice, and keep my remarks short. First, I would like to put things into context from a Medway perspective. Medway local authority has a good and close relationship with speech and language therapy teams. It has been working collaboratively to develop capacity so that teachers and school staff can address most speech and language needs in school. That frees up time for speech and language therapists to give direct therapy to the children with the most complex needs.

In the current financial climate, where budgets are so closely scrutinised, will the Minister tell us how the Green Paper will address the anomaly of local authorities being responsible for funding speech and language therapy that is diagnosed by health bodies and written in a statement? Will the forthcoming Green Paper provide for a focus of speech and language therapy in early years; for example, through a refocused Sure Start that targets children living in poverty?

10:18

[Vernon Coaker (Gedling) (Lab)]

I join other hon. Members in congratulating the hon. Member for Blackpool North and Cleveleys (Paul Maynard) on securing this debate. Debates that take place in Westminster Hall are often significant. This is one such debate and it deserves a huge audience. It is not only in Parliament that we do not get to debate certain topics that, despite being mainstream, never capture the headlines they deserve.

Sometimes, when we discuss policy, these sorts of issues do not have as high a profile as they should. We are talking about millions of children and adults who cannot communicate effectively. The service that we provide is often a Cinderella service in terms of the demand that it makes of the system, and the way in which the system responds with the money and resources that it receives. Whatever the size of the pot, and we may argue about that, the service does not get its fair share. That is because, for some reason or other, it does not make a loud enough noise, which is why the debate secured by the hon. Gentleman today is vital.

I want to say a couple of things and to raise a particular case that demonstrates some of the problems we have. The project to encourage and help children with their communication, referred to by the hon. Gentleman, is especially important. One of our problems is that sometimes we say, “We need to involve the family,” and of course that is important, but in some of those families the parents cannot communicate particularly well. Their vocabulary is limited.

I do not mean any disrespect to anyone and I am not decrying any particular families; I am making a statement of reality about our social situation. Many of us have experience of what we see in schools, and not just in schools: the limited amount of vocabulary that some children have at two, three, four or five, compared with others of the same age, is frankly astonishing. If we talk to some of the parents—do not get me wrong, they are loving parents, who care and so on—again, we find that the communication stimulus that many of us would recognise in our own homes is not there. Such things are important. I think one problem is the talk of involving the parents, which of course is crucial, when the parents have limited vocabulary to provide in support. We need to develop that.

I do not want to make a political point. We know that we are in difficult times and that there are differences between the parties about spending and so on, but I want to raise a particular case in my constituency, that of Dylan Scothern.

Dylan Scothern is six years old and he is autistic. He cannot communicate. The vocabulary he has now is thanks to the work of his loving parents. His mother, Rachel Scothern, has been at the forefront of the campaign about Dylan that I will come to in a moment. With the help of speech and language therapists, Dylan can communicate with about 20 words. Rachel has put something on Facebook in which they do “The wheels on the truck”—no, I mean, “The wheels on the bus go round and round”—he communicates with it better than I do. He has been brought to that point through the speech and language therapists.

Nottingham Community Health NHS Trust says that its funding for Dylan’s speech and language therapists will now stop because he has reached six years of age. The trust has changed its policy so that only children of five years and under will get speech and language therapy.

As I said, I do not want to make the issue political. I do not care what the budget is for Nottingham Community Health, because I am going back to the point I made before: why is it that such services are always the first that people look to when making savings? That is the importance of the debate secured by the hon. Member for Blackpool North and Cleveleys. There are easy hits when it comes to cutting money—often it is youth services, rather than services for pensioners—and here we have an example in health. Again, that is an important point made by the hon. Gentleman.

The Minister, who I know will take the issue forward, needs to talk to her colleagues in the Department of Health, because there is a young child at a school—he is going to school—who is having his speech and language therapy taken away, not because of the actions of her Department but because of the actions of the Department of Health through Nottingham Community Health.

The case simply has to be revisited, and I am using the debate to ask the Minister to do so. I know she will not know about the case—I do not expect her to know all the details, but I will write to her with them—but can she raise it with her Department of Health colleagues, Nottingham Community Health and others with responsibility? Can she say that in the debate all of us recognised the importance of speech and language therapy for some of the most difficult young people in terms of their learning challenges, and that it is simply not acceptable to cut speech and language therapy for an autistic child because he has reached the age of six? Frankly, that is not good enough. The policy needs to be changed and looked at again.

With that, I shall finish, but going back to the point I made at the beginning. Let the debate be a clarion call not just for the case of Dylan and Rachel Scothern, a family who live in my constituency, but to all of those who provide such services, whether through health or education. We need to recognise their importance and understand that, simply because they are not necessarily front-page news all of the time, they are of fundamental and significant importance to countless families and young people up and down this country. If we mean to provide equal opportunities, we should ensure that those people receive those services, which should not be the first port of call for people with difficult budget decisions to make.

10:25

[Mr David Amess (Southend West) (Con)]

I congratulate my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) on how he introduced the debate. I agree with everything he had to say; indeed, I think that I have agreed with everything that everyone has said thus far, so I will not repeat things.

Just as my hon. Friend waxed lyrical about his experiences at school 30 years ago, with the indulgence of hon. Members I shall talk about my experiences at school 50 years ago. There I was, in a class of 56, in the east end of London, and my teacher, Miss Grey, asked my mother to come up to the school. My mother was worried, thinking her son had been disruptive, but the teacher said, “Do you realise that your son is nicknamed Double Dutch?” Apparently, I could not communicate with anyone—my sister used to interpret what I wanted to say to people. I could not make the sounds “st” or “th”, I had a bad stutter and for three years my mother walked three and a half miles with me to a speech therapist in West Ham lane—I can now hear the violins playing. For three years, it was, literally, “How now brown cow”, which is why I do not have a pure cockney accent. I had old-fashioned braces on my top teeth and on my bottom teeth.

My hon. Friend talked about 30 years ago, but I am talking about 50 years ago and I want to tell the Minister and our Government that all those years ago, in a class of 56 in a challenging part of the country, Miss Grey—to whom, with the speech therapist, I obviously owe everything—could identify me as having those particular problems. Therefore, why is it that in 2010, with all the advances that we rejoice in, I am sitting in the Chamber this morning listening to any number of problems and challenges? I simply want our Government to give children today the same opportunity that I was given all those years ago.

10:27

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

I join other Members in warmly congratulating the hon. Member for Blackpool North and Cleveleys (Paul Maynard) on securing this important debate. He spoke passionately, clearly from unrivalled personal experience and knowledge, about this important area. I agree with the high-quality contributions we have heard from all parts of the Chamber and I hope that the debate sends a powerful message to the Government about the importance of services in this area.

I want to speak in particular about the special value of the ACE—Aiding Communication in Education—centre to which the hon. Gentleman referred and which is based in my constituency, and of ACE North, which is based in Oldham. The centres provide a unique service for parents and professionals, with joint health and education-based approaches, combining whatever it takes to give children with severe communication difficulties access to communication, education and, thereby, independence.

I have seen at first hand the remarkable—often moving—difference the centres make in children’s lives. I took former Labour leader John Smith to the centre once and we were moved almost to tears watching a young girl learning to communicate using assistive technology, opening a world that would otherwise have been closed to her.

The centres provide a level of clinical expertise far beyond what is provided by the statutory services for children with such complex disabilities. Their intervention not only changes lives but saves money in later life. They also save money by preventing cases from reaching tribunals, which may be one of the reasons why some local authorities ask them for assistance.

The centres have a huge loan library of specialist equipment that children and their parents can try before they buy. That saves authorities buying unsuitable, expensive communication devices, which can cost many thousands of pounds and which would, if inappropriately purchased, end up in the school cupboard. The centres also work with the IT sector in a rapidly changing area to develop more effective aids to communication. At the point of use, advice to parents is free and independent, which is a lifeline for families learning to live with and support a child with severe communication difficulties.

The future of the centres and the services they provide is under pressure and under threat, and there are two main reasons for that. One is that the provision of direct funding, which central Government made available through grants and project support, is being shifted to local authorities. We should sound a note of caution to those who, under the mantra of localism, would shift all funding in the direction of local authorities, because highly specialist services can be marginalised and lose out in the process.

The other problem is that although the centres charge local authorities to recoup operation costs, the money is not always forthcoming at the necessary level. Furthermore, charitable donations, which the centres also attract, have decreased considerably due to the tougher competition facing all areas of the third sector in this difficult financial climate.

We therefore face a threat to a vital service. Were that service to go, we would lose something that, since 1984, has given thousands of severely disabled young people a voice and a chance in life. To run down these vital services in the national year of speech, language and communication would clearly be perverse and unacceptable.

[Nick Smith]

I do not want to make a partisan point, but the previous Government showed great leadership on this topic. They set up the Bercow review, and the then Secretary of State for Children, Schools and Families established the communication champion. Does my right hon. Friend, like me, hope that the new Government will show the same energy, dedication and enthusiasm as the previous Government in pursuing change on this important topic?

[Mr Smith]

Yes, I certainly endorse that, although I was not making a party political point, because the shift towards the presumption of local authority funding clearly did not start with the current Administration.

It would be disastrous and a tragedy if we removed the centres, losing their specialist experience and their huge loan library of communication equipment, in a climate where there is technology to help children, but the understanding, guidance and expertise to help them use it is often in desperately short supply. The same is true of the loss of specialist training for teachers and therapists in how to use the technology to support and motivate children in learning and moving towards independence.

The centres therefore face a serious situation, and I ask the Minister for an assurance that central Government sustainability funding for the ACE centres will continue for the full three years, until April 2012. On the centres’ service-level agreements with local authorities, what assurances can she give that councils will have, or will be guided to make available, the resources to ensure that the appropriate assessment and help is available in their area to children who need it? Will she look at providing immediate additional support from the sustainability services fund and the transition fund to ensure the future of the ACE centres? I should also be grateful if she could give an assurance that she will meet representatives of the centres to discuss the way forward so that we can save these valuable services.

10:34

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

I am delighted to serve under your chairmanship, Mr Streeter, and to make my first contribution to a Westminster Hall debate as a shadow Minister.

I congratulate the hon. Member for Blackpool North and Cleveleys (Paul Maynard) on securing this important debate. I compliment him on his well-informed and impassioned speech. Mrs Williams, his speech therapist, taught him not to rush, but to slow down, and a lot of us—especially me—could benefit from following that advice when making our speeches, even given the time constraints. I am delighted that so many Members are in the Chamber to contribute to this important discussion. They have raised many questions, which I hope that the Minister will answer today.

Many Members will know that I have a personal interest in this topic. I did not have speech therapy myself, but my son required it from the age of two and a half. I have put on record the problems we encountered when we moved around the country, and my hon. Friend the Member for Gedling (Vernon Coaker) mentioned a lot of similar issues when he talked about the case of Dylan. My son’s speech therapy stopped when he was seven, because we had moved from Gateshead to London, and we were told that speech therapy was not given to children over the age of five. Incidentally, when we moved back to Gateshead, local professionals said, “We know he’s 14, but he could really still benefit from speech therapy.” Members can imagine how I reacted to that, when he had missed out on seven years of possible speech therapy because of where I lived.

A lot of Members have spoken, and I want to give some quick tributes. My hon. Friend the Member for North West Durham (Pat Glass) gave a very intelligent and thoughtful speech, showing her immense knowledge from a long and successful professional career in the education and SEN sector. She is a true asset to the House, especially on this issue, and the Minister would be wise to pay particular attention to her contributions.

The hon. Member for Mid Dorset and North Poole (Annette Brooke) always speaks with good wisdom and great analysis on SEN matters, and that was evident once again today. My right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr Clarke) is a long-standing campaigner on this issue, and I wish that he could have spoken for longer. The hon. Member for Gillingham and Rainham (Rehman Chishti) gave a short, concise, but important contribution.

My hon. Friend the Member for Gedling gave a very knowledgeable speech, as we would expect, and raised the important case of Dylan in his constituency. I hope that the fact that he has done so will lead to a change in Dylan’s situation. The hon. Member for Southend West (Mr Amess) and my right hon. Friend the Member for Oxford East (Mr Smith) also made excellent contributions.

I regret that I was unable to attend the reception in the Commons a couple of weeks ago to mark the launch of “Hello”, the national year of speech, language and communication, which ties in with this debate, but I look forward to hearing what is planned for 2011. If the Minister can give an assurance that departmental funding for that important initiative will survive the cuts that the Chancellor chose to make, it will signify a commendable commitment to the campaign.

The national year is, of course, one of the 40 recommendations of the Bercow review, an excellent and thorough piece of work, which was welcomed by everyone on both sides of the House. No one was more receptive to those recommendations than the former Secretary of State for Children, Schools and Families, my right hon. Friend the Member for Morley and Outwood (Ed Balls). Together with the Health Secretary at the time, he published an action plan and pledged £12 million to ensure that all the Bercow recommendations were put in place.

It is important to pay tribute to that commitment, as well as to the work of Mr Speaker, who will be keeping a keen eye on the debate. I am sure that commitment is shared by the Minister, and the debate gives her a good opportunity to give us an update on what progress has been made since the election on carrying on the good work that has been done.

The Government have, of course, recently consulted on an SEN and disability Green Paper, and I certainly look forward to reading the responses to it and scrutinising the conclusions that the Minister draws from them. One concern that has been raised with me is that work on the Green Paper is going on while the education and health systems are going through fundamental changes. I hope that the Minister will be able to confirm today that she meets Department of Health Ministers regularly to ensure that when children need support from NHS professionals, as is the case with the children we are discussing, the Government’s reforms will not have a negative impact on the provision of such support.

In that respect, my main concern is that the Green Paper should focus purely on improving services for young people with differing needs and not on reducing the money spent on such improvements. There is real concern in the sector that the results of the comprehensive spending review will force the Minister to do just that. If she could confirm that the funds for statemented children with speech, language and communication difficulties and other needs will be entirely on top of any pupil premium funding that they may attract, I think a lot of people’s fears will be put to rest.

When we include in the equation significant cuts to local government budgets, and the wholesale restructuring of the NHS, which employs the vast majority of the professionals such as Mrs Williams who help children with communication difficulties, we are left with inevitable pressure on funding for supporting those children—unless the Minister can tell us otherwise this morning. I look forward to her speech.

Concerns have also been raised, especially by the National Deaf Children’s Society, that budget cuts to existing Building Schools for the Future projects will mean that new facilities do not meet the standards set for acoustics. I would welcome comments from the Minister on how those effects can be mitigated.

The hon. Member for Blackpool North and Cleveleys described in his maiden speech how without speech therapy at an early age he might never have had the ability to be in the Chamber talking to us. He is a great example of early intervention reaping huge dividends. I am sure that if Mrs Williams is watching today she will be enormously proud of her work—and his.

One of the better things to be announced in connection with the CSR was that the Government are to go ahead with Labour’s plan of extending free nursery places to disadvantaged two-year-olds. Although I am slightly dubious about whether enough money has been committed to achieve that, I hope that doing so will present an opportunity for earlier identification of more children with speech, language and communication needs. Earlier intervention is important in tackling the problems that those difficulties can lead to later in the child’s school career. In some deprived areas, as we have already heard, 50% of children begin school with language delay already obvious. As they get older about two thirds of them will have behavioural problems. Because they are often not recognised as having difficulties that may be causing their behaviour, it leads to exclusion and the problems that go with that. It is no surprise, then, that well over half—probably more like two thirds—of young offenders are said to have those difficulties. With early intervention, I am confident that those depressing figures could be reduced, and I shall welcome any measures set out in the Green Paper to that effect.

I believe that the Government are committed to universal screening for two and five-year-olds, and I would be interested to hear from the Minister how that will be implemented. If we are to have early intervention, it will of course require funding for the extra cases that it brings to light. Training all teachers to spot risk factors at all stages of a child’s school life will require yet more funding. Again, I am not sure where all that funding will come from, and I think that pretty much takes my remarks full circle.

I think that hon. Members who have taken part in the debate are in unanimous agreement that action is needed to ensure that children get the right support. I am sure that the Minister shares that view. I realise that much of what constitutes future Government policy on speech and language therapy will rest on the outcome of the consultation for the Green Paper, so she may not be able to give too much away today; but I hope she can offer some reassurance to Members, as well as to the many parents, professionals and their advocates who will have a keen interest in this debate, that providing the best possible facilities and support for children and young people with speech, language and communication difficulties, as well as other special educational needs, will be a matter of principle and not of price.

10:43

[The Minister of State, Department for Education (Sarah Teather)]

I congratulate the hon. Member for Blackpool North and Cleveleys (Paul Maynard) on securing the debate. I know how committed he is to the issue, and I could not help but hope, as I listened to his speech, that Mrs Williams was beaming with pride, and watching the debate. Similarly I hoped, when my hon. Friend the Member for Southend West (Mr Amess) was speaking, that Miss Grey could hear his tribute to her help.

[Mr Amess]

I think she is dead.

[Sarah Teather]

Perhaps she is listening from another place—if that is not to misuse parliamentary terminology.

I am hugely grateful to the hon. Member for Blackpool North and Cleveleys for securing the debate, and for speaking so knowledgeably and passionately. I was fortunate enough to attend a round-table meeting that he organised a few weeks ago on speech, language and communication needs. He is aware that I share his ambition. His expertise and the way he has campaigned on the issue since coming into Parliament is something that the sector recognises and is grateful for. The Government are grateful too.

The debate has come at an opportune moment because, as hon. Members will know—and as several hon. Members pointed out—several policy areas are in the process of being changed and developed. Consultation has just closed on the NHS White Paper, and we are drawing together White Papers on schools and on public health. The process in which I am personally involved is the production of a Green Paper on special educational needs and disability. Despite the suggestion that that might be a risk, I hope it may be seen as an opportunity. A key theme raised today was that of getting different services—local authorities, education and health—to work together. If everything is changed at the same time there is a much better chance of making sure that the elements of the new system will work closely together. Perhaps it is flippant of me to say so, but if Liberal Democrats and Conservatives can be got to co-operate in government, it cannot be beyond the wit of man to get health and education to work together.

In the past few months I have engaged in a series of small events and round-table meetings with the sector. I hope that hon. Members will not mind if I treat the debate as part of the Green Paper process. I shall do my best to respond to as many as possible of the issues that have been raised, but I shall not get to everyone. However, I shall pass on to the Department of Health the questions that have been raised, or make sure that they form part of our process of forming the Green Paper.

There were many knowledgeable speeches, including those by my hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke), who has spoken on the issue over a long period; the hon. Member for North West Durham (Pat Glass), a new Member, to whom I always enjoy listening, and who speaks passionately on the subject; and the right hon. Member for Coatbridge, Chryston and Bellshill (Mr Clarke), who has campaigned on the issue for many years. I was particularly grateful, because those hon. Members have a long-standing interest in what we are debating.

Speech, language and communication skills are the bedrock of learning. If someone cannot communicate their needs, those needs are unlikely to be met. If they cannot explain what they do not understand, their questions are unlikely to be answered. If someone cannot tell another person how they feel, that person cannot help them; and it will probably be a struggle to make friends. Children with speech, language and communication needs can have a lonely childhood and a poor education, and it is no wonder that many go on to develop behavioural difficulties or that they are misdiagnosed.

As many hon. Members have said, the range of problems is huge, from speech delay to intractable and chronic problems that require intensive intervention. Speech, language and communication issues may occur alone or co-exist with other special educational needs or social disadvantage. The hon. Member for North West Durham focused on that overlap with social disadvantage, and I want to touch on it shortly.

Speech therapy and other services, allied to good teaching, are vital for children and young people with the difficulties in question, to help them learn and get the most out of life. There has been significant progress, and the Green Paper will build on the work that the previous Government did, not rip it up and start again. I recognise that, particularly in the matter of speech, language and communication needs, progress was made. I pay tribute to the part that Mr Speaker played in raising the profile of the issue. The Bercow review comprehensively mapped out the challenges in policy, and since then much progress has been made in accomplishing the action plan.

We are of course about to begin the first national year of speech, language and communication, and I congratulate the Communication Trust and the communication champion Jean Gross on their work to promote better information for professionals and parents. Raising awareness of speech, language and communication needs is the theme of the trust’s work and the “Hello” campaign that the hon. Member for Washington and Sunderland West (Mrs Hodgson) mentioned. If we are to make the best use of the expertise that we have in speech and language therapy, and in other matters, we must get much better at picking up problems earlier and putting in place the right package of support.

Several hon. Members mentioned the fact that more than 60% of young offenders have speech, language and communication difficulties. That is a shocking statistic and a clear reminder, if we should need any more, of the importance of intervening early to prevent problems later.

[Pat Glass]

The Minister spoke about early intervention, which has huge support. However, we are hearing fairly reliable but worrying reports that the much-trumpeted pupil premium will not be paid for children under the age of five. Will the Minister confirm that it will be paid for all children in education from the age of two, and not be restricted to those over the age of five?

[Sarah Teather]

The hon. Lady will be aware that the consultation closed just before the comprehensive spending review. We will be making a much more detailed announcement on the pupil premium shortly, but we want to ensure that local authorities know much more about the scheme when they get their settlement.

I was about to speak about some of the issues raised by the hon. Lady in her speech. Early identification is vital for the child and the family; as she said, it will reduce costly interventions later. It is essential that more timely referrals are made to specialist services. That is why I asked Dame Claire Tickell, who is leading a review on the early years foundation stage, to look specifically at how to improve early identification of such problems by the EYFS. She is leading the process at the moment, and she will soon be reporting her findings to the Government.

For the same reason, we have extended the two-year-old offer to significantly more disadvantaged young children. About 130,000 disadvantaged two-year-olds will benefit from 15 hours of early education a week. That point was raised by a number of Members. Indeed, the hon. Member for Gedling (Vernon Coaker) said that children often arrive at nursery without the required language skills because they have not been exposed to language in the usual way. Offering high-quality early education is vital in giving those children the chance to pick up those skills.

The hon. Member for Gillingham and Rainham (Rehman Chishti) spoke about Sure Start centres. Many already provide speech and language therapy, but more use of such evidence-based programmes is definitely part of the reform programme that the Government want to institute. The Under-Secretary of State for Health, my hon. Friend the Member for Guildford (Anne Milton), who is responsible for public health, recently confirmed the Government’s intention during this Parliament to recruit and train 4,200 health visitors. Health visitors will be key in picking up on speech delay in very young children, ensuring that they are referred to the appropriate services, including Sure Start centres.

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

rose—

[Nick Smith]

rose—

[Sarah Teather]

I shall give way first to my hon. Friend the Member for South Swindon (Mr Buckland).

[Mr Buckland]

I am grateful that my hon. Friend made that point about health visitors. As we know, they carry out a uniform hearing test for very young children. It seems to me and many others that we should be training health visitors to take that sort of approach for speech, language and communication difficulties.

[Sarah Teather]

Health visitors are the key to picking up problems in the early years and making appropriate referrals. Some really interesting projects have been undertaken in Manchester, using community-based budgets; they linked health and education, realising that many children who fall behind when they get to nursery school have often missed health checks. Ways of sharing that data are important.

[Nick Smith]

I thank the Minister for giving way. I thank her also for confirming that the Government will not rip up plans introduced by the previous Government to take forward this important agenda. However, some of us are concerned that the new commissioning agenda for the national health service might mean that specialist services for speech and language therapy will not be commissioned by GP consortiums. Will the Minister confirm that special efforts will be made to ensure that GP consortiums are fully aware of this important service and that they continue to make it available?

[Sarah Teather]

I shall turn to commissioning in a moment. First, I want to say something about the school work force, a theme that was developed during the debate. It is vital that teachers and other members of the children’s work force have access to information, and that they have the opportunity for professional development in supporting children with special educational needs. Those on the front line are often the first to pick up problems, and they are vital in implementing whatever is suggested by the specialists.

One Member—I noted the point but not who raised it—spoke about the need for speech and language therapy to be well integrated into what happens in school. There are some good examples of that. Indeed, it is the kind of good practice that we want to build on through the Green Paper, with speech and language therapists training teachers to ensure that the therapists’ work continues in the classroom once the specialist help is over. That is vital. Progress has been made in recent years with the development of dedicated resources for teacher trainers and trainees, with specialist professional development for special educational needs co-ordinators and with online training material for school staff on a range of special educational needs, including specific materials on speech, language and communication needs for teachers and other staff.

[Alun Cairns]

I am grateful to the Minister for giving way. The shortage of speech and language therapists for many schools means that when the need for specialist help arises it is not necessarily there. Often, only speech and language therapists themselves can deliver the necessary support, rather than the problem being passed on to the teacher every time.

[Sarah Teather]

We need a mix; that is why I said that speech and language therapists can often offer good professional advice to teachers, who are then able to do some of that work during the week. The number of speech and language therapists is rising consistently. The question of whether we have enough depends on commissioning, and the way in which those therapists are employed. The White Paper on schools and the special educational needs Green Paper will set out plans for developing the knowledge, understanding and skills of the children’s work force and will specifically address continuing professional development.

A number of Members asked about commissioning. I realise that we need to be much better at integrating the commissioning of services for children with special educational needs, as in many other areas. As I said earlier, I hope that the rapid change experienced in many areas will provide us with the opportunity to do much better. We are creating more diverse school systems with more freedom for schools to innovate; and the NHS White Paper focuses on creating locally based opportunities to improve patient care.

Improving outcomes is exactly what Mr Speaker wanted to achieve for children with such difficulties through his review. The challenge is to design future arrangements that work much better together and that focus specifically on the needs of children and families. I am working closely with colleagues at the Department of Health on all these matters. I am determined to ensure that we are better able to streamline the assessment process.

[Vernon Coaker]

rose—

[Sarah Teather]

Only three minutes remain, and people are already arriving for the next debate. I still have five pages of notes, so I shall end up rushing.

The hon. Member for Gedling mentioned a constituent of his, and I will ensure that excerpts from his speech are passed to Ministers at the Department of Health so that the matter is drawn to their attention. Things falling between Departments is exactly what we want to address in the Green Paper.

There are a couple of other points that I shall not manage to answer, but the hon. Member for North West Durham raised the question of the differences in commissioning for high need with low incidence and low need with high incidence. I know that the Department of Health is aware of the communication champion’s views on commissioning, and those views will be taken into account in designing the system.

I shall finish with a few words about the Green Paper.

[Mr Andrew Smith]

Will the Minister give way on ACE centres?

[Sarah Teather]

On that subject, my Department is considering the best way to secure support for children who require augmentative and alternative communication with colleagues in the Department of Health following the spending review. I hope that the right hon. Gentleman will understand that I am not able to give much detail on those commitments, because there is much yet to do.

I have one minute left, which is not enough time to say all that I want about the Green Paper. We have a real resource of knowledge in Parliament, and many Members have a real passion about the subject. The Green Paper is part of a consultation process, so I hope that right hon. and hon. Members will feel able to use their knowledge and expertise and get involved. I shall try to find ways to involve parliamentarians with such expertise; I am well aware of how much experience Members of Parliament have, both personally and in their campaigning role. I look forward to debating these issues again with those who are here today.

Consular Services

Wednesday 3rd November 2010 Westminster Hall

10:59

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

I welcome the opportunity to hold this debate. I would like to start by reporting my personal experience of a number of harrowing or complex cases, such as that of Mr Khadum al Sarraj—an Iraqi national married to a British citizen, Shereen Nasser—who was detained at Camp Cropper in Baghdad. He was fortunately released eventually, and is now safe in the UK. There are also the cases of Mr El Mahdy, who is currently detained in a police station in Qatar; Mr Neil Juwaheer, who died in suspicious circumstances in a police cell in Brazil; and Robbie Hughes, who was very badly beaten in an attack in Malia in Crete. I want to dwell on the last two cases at some length.

The death, serious injury or detention of a loved one abroad can be the most traumatic experience anyone is likely to face in a lifetime. It is easy to see why. One is stranded in a foreign country with all the language barriers that brings, the cultural barriers, the different legal systems, often dwindling financial resources and corruption in the legal service of the country or within the police. It is clear why it can be a devastating experience for a family. I would like to consider two cases in some depth.

First, there is the case of Neil Juwaheer. My constituents, the Juwaheers, live in Carshalton, and their son, Neil, died in suspicious circumstances while in police custody in Brazil. The Brazilian tourist police report included a statement that a torn package of drug powder was found in his body—and that caused the death by chemical intoxication—a claim that is disputed by the family and by an autopsy that they had carried out. They allege that their son was in fact restrained in a cruel and barbaric way by strapping him up with antenna wire, and was beaten, and that was what probably caused his death while in detention in Brazil.

I first raised the matter with the Brazil desk of the Foreign and Commonwealth Office in 2007. At that point I raised concerns about the family’s inability to get closure on their son’s death, because the process in Brazil is so slow. I tried to identify what further the FCO might be able to do to support the family. Kim Howells, the then Minister, set out in his response in October 2007 what the FCO had been able to do—the consul had assisted the family when they made a visit to Brazil—and confirmed that the Brazilian police were continuing their investigation, though that would take time. He added that the British Government will only consider intervention if the investigation takes longer than the norm for a Brazilian national. I will shortly come back to that point. Mr Juwaheer was provided with a list of English-speaking lawyers, and it was suggested that he should seek legal advice in Brazil and consider appointing a lawyer, which he then did.

I followed that up with a further letter to the then Foreign Secretary, the right hon. Member for South Shields (David Miliband), in February 2008. I set out again the alleged circumstances of the death, explained that Mr Juwaheer had followed the FCO advice, in getting in touch with and securing the assistance of a lawyer in Brazil. I went on to set out why I thought there were reasons for the FCO to get involved in the case. It was not just a routine case as far as the Brazilian police or judicial system were concerned. I set out the concerns that we had about some aspects of the case. For instance, the head of the Brazilian CID, who was investigating the case, had been suspended, and it was alleged that he had been responsible for the deaths of other people. Two autopsies were deemed inconclusive, although miraculously, later, the alleged package that was supposed to contain drugs materialised after the autopsies had been completed. There were allegations that Mr Juwaheer, when he died, was foaming at the mouth, but that can be a symptom of asthma, not drug abuse. If it was suggested that he had been having a seizure, why was he not sent to hospital, as opposed to being detained at the police station? Why was he inappropriately and tightly wrapped up in antenna wire, leaving severe marks on his body which showed up in the autopsy? The autopsy that the family had carried out suggested that he had been beaten and had died. There was some difference of opinion between the autopsies about whether he died a violent death or from an overdose. Clearly, there were a large number of suspicious circumstances that surrounded this death. Even for the Brazilian police and legal system, this must have been an atypical case.

I again took it up with the FCO and, I am afraid to say, simply got a letter repeating the content of a previous reply, setting out that the FCO could do nothing because the case was being dealt with in the way that the Brazilian legal system would deal with it. I want to come back to the question about the British Government only considering intervention if the investigation takes longer than the norm for a Brazilian national. I do not know whether the Minister, when he replies, will be able to set out what he thinks the norm is in relation to a case involving a Brazilian national. One could argue that if the norm for a Brazilian case was to take 20 years, perhaps the FCO would still feel duty bound to get involved to some extent, because I think we would all want to support intervention in cases where a legal system has either clearly failed or is dragged out to such an extent that it is clear that nobody is going to get justice at the end of the process.

The second case I would like to refer to is that of Robbie Hughes. The matter is subject to a court case in Crete at the moment, so I will be careful what I say. The facts are known of what happened and are widely documented. He was seriously injured during an attack in Malia in Crete. It is alleged that his attackers may have been British tourists. His mother is a constituent of mine and made contact with me while she was out there, after she had flown out to Greece to support him. She encountered all the problems that the Juwaheer family had encountered, in terms of trying to overcome the language barrier, dealing the Greek police, dealing with a hospital environment, of which frankly British tourists need to be aware. If they are going to Greece, they need to make some insurance preparations, because if they end up in a Greek national health service facility they are going to be rather shocked by what they find. Certainly, Maggie Hughes was incredibly shocked by what she found and the level of care that was being provided to her son. As a result of what happened to Robbie, she has set up an organisation called Please Enjoy, Don’t Destroy, and is campaigning on these issues.

In defence of the FCO staff, Maggie Hughes said they were as helpful as possible. However, they were grossly overstretched and had six people who were trying to cover all of the Greek islands. If you imagine what the Greek islands are like in the summer with hundreds of thousands of Brits over there holidaying, six people to cover that area is not sufficient. What that meant was that the FCO was ringing my constituent Maggie Hughes and saying, in effect, “We are aware of a British family; something dreadful has happened to their son or daughter. Would you be willing to make contact with them and help them and provide support?” She did not object to that; she was happy to do it; she had been through that experience. However, one has to question whether it is entirely appropriate for the FCO to call on British residents when they are abroad to seek their support for British citizens who have either been injured or seriously affected by an incident abroad.

[Stephen Twigg (Liverpool, West Derby) (Lab/Co-op)]

I congratulate the hon. Gentleman on securing this important debate today. Two weeks ago at Prime Minister’s questions, I had the opportunity to raise with the Prime Minister the case of Gary Dunne from my constituency, who was murdered in Spain. The Prime Minister kindly agreed to meet Gary’s parents, Steve and Lesley, who have been campaigning on issues arising from that experience in a very similar fashion to the constituents whom the hon. Gentleman mentioned.

One aspect of the Dunnes’ experience in Spain was precisely the lack of efficiency in the consular response in dealing with the family following Gary’s murder. So I congratulate the hon. Gentleman on securing this debate and I hope that, when the Minister responds, there will be reference to the need for greater efficiency and speed in dealing with cases such as those described by the hon. Gentleman and that of my former constituent, Gary Dunne.

[Tom Brake]

I am very grateful to the hon. Gentleman for his intervention. As he confirmed, he is simply seeking to reinforce these points about what support can be given to families. I think that we would agree that the type of support that we are talking about is not the FCO and consular staff getting involved to help someone when they have lost their passport. These are cases in which someone has been murdered or perhaps seriously injured as a result of a car accident, an attack or something else of that nature. So we are talking about a relatively small group of people and not about each and every British citizen who encounters some difficulty while they are abroad.

My involvement with Maggie and Robbie Hughes led to Maggie and me holding a meeting in Parliament at the end of last year. I have a copy of the report that was produced after that meeting, which I will hand to the Minister at the end of this debate. The report just sums up the recommendations we made at the end of that meeting. There should be a copy of the report within the FCO already, because Julian Braithwaite, the director of consular services, attended that meeting, and I am sure that he was sent a copy of the report afterwards. However, I will give the Minister another copy so that he has it to hand in case the first one has been mislaid.

So what do we suggest should be done? First, let me say that I am not the only one making these suggestions, nor is it just the hon. Member for Liverpool, West Derby (Stephen Twigg), who just intervened on me, and nor is it just Maggie Hughes and Mrs Juwaheer. Organisations such as Support After Murder and Manslaughter Abroad and indeed the National Policing Improvement Agency also support the recommendations made in the report. We came up with many of them after that meeting, which was with families who have been affected by either the murder or the involvement in a serious accident of a loved one abroad.

I will outline those recommendations. First, the FCO needs to provide more information about the services that it offers. I am pleased that, following Maggie’s intervention, the FCO website has been improved in terms of the level of information that it provides. Secondly, the FCO needs to provide more help in getting family members to wherever their loved ones are abroad. Occasionally, the family involved will have difficulty in physically getting to the place where the incident occurred.

Thirdly, the FCO should help to report crime to the local police and obtain police reports. That was clearly a big issue for some families who attended the meeting, because the police that they had dealt with were refusing to accept that a crime had been committed. Fourthly, the FCO should intervene if no police action is forthcoming. Fifthly, the FCO should challenge police corruption. Sixthly, the FCO should be able to provide information and assistance in serious cases, and I think that that is perhaps the crunch point. We are talking about the relatively small number of people who experience a real tragedy abroad. Furthermore, I would add to that recommendation in our report that there should be an agreed level of service, clearly setting out what different Departments and agencies are responsible for.

I acknowledge that by restricting this type of support to people involved in the most serious cases there will be other people on the margins who will perhaps feel let down by the FCO, even if the FCO makes the improvements that we suggest. Nevertheless, we have got to be realistic about what is achievable, particularly in the present climate. Therefore, I am afraid that there will be families who will miss out, even though they may feel—perhaps rightly—that their cases were as serious as some of the other cases that we have referred to.

Seventhly, the FCO should provide a translation service, or know where such a service can be secured. Simply providing a list of lawyers or a list of translators is not actually the same as providing access to a legal or translation service. Eighthly, the FCO should strengthen or resurrect a network of honorary consuls able to provide local knowledge to support victims and their families at a time of crisis.

Coincidentally, because our meeting was principally about Greece—that was not our intention, but the families who came had principally experienced some tragedy in Greece—there are a number of recommendations about how the Greek police and authorities should work together with the British police. However, I think that those recommendations are applicable to whichever country we are talking about.

So, the report made a strong recommendation that a victim’s family member should attend any joint meetings between Greek and UK police, or between other Greek and UK authorities, so that the family member can provide some insight about what it actually means to a family when such an incident occurs.

There is one other aspect that is clearly not relevant to the Juwaheer case but is very relevant to what happens in places such as Malia in Crete. It relates to what the FCO can do with tour operators, and I know that the previous Minister in the last Government who I dealt with, Kim Howells, worked hard on this issue. The FCO should work with the tour operators to establish what more they can do to try to ensure that the people who are going abroad to have a happy time actually have a happy time and do not end up very seriously injured as a result of binge drinking. Even now, Maggie Hughes, who has been out to Greece on a regular basis, is still hearing of or even overhearing tour operators or tour reps encouraging people to visit Greece, by saying, “Go there, it’s really cheap and you can get completely blotto for next to nothing.” We need to clamp down on the tour operators and ensure that they understand that they have a real responsibility to tackle binge drinking and certainly should not be promoting it, as some of them still appear to be doing.

Also, there may be more work that tour operators can do in relation to insurance, because even if British people are travelling to EU countries the level of care that they will receive in some hospitals in those countries can be absolutely dire, and if they do not have the right level of insurance they will have a really nasty shock if they turn up at one of those hospitals.

Since we produced that report last year, I know that Victim Support has set up a national homicide service, which was started under the previous Government. That service provides one-to-one support for families who have been affected by murder or manslaughter. I wonder what progress has been made on that initiative, and I also wonder whether it applies to victims of murder or manslaughter abroad and not just to victims of murder or manslaughter in the UK.

Before I conclude, there is another issue that I want to bring to the Minister’s attention. More information needs to be made available about the fact that legal aid is available to UK citizens in EU countries. That legal aid is not always going to be as much as one would like, but it is available and people need to know that it is available because at the moment they do not.

To conclude, I just want to say that it cannot be right that—as the recently departed Brazilian ambassador to the UK, Carlos Augusto Santos-Neves, said—there are 22 British embassy staff in Brazil working on climate change and none of them is helping to support people such as the Juwaheers. Equally, as I said earlier, there are only six British diplomatic staff covering the Greek islands, which meant that my constituent, Maggie Hughes, had to intervene to provide support to other British families.

I know that the FCO is working within a tight budget, but I hope that the Minister will be able to provide some comfort to the Juwaheer family, the Hughes family and the hundreds of other families represented by organisations such as SAMM Abroad that in future the support that such families will receive will be more timely, more effective and more comprehensive at their time of greatest need than many families have experienced in the past.

11:18

[The Minister of State, Foreign and Commonwealth Office (Mr Jeremy Browne)]

This is the first time that I have replied to a Westminster Hall debate, or indeed any debate, as a Minister, and it is a pleasure and a privilege for me to do so under your chairmanship, Mr. Streeter. I also pay tribute to my hon. Friend the Member for Carshalton and Wallington (Tom Brake), not only for securing this opportunity to discuss an important topic but for his ongoing vigilance and interest with regard to what is an extremely important matter. It is obviously extremely important for the individuals concerned, but it is also extremely important for us all more generally in policy terms.

I am also grateful to my hon. Friend for holding a meeting in December last year for the victims of crime abroad, which he mentioned in his speech. I take note of both the cases that he specifically raised, as well as the case that was raised by the hon. Member for Liverpool, West Derby (Stephen Twigg). When we are discussing such cases, we should always remember that they involve real people and that they are very harrowing cases that have transformed for ever the lives of the individuals concerned and their immediate families. We do remember that they are not statistics but people whom we want to help.

I have read about and take an interest in the cases of Robert Hughes, who was seriously injured in a life-changing way in an attack in Greece in 2008, and of Neil Juwaheer, who died in police custody in Brazil in 2007. In the latter case, I note that the legal processes following the Brazilian authorities’ investigation into the death continue, and in the former case, that of Robbie Hughes, there is still a court case pending.

We are keen to try to help and be of assistance, because it is the right thing to do, but also because of the reasons given by my hon. Friend. It is particularly difficult and harrowing for people who are involved in such cases, normally completely unexpectedly and in circumstances with which they are not familiar. They may not speak the language, they may be shocked by the medical facilities that are available and they may not understand the legal system. There is a duty on us to try to assist people in harrowing circumstances as much as we possibly can.

So that people can understand the context, I should say that the number of Britons travelling abroad is significant. I visited our consular operation in Bangkok recently. Almost 1 million British visitors go to Thailand every year. Of course, in the vast majority of cases, their time there is incident-free, and they have no dealings with our consular authorities. Many of the cases of those who do have dealings with them are relatively trivial, such as cases involving lost passports, although they still take up consular time and effort. Sometimes the individual concerned may not regard their case as trivial, even though others may when looking at it more objectively.

My Department is keen to try to do as much as it can to prevent people from getting into difficulty in the first place. The case for insurance cover was well made. It is surprising how many British nationals travel abroad without insurance cover. In most cases, of course, they get away with it, but when they do not, they regret it for a long time to come, so we are trying to provide better information on the Foreign Office website. We do specific work when a large number of people go abroad for a particular event; for example, we try to anticipate problems in those circumstances, and we try to educate people better about how they can guard against difficulties abroad.

We have high expectations of our consular staff who operate in countries where circumstances can be difficult, and we want them to be able to assist where they can to obtain relevant information from the country’s authorities. However, it is important to stress what they cannot do, because sometimes the expectation is that consular staff will be multi-purpose police investigators, lawyers and medical staff. That is not a level of service that we are realistically able to achieve.

It is worth sharing briefly with hon. Members what the consular department of the Foreign Office is trying to do at present. A new consular strategy for 2010-13 was launched in June. It sets the direction for consular work for the next three years and has three focal points. The first is on services that only we can provide, and is based on research and consultation with British citizens who have told us what they particularly value. Customer feedback has been obtained, particularly from British nationals who have been affected by the worst incidents or crimes overseas, and it is central to our decision-making processes. We are keen to try to concentrate as much time and resource as possible on the people who need help the most.

We want to invest more in the people who work for us, to ensure that they maintain the highest levels of professionalism. There is compulsory training, including for our honorary consuls, to whom I pay tribute this morning. Many of them do a large amount of work, particularly during seasons that are busy times of the year for British travellers, for virtually no personal financial compensation at all.

We also want to strengthen our global network because, although there are areas that British people travel to in great numbers—my hon. Friend mentioned Greece, and I mentioned Thailand—there are, of course, British citizens in every country of the world who require our assistance. Therefore, we need a global network to try to ensure that we are able to provide assistance wherever it is needed.

I want to say something that goes a bit beyond that. I have the relative advantage of still being a new Minister, so I can look at services with a fairly objective and dispassionate eye. What impresses me about the consular service is the level of professionalism and how comprehensive it is, certainly on a global scale. Few countries would even aspire to replicate what we do to help British nationals who require our assistance in far-flung parts of the world.

However, I think we can do more when people find themselves, not necessarily through any fault of their own, in particularly harrowing and difficult circumstances. This is where I particularly agree with my hon. Friend, who was right to make the point that such cases are relatively few. Millions of British people travel abroad, and hundreds of thousands of them need minor assistance of one kind or another, but the number of people who need help in really difficult circumstances is relatively small. For example, about 50 to 60 British nationals abroad are murdered each year. In the grand scheme of things, that is a relatively small number—roughly one a week, on average. We could look at providing a better and more comprehensive service for people in particularly difficult circumstances.

I had a meeting last month with members of the group that my hon. Friend mentioned, Support After Murder and Manslaughter Abroad, and discussed with them their experiences and ideas, and I have had several detailed conversations with officials in the Department about how we can provide a service charter that is more comprehensive in terms of the services that British nationals can expect. However, there are some challenges. It is not necessarily quite as straightforward as it might appear on first inspection.

[Tom Brake]

Has the Minister had any thoughts yet about what components there might be in a better and more comprehensive service?

[Mr Browne]

Let me come to that in a moment. I will answer the question.

Challenges include the legal systems in the countries that people visit. I sometimes turn this on its head and ask whether we would expect a foreign national in Britain to receive treatment in the British court system or a British prison that is different from that enjoyed by British nationals, and by and large people say that we would not. That same constraint is imposed on us when British nationals are abroad. There are resource constraints—there always are in Government—and there are some specifics.

For example, let us look at the two cases that my hon. Friend raised. I spoke specifically about what more we can do to help murder victims and their families, but the person in the first case was not murdered. Robert Hughes was seriously injured but not murdered, so he would not fall under that narrow classification. In the second case, the Brazilian authorities do not consider Neil Juwaheer to have been a victim of crime, so under a strict legal classification, he would not come under that category either. There are many cases that are extremely harrowing and difficult. If one were to try to impose narrow criteria, the danger is that we would roll out a service with great fanfare that looks good but then get many specific instances that do not fall within its scope.

I hope that we will provide a more comprehensive service that gives people a clear expectation of the assistance that they can have, and that that assistance is more direct and more hands-on than it has been in the past. I will announce more specific details when I am in a position to do so.

I would be more than grateful to have representations from my hon. Friend and from the hon. Member for Liverpool, West Derby, about how, within the budget that the Foreign Office has for consular services, we can focus our resources better so that people who find themselves in great difficulty and harrowing circumstances, and their families, can be confident that they will get the best possible service from our Government.

11:29

Sitting suspended.

Higher Education

Wednesday 3rd November 2010 Westminster Hall

14:30

[Mr David Lammy (Tottenham) (Lab)]

I am grateful for this opportunity to continue a hugely important debate. The decision taken by the Government today is of historic importance to this country, for two reasons. First, the decision to treble fees for this country’s young people could have a huge impact on participation in higher education. Secondly—this has been covered less, but is as important—the decision to withdraw state funding from a large part of the curriculum, namely arts and humanities subjects such as geography, history and politics, has huge implications for our democracy. We are a liberal democracy committed to the liberal arts, and today’s decision is to abandon that solely to private income. This is an important day, and I will be talking specifically about participation.

I am pleased to see the Minister in his seat. We have had many years of debates on education matters in this House. I know that he is committed, from his perspective, to participation. We understand the subject, but we do not always agree on the means, and I suspect that we will disagree today. However, I remind him that in 2004, he described tuition fees as

“flagrant, appalling and an abuse”. [Official Report, 26 February 2004; Vol. 418, c.503.]

That was his position as he voted against them. Can he really defend tripling fees to £9,000? I am pleased that so many colleagues from across the House have joined me today.

[Mr Rob Wilson (Reading East) (Con)]

I congratulate the right hon. Gentleman on securing this debate on an important subject. I know that he was in the Chamber this afternoon; does he agree that there is a third historic element to the settlement? Does he recognise the positive impact that proper funding for part-time students will have on the participation of disadvantaged groups in universities?

[Mr Lammy]

I am grateful to the hon. Gentleman for putting that decision on record. The last Government, of course, made progress on funding part-time students, but when we set up the Browne review, it was essential that part-time students were given the same arrangements as full-time students, and that has been achieved. That is the silver lining in the Government’s response today. However, it cannot be right that one group of students, of the sort that come from my constituency, should be encouraged to attend part-time courses at newer universities while another group of students, who can afford fees and are not put off by higher education, attend our more elite, select universities. I will go into the detail over the months.

I hope that we can all agree that it is morally right that university education be made available to all those who wish to take advantage of it. I know that that is true. University brought me, a young black man, from the shadows of Broadwater Farm estate in my constituency to the House of Commons. I want the same opportunities for all young people, regardless of their background.

The Labour Government inherited a higher education system that was the preserve of the rich and privileged. It was not a system in which university education was made available to all those who wished to take advantage of it, which is why we created the Office for Fair Access to monitor and analyse admission and participation and ensure that we increased the opportunities available to all students. It is also why, in 2004, we set up the Aimhigher programme, a national comprehensive programme working across constituencies as different as Cumbria, Liverpool and mine to encourage partnerships and access to higher education.

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

My right hon. Friend correctly said earlier that all those who could benefit from higher education should have access to it, but there is a further point. Society as a whole benefits from a highly educated population. There is obviously an issue about personal fairness, but the bigger issue for us as Members of Parliament is what is right for us as an economy, and what is right for us as an economy is that everyone who can benefit should have access to higher education. That is what gives us growth and makes us a strong country.

[Mr Lammy]

My hon. Friend is exactly right. That is why France, Germany, America and other countries throughout the developed world have a huge commitment to higher education and are increasing funding, not decreasing it. There is a drive to give more of the population the higher-level skills that come from higher education. The Government’s decision is crucial to the future of this country. We commissioned the National Council for Educational Excellence to encourage schools and universities to work better together to raise aspirations and achievement.

We do not say that schools in this country are only about driving young people to get GCSEs or A-levels. It is about outcomes, and one of the most important pathways to a better outcome for individuals and society as a whole is attendance at university. By the year we left office, £580 million was being spent annually on broadening access to higher education and widening its reach to poorer families across this country.

The number of entrants to higher education increased by 44% between 1999 and 2009. Since 2004, participation among the poorest 20% of the country has increased by 32%, compared with a rise of 20% among the richest. Our policies raised aspiration among people who had never before seen the path to university as being for them. Schemes such as Aimhigher broke cycles of poverty and underachievement that had existed in families for many generations. The proportion of university places taken by ethnic minority students increased from 13% in 1994 to a figure broadly proportionate to the size of the young population as a whole. None of those changes happened by chance. They happened because we wanted them to. We put money and a lot of effort into them.

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

I do not want to interrupt the right hon. Gentleman’s flow, and I endorse what he said about our shared intentions in respect of participation. He will know that on his watch as Minister, the funding for Aimhigher was reduced. Why?

[Mr Lammy]

I have no recollection of the proportion of funding for Aimhigher being reduced. The Aimhigher programme sat alongside the funding that we gave universities to both widen participation and increase retention. As I said, that overall pot was about £580 million. That is a significant amount of money, and it made a huge difference. I do not recognise what the hon. Gentleman said.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

Does my right hon. Friend agree that the student support that we put in place was important as well? As the Browne report said:

“The evidence suggests that improvements to the support for living costs helped to ensure that the changes in fees in 2006 did not have a negative impact on participation.”

Some progress has been made, but not enough. However, does the shadow Minister agree that we are now in unknown territory? The balance is getting out of hand, and the tripling of fees will have a deterrent effect on people from poorer backgrounds, who will feel obliged to choose cheaper courses at different universities.

[Mr Lammy]

That is, indeed, the fact. I want to emphasise that the increase in young people going into higher education in my constituency in the past 10 years is not just 5% or 10%; there has been a 100% increase in participation in higher education. That is, of course, to do with the support and the grants that were available, but it is also because of programmes such as Aimhigher Associates. Through such programmes, we encouraged young people, who were often from poorer backgrounds, to leave university for half a day a week and go back into schools to encourage others to go to university. That takes money, funding and priority. Making this issue a priority is in the national interest because of what has been said about growth.

[Ms Abbott]

My right hon. Friend makes a very important point about the increased participation of working class and black and minority ethnic students. Does he agree that, regrettably, there was a vestigial sense of a sort of educational apartheid in London, where working-class ethnic minority students tended to be grouped in what were often the weaker universities and middle-class students went to Russell group universities? Will such a steep rise in tuition fees not exacerbate the sense that people from areas such as his and mine think that a certain type of university is not for the likes of them?

[Mr Lammy]

My hon. Friend makes a profound point, which I hope to come on to. Such schemes worked, but they required money. Many of us who initiated such schemes hoped that they would make further progress than was achieved. We saw progress, but it was not at the speed and depth we would have liked. My hon. Friend is exactly right: it cannot be considered significant progress. One London university— I am thinking of London Metropolitan—has more students of black descent than the entirety of the Russell group. There was progress, but there is much more to do. We are concerned that today’s announcement will mean things go backwards—in the wrong direction.

[Mr Rob Wilson]

I do not doubt the previous Government’s intentions, and I hope that the right hon. Gentleman would not doubt the good intentions of the current Government. Does he accept that the current system is unable to meet the challenge of the rising demand for higher education? In particular, does he accept Sir Martin Harris’s report, which mentions the participation rate among the least advantaged 40% of young people and the fact they are not getting into the top Russell group universities? That figure remained flat throughout the period of the Labour Government.

[Mr Lammy]

As I said, we were all concerned about the progress in relation to our most selective universities. That is why allowing our most selective universities to raise their fees to £9,000 a year must be counter to the progress that I would hope the hon. Gentleman desires. The Sutton Trust estimates that there are 3,000 missing state school students from Britain’s 12 most selective universities. A further statistic that comes to mind is that only one black Caribbean student was admitted to Oxford university in 2009—one student.

The Government’s claims are hugely important. They claim to be committed to higher education’s role in social mobility. Indeed, we are told that access is hard-wired into the coalition agreement. However, despite that hard-wiring, the Secretary of State has apparently long questioned whether the 50% participation rate is sensible or affordable. It is important that the Minister says something about what he considers will happen to the participation rate. Does he believe that the Government can widen access with an increased tuition fee of £9,000 a year? How will trebling fees encourage the sons and daughters of nurses and dinner ladies to achieve what their parents never had the prospect of doing? If we add to that figure the £8,000 a year maintenance that a student needs to live on, the Government’s plans mean that it will cost £17,000 a year to study for a degree. Will that encourage a nurse on an average of £23,000 a year to send her young son or daughter to university? With costs that are three quarters of their salary, will they not decide that university is what they always believed it to be: not for them?

Does the Minister honestly believe that students from the poorest backgrounds will not be put off by these staggering sums of money? A Sutton Trust opinion poll shows that only 45% of 11 to 16-year-olds who are currently interested in progressing to higher education at current fee levels would be interested if the fees were increased to £7,000. What does that then say about the current figure of £9,000? With institutions now capable of charging variable fees of between £6,000 and £9,000, it is inevitable that some of the most capable students from the poorest families will make choices based on cost or on the perception of cost, rather than because of academic talent.

[Mr Hayes]

I am intervening so that we can deal with some of the important questions the right hon. Gentleman raises. In the spirit of fairness that he normally adopts on these occasions, he will want to acknowledge that the statement made today by the Minister for Universities and Science, for the first time links fees to access. The proposals will explicitly link fees to the extra demand on universities in order to widen participation.

[Mr Lammy]

I hope that the Minister will explain in his response to the debate the detail of that access. As I listened to the Minister for Universities and Science a few moments ago, there did not appear to be the teeth required to ensure that level of access. I did not hear anything about the programme of effort—the punishment or fine—that we will need to ensure that higher education meets the necessary access levels.

[Nic Dakin (Scunthorpe) (Lab)]

I congratulate my right hon. Friend on bringing such a timely and pertinent debate to Westminster Hall. Is he not making the point that students historically have been able to choose their higher education destination based on the course they want to do and where they want to do it? They will now have to look at the course, the where and the price. That radically changes how the market will operate to the detriment of students, and both universities and higher education establishments.

[Mr Lammy]

My hon. Friend is absolutely right. The proposals are a huge departure. The Minister for Universities and Science indicated that there will be different price levels for different subjects and across the family of our universities. We also know that there will be a different state contribution to courses. That is a huge and profound change, which is far bigger than the change made to higher education in 2004.

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

I, too, congratulate my right hon. Friend on this timely debate. On the point he is making, obviously we need to invest in science, but surely we also need to invest in our arts programmes. A number of industries, not least our creative industries, are growing and are part of our future economic development. The future of such industries must be called into question by today’s announcement.

[Mr Lammy]

My hon. Friend is absolutely right: arts and the creative arts make a huge contribution to our economy and to the new digital creative economy. The decision to withdraw state funding from such courses is bizarre, particularly as it was made alongside the decision to make massive cuts to the Department for Culture, Media and Sport.

Those subjects cut to the heart of what it means to be a democratic country. We all sit in this Chamber as politicians—politicians who draw on the liberal arts and who, I would have thought, expect the state to make some contribution to that area of study. Even in the United States, with its highly developed private higher education system, every state has a state university, as is the case in California, and all those universities make a massive contribution to the liberal arts. The departure that we are making in the UK leaves countries such as France, Germany and the United States making a contribution to that area of study, yet for the poorest students in this country, that will no longer be accessible.

I put on the record my thanks to the many people up and down the country who have worked in the Aimhigher programme. It is a programme that works. Pupils have been able to attend three-day summer schools attached to our universities as a result. I saw a scheme working with students in the Toxteth area of Liverpool; it was really reaching out to those young men, most of whom came from backgrounds like mine and had been raised by lone parents. They really wanted to aspire for the first time because of the huge inspiration that the scheme gave them. Following the decision that was announced today, what is to happen to Aimhigher? We have heard much today about the new access and success fund, but will the Minister confirm whether that fund will equal the £580 million a year that the previous Government invested in widening participation?

The Browne review promises to introduce stringent access agreements, and the Minister for Universities and Science confirmed that today. With universities charging more than £6,000 a year, will the Minister confirm what penalties they will suffer if they do not meet their access agreements? Will those agreements have teeth? I was saddened to hear the Secretary of State for Education being interviewed on the “Today” programme this morning. We did not want to hear that universities will demonstrate that they will use imaginative ways to attract students from poorer backgrounds; we want a lot more than imagination.

The Minister is really attracted to choice for students and to having funds following students to university. He has made great hay of the pupil premium, so why not have a pupil premium in that area of the education system? Why not fund students from poorer backgrounds better to get that buy-in from the higher education sector? Does he not agree that universities need real, hard commitments on access that are statutory and can be challenged? That is important if we are not to see the situation deteriorate.

[Mr Hayes]

I am grateful to the right hon. Gentleman for giving way a third time—I will not intervene again unless he says something extraordinary or outrageous, but I know that he will not. On the pupil premium, he knows that the biggest challenge in widening access is prior attainment. Unless we have more applications from people who come from disadvantaged backgrounds—as he and I do—we simply will not get the admissions we want. That is about the pupil premium and about supporting people in schools. Surely that is right.

[Mr Lammy]

I hope that the Minister appreciates the fact that 494 black students of Caribbean descent received straight As in their A-levels last year. I have already presented him with the evidence about Oxford university. The question for him is this: how will his changes make that situation better? Will they not make it worse?

It is important to note that there are three primary beneficiaries of higher education: the graduate, wider society and, of course, the employer. When we set up the Browne review, we asked it to look specifically at the employer contribution. I was disappointed that Browne spent only 300 words in his entire report on the employer contribution. We heard nothing from the Secretary of State on that subject when he responded to the report, and nothing from the Minister for Universities and Science today. Will the Minister now take the opportunity to explain why he departed from that key element in the basic terms on which we set up the Browne review? Why should we load young people, students and poor middle-class families with the debt, yet not ask employers, who are a beneficiary of our higher education system, to meet part of the cost? Why was that decision ruled out?

Will the Minister make a commitment that by the end of this Parliament, when—we are told—the structural deficit will have been eliminated, he will raise the public contribution to all courses, and lower fees? The changes have been presented to some extent as emergency measures that are necessary because of the deficit. When the legislation comes before the House, as we are told it will in a few weeks’ time, can we expect to see a sunset clause so that we depart from and then return to a system of more equalised contribution? I would like the Minster to say something about that.

On widening participation, I want to hear what the teeth, or the beef, of the programme will be. In particular, will the Minister commit to Aimhigher? I started my speech by saying that the Minister cares passionately about the issue, but I hope he will realise that, on this day of all days, many people beyond the Chamber are looking to this House, and what they want are answers.

14:57

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

Once again, I congratulate my right hon. Friend the Member for Tottenham (Mr Lammy) on securing the debate. I think that we should be very proud of the Labour Government’s record on widening access to higher education. Figures from the Higher Education Funding Council for England show that participation rates among young people increased from about 30% in the mid-1990s to more than 36% by 2009, and the extended opportunities for mature students mean that the figures for participation were well in excess of 40%.

Although differences in participation rates remain, depending on where one lives, Labour did much to increase participation among disadvantaged students. Young people from poorer areas have been substantially more likely to enter higher education since the mid-2000s. In the most disadvantaged areas, there have been substantial and sustained increases in the proportion of young people entering HE. That is because of recent increases in participation rates for young people living in disadvantaged neighbourhoods, whether neighbourhood disadvantage is defined by participation rates themselves or by measures of parental education, occupation or income. The proportion of young people living in the most disadvantaged areas who enter HE has increased by around 30% in the past five years, and by more than 50% in the past 15 years, which is truly an extraordinary increase.

The increases in the proportion of young people living in the most disadvantaged neighbourhoods who enter HE are also consistent with other statistics, including recent trends in GCSE attainment. Since the mid-2000s, the majority of additional entrants to HE have come from more disadvantaged areas. Most of the ways of measuring the differences between the participation rates of advantaged and disadvantaged neighbourhoods have shown a reduction since then.

That last point is critical, because it means that Labour was starting to narrow the gap in participation rates between the most advantaged and most disadvantaged areas. We should also recognise that the chances for young people to go to university if they came from a more advantaged neighbourhood increased, so that has given us quite a task, which is why we must have strong measures that continue to widen access to HE.

We have to ask ourselves why we want to do that, and I shall put forward a few brief points. Most of us who had the experience of HE, particularly if we came from a low-income background—I am someone who did, and was the first person in my family to go to university—know the transformative effect that going to university had on our life chances. It is incumbent on all of us to make sure that that opportunity is available to all young people who are able to, and want to, benefit from it. We should not be sitting in this place putting up barriers that will stop young people being able to go to university.

This country needs to continue to invest in higher level skills. My right hon. Friend the Member for Tottenham made an excellent point about the need for skills across a range of subjects. One of the concerning aspects of today’s proposals is the total withdrawal of state funding for the arts, humanities and social sciences in our universities because of cuts to the teaching budget. We need those higher level skills if we are to compete in the global economy of the future. Why is this country not prepared to invest in our HE system to the same level that other developed—and, indeed, developing—countries are?

[Paul Uppal (Wolverhampton South West) (Con)]

I, too, thank the right hon. Member for Tottenham (Mr Lammy) for securing this debate on a hugely important issue. I speak on breaking down barriers to HE as someone who came from one of those poor backgrounds. Most of my peer group were from an Afro-Caribbean background. The figure given by the right hon. Gentleman of only one candidate from that background going to Oxford or Cambridge is shocking, but is it not the case that the issue is about more than purely finance? If we discuss only money, the debate will be prosaic and we will not do it justice. This may not be the remit or framework for a full debate, but, as someone who has personally seen the disconnect in his peer group, I can say in all sincerity and modesty that most of that peer group were far brighter than me, but they fell away dramatically in those years between 14 and 18. The debate is about more than just money.

[Roberta Blackman-Woods]

I thank the hon. Gentleman for that intervention, but surely the issue is removing all the barriers that prevent young people who want to go to university from being able to do so. Some of the barriers may be cultural, and there are many programmes in place to try to break them down. My right hon. Friend the Member for Tottenham spoke about the Aimhigher programme. I have worked closely with Aimhigher in my constituency because we had a fairly low level of HE participation historically. Aimhigher works alongside schools and groups of young people to encourage them to make the most of their potential.

Of course we have to look at more than the financial situation, but it is important, in so far as it acts as a disincentive. One of the points that Opposition Members were making on the Floor of the House earlier, and are making in this Chamber, is that we are terribly concerned that the proposals to put fees up to between £7,000 and £9,000, with additional borrowing for maintenance, mean that young people will be faced with a debt of about £40,000 when they leave university. That will act as a huge disincentive, and we would like the Government to look at those proposals again. We would like them to take our points seriously.

My final point is about international competition. We know that we need our economy to grow. That is the biggest factor facing this country at present. We have to put more emphasis on economic growth, and to do that, we need more knowledge transfer from our universities. They need to be investing in their local communities, but that will be made much more difficult by the withdrawal of Government funding to universities that was announced today.

I would very much like the Minister to take on board these specific points. Is there some detail about how widening access will continue? What will the Government do to ensure that young people from middle-income backgrounds are not faced with a huge disincentive to going to university because of the level of fees being proposed? What will his Government do to ensure that universities continue to invest in their local economies?

[Several hon. Members]

rose—

[Mr Clive Betts (in the Chair)]

I have indications from four hon. Members that they wish to speak. To get everyone in before the winding-up speeches, could Members take no longer than eight minutes? I have no power to impose a time limit, but consideration for colleagues will allow everyone to get in.

15:00

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

Thank you, Mr Betts. I am grateful for this opportunity to speak under your chairmanship on this important topic, and I congratulate my right hon. Friend the Member for Tottenham (Mr Lammy) on securing this important debate. If there were ever any doubt that he cared passionately about the future of higher education, and the future of children from estates such as his, mine and those of other hon. Friends here today, his speech will have proved his passion and commitment—long may it continue.

I wish to discuss what the Government’s plans will mean for many of my constituents. In a Liberal Democrat press release during the election campaign, Nick Clegg said:

“If fees rise to £7,000 a year”—

[Mr Clive Betts (in the Chair)]

Order. The reference should be to the Deputy Prime Minister.

[Mrs Hodgson]

I apologise, Mr Betts. The Deputy Prime Minister stated:

“If fees rise to £7,000 a year, as many rumours suggest they would, within five years some students will be leaving university up to £44,000 in debt. That would be a disaster.”

I have to say this, Mr Betts: this is one of the few occasions on which I agree with Nick.

Even if most universities charge the minimum of £6,000, it will still be a disaster, and if most of the more prestigious ones charge £9,000, it will be an even bigger disaster. If I were a 16 or 17-year-old working-class girl from Gateshead—not too much of a stretch of the imagination, as I once was—looking at my options for the future, a potential debt of £44,000 would make me think seriously about whether I should go to university, especially if I were the first in my family to do so. It was not a journey that I was ever able to make personally because of cost constraints, and having to go out to work to help support my mam, who was on benefits, and two younger brothers.

If I were desperate to go to university, I would probably have to go to one of my local universities to avoid the extra living expenses, rather than the best university that would accept me based on my ability and grades. That seems to be what the Secretary of State for Business, Innovation and Skills intends people from my constituency to do. I would also most likely have to take a significant amount of paid part-time work, reducing the amount of time that I could dedicate to my studies, and consequently my attainment.

Even then, when I had struggled through three years and racked up a debt of £15,000 to £20,000 for the privilege—assuming that I had received some of the grants that the Minister of State outlined—my debt would continue to grow at a rate far above that at which my earnings would be likely to grow. An interest rate of 2.2% plus RPI, which would currently be 6.8%, does not compare favourably with a typical increase in median income of 3% to 4%. By that logic, somebody finishing university this year with £20,000 of debt would see that debt grow by more than £1,300 in a year and would need to find a job paying more than £30,000 just to keep up with paying that off. Today, though, we have heard that someone earning £30,000 could be liable to pay even more interest. That will mean millions of young people never paying off their loans and quite a number of those loans—not just the odd one—probably being written off after the end of the 30-year period. The thought of being 16 or 17 and realising that I would still be paying for my education in my 50s would definitely put me off higher education.

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

Unfortunately, I am one of those Members of Parliament who are still paying back their student loans, even though I left higher education more than a decade ago. Does my hon. Friend share my concern that no one in government seems to consider the aggregate effect of people having these levels of debt for so long, when house prices are rising, mortgages are hard to obtain and contributions to the pension system will have to be higher? No one seems to look at the fact that the sheer amount that people pay out on their loans every month diminishes their capacity to spend their money on other things, which is detrimental to family life and their prospects.

[Mrs Hodgson]

I certainly agree. We should also remember that some of the young people being burdened with huge debts will be from families that have no other mechanism to support them in making further life choices, such as getting into the housing market, or in paying unexpected bills. Having large elements of their earned income tied up for the next 30 years will be more of an ask for those young people than it will be for young people from a more middle-class background, but that has not been taken into account. For people from some of the backgrounds that we are talking about who might want to strike out and go to university, such factors will have a big detrimental impact on the decision that they take.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

Following on from the intervention from my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds), will my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) join me in asking the Minister to comment on the impact of today’s announcement on undergraduates who want to go on to postgraduate education? We heard nothing about that impact in today’s statement, and it would surely be useful to hear whether those from lower-income backgrounds who have heavy loans to pay back will be deterred from going on to postgraduate study.

[Mrs Hodgson]

That is an important part of the debate, but it has not been discussed yet, and I certainly hope that the Minister will refer to it in his closing remarks. Even during my time as an MP, I have seen a change among the people who have applied to work for me as a researcher, with those who apply now having chosen not to do postgraduate qualifications for the reason that my hon. Friend sets out. Degree-level qualifications will therefore probably be the maximum attainment for some children from working-class backgrounds.

I want now to touch on the education maintenance allowance. At the same time as the current changes are being made, the Government are planning to overhaul the EMA system, which has been instrumental in ensuring that talented young people from less well-off backgrounds get the necessary qualifications to apply to university in the first place. There was a debate on this subject in Westminster Hall yesterday, which was secured by my hon. Friend the Member for Glasgow North West (John Robertson). He is a great advocate of the EMA, and I see from Hansard that he put the case for its retention impeccably, so I will not repeat it.

My hon. Friend has plenty of evidence to back up his case. The evaluation of the roll-out of EMA showed that it reduced the level of those not in education, employment or training and encouraged those receiving it to work harder. Indeed, Institute for Fiscal Studies research showed that attainment among recipients has increased by 5% since the introduction of the EMA. If the Government remove something that encourages less well-off children to stay in further education and to aim higher, and they couple that with huge disincentives to apply for higher education, applications from that group will almost certainly drop significantly, particularly to the better universities.

[Paul Farrelly]

In his intervention, the Minister talked about the importance of encouraging further applications. When I was growing up, I was one of those people whose family encouraged them to go out to work at 16. The EMA, which I argued for in my maiden speech in 2001, has been really important in changing that, but the Government gave us no indication of the implications of scrapping it when they announced the changed regime today.

[Mrs Hodgson]

My hon. Friend makes a good point. I always tell people that the EMA would have been the one extra thing that would have given me the confidence to resist the push to go out to work, because I would have had just that little bit of money that was mine.

I note from Hansard that the Minister who answered yesterday’s debate tried to shift the blame for the decision to remove the EMA on to the previous Labour Government, much as I expect the Minister, unfortunately, to do today. The fact is that there are alternatives to those choices that have been made—ones that would have put more of the burden on the people who caused the situation that we are in, rather than on a generation that has had nothing to do with it.

The Minister for Universities and Science is not representing the Government here today, but he is apparently the author of an interesting book called “The Pinch”. I regret to say that I have not had time to read it yet, although perhaps a friend will be watching the debate and get me a copy for Christmas—if they do, I will be sure to pop along to the office of the Universities Minister to request an autograph. In his book, he argues that his generation—it is not quite my generation, because I am not that old—has benefitted from all the things that it is now unwilling to fund for the current generation and the next generation, including subsidised higher education. Does he not think that the Government’s reforms enforce that attitude, which he clearly sees—or saw—as hugely detrimental to young people?

I have a copy of today’s statement by the Universities Minister; he spoke of introducing a progressive system. The only progress that I can see between when he wrote his book and his speech today is a kind of backwards progress, which is, I believe, an oxymoron—a bit like his claim that the Government’s changes are progressive.

15:17

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

I, too, congratulate my right hon. Friend the Member for Tottenham (Mr Lammy) on securing this timely debate.

I represent Liverpool, Wavertree, which has one university, Liverpool Hope, within its borders and two, Liverpool John Moores and Liverpool university, just outside. Many members of Liverpool’s student and academic community live in my constituency. Along with my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds), I am probably one of the Members who was most recently in the higher education system and I am still paying off my student loan. I was also one of the 500-plus candidates who signed the National Union of Students pledge not to vote for an increase in fees, and I will be upholding that pledge.

I recently met representatives of Aimhigher Greater Merseyside and I heard in great detail about the fabulous work that they continue to do across the region for 35,000 young people. As many of my hon. Friends have said, the goal of the Aimhigher programme is to widen participation in higher education and to encourage young people from disadvantaged backgrounds to apply for university.

[Lisa Nandy (Wigan) (Lab)]

Will my hon. Friend join me in paying tribute to the work of Aimhigher not only on the issues that have been mentioned, but in providing advice and guidance to much younger children, who might never have thought about going to university? I am sure that there are far too many young people in her constituency, just as there are in my constituency of Wigan, whose talent and ability are not matched by their aspirations. Will she join me in urging the Minister to make sure that the invaluable work that Aimhigher does with young people from the ages of 13, 14 and 15 continues?

[Luciana Berger]

I thank my hon. Friend for that intervention; she raises some valuable points about the fantastic work that Aimhigher has done not only with young people in further education, but in schools, and I will go on to mention some of the wide range of activities that it is involved in. Most specifically, Aimhigher helps young people from families with no other members who went to university to consider higher education. For many of them just going on to further education is a massive step.

I want to expand on the list of Aimhigher’s activities, because it does so many things. It has made more than 1 million interventions to encourage young people to think about university—an incredible amount of activity. That extends to more than 2,500 schools in the UK, and 300 colleges. We have heard about its summer school, which gives young people a three to five-day taster experience of what it means to go to university. It offers one-day master classes, given by university staff, in all subject areas. It also offers continuing professional development for teachers in school and staff in further education colleges, to make them aware of changes in higher education and the opportunities that are available.

Aimhigher offers impartial workshops on university life, finance, choice and how to make an application—because for many young people filling in the UCAS form is a massive step forward. It also offers bespoke programmes for those with disabilities, and for people who were looked-after children. In Liverpool we try to do a lot of work to help looked-after children to take that step, because so many do not go to university. Aimhigher also offers additional support for vocational learners—especially apprentices, as there is no reason why they should not go on to university if they want to.

I was therefore incredibly alarmed to learn from the Universities Minister a few hours ago, when I asked him about the Aimhigher programme, that responsibility for the activities that it currently pursues will fall to universities. I am incredibly concerned about that, because there is not enough detail, and a massive vacuum will be created during the transition. There will be a £150 million national scholarship fund. I welcome that, but it is only a fraction of the investment that the Labour Government made in the widening of participation—and it assists only the brightest, as we can see from today’s statement, to the exclusion of those who may still be good enough to apply to university, but who will not qualify for a scholarship.

My hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) quoted something that the Deputy Prime Minister said the week before the election, and I want to return to that, because the next line is very pertinent to the debate. He said:

“If fees rise to £7,000 a year, as many rumours suggest they would, within five years some students will be leaving university up to £44,000 in debt. That would be a disaster.”

Then he added:

“If we have learnt one thing from the economic crisis, it is that you can’t build a future on debt.”

[Nic Dakin]

Does my hon. Friend think it is ironic that the Deputy Prime Minister, who was so correct when he said that, should now use the excuse of the debt caused by the bankers to transfer the problems of and payments for that debt to the young people of today and tomorrow? It seems completely wrong.

[Luciana Berger]

My hon. Friend has made exactly the point I wanted to make, so I thank him.

Many of my constituents talk to me now about the challenges they face because of their current debts, when fees are only a third of those proposed by the new Government. Access to higher education should be about students’ ability, not the ability to pay or willingness to shoulder thousands of pounds of debt. That is my greatest concern.

[Mr Thomas]

Will my hon. Friend join me in asking for more clarity from the Minister about what will happen to the widening participation grant that is currently in his Department’s budget? We have had no information about whether it will be increased or decreased, or stay the same. I am sure that universities and students will be attending to this debate, and will want that information too.

[Luciana Berger]

I thank my hon. Friend for asking that relevant question. Given the fraction of money that will go from Aimhigher to the national scholarship fund, and the scarcity of detail in the statement about how widening will be funded, I too would be grateful to know what grant there will be.

15:24

[Paul Blomfield (Sheffield Central) (Lab)]

I congratulate my right hon. Friend the Member for Tottenham (Mr Lammy) on securing the debate. I know how passionately he feels about participation, and was pleased to join him, when he was the Minister for Higher Education, on a visit to Sheffield’s Aimhigher programme. We were both impressed by the excellent work done by the programme team. I congratulate him also on the timeliness of the debate, on a day when we have heard the Government’s proposals for the most fundamental remodelling of our higher education system for 50 years —shifting the responsibility for the funding of universities from the state on to students, and creating a market in which it is clear that a 50% higher fee for the best courses at the best institutions will lead many families, after discussion, to base choices not on a potential student’s ability to learn, but on their ability to repay greater debt.

[Bill Esterson (Sefton Central) (Lab)]

My hon. Friend is talking about choices, and I want to mention the impact not just on participation but on subject or even career choice. Students in my constituency have said that they must seriously consider courses on the basis of how much they might earn after qualifying, rather than on the basis of interest or the career they want. That is a grave concern and perhaps the Minister might be asked to respond to it.

[Paul Blomfield]

My hon. Friend makes a good point. There is a further message within the Government’s announcement, about social sciences, arts and humanities courses. The Government are sending out the message that they are not valued by the country. That will, I am sure, also be a factor in students’ decisions.

We know from talking to constituents, from research and from looking across the Atlantic at the United States model that the Government seem intent on creating, that the cost of courses is a significant disincentive for those who can least afford them. The levels of debt that the Government seem intent on students taking on will be a disincentive, particularly for those on lower—and, indeed, ordinary—incomes, who cannot contemplate such financial risk.

Apart from the impact on participation, the Government’s proposals fail their own test on the funding of the higher education system. I refer hon. Members to the remarks made by Professor Steve Smith, president of Universities UK, who wrote recently in The Guardian:

“The government should be in no doubt about the risks these cuts in funding pose to the world-class standing of our higher education system, and thus to the country’s future economic growth and prosperity. The UK’s competitors face the same deficit reduction challenges as we do, but they have decided to invest in higher education at this crucial time, not cut it.”

[Mr Hayes]

I know that the hon. Gentleman is a devotee of Steve Smith’s words on this subject. This afternoon, following the statement, he said:

“We believe that this package of proposals represents the best available funding system for universities.”

[Paul Blomfield]

I understand the messages that the Government have been sending about the available options, and the way the universities are being forced to accept a way forward that is deeply unpalatable for many of them. Steve Smith went on to point out in the article I quoted that the spending review set the context within which to understand Browne. That is a crucial point. The previous Labour Government set up the Browne review as an independent review of our higher education system, but clearly the steer that was given to Browne on the resources that would be available, and the way they would be allocated, shaped the recommendations and took away any pretence that the final report was the independent review we had sought.

[Luciana Berger]

Is my hon. Friend aware that in 2007 we, as a country, spent only 0.67% of GDP on higher education when the OECD was recommending 1%, and that that figure is now likely to fall as a result of the announcements made today?

[Paul Blomfield]

That is a very important point on our position in relation to competitors in the OECD. We have made enormous progress in the funding of higher education over the past 13 years. We did not get to where we needed to be, but we were moving in the right direction. This Government are reversing that direction and taking us backward.

Let me return to the point about the negative message being sent out about arts, humanities and social science courses, and share with Members the views of the vice-chancellor of the university of Sheffield, Professor Keith Burnett. He is an outstanding leader of an outstanding university, and a scientist. He said:

“In the last few days I have been thinking about how I would feel if my subject – Physics – had been identified as fundamentally unimportant to the UK, or at least unworthy of its investment, in the way that many of our colleagues’ subjects have been. I would be gutted….When I see what richness the work of our colleagues…has brought us…Sir Ian Kershaw’s books on Hitler…shed a unique light on how fascism emerged…offered insights and judgement which can’t be ignored. Mike Braddick’s new book on the Civil War…helps us understand how we came to be who we are as a nation…Focusing on a period when fundamental questions were being debated…casts new light on the transition of Britain’s passage from one era to another…One of our most powerful resources as a country, and as a University, is our cultural insight, our deep questioning of our own society and ideas – perhaps we have never needed that analysis more as we consider how best to go forward. In a world of global competition and profound change, we want our children to have more than just bread to live on.”

I turn now to the point that my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) made on education maintenance allowances. Fundamentally—the Minister himself acknowledged this—participation in higher education is in many senses determined by people’s experience of the education system in their early years. We know that for many people who aspire to go to university the critical decision is at the age of 16, and that in low-income families with no history of post-16 education there is huge pressure not to be a further drain on the family’s financial resources. I have talked to constituents across Sheffield, and have been left in no doubt that education maintenance allowances have transformed life chances. Last year, almost 7,000 EMAs were awarded across the city. In the comprehensive spending review, the Chancellor talked about replacing

“education maintenance allowances with more targeted support.”—[Official Report, 20 October 2010; Vol. 516, c. 964.]

I suggest that that is a deeply cynical use of language. What could be more targeted than allowances that are assessed according to family income, with the level of payments being determined according to need? The Minister cuts a rather lonely figure today, and I regret that there are not more Members of other parties interested in the debate. I hope that the Minister will address my remarks in his contribution.

[Mr Clive Betts (in the Chair)]

Before I call the next speaker, I remind Members that I will start the wind-ups at 3.40 pm.

15:33

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

I am grateful for the chance to take part in this valuable debate. I congratulate my friend and colleague, the right hon. Member for Tottenham (Mr Lammy), on obtaining this important debate. My Government had an excellent record in further and higher education, particularly when he was a Minister in that Department.

Like my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger), I signed a pledge not to vote for an increase in tuition fees, and I had to fight through a crowd of Lib Dems in this House to do so. I had imagined that that same crowd of Lib Dems would be here today; I cannot imagine what has happened to them. As I said, my Government had an excellent record in further and higher education, but I voted against tuition fees in any form or fashion because my view was that society as a whole benefits from education and society as a whole should pay.

It was also my view that I had benefited. As the child of people who left school at 14, I have benefited from an education at one of our better education institutions, nestling as it does in the mists of the fens of East Anglia, and I was not prepared to draw up the ladder behind me to another generation of young people. I also knew that this is where it would all come to. It was all very well for us to introduce tuition fees in a very careful way, hedged about with all sorts of support—very judicious—but I knew that it would end in a Tory-led Government ramping up fees unconscionably, leading to a more divided education system than we have ever seen.

[Mr Hayes]

When did the hon. Lady change her mind about fees, or is she totally, wholly and implacably opposed to fees of any kind?

[Ms Abbott]

I am afraid that I did not attract the Minister’s attention. I have always been against tuition fees; I have marched through the Lobby against them. It gives me no pleasure to say that I knew it would end up like this, with Tory Ministers such as the hon. Member for South Holland and The Deepings (Mr Hayes) ramping up fees—[Interruption.] Members will see how I cast my vote in the coming debate.

The point that I wanted to make is that in a world of markets—all of us here, even my good self, believe in markets nowadays—price is an indicator and, as I said earlier, if there is variable pricing, the indicator to students is that the higher-priced universities are not for the likes of them. Over the years, I have counselled many young people in my constituency, including ethnic minority young people, to try to encourage them to go on to higher education. They are held back not because they do not have the qualifications—their teachers bring them to me precisely because they think they are bright enough to benefit—but because their parents and they themselves are worried about leaving home, about the sorts of people that they will meet, and that the environment might be snobbish. And now that we see a gap of perhaps £6,000 or £7,000 between fees, what will those working-class students think?

I was the first in my generation of my family to go to university. I always remember my father, who was a committed and kindly parent, saying when I was in the sixth form, “Girls of your age are out of school.” He was not being cruel; all the black girls of my age that he knew were out of school. I voted against tuition fees in the first place because had someone told my father, who left school at 14 and worked all his life, that not only was I staying on into the sixth form, not only was I going on to university, but I was going to pile up upward of £40,000 debt to go to my chosen university, he would have said, “No. You leave school and you become a nurse like your mother,” not because he was cruel, but because he was looking out for my future. For someone from his kind of background, that level of debt would be more than they would earn in a year, and more than my father in his day would have earned in several years, which would have been completely unthinkable.

I agree with Government Members who said that the issues that face young people from communities such as mine when going forward into further education are not just about money. They are very complex issues, and that is why for many years I have run a programme that is designed to encourage black young children, specifically, in London to raise their achievements. We have conferences and seminars, and we give out awards. There are, of course, hundreds of ethnic minority young people doing very well in school, in spite of everything and, as I am sure my right hon. and hon. Friends will agree, this measure will hit not just people from communities such as mine, but middle England also. In some ways, the people who will be worst off are those who are just in the middle, who are not eligible for the help but cannot afford to contemplate their children going on to pile up £40,000 of debt, not when they will have to think about their pension and their jobs, and interest rates on mortgages are rising. I believe that the introduction in this way of a crude market mechanism into higher education is wrong. I believe that it shows the reality of our invisible Lib Dem colleagues’ commitment to equality and fairness. I look forward to hearing the Minister responding to my colleagues’ points today, but I look forward even more to seeing what the electorate in Southwark, in Hornsey, and in Lib Dem constituencies up and down the country, will say in response to the way in which the Lib Dems have today walked away from signed commitments not to have higher tuition fees.

[Mr Clive Betts (in the Chair)]

I thank all Members for their co-operation in ensuring that everyone who wanted to speak had a chance to do so.

15:40

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

It is a privilege to join the debate led by my right hon. Friend the Member for Tottenham (Mr Lammy), not least because he has a distinguished record championing the widening participation agenda as a Minister, a point others have touched on. Although I have a slight problem with his constituency, I welcome the opportunity to put on record my appreciation of his record in Government. Given his profound knowledge of the subject, I hesitate to speak so soon after my appointment to this shadow brief.

My right hon. Friend and my hon. Friend the Member for City of Durham (Roberta Blackman-Woods) rightly praised the improvements in access to participation under the Labour Government. Those from the top three social classes are twice as likely to go into higher education as those from the bottom four classes, and 19% of the poorest 20% go into higher education compared with 57% of the richest 20%. As my right hon. and hon. Friends made clear, there has been encouraging progress since 2004. Higher education participation by the poorest 20% is up by some 32% compared with a rise of 4% for those from the richest 20%, which means an extra 33,000 students from the bottom four social classes going into higher education between 2003 and 2008. My right hon. Friend and the previous Government can be proud of that record. As hon. Members have rightly said, we need to do more work in that area, so I share the profound scepticism of all those who have spoken from the Opposition Benches that the package announced today by the Minister for Universities and Science will help the effort to increase access to participation.

The hon. Member for Reading East (Mr Wilson), who, sadly, is no longer in the Chamber, intervened on my right hon. Friend the Member for Tottenham. As my right hon. Friend said in his answer, the one bit of good news in the Government’s response to the Browne review was about access to loans and better support for part-time students. There were interventions and speeches by my hon. Friends the Members for Hackney North and Stoke Newington (Ms Abbott), for Stalybridge and Hyde (Jonathan Reynolds), for Newcastle-under- Lyme (Paul Farrelly), for City of Durham (Roberta Blackman-Woods), for Washington and Sunderland West (Mrs Hodgson), for Liverpool, Wavertree (Luciana Berger), for Wigan (Lisa Nandy), for Scunthorpe (Nic Dakin), for Sheffield Central (Paul Blomfield) and for Sefton Central (Bill Esterson). I hope to pick up on some of the points that they made.

The hon. Member for Wolverhampton South West (Paul Uppal) made the perfectly fair point that barriers to widening access to education are not simply about finance, but I hope that when he reflects on his intervention he will recognise that a substantial cut in the teaching grant—of which more shortly—will have a big impact on the effort to increase participation. My right hon. Friend the Member for Tottenham referred to the research by the Sutton Trust, which has long championed better access to the oldest universities—Oxford and Cambridge. It will be interesting to hear the reaction of the Minister for Further Education, Skills and Lifelong Learning to the work that the Sutton Trust published and the profound concern it raised about the impact of the Browne review on the ability of universities to increase participation.

My right hon. Friend has also championed the future of Aimhigher. In answer to questions that I tabled about its future, the Minister for Universities and Science made it clear that Aimhigher has made a significant difference to access to higher education for those from low-income backgrounds. I hope that the Minister for Further Education, Skills and Lifelong Learning will give us more detail about the future of the widening participation grant. Does he expect it to go down?

I hope that the Minister will deal with the Opposition’s profound concern about the scale of the cut that universities have to contemplate. It has been largely hidden away and not referenced until today’s statement and debate. It is not the 40% spending review cut that the Department for Business, Innovation and Skills owned up to, but the 80% cut in the undergraduate teaching budget that is set to have such a profound impact, and is the prime driver behind the increase in fees that we are set to see.

As I said in response to the statement by the Minister for Universities and Science today, we expect universities to lose millions of pounds over the next four years. I hope that he has the courage to recognise that the universities that have done the most to increase participation are set to see the biggest drop in teaching grant funding. As a result of the cut in the undergraduate teaching budget, the university of Bedfordshire is set to lose more than £25 million; Sheffield Hallam university, which serves the constituency of the Deputy Prime Minister, is set to lose £63 million; Leeds Metropolitan university is set to lose almost £61 million; Manchester Metropolitan university is set to lose £60 million; and Liverpool John Moores university is set to lose more than £48 million. A series of universities are set to lose all their teaching grant funding.

In response to the statement from the Minister for Universities and Science today, my right hon. Friend the Member for Lewisham, Deptford (Joan Ruddock) referenced Trinity Laban, which serves, in part, one of the most deprived communities in London, and is set to lose all of its funding simply because it does not teach science, technology, engineering or maths. There is huge concern in the higher education sector, as I hope the Minister will acknowledge, about how the transition to the new system will work, about the pace of cuts in higher education funding and about the extent to which the income from increased fees will come on stream.

The key question for the Minister is how such a huge cut in the undergraduate teaching budget will help universities to increase participation. My hon. Friend the Member for Sheffield Central mentioned that we are one of only two countries in the OECD that is decreasing spending on higher education—we join Romania in that regard. In the US, President Obama wants the highest number of undergraduates in the world to be from the United States by 2020, and he is backing up that commitment with substantial additional investment in higher education and research. France, Germany, our allies in Europe, Australia and our allies in the Commonwealth—all OECD members—are substantially increasing their investment in higher education, because they want to increase and widen participation. They recognise both the importance to their economies of having highly skilled graduates and the social justice argument for ensuring that those from low-income backgrounds can go to university.

Although a huge number of Labour Members are interested in this debate, it is telling that not one Liberal Democrat has turned up to take part. They are skulking away in the corners of the House, no doubt embarrassed by what their party has signed up to. It is extraordinary that back in April the Deputy Prime Minister signed his headline manifesto commitment opposing tuition fees—wanting them abolished—yet he now supports trebling them as part of the package today.

What is the future for the widening participation premium? What will be the impact of much higher fees and loans on mature students? What analysis has the Minister commissioned about the impact of the package announced today on those from low-income backgrounds? What will be the impact on postgraduate teaching, and what will be the impact on people from low-income backgrounds in terms of participation in postgraduate study?

Will the Minister tell the House how the new access agreement that each university will have to sign with the Office for Fair Access will work? Will there be targets in the access agreement? How will they be set? Will the access documents be public, so that universities and those outside the higher education sector can compare like with like? What will be the penalties if universities do not achieve the targets set out in the access agreement? That point was raised by my right hon. Friend the Member for Tottenham.

15:50

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

It a pleasure to speak in this debate, Mr Betts, and I congratulate the right hon. Member for Tottenham (Mr Lammy) on securing it. I acknowledge that we both care deeply about this subject, and we have debated it over many years. It was especially fortuitous of him to secure the debate for today. He applied for it and secured it before he knew about the statement that would be made—a remarkable achievement.

I have always listened to the right hon. Gentleman with interest. His journey from Tottenham to this place is one that we all believe more people should be able to take. Like many other hon. Members who have spoken, I was the first person in my family to go to university and, as the right hon. Gentleman knows, I want that opportunity for more people from working-class backgrounds. Like the hon. Member for City of Durham (Roberta Blackman-Woods), I believe in what she described as the transformative power of learning, and the way that learning changes lives by changing life chances.

However, let us be frank during the course of our affairs this afternoon. The previous Government knew, just as this Government know, that we have to think again about how we fund such opportunities. That is precisely why the previous Government commissioned the Browne review. I have a series of quotes from Lord Mandelson and others. It would be tedious to read them out, but they state that we need to think afresh about the way that we fund universities and think carefully about the contribution made by graduates. That was why we needed to commission a review that looked at such matters. The terms of reference of the Browne review could hardly have been agreed on had it not been anticipated that the outcome would address such subjects. That is precisely what Lord Browne did.

We have heard from a number of hon. Members about the problem of the disincentive effect of higher fees. We heard about that issue from the hon. Members for Sheffield Central (Paul Blomfield) and for Liverpool, Wavertree (Luciana Berger), and the hon. Member for Harrow West (Mr Thomas) mentioned it in his summing up. That stands in contrast to the simultaneous and accurate claims made by hon. Members that since fees were introduced, things have improved in terms of widening access. Rather than being a disincentive, there is little evidence to suggest that people have been put off by fees. As we heard, more people from less-advantaged backgrounds have been going to university since the introduction of fees.

[Paul Farrelly]

Will the Minister give way?

[Mr Hayes]

I will happily give way, but I am not going to give way too much because of the time. I want to cover all the points that have been raised.

[Paul Farrelly]

My hon. Friend the Member for Hackney North and Stoke Newington (Ms Abbott) and I were veterans of the bloody battles that were fought in the Labour party over a market in higher education. The Conservative party and the Liberal Democrats agreed with us. The key achievement all those years ago was to stop the variability, which would have led to people from poorer backgrounds choosing cheaper universities.

While I am on my feet, I would like to make another point—

[Mr Clive Betts (in the Chair)]

Order. Interventions are supposed to be brief.

[Paul Farrelly]

This will be very brief, Mr Betts. The price paid for a degree sends a market signal to employers that the higher the price, the more a degree is worth. Therefore, more universities will charge higher fees simply because of the signals that that will send to employers. There will be many effects that have not been researched.

[Mr Hayes]

I rather suspect that that depends on the degree. There is much more evidence to suggest that degrees in applied sciences, for example, and some of the practical subjects, tend to increase employment potential, whereas some other degrees do not—we could share that discussion offline, Mr Betts, if we have not got time to share it now. I do not write off those other degrees. My goodness—I am a politics graduate and I ended up in this place. As a social scientist, I do not want to make a case against social sciences, and as someone interested in the arts and humanities, I am not going to make a case against those subjects. None the less, if the hon. Gentleman looks more closely at the evidence, he will find that the issue is more about the type of degree.

Much has been made in the debate about the issue of prior attainment. I want to emphasise and amplify the point that the key problem with widening access is prior attainment. If the number of applications were greater, the number of admissions would be greater too. There is not much evidence to suggest that the admissions system is skewed against people from less well-off backgrounds. Many studies have been done to try to establish that, but such a claim is not evidentially based. The issue is about the number of people who apply to universities from less well-off backgrounds. We have to get the school system right and put people on the starting block in the race for higher learning.

We must get advice and guidance right. All too often, people from disadvantaged backgrounds are not given the right kind of empirical advice about the opportunities available to them. When people are advised properly, equipped with the qualifications necessary for their applications and encouraged to apply to university, we see the widening of participation and the fair access that both I and the right hon. Member for Tottenham would like.

[Sheila Gilmore (Edinburgh East) (Lab)]

rose—

[Mr Hayes]

I will give way once more, and then I must make progress.

[Sheila Gilmore]

No one would disagree with the need to improve attainment, but I do not think that those issues are necessarily in conflict—I will ask the Minister for his view on that. Over the past few years, if people wanted to get into housing, those who could go to the bank of mum and dad did so. Are we going to see a position where those who have the bank of mum and dad, or perhaps an inheritance from mum and dad or grandparents, will in future be able to make choices about higher education that other people cannot make?

[Mr Hayes]

It is more the case that people who get advice and guidance derive the wherewithal that turns their aspirations into reality because of a familiar understanding of opportunity. Research suggests that people tend to get that wherewithal from social networks or familiar experience. That is why my children will benefit from advantages that I did not have because of my understanding of the options that are available for higher study. The issue is not only about money, although money is part of it and I shall come on to that in a few moments.

[Mr Thomas]

Will the Minister give way?

[Mr Hayes]

I will not. I am terribly sorry, but I want to make progress. A lot has been said about Aimhigher. I charged the right hon. Member for Tottenham with the claim that he cut the budget for Aimhigher—that was perhaps a little unfair given that he will not have access to the same figures as when he was a Minister or a Front Bencher. However, I would like to give him the facts and I know he will also want them on the record. In 2007, the budget for Aimhigher was £102 million; by 2009 it had dropped to £81 million, and by time the right hon. Gentleman left office, it had fallen to £78 million. The faith that he and others expressed in Aimhigher was not supported by a financial commitment in the budget over which he presided.

[Mr Lammy]

Let me put on the record that I was not the Minister in 2007. We increased the widening participation budget for universities more broadly, alongside Aimhigher.

[Mr Hayes]

The right hon. Gentleman was not the Minister when funding for Aimhigher was at its highest, but he was when the funding fell. We understand his point.

The quality of achievement at state schools and the prior attainment of students is critical. The right hon. Gentleman makes an important point about the success of black students in getting into Russell group universities. That is a matter of profound concern and something that the Government should look at, particularly in light of the recent research that he and I discussed yesterday. I want to see what we can do to address that issue.

I also wish to speak a little about the point made about arts subjects. It is important to understand that we will continue to support the arts. It was suggested that arts subjects will no longer receive funding, but we will continue to focus the Government subsidy for teaching on that.

[Roberta Blackman-Woods]

Will the Minister give way?

[Mr Hayes]

I cannot give way; I do not have time. I apologise. We will continue to support the arts through the subsidy for teaching in universities.

I have a couple of other points. First, the increase in support for part-time learning will do more to widen participation than any other single measure. As the right hon. Gentleman and others know, disadvantaged people are disproportionately represented among part-time learners. Raising the income threshold to £21,000 will have a profound effect—

[Mr Clive Betts (in the Chair)]

Order. We must now bring the debate to a conclusion.

A614

Wednesday 3rd November 2010 Westminster Hall

15:59

[Mr Mark Spencer (Sherwood) (Con)]

I am grateful to have been allowed this time to debate this issue, which is crucial to my constituency. The A614 is a rural single carriageway road that runs down the spine of Sherwood and is a key stage of many commutes in my constituency, providing essential access to the city of Nottingham. The A614 is, however, an historically dangerous stretch of road. It is the site of frequent incidents. In the past 18 months alone, two horrendous fatal accidents have claimed eight lives.

The people of Sherwood have been lobbying hard for improvements to the road, and I am today calling both for better funding for the local county council to make the necessary improvements and for a look at the wider lessons that can be learned from roads such as the A614.

Let us consider rural roads in general. The Institute of Advanced Motorists states:

“On an average day, nine people die on Britain’s roads; six of them are killed on rural roads.”

It also states:

“Two-thirds of fatal and serious casualties on rural roads happen on 60 or 70 mph speed limit…roads.”

It is also relevant to note that half the casualties in rural Great Britain are injured on dry roads in dry weather and that more are injured in daylight than in the dark. Those figures show that rural road safety as a whole needs to be considered when the House can commit more time to the subject than this debate allows, but the A614 is of particular relevance to Sherwood and its people.

I would like to acknowledge for the record that the county council has done excellent work in bringing down the numbers of accidents and particularly fatalities on the A614, but there are a number of areas in which I believe that the Government could support the county to make further improvements in the A614’s safety record. I shall specify where improvements are necessary.

The A614 attracts the vast majority of its accidents in dry, light conditions, with no other hazards detailed on the accident reports. That begs the question, why is the A614 a consistent source of road incidents? There are several hot spots along the route that warrant improvement. Between 2004 and 2009, there were 11 accidents at the junction with the B6030, locally known as the Rose Cottage junction. The installation of traffic signals at the junction was investigated but not proceeded with, as the necessary funding was not available. Any resident of the village of Edwinstowe who tries to gain access on to that busy road will know the dangers of pulling out. When that is combined with the Center Parcs traffic coming in and out of the same junction, there are enormous delays, which lead people to take risks that they should not. An improved road junction at that site would really assist and lower the number of accidents.

Mickledale lane is a little further south. There have been three accidents there since 2004. Residents of Bilsthorpe, a local village, use the junction to gain access to this busy road. It is an horrendous pull-out. Anyone who has used the junction will know the dangers of pulling out into high-speed traffic.

A little further north is Ollerton roundabout—a source of much congestion and debate in the past. The county council has worked long and hard to try to improve that roundabout. There have been 16 accidents along that stretch of road since 2004, and 13 of the 16 involved vehicles turning into or out of a junction. One occurred at a private driveway near the railway bridge, four occurred on Station road—a rat run for people avoiding the congestion at Ollerton roundabout—and eight were associated with the two service stations south of Ollerton.

Although safety is the clear priority at all times, there are major issues with traffic flow, resulting in major tailbacks. Heavy and slow traffic has its own safety consequence, with several bumps occurring in slow-moving traffic. I must, however, give credit where it is due. After years of inaction, the Conservative county council has finally taken action with a small improvement scheme and is delivering that as we speak. However, I expect that the hold-ups will remain. The issue needs solving.

Gravelly Hollow is the junction by which the residents of Calverton gain access not only to the A614, but to the M1 motorway. Due to lack of funds some time ago, the county council decided to close that road junction completely. Funding was not available to improve it, and it had such an horrendous safety record that it was closed to the residents of Calverton. They are now pushed south to an equally dangerous junction at Ramsdale and turn at an acute angle northbound, taking a great risk.

Inevitably, money must raise its ugly head, but I think that investment from Government through the LTP3—local transport plan—settlement would offer a number of clear benefits. Sherwood has had no firm commitments to transport infrastructure improvements, but an increase in the LTP3 settlement would allow the county council to make the vital improvements that Sherwood needs to improve road safety and traffic flows. As improvements have been made to the road over a number of years, accidents have reduced slightly. If the county can commit to improving the remaining sites, the numbers will inevitably fall further. Investment is a prime means by which the Government can support the localism agenda. With relatively modest investment, the Government could support local improvements and ensure that the county can invest in the right places to save lives.

However, although certain physical improvements to the A614 would benefit Sherwood enormously, it cannot be overlooked that the road attracts the vast majority of its accidents in light, dry conditions in which no other hazards seem relevant. I am haunted by the statistic I read that the biggest killer of teenage girls is their male drivers; they are killed as passengers in those cars.

The accident investigation department at Nottinghamshire county council has looked at the accidents caused on one of the worst stretches of the A614—Lockwell Hill roundabout to Ollerton roundabout. Almost 20% of the accidents there were caused by drivers aged 16 to 25, despite that age group constituting only 12% of licence holders. Indeed, more than half the single vehicle accidents on that stretch of road involved under-25s.

It is not my intention to penalise young drivers, but it is an unavoidable truth that at some level our driver education system is failing and that we are still producing, though clearly by no means exclusively, drivers who pose a risk to themselves, their passengers and other motorists. In recent years, there have been a number of changes in the driving test procedure, including the six penalty point limit on all new drivers, but there are other measures that, rather than punishing new drivers, could support better learning and long-term motoring skills.

The AA has said:

“Learner drivers should be encouraged to gain as much practice as possible before taking their tests.”

It has also said:

“Newly qualified drivers need to gain more experience as learners, particularly to build better hazard perception.”

I share its belief that the best way to facilitate that is to support the addition of learners to the policies of qualified drivers—it is usually a parent—to allow them to learn over a longer and more extensive period of time than is allowed by expensive weekly driving lessons. As things stand, such an arrangement is often prohibitively expensive. The cost of adding a 17-year-old learner driver to the policy for a 1.1-litre Renault Clio ranges from the fairly high figure of £2,500 a year to an incredible £20,500. That was the most expensive quote that we could find on the internet. That is a major financial commitment for any family.

I and various motoring organisations believe that such a premium does not reflect proportionately the risk posed by a supervised learner. Insurance companies must distinguish between the 17-year-old who has just passed his test and is inclined to show off to his friends and the one whose mum is sitting in the passenger seat with a firm eye on the speedometer. The AA has said:

“Government should work with the insurance industry to review the premiums charged to parents wishing to include their learner driver children on their policies so that premiums follow actuarial risk.”

I fully agree.

In one of the grimmest accidents on the A614, the coroner observed that

“it was dark, however the visibility was very good, aided by street lighting…All the road markings were in good condition and clearly visible”,

but the driver was a young man.

The reality is that, while we must ensure that all road safety tools are physically in place—bright lines, proper lighting, adequate junctions—such measures will never completely exclude the occurrence of accidents. Drivers who lack the experience to use the roads will always cause problems.

Furthermore, the key point is that young drivers are not trained on the roads and the conditions most challenging to inexperienced drivers—rural single carriageways, often travelled at night or in the wet. I would like to discuss the idea that such roads and conditions should appear in the driving test or in a reformed approach to driver training that encourages young drivers to get as much experience on as wide a range of roads as possible. Such young drivers have a lower risk of crash involvement in the key early months, as found in Sweden. Advanced driver training has also been suggested by the IAM, as a key component of any approach to reducing crashes—positive encouragement and awareness raising of how extra training can save the driver’s life on a rural road.

For those concerned about learners in an urban context, for whom the countryside is half a lesson away, the reality is that inner-London drivers are less likely to come a cropper on rural roads than are Northampton or Nottingham drivers, and yet it is perfectly possible to get out of those towns for a rural experience. The test could reflect local driving environments and casualty reasons, rather than being a national exam in which instructors all focus on low-speed urban driving, such as reversing around a corner, to pass the test. It is worth noting that hardly any casualties result from anything currently tested by the DSA. While that could be a testament to the success of the test, that is unlikely.

Various post-training schemes exist, including the IAM’s of course, but young drivers have little incentive to partake. I am not proposing graduated licensing, but anything that the Government can do to introduce and encourage continuous development will deliver reduced casualties.

Pass Plus was a start for the UK, but the Austrian system whereby new drivers have to undergo three training events in the first year seems more likely to deliver results—it also appears to go down well with the drivers. The training is not seen as an onerous task but as a normal part of building someone’s skill as a driver—it is certainly worth studying for lessons that we could learn.

In conclusion, I ask the Minister again to look at the A614 and its accident record, but also at the role that young people play when driving on our roads. Anything we can do to encourage those young people to keep themselves, and ourselves, safe would be greatly appreciated. Thank you for the time.

16:13

[The Parliamentary Under-Secretary of State for Transport (Mike Penning)]

I congratulate my hon. Friend the Member for Sherwood (Mr Spencer) on his tenacity in standing up for his constituents, in particular those concerned with safety on the A614, and, more openly, for the whole issue of driving with safety on our roads. We have answered my hon. Friend’s parliamentary questions and he has already met the Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker), the Minister responsible for local roads. I am answering the debate today purely because of the road safety remit of my ministerial role.

I would like to touch on two aspects of the debate this afternoon: the problems of the A614, and what can be done with the limited funds available. I also pay tribute to the work of the local authority, the police and the other agencies in Nottinghamshire, which have done remarkably well on this stretch of road, in particular along the length of the road, taking 102 deaths in 2005 down to 24 in the first half of this year—24 too many, I fully accept. However, things are difficult in rural areas and, even when conditions are dry, bright and safe, and things are done with the road markings, as the coroner indicated, deaths still, sadly, occur.

In my previous incarnation as a rescue tender driver in the fire and rescue service in Essex, I attended all too many road traffic accidents. They involved young drivers in particular—something I shall come on to again in a moment—and people could suffer serious injuries, on roads that gave no explanation as to why the accident had happened.

The other day I experienced a horrendous accident—on the M62, I believe—in which someone was changing the wheel on their car. For no reason at all, a lorry swerved from the inside lane and completely wiped them out—very sadly, they were both killed. There was no reason. The driver was not drunk or under the influence of drugs and was certainly not exceeding his tacho hours limit, but for some unknown reason we sometimes have such accidents.

We can do a lot with education, in particular on this stretch of the road, perhaps, and not only is work being done as we speak on the Ollerton roundabout, but the local authority is now looking at whether average-speed cameras could be funded along that stretch of the road. I want to reiterate some guidance to do with speed cameras which I will be sending to all local authorities in the UK that come under my remit—there is, of course, a difference between speed cameras and average-speed cameras.

One of the things that the new Government have done in the past six months, with our restricted funding, is to say to the local authorities that, instead of hypothecating money specifically for speed cameras, we will let them make local decisions on local areas. They do not have to use some of the money specifically for speed cameras—they can if they wish—but they can spread the money across myriad road safety features. The old system meant that some of the money had to be spent on speed cameras no matter what, which skewed a lot of decisions.

What will happen now is that, if speed cameras are wanted, the local authorities can use the funding in that way, but we are saying, “Please, look at whether speed cameras are the only option, whether there are better options and whether, in particular places—this road might well be one—average-speed cameras could be used,” if the authorities wish to reduce the speed limit from 60 to 50 mph. They would have to apply to me, as the Minister, to reduce the limit to 50, but if they did I would be minded to do so. However, if we do that, the indication must be that it is enforceable. With the limited resources that the police have—the police are very involved with accidents along the road, there is no point putting in a speed limit that we cannot enforce one way or another.

My theory is that if we had single speed cameras just staggered along a road, on a long stretch of undulating road such as this, if we were not careful, we would have people braking for the speed camera—everyone knows where they are—then speeding up and being away again. That adds to the problem. However, in certain circumstances, in particular on motorways, interestingly enough, but also on dual carriageways, we know that average-speed cameras have worked very well. Putting in average-speed cameras would be a new approach for such a road. There is an expense, of course, but the money is available in the existing budgets for local authorities, if they wish to use it in that way. It is very much their choice.

The Under-Secretary of State for Transport, my hon. Friend the Member for Lewes, when he met my hon. Friend the Member for Sherwood, indicated that it is not for central Government to tell local authorities the best way to address the situation. We can help; we can give guidance, but it is very much their decision.

[Mr Spencer]

That is the point that I am making. If we can find a facility to give Nottinghamshire county council an improved LTP3 settlement, it can find a means by which to solve its local problems at a local level.

While I am on my feet, I am grateful that the Minister has taken the time to come here today, but could he find time in his busy diary to come and have a look at the road? I would be delighted to show him the issues and for him to meet some of the residents who live near those junctions, so that he can experience the dangers that they face.

[Mike Penning]

I would be delighted to respond to that kind invitation. I love that part of the world—I know the Center Parcs to which he referred earlier very well indeed, from when my children were much younger. If it is not me, it will certainly be the Under-Secretary of State for Transport, my hon. Friend the Member for Lewes, depending on our programme.

When we come to funding, things are difficult—improved funding means more funding, and my county would like that, the same as Nottinghamshire, but we have to look directly at what can be given and what can be spent. That is where the pressure of hon. Members and their councillors can ensure that the money is spent in the right, most feasible way.

I shall spend a little time on the serious subject of young drivers, particularly boys between the ages of 17 and 25—and in some parts of the country up to the age of 30. I was heavily involved in this matter not only as a Back-Bench Member when I first came to the House but in my previous occupation in Essex fire and rescue service.

It is the most horrendous thing for policemen, ambulance paramedics or firemen to see young lives being wiped out. There are times when there seems to be no logic to such incidents. I have been to many incidents that, to our knowledge, did not involve drink or drugs, and where the road conditions were fine and the vehicles were of a low horsepower.

The vehicle of choice for the young and particularly for boys is the Saxo or the Corsa. Such cars are not built for speed, although attempts may be made to change the baffles in the exhaust pipe to make it sound like a grand prix racing car. Nevertheless, those cars can speed quite well and with the wrong road conditions speed is one of the biggest problems.

We have been in government for only a short time but we are giving careful consideration to the driving test—I shall return to that subject in a moment—and to projects to educate young people so that they understand that they are not immortal. What fascinates me is that many young people who get into such difficulties when driving are intelligent.

I am sure that his family will not mind my mentioning this, because it adds to the debate, but a wonderful young man came to do some work experience for me when I was newly elected to the House in 2005. He had worked hard to become the head boy at the local comprehensive school and was going to one of the top universities, and I hope that his work experience with me added to his curriculum. After taking a morning exam, he drove down one of the country roads in my constituency. The end result was that he put the car into an oak tree. That happened for no apparent reason—apart from adrenalin, excitement, the thrill of driving and, not least perhaps, peer pressure from some of the others in the car. The old-fashioned phrase for that is showing off, but it puts other people’s lives at risk as well as that of the driver.

I passionately believe that we can work with some of the measures introduced by the previous Government, including the six points rule, which is good. However, we must be careful. My hon. Friend touched on insurance, and I note that the fine for not insuring a young person to drive is vastly less than paying the insurance. I assure my hon. Friend that we are working with the Ministry of Justice to ensure that fines act as a deterrent rather than an incentive to remain uninsured.

We are working closely with the insurance companies to make it mandatory for vehicles to be insured. There are millions of vehicles on our roads that are not insured. People say, “Well, it’s sitting outside on the road outside my house. I’m not using it. It’s taxed but doesn’t need to be insured.” It has to be insured, because if someone decides to use it even for an emergency they will not be covered. We are moving fast on that.

I am very keen to have a national framework for educating young drivers on the dangers of driving. When I was on the Back Benches, I went to see a scheme in Cheshire called Drive to Survive. It is an excellent scheme. If my hon. Friend wants, I shall drop him a line telling him about other schemes around the country. The schemes are a bit of shock but have a little compassion; they shock young people, and not only those who have been breaking the law by showing them what they could have done to themselves and to those whom they love dearly. At the end of most courses, someone is there to tell how they lost a loved one, and to talk about sons or daughters who had been maimed or killed at the same age. I pay tribute to Mr Beatty in Scotland and Mr Kerr in England; both are to advise me from personal experience how that campaign works. We may have wonderful, big organisations, but I want people from the grass roots to work with me on how to skill up our young people.

I turn to the changes to the test that were touched on earlier. They are being implemented as we speak. People, and not only young people—this is so true—are trained to pass a test and not to drive. One thing that I have asked during the six months during which I have had the honour of being a Minister is the question, “Is the test fit for purpose?” Are we training people to drive in a fit and safe way so that they can enjoy the road?

That applies not only to cars and HGVs but particularly to motorbikes. Even though we have some of the safest roads in the world, our motorbike death rate is going in the wrong direction. Although we had only a 2% increase last year in motorcycle use, the motorbike death rate has increased by 4%, which is going in exactly the opposite direction of all other motor and cycling deaths. I have therefore announced a review, which is ongoing, of the motorcycle test. As my hon. Friend is aware, our undulating roads are a big problem for motorcyclists as well as car drivers.

The previous Government introduced the two-part test. Part of it was to be taken off-road. That sounds eminently sensible—ish—until one realises that the only way to get to the test centre is for those learner drivers to drive on the road. It can take anything up to two or two and a half hours to reach the test centre. Then comes the off-road test, and we have had some nasty accidents there. Those who fail are sent off home to drive on the roads again. It seems to me that if we are training people to drive on the highways and byways of this country, testing them on the roads is the best way forward.

Other things concern me about the car driving test. My hon. Friend insinuated—it was right and proper for him to do so—that those teaching people to pass the test are doing so in order to get paid and move on to the next test. As a result, they have learned the test routes. I know that my young daughter will not mind me saying this—I know that because I am always doing it, and sometimes in front of her. She passed her test first time. We live in Hemel Hempstead in Hertfordshire, and the test centre is at St Albans. She took all her driving lessons in St Albans. On the day of her test the instructor said, “Turn left; then turn right,” and she smiled. She knew the route like the back of her hand. She will admit that that is not the best way to test people, and we are desperate to change that. I have therefore banned the routes being published. New routes will be worked in the test centre areas so that there will be no knowledge of the route; instead, there will be knowledge of how to drive.

Another change has been introduced. Once people have passed the test they are likely to drive on their own. My daughter came home after her test and parked the car. At about half-past 5 she went out of the front door, put the keys in the ignition and sat there for half an hour. Like a good parent, I was staring out of the window so that she could not see me, but eventually I went out to her and said, “What’s the matter, mate?” She was crying. She was petrified. She had never driven a car on her own, yet the law—and I as the Minister—had given her a piece of paper that said, “Off you go. You’re as good as everyone else on the road.” That is not the case. We need to work with the Institute of Advanced Motorists, the AA and other organisations on post-test training, and to ensure that the test itself is fit for purpose.

I thank my hon. Friend again for introducing a subject that I would like to debate more often. People take an interest in their local community and its roads, and are concerned about the deaths and accidents that take place there. It is something that every Back Bencher should do. It is a great honour to stand here as a Minister and listen to someone who understands his constituency so well, who understands its topography and layout and who knows where the problems are.

Of course it is my hon. Friend’s job to ask for more money, but with the limited funds that we have I must ensure that the money is spent on the right projects and that we do not pick on the same ideas each time but look outside the box. That is particularly so for rural roads, where white lining on the edge of the roads is so important. White lining has saved millions of lives—that is an overstatement, but it has certainly saved thousands of lives—since it was introduced in the 1960s. Some of those white lines are now wearing out, but white-lining technology has improved and we now have retro-reflective white lining that absorbs light and throws it straight back at the source rather than onwards. That sort of technology should be used, as it is very cheap. When we go to look at the roads in my hon. Friend’s constituency—I do not know whether it will be me or my colleague—it will be interesting to see whether the white lining was improved at the same time as some of the other works that have been approved. On rural roads, it is very useful.

Finally, I turn to the cost of insurance. As a parent, I put both of my children on my policy, but they were not the main drivers. In many cases, however, children are the main driver, but are not listed as such. That is breaking the law, and it is not fair on the insurance industry.

Rebalancing the UK Economy

Wednesday 3rd November 2010 Westminster Hall

16:30

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

Amid the feverish analysis of the size, scope and impact of the Government’s chosen spending cuts, a fresh debate is emerging about a desirable blueprint for Britain’s economic future. Such is the near-universal distaste reserved for financial services, that a determination no longer to rely on their economic contribution seems one of the few certainties in the debate. As a result, rebalancing is the new economic watchword. For sure, the financial crisis has painfully highlighted the UK’s dependence on the City and our collective exposure to the risks taken by the global banking fraternity. My worry, however, is that the phrase is being used—even, I fear, by some Conservative coalition Ministers—for playing to the gallery as part of the general banker-bashing sentiment.

It is superficially convincing to promote attempts to stimulate growth more evenly through the regions, and stepping up our game in the innovation and incubation of companies in the high value-added areas of high- tech manufacturing, engineering, pharmaceuticals and biotechnology. I acknowledge my own part in that: I have played a role in ensuring the incubation of those small companies in the City of London. The Corporation of London is to be complimented for finding premises in double-quick time for such companies.

I wholly support the initiatives of the Government, in particular funding the £200 million science park in St Pancras. That is both welcome and highly commendable. However, we should be wary of how the aim of rebalancing is pursued. Unwisely, most of the focus so far has been on how we might shrink the City to reduce its relative importance, rather than providing a positive economic climate in which all other sectors can flourish.

Before we pursue what I believe would be such a dangerous policy any further, I wish to make the case why financial services must remain a central plank in Britain’s bid for continuing relevance in a fast-changing global economy. A strong financial services sector is overwhelmingly beneficial to our nation. It will provide the critical mass to draw business to this country. It offers diversified sources of capital to small business. It makes huge contributions to the Treasury’s coffers, in terms of tax and employment, and it supports a wide range of complementary industries, from law to leisure. It is also one of the very few areas where we might envisage significant growth in the decades to come.

The tens of millions of people who join the ranks of the global middle class annually from India and China have a greater cultural propensity to save, and they will seek expertise in investing their savings for the future. It seems evident to me that the entire drive for the west is directed towards capturing the growth of the developing markets. It is an argument that has been put to me in recent weeks by German industrialists. Here in the UK, we have already secured such an important competitive advantage. It is in the financial services sphere. Why throw that advantage away? Aside from that, there are several reasons for us to believe that the task of rebalancing might well prove trickier than we may wish.

It is time that we changed our attitude towards the City, from one of punishment, which has taken place in the past two or three years in the aftermath of the financial crisis, to hard-headed realism. How we treat our nation’s most valuable economic resource in the years ahead will be a litmus test for international business in determining how serious Britain is in its wish to be dynamic and have an open economy that embraces global talent, promotes aspiration and welcomes business.

I hope that the Minister will consider this: the UK should perhaps, for example, look at the way that the Isle of Man has quite successfully rebalanced its economy through promoting new growth areas but, crucially, in a way that has not undermined or diminished the importance of its own very important financial services sector. The Isle of Man has embarked upon a diversification drive that has built a thriving hub for high-tech manufacturing, including aerospace, which of course has strong links to the north-west of England economy. It has created a propitious environment for world-class e-gaming companies; it has established world-class high-quality aircraft and ship registers and created a diverse and thriving space commerce sector, with many of the world’s leading operators established on the island. Crucially, it has also continued to support—very vocally—and promote its successful financial sector, which is wholly compatible with, and supports, other sectors of its diversified economy. In essence, the Isle of Man Government have not picked winners at the expense of penalising other sectors, but have shown that they can build a balanced and diversified economy, while maintaining a strong and thriving financial services sector.

While the banking crisis was in full swing in 2008, it seemed that almost overnight the financial sector had become a useful scapegoat for all our economic ills. Many of the criticisms levelled at the banking fraternity have been legitimate, in part at least. The failure in that sector of the economy exposed the domestic taxpayer to such mind-boggling sums that it was, in many ways, scandalous, and seemed to confirm suspicions that the wealth created by the City was simply a mirage. Irresponsible risks were taken. Debt instruments certainly became too complex. Money was lent to those who could ill afford the repayments. Incidentally, I fear that one of the difficulties is when policy makers seek out so-called socially useful banking—the genesis of the sub-prime problem that occurred initially in the US and in the UK subsequently from the mid-1990s. Regulators—if not regulations—proved ill equipped at times for their job.

The City’s dominance in the domestic economy in the past two decades had some wide-ranging social consequences. For a large proportion of British people working outside the gilded corridors of the financial services industry, the growth of the City’s power increased the cost of living and reduced, at times, to just a wistful dream any prospect they may have had of getting on the housing ladder, except via colossal personal debt. It could also be argued that the City precipitated a brain drain from other professions and industries, with so many of our brightest and best graduates over the past quarter of a century tempted away by unrivalled starting salaries in the banking sphere.

In some senses, the City’s success has merely masked—until its failure uncovered—some more fundamental problems that had developed in the western economies. Governments had been spending far too much money. As individuals, we had also racked up far too much debt. We found it cheaper and easier to buy cheap goods from abroad, import migrant workers and pay off our own citizens with welfare, rather than confront the difficulties of either finding sufficient employment for blue-collar workers who were losing ground to eastern competition, or tackling the dearth of skills among the indigenous population. I am glad to say that with some of our welfare policies, the Government are definitely going down the right route to try to counter some of those issues.

Neil Carmichael (Stroud) (Con): I do not think that it is inconsistent to have a thriving financial sector and other thriving sectors, including small and medium-sized businesses. Thriving businesses will deal with the problems to which you just alluded, in terms of migration, skills training and so on. A financial sector would welcome further opportunities to invest in its own territory and internationally. The two things go hand in hand.

[Mr Field]

I would not disagree with my hon. Friend in any way. It is the rhetoric, I think, of some policy makers, both in the present, but particularly in the past, that could have applied something of a barrier to that very ideal goal.

Rather than openly confronting some of those issues post-crisis, the implicit and perhaps all too easy assumption has been that, had the banking sector not collapsed through the profligacy and greed of some its employees and key players, we might have continued as we had before. There is also an assumption that to solve our current problems we need simply to return to what used to be the strength of a couple of generations ago—rebalancing the economy towards making things. The intensity of the rhetoric that has built up around the role of banks in the economy is such that politicians and even bankers themselves have often been unwilling to stand up for the sector.

Alas, that rhetoric has not subsided as time has passed. In fact, it is likely to intensify in the months ahead as the cuts bite and questions are asked about how and why Government money can be found to prop up the banks and pay out what I suspect will be another bumper round of bonuses this year while public sector jobs and services, as well as benefits, face the axe.

In response, Governments approach the financial services sector as something to be outwardly chastened, while they privately recognise its importance to the wider economy and rely on the continued income and jobs that it provides. In public, banks are told to lend to inherently risky start-ups—small businesses and first-time buyers. They are berated for trying to take the collateral that small business owners will often have tied up in their own property. At the same time, however, banks are told—indeed, they are required—to meet stringent new capital requirements. The new £2 billion bank levy is announced with a fanfare and the 50% income tax rate remains in place, yet the Treasury quietly acknowledges that it cannot put further pressure on balance sheets while storms are still gathering in the eurozone, which I think will be one of the big stories in the months ahead.

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

This is a very interesting and timely debate about financial services. I declare an interest as a former City lawyer. I note with interest that you say financial services include lawyers, accountants and so on. Given that your concern is about publicity, do you agree that sometimes it is what some of the professional services have done themselves that has given rise to those problems? Furthermore, do you agree that, although it is not so much a City phenomenon as one related to smaller firms, the “no win, no fee” approach that law firms have adopted—as I say, it is usually adopted by smaller firms—has not really helped the cause of financial services?

[Mr Field]

As someone who is also from the “former lawyer” fraternity—I worked for a City law firm and I know that my hon. Friend worked for another City law firm over the years—I agree. There are elements of the ethics of business that concern me; I have never been a wide-eyed supporter of everything that has been done in the context of the City. Equally, it is important to recognise the City’s importance if this country is to get off its knees.

We witness, to an extent, the public baying for more blood after the banks have posted healthy profits, due, of course, to a combination of low interest rates, a lack of competition and a cut in corporation tax, yet the public are bemused when Government restrictions lead to increased bank charges for consumers.

[David Mowat (Warrington South) (Con)]

The right answer to the question of how to rebalance the economy is not to shrink the financial services sector. However, the fact remains that we have the largest financial services sector in relation to the rest of the economy of any advanced economy; the financial services sector accounts for something like 27% of our economy. The interesting policy question is whether we want that percentage to increase as a percentage of the whole or whether we want everything in the economy to increase together.

I think that you also raised a point about the public relations problems that banks are suffering at the moment. Of course, banks have made a huge contribution to our economy, but during the last two years they have sucked in something like £150 billion-worth of Government money and they are not really answering the question about how they should restructure themselves. That question has been left to the Bank of England and others—whether through the Glass-Steagall Act, or whatever—to answer. Until the banks do that themselves, they will continue to be criticised over bonuses.

[Mr Clive Betts (in the Chair)]

Order. I want to say something to the three hon. Members who have made interventions. It is fine that you made interventions, but on each occasion you have used the word “you” as part of your comments. This is just a small reminder—I did not want to stop you in mid-flow.

[Mr Field]

It is a credit to you, Mr Betts; it must be the informality of these arrangements that have allowed my colleagues to drop their guard somewhat.

I think that there is a lot in what my hon. Friend just said. As he rightly pointed out, in many ways a huge amount of money has been pumped into the financial services sector, yet there seems to be very little idea of what the global landscape of banking and finance will look like in the future.

The Government have a part to play in the process. We are, after all, majority stakeholders in two of the big four banks—the Lloyds Banking Group and the Royal Bank of Scotland—and we need to utilise that muscle to try to make a case for how the banking world should look in the future.

To some extent, there has been a somewhat confused strategy that has been of no benefit to the Government, the banks or the public. In essence, the risk is that we are now penalising our single most competitive economic sector, while somehow fooling ourselves that a miraculous rebalancing of the economy can occur by default. In truth, the rebalancing will only be threatened by diminution of the financial services sector. Let us not forget why, on the whole, a thriving City makes for a successful Britain.

Since time immemorial, the City of London has enjoyed an international reputation as a bastion of commercial certainty and reliability. It has promoted financial innovation, it has provided an international market for global merchants and in commercial affairs it has rightly been seen as a watchword for justice, neutrality and fairness. Of course, it also has a number of innate advantages that ensure that companies’ loyalty to London runs deeper than just appreciation of its tax regime. Those advantages include, of course, a time zone that lies between those of north America and Asia, which makes the City an excellent base for international company headquarters, and the lifestyle assets of a culture, an excellent educational offering and a population so diverse that all can feel at home.

As a result, London has emerged as the global financial centre. Indeed, so successful has the British financial services sector been that it now contributes more than 10% of Britain’s economic output. We should also remember that although the sector is focused in central London, a significant amount of its activity takes place in a range of regional centres in the UK.

Of course, it is not only banks that benefit from our financial sector but complementary industries such as law, insurance, retail and entertainment, as my hon. Friend the Member for Newton Abbot (Anne Marie Morris) pointed out. Our top-flight universities, the arts and the charitable sector also gain, the latter two from cultural funds or corporate responsibility grants that are, of course, often provided by the City’s top banks and bankers. The presence of our large financial sector gives London the critical mass to attract the best professionals from across the globe.

Banking bail-outs notwithstanding, the financial services sector contributes massively to the Treasury’s coffers in tax revenues, with an estimated contribution of £61 billion in 2008-09. Of course, it also contributes massively in terms of employment, with more than 1 million people employed directly in financial services across the UK.

The financial services sector also plays a critical role in supporting business, not only in attracting huge inward flows of foreign capital to help to fund our infrastructure but in propping up our companies and providing British companies with access to a diversified source of capital, to enable them to invest and expand.

Even if opposition to City dominance is practical rather than simply ideological, I suspect that it is unlikely any time soon that any other economic sector will be a world-beater in the way that the financial services sector is. I am afraid that the industries in which we are hoping to diversify are ones where competition will be very stiff. For example, the Chinese are as keen to develop their manufacturing capacity when it comes to green technology as we are.

Moreover, we should not assume that people in developing countries will start to spend their savings as the western world weans itself off debt and consumption. Britain is just one of the nations that have been pinning some of their hopes on export-led growth. However, despite a 20% depreciation in the value of the pound, the UK’s trade deficit has continued to widen. Meanwhile, with uncertainty infecting the financial system, British corporations have shown little appetite for expansion any time soon, as they accumulate cash cushions instead of investing.

[Neil Carmichael]

Will my hon. Friend give way?

[Mr Field]

My hon. Friend will have to forgive me for not giving way; I want to say a few more things and I obviously want to hear what the Minister has to say in response.

I am not convinced that London’s population is sufficiently equipped to deal with significant growth in new industries. Few people outside the capital may realise that, at 9%, London has one of the highest levels of regional unemployment in the UK. With Britain wedded to a model of high welfare and unemployment benefits, those living in the capital need to earn considerably more than the minimum wage to make it worth their while to work. As a corollary, it has of course been far easier in recent years to encourage hard-working migrants to fill the jobs that Londoners have been unwilling or unable to take up themselves. In the capital, a large proportion of the indigenous working-age population are without the skills or inclination to fill jobs of any kind.

Put simply, our financial services sector is a huge asset. With vast numbers of employees in the developing world entering the middle classes each year and earnestly looking for ways to save and invest, it is also one of the few sectors in which we can confidently predict significant growth in the years ahead. A nation of only 60 million people should be grateful to have one absolute world-beating industry that is, in normal times, incredibly lucrative and that feeds a wide range of other sectors.

By all means, we should focus on trying to help build up other sectors if we can, and on reducing the exposure of taxpayers to risk. However, economic diversification will not be an easy option and it should not lead to the neglect or diminution of the City. Indeed, if it leads to that, the task of diversification will become even harder. Global businesses and their highly skilled work forces do not necessarily have any innate loyalty to the UK. They will go where the legal, fiscal, regulatory, physical and social environment works best for them. I fear that the continued rhetoric of hostility towards banks and regulatory uncertainty only serve to deter such businesses. Why stay and put up with ever more grief?

In that respect, more pressing than diversification is the need to make the UK a place of possibilities, enterprise and entrepreneurship. It is not for this or any Government to pick winners and losers, or indeed to prop up losers and penalise winners. The continuing attacks on our financial services sector no longer serve any purpose. I understand the need, just before the election, to play a bit to the gallery—one had to recognise public sentiment—but we are now four and a half years from the next general election. I hope that the Government will have the confidence to make the case for our financial services industry. As long as we get the regulation right, we should not be fearful of confidently articulating the terrific benefits of a robust and expanding financial sector. Let us draw a line under this period of uncertainty and hostility while we still have that fantastic springboard to ensuring the UK’s great relevance in a fast-changing global economy.

16:50

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

I congratulate my hon. Friend the Member for Cities of London and Westminster (Mr Field) on securing this debate. He made some important points that I will address. I think that we all recognise that our financial and professional services industry is world-class and that the UK can rightly be proud of it. It affects every constituency in the country. For example, my constituency has more than 2,000 people who work in financial services and related professions—1,600 of them are in financial services—and Fareham is not the centre of the global financial sector. As my hon. Friend mentioned, the sector contributes to employment in regional centres. Belfast, Birmingham and Bournemouth all host processing centres that support the work of international financial businesses based in London and headquartered overseas.

For centuries, the UK has been at the heart of international finance. Our openness is an asset to our economy that we are keen to maintain. The recent global financial centres index once again ranked London as the most competitive financial capital in the world. We should seek to preserve and enhance that competitiveness, but it is also important that we do not lose sight of the other areas of our economy that make the UK an excellent place to do business.

It is right that we should support investment in areas of our country where it has been absent during the past decade. That is why, as part of the spending review, my right hon. Friend the Chancellor introduced the £1.4 billion regional growth fund to tackle the gap that opened during the last Government between the south-east and the rest of the country. The money is designed to lever in long-term investment in the capacity of our transport system, science and green energy across all parts of the UK.

I share the sentiment expressed in an intervention by my hon. Friend the Member for Stroud (Neil Carmichael). Many people, including me, have called for a rebalancing of the economy, but we will not achieve that by cutting down the tallest flowers; we need to make others grow taller and faster. I believe that we can have a more diverse economy and be home to the world’s leading financial centre. Indeed, the fact that the UK is home to a global financial centre can help us develop that more diverse economy.

Going back to the roots of the City and its success, the City flourished because it supported trade through insurance of trade finance. It found capital to invest in new enterprise and developed new and innovative ideas to provide security and certainty for businesses and households. It is an important part of the process of restoring confidence in financial services for the City to reconnect with commerce. We need banks to lend to businesses if they are to take advantage of new investment and trading opportunities, but it is not only banks that need to do so. That is an important priority for this Government.

We welcome the work done by the British Bankers Association on that issue, involving commitments to improved data, greater transparency and an army of business mentors to get businesses ready for finance. However, we also need to broaden the sources of finance available beyond banks. We need sources of new equity. Banks will be contributing to a £1.5 billion equity fund to support growth, but we know that there are other sources of capital from equity, such as business angels. Insurers have raised funds to invest in debt for businesses. We need to lever the skills, enterprise and success of London’s global financial centre to help businesses grow.

My hon. Friend the Member for Cities of London and Westminster referred to the opportunities emerging in the far east and South America. Again, the City has an important role to play, not only by exporting its own services to emerging and growing economies but by supporting other businesses in their attempt to exploit those markets.

However, support for the financial sector cannot be uncritical. As my hon. Friend recognised, there were flaws in City practices in the run-up to the financial crisis, as well as a failure of the regulatory architecture. We need to resolve those issues if we are to provide a stable foundation for the financial services sector to grow. That is why the reforms that we have set out since the formation of the coalition Government in May are rooted in economic and financial stability, not the size of the financial services sector. That is an important distinction to draw. We want a stronger, more stable structure. That will require a reform of regulation, but it is not about the size of the sector.

We have been clear in the reforms that we have introduced that we want more effective supervision and a new structure to tackle emerging threats to financial stability. That is why we are setting up a Financial Policy Committee as part of the Bank of England to consider emerging threats to our financial stability and determine what response is needed to enhance the stability and resilience of the UK financial sector.

[David Mowat]

Does the Minister agree with the comments made last week by the Governor of the Bank of England vis-à-vis the current structure of the banking sector in the UK?

[Mr Hoban]

It is an important debate, and there is no clear consensus on what structure the banking sector in the UK should have. That is why we decided to set up the Independent Commission on Banking, under the chairmanship of Sir John Vickers, to consider structure as well as competition in financial services. Over the course of the financial crisis, we have seen a significant concentration of financial services and the banking sector—there are fewer banks from overseas operating in the small and medium-sized enterprises sector, and Lloyds has taken control of HBOS—and we want the independent commission to consider that and decide whether structural changes are needed to improve the resilience and strength of the banking sector, and whether we can introduce measures to improve the competitive landscape and provide greater choice for businesses and consumers looking for financial services products, whether they are loans, current accounts, business accounts or other products. We need to consider the structure carefully, which is why we set up the Independent Commission on Banking.

To return to the point about regulation, we recognise that there were flaws in the structure of regulation; that is one reason why we set up the Financial Policy Committee. We also want to examine how the Financial Services Authority operated under its dual mandate to consider prudential supervision and consumer protection. We decided to create two new regulatory bodies to replace the FSA. One is the Prudential Regulation Authority, which will be a subsidiary of the Bank of England and will focus on the strength and resilience of banks and insurance companies particularly; the other is the Consumer Protection and Markets Authority, which will ensure that consumer markets in the UK work effectively to support the long-term aspirations of consumers as well as considering how wholesale markets in the UK work. That is an important aspect of the financial services sector; a great deal of work on that issue is going on at an international or regional level through the EU, and it is important that the UK takes a strong lead in ensuring that those markets are regulated effectively. If we get the regulation of the financial services sector right—if we take steps to improve markets’ transparency, resilience and strength—I believe that it will provide a firm foundation for the continued growth of the sector in the years to come.

On the diversity of the economy, we must recognise that there is more to our economy than financial services. We have strengths in other areas, partly as a consequence of language, time zone and other aspects of the UK. My hon. Friend the Member for Newton Abbot (Anne Marie Morris) referred to the legal system, which is a huge asset for businesses seeking to work here due to the legal certainty that comes from our world-class legal framework. We have a deep and highly skilled talent pool and strengths in pharmaceuticals, construction and business services.

We need all those sectors to grow, but their growth does not mean that we should diminish the size of the financial services sector. A strong financial services sector can help develop the diversity the UK economy needs to demonstrate that we have learned the lessons from the financial crisis. We cannot have an unreformed financial sector, given the scale of the crisis that we have been through. Reform has been introduced to help the sector’s stability and resilience and produce a better outcome for businesses and households.

17:00

Sitting adjourned without Question put (Standing Order No. 10(11)).

Written Ministerial Statements

Wednesday 3rd November 2010 Written Statements

Wednesday 3 November 2010

Penfold Review of Non-Planning Consents (Government Response)

Wednesday 3rd November 2010 Written Statements

[The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)]

The Government have today published their response to the review into non-planning consents by Adrian Penfold which was published on 3 July 2010.

The Penfold review was set up to find out what problems business, and especially small businesses, encounter that can make or break investment in development. The investigation into “non-planning consents”, such as environment permits, highways orders, and heritage consents that are needed alongside or after planning permission, found a complex and fragmented landscape that poses real problems for some businesses to navigate effectively.

The Government are committed to providing a regulatory environment that effectively delivers our policy commitments, but minimises unnecessary delay, complexity and cost for business and other applicants. Encouraging such an environment in the planning and development consents systems is crucial in ensuring the UK develops a competitive business environment that underpins business success, attracts investment and ultimately promotes economic growth.

The Government therefore welcome the recommendations of the Penfold review and will begin work to develop concrete reforms of the development consents system based upon the findings of the review. Our ambition is to use this review as a base from which to drive a programme of streamlining and simplification in the planning and development consents systems.

A further report will be published in spring 2011 with an update on progress.

Copies of the Government response to the Penfold review have been placed in the Libraries of both Houses.

Leasehold Advisory Service: Annual Report and Accounts 2009-10

Wednesday 3rd November 2010 Written Statements

[The Minister for Housing and Local Government (Grant Shapps)]

I have today deposited in the Library of the House a copy of the annual report and accounts of the Leasehold Advisory Service (LEASE) for the financial year 2009-10.

LEASE is an executive non-departmental public body sponsored by the Department for Communities and Local Government (and by the Welsh Assembly Government) to provide advice, information and other services to the public and others in England and Wales on residential leasehold. (In 2009-10 LEASE was also sponsored by the Ministry of Justice to provide advice on commonhold tenure.)

The report sets out its main activities and performance during the year, details of its financial status, along with statistics on the number of inquiries it dealt with during the year. In 2009-10, for instance, LEASE dealt with 37% more inquiries than in 2008-09 and visits to its website increased by 18% on the previous year.

The report provides details of LEASE’s performance against its key indicators and shows the value of the service LEASE provides to the public and others in the leasehold sector.

Education Endowment Fund

Wednesday 3rd November 2010 Written Statements

[The Secretary of State for Education (Michael Gove)]

The Government have today announced a new £110 million Education Endowment Fund (EEF) to help raise standards in underperforming schools. The Government’s proposals draw on President Obama’s “Race to the Top” programme, launched in 2009.

The EEF will distribute money to local authorities. Academy sponsors, charities and other groups who bring forward innovative proposals to improve performance in our most challenging schools. Those bidding for funds from the EEF will have to outline how their proposals will raise attainment. Bidders must also demonstrate how they will be held accountable for the success of their proposals.

By inviting bids from those who wish to turn round our weakest schools the Government are building on the transformative potential of the new pupil premium. Our most challenging schools are concentrated in our areas of greatest deprivation. The pupil premium will result in more money being allocated to support the education of all our poorest children, adding £2.5 billion to school funding by the end of the CSR period. The EEF will allow many of the schools which educate our poorest children to do even more. And the innovative practice it encourages should drive improvement across the school system.

The EEF will be administered at arm’s length from Ministers. The team administering the fund will be appointed following an open competition.

Funding for projects will come from the returns on the EEF’s investment—plus capital draw-down from the total sum each year. The independent organisation that runs the EEF will also be expected to attract additional contributions from other organisations and philanthropists to add to the fund.

This fund is being established from the money set aside when the Government took the decision not to increase the number of free school meals. The establishment of the fund fulfils the Government’s pledge to use this money better to improve the attainment of disadvantaged pupils.

Parliamentary Written Question (Correction)

Wednesday 3rd November 2010 Written Statements

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

I would like to inform the House that a written answer I gave on 22 October 2010, Official Report, column 923W to the hon. Member for Glasgow Central (Anas Sarwar) contained some inadvertent errors in that National Energy Action (NEA), Keep Britain Tidy and Action for a Global Climate Community Ltd were included in the answer. These three organisations should not have been included in the answer as each of them were recipients of grants.

The correct information is as follows:

DECC was formed in October 2008. The Department did not award any contracts to voluntary organisations during the financial year 2008-09.



Contracts awarded by the Department during the financial year 2009-10 to such organisations are as follows :

State Pension Age

Wednesday 3rd November 2010 Written Statements

[The Minister of State, Department for Work and Pensions (Steve Webb)]

Plans to increase the state pension age to 66 were announced by the Chancellor of the Exchequer as part of the spending review. Today, the Government will publish details to show how the increase in the state pension age will be delivered.

More of us are now reaching state pension age and then living to draw a state pension for longer than ever before. Increasing longevity is a cause for celebration. Nevertheless, the legislated timetable for increases to state pension age was based on an expectation of longevity that has since been revised upwards.

Women’s state pension age is currently rising from 60 to be equalised with men’s at 65 by April 2020. To enable an earlier increase to 66, the equalisation timetable will be adjusted from April 2016 so that women’s state pension age will reach 65 by November 2018. Then, in December 2018, the state pension age for men and women will start to rise so that it reaches 66 from April 2020.

Copies of the Command Paper will be available in the Vote Office and the Printed Paper Office and online at: http://www.dwp.gov.uk/spa-66-review.

Grand Committee

Wednesday 3rd November 2010 Grand Committee

Wednesday, 3 November 2010.

Identity Documents Bill

Wednesday 3rd November 2010 Grand Committee

Committee (2nd Day)

15:45

[The Deputy Chairman of Committees (Viscount Ullswater)]

My Lords, if there is a Division in the Chamber while we are sitting, this Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.

Clause 6 : Possession of false identity documents etc without reasonable excuse

Amendment 13

Moved by

[Baroness Hamwee]

13: Clause 6, page 3, line 11, after “(“P”),” insert “knowingly and”

[Baroness Hamwee]

I have Amendments 13 and 15 in this group, which also contains Amendments 14 and 16 in the name of my noble friend Lord Phillips. Amendment 13 is in my name and that of the noble Earl, Lord Erroll, who has asked me to say that he is sorry that he cannot be here this afternoon and that he very much supports the amendment, which in a way is a little embarrassing for me, as this is only a probing amendment, as indeed are all my amendments this afternoon.

Amendment 13 would insert the words “knowingly and” before “without reasonable excuse” in Clause 6(1). On the first day of Committee, the noble Lord, Lord Brooke, took us into some Latin terminology and I suppose that I shall, too, in asking whether mens rea—a guilty mind—is included in Clause 6(1). It is not obvious that it is covered by the phrase “without reasonable excuse” but, as the clause creates an offence, the “knowingly” aspect may well be imported in any event.

Amendment 15 would remove paragraphs (e) and (f) from Clause 7(1). It enables me to ask the Minister whether offences already exist relating to the misuse of driving licences. It struck me as odd to think that such offences came into effect only with the 2006 Act, so I would be interested to hear why it is necessary to refer to them at this point. I beg to move.

[Lord Phillips of Sudbury]

My Lords, the other two amendments in this group, Amendments 14 and 16, are in my name. I reiterate what my noble friend said about the noble Earl, Lord Erroll, who has put his name to both my amendments.

The purpose of Amendment 14 is to get on record—this may help those who have to interpret the statute—an explanation of the difference between Clause 6(1)(a), which my amendment would delete, and Clause 4(1)(a). If the Minister could explain the intended difference between the offences laid out in those two paragraphs, that would be extremely helpful, as they are close in wording, albeit with different conditions. Amendment 14 is truly a probing amendment.

Amendment 16 relates to Clause 8, which is headed, “Meaning of ‘personal information’”. The phrase “personal information” is used in Clauses 4 and 5. My amendment seeks to clarify paragraph (l) of Clause 8(1). I ask the Committee to humour my error in framing the amendment. Its first word, “or”, is redundant and my amendment should therefore read,

“in relation to any identity documents”.

The paragraph, as it stands, refers only to “documents”, not “identity documents”, which my amendment does. The term “identity document” is defined in Clause 7, but I am concerned that the paragraph could refer to, for example, a rating return, a television licence or any one of many other documents which identify the person to whom they relate and which contain numbers allocated to person A. I should be grateful if the Minister could say whether I am right or wrong in seeking to confine the personal information defined in paragraph (l) to that which relates only to identity documents, as defined in Clause 7.

[The Minister of State, Home Office (Baroness Neville-Jones)]

My Lords, I am not sure as to whether I am lost. Let me try to explain the differences. One of the difficulties that noble Lords are having relates to whether there is a difference between Clauses 4 and 6, to which my noble friend Lord Phillips referred. Clause 4(1)(a) requires proof of improper intention and so requires proof that a person has used a document or has allowed it to be used by another person. On the other hand, Clause 6(1)(a) requires only proof of possession of such a document. There is a difference between having something in your hand and having it in your hand when someone else has knowingly permitted you to use it wrongly. These clauses are different in their purpose.

More generally, I confess that I am concerned about the amendments, which are intended to bring greater clarity to the offences that are being re-enacted. I remind noble Lords that these clauses are re-enacted from the Identity Cards Act 2006. We do not believe that the proposed amendments offer anything of substance and we are concerned that they may cause confusion at the level of investigation and enforcement. As I mentioned on Monday, the definitions of offences work well on a daily basis—there are more than 3,000 convictions a year for false applications and attempts to get false documents. That is clearly an important element in trying to prevent identity fraud. Therefore, we are anxious to keep the effectiveness of these provisions in the Act.

As we know, the Identity Cards Act is four years old and, as I mentioned previously, we want in the near future to review the existing offences under this Act, the Fraud Act 2006 and the 2001 legislation on fraud and counterfeiting. We want to ensure consistency between these pieces of legislation. The review will consider not only areas of overlap but what potential improvements can be made as part of the rationalisation work. As I mentioned in our discussion on Monday, we would welcome the views of noble Lords on that when the review work is completed. As things stand, we would like to transpose—the transposition would be direct and unaltered—the existing clauses in the previous Act. We do not want to start altering them now, because we will be carrying out a more extensive and substantive review in a short while.

The noble Lord also asked about the definition of “personal information”, which is relevant to the offences set out in Clauses 4 and 5. As drafted, included within the definition of personal information is information about numbers allocated to a person for identification purposes and information about documents to which the numbers relate. For example, this could include the number of a departmental pass or the fact that the number related to a pass issued by a particular department. If you suspect that someone is trying to assume another person’s identity, that kind of information would be helpful to them and they would be all the more likely to use a guise of that kind given their knowledge of the document to which it relates.

The link between the number and the document would be lost by the wording of the amendment because the amendment would bring within the definition of personal information,

“information in relation to any identity documents”.

We are not clear about what is intended or to what extent the amendment adds to the matters set out in paragraphs (a) to (k) in Clause 8(1).

[Lord Phillips of Sudbury]

The Minister mentioned that a departmental pass would be a document under this paragraph. What about a television licence or a rating demand, both of which have specific numbers and relate to a particular individual? Would they be documents within this paragraph? It may be unfair to ask the noble Baroness that on the hoof—in fact, it is unfair—and I would be content to hear the answer later. But, no, here comes an answer. This is Roy Rogers at his best.

[Baroness Neville-Jones]

The advice that I am getting is that that would not be the case because a TV licence or similar document does not identify the individual but relates to them. That is right. You get back a receipt for the money that you have paid but it does not verify in any way the identity of the person who has paid the bill.

[Lord Maxton]

Perhaps I may briefly clarify that. A TV licence does not relate to an individual; it relates to the property to which it applies.

[Lord Phillips of Sudbury]

It would seem that I have given a bad example. Does it not have the name of the licence holder on it?

[Lord Maxton]

It has the name of the person who paid for it.

[Lord Phillips of Sudbury]

Right. It therefore identifies that person and there is a number in relation to it.

[Lord Maxton]

I am not even sure that it does that.

[Lord Phillips of Sudbury]

I will hold my peace and think more about it.

[Lord Hunt of Kings Heath]

Before the noble Baroness agonises over whether to withdraw the amendment, perhaps I may ask the Minister about the review. Will it be a departmental review or will it be a more public review? Can she say something about its timing?

[Baroness Neville-Jones]

If you are going to do a review as extensive as the one proposed, it will have to have external input. It would not be particularly valid unless we were able to take advice on the kind of things on which I am offering to have consultation. I am told that the findings will be made public. We ought to make it known that we are conducting this review and we should be open to inputs from those who have interests in the matter.

16:00

[Baroness Hamwee]

I am not sure that I have worked out which part of the Minister’s answer related to my amendments. It all seemed to be addressed to my noble friend. I am not sure that the Minister dealt with Amendments 13 and 15. I could of course bring them back.

[Baroness Neville-Jones]

I apologise. The noble Baroness is absolutely right: I failed to deal with the issue. I am concerned that the effect of Amendment 13 is to shift the burden of proof. The prosecution in these circumstances would have to prove a couple of elements. It would have to prove, first, that the defendant knew that they were in possession and, secondly, that they had no reasonable excuse so to be. In Clause 4, which covers the possession of false identity documents with improper intention, the burden of proof is on the prosecution. It must prove improper intention. I hope that that clarifies the difference between what is there at the moment and what I understand to be the effect of the change that would be made by the amendment.

[Baroness Hamwee]

In other words, one can commit an offence under Clause 6 without knowing that one is doing so. I do not mean not knowing about the law; it is not an excuse not to know what the law provides. In this case, do you not need to know, for instance, that an identity document in your possession is false or has been improperly obtained?

[Baroness Neville-Jones]

It hangs on the improper intention.

[Baroness Hamwee]

I think that I am grateful for that. I do not know whether there has been an answer on my Amendment 15. I had given notice that these were probing amendments and of what was behind them. My point was simply that it was interesting that offences had to be created in this way. I would have thought that there must be offences attached to the holding of driving licences quite separately from this.

[Baroness Neville-Jones]

It is not established that that is the case but I think that it is. We do not believe that the Act to which the noble Baroness refers covers driving licences. We would have to check this and provide a written answer. I suggest that we provide the noble Baroness with a more detailed answer on this between now and Report. To speed through this legislation, and in light of the fact that we will be conducting this review, I hope that noble Lords will agree not to press their amendments.

[Baroness Hamwee]

I beg leave to withdraw Amendment 13.

Amendment 13 withdrawn.

Amendment 14 not moved.

Clause 6 agreed.

Clause 7 : Meaning of “identity document”

Amendment 15 not moved.

Clause 7 agreed.

Clause 8 : Meaning of “personal information”

Amendment 16 not moved.

Clause 8 agreed.

Clause 9 agreed.

Clause 10 : Verifying information provided with passport applications etc

Amendment 17

Moved by

[Baroness Hamwee]

17: Clause 10, page 5, line 42, leave out paragraph (h)

[Baroness Hamwee]

My Lords, Amendment 17 is grouped with Amendment 18. Again, these are probing amendments and I hope that my questions will not cause too many anxieties. I know that there is an answer to the first one, which is to ask the Minister to explain the desirability of including a qualifying reference agency as one of the bodies in Clause 10(3). I have heard the reason informally but I think that it should be on the record.

Amendment 18 deals with the provision which allows the Secretary of State to retain information—in other words, not to have to comply with subsections (8) and (9) where he thinks that it is desirable to prevent or detect crime, or apprehend or prosecute offenders. Again, I should be grateful to hear a little more about, and to get on the record, the Government’s thinking on this.

It is clear from the debates in the House, particularly before the last election, that there is growing concern about provisions which allow the Secretary of State to take this sort of executive action, which one might think would require either an order or some judicial input. In debates in which I have taken part with regard to RIPA and parallel matters, noble Lords have suggested that magistrates should play a role because they can always grant applications when there is an urgency or a particular necessity, and that would provide some control over the Executive in a way that certainly colleagues across all sides of the House have thought would be proper in those situations. It seems that there should be justification for Clause 10. I beg to move.

[Baroness Neville-Jones]

My Lords, during the passage of the Bill in another place, the Government introduced an amended Clause 10, adding significant safeguards, and I think that it is entirely right to demand such safeguards. We specified in the Bill that data collected have to be destroyed within 28 days following the issuing of a passport unless—and this is obviously the whole point—they are retained to prevent, detect or investigate crime or prosecute offenders. My understanding is that the amendment would remove that provision, but I should like to put to the noble Baroness that it has to be recognised that an agency which is responsible for passports and civil registration should be in a position to retain information that is relevant to assisting in the pursuit of suspected or actual criminals.

I probed this issue myself to establish what the criterion for retention would be, to which I got the answer that it would indeed be “reasonable suspicion” for as long as was necessary in determining whether the suspicion would lead to a prosecution. Therefore, such retention is for a strictly limited time and for a strictly limited purpose. This has been put into the Bill so that the matter is quite obvious, and I hope that it removes all doubt about the extremely limited circumstances in which the Identity and Passport Service would be allowed to retain information. I suggest that this is really a safeguard and not a power.

The other point raised by the noble Baroness is the resort to credit reference agencies. In the process of issuing a passport, it is very important to be absolutely certain about the claims being made by the applicant. The IPS makes use of a credit reference agency because it provides the most up-to-date information on addresses and is able to provide a relevant historical perspective which is particularly useful during interviews. In the course of one’s application, one gives one’s assent to this being done. It is a part of ensuring that a British passport is a reliable document that meets the highest standards. It is a very important part of the verification process. The information is strictly limited and must be relevant to the application. It would be a bad idea to remove the ability of the IPS to maintain a high level of verification by excluding a resort to a verification process conducted by an agency which itself maintains high standards and which has become important to verification. External credit reference agencies can add to the range of agencies able to provide a high degree of security and verification in considering applications for passports. I hope that, on this basis, the noble Baroness will be willing to withdraw her amendment.

[Baroness Hamwee]

I am grateful for that answer. I recognise that Clause 10 is a recent addition to the Bill. I think that it was added without any debate in the Commons and so has not been looked at in detail previously. I guess that it indicates how old-fashioned I am that I feel slightly uncomfortable in thinking that a credit reference agency is more up to date and more accurate than a number of government departments.

Where is the accountability in subsection (10)? How can the public know how and when the power is being exercised? The provision seems to be entirely private in the way that it is drawn.

[Baroness Neville-Jones]

The noble Baroness asks a perfectly reasonable question to which I shall try to get her an answer. I share her feeling that one must have accountability and that one must be certain that, at the end of the process of determining whether there is prosecutable evidence, information is destroyed. Both these things need verification.

There are two government changes to Clause 10. The first inserts a time limit of 28 days and the second defines that the information used must be strictly relevant. It is all subject to the terms of data protection legislation. While we could not be expected to inform a suspect that information about them was being held, one can rely on the fact that use of the data and all the provisions governing their retention will be subject to the terms of the data protection legislation. So they are not exempt; you cannot just do your own thing under this legislation.

[Lord Brett]

I am fascinated by the idea that information from a private sector credit reference agency, whose staff are not vetted by anybody, is considered to be reliable and secure enough for us to see it as a key part of the provision of passports. Concern was rightly expressed during the passage of the 2006 Act about government security and the destruction of the information being held. The Bill states that the information will be destroyed within 28 days. Can the Minister go into more detail about what “destroyed” means? Does it simply mean wiping out the tape that holds the information? Does it mean a wider destruction of information? For example, every piece of information that is put on the record goes on the computer, which has a hard drive that retains it. The word “destruction” carries with it a fairly comprehensive meaning, but the reality is that 28 days is a short period of time. Can we have more of a flavour of what physically has to be destroyed?

[Lord Hunt of Kings Heath]

My Lords, perhaps before the Minister answers, I could just ask her about what it says at the top of page 6 of the Bill, in Clause 10(3)(i). Following my noble friend’s intervention on qualifying the credit reference agency, I notice that there is an open-ended paragraph that says,

“any other person specified for the purposes of this section by an order made by the Secretary of State”.

It would be helpful if the Minister could let me know either now or in writing what sort of “any other person” might be mentioned. There was a concern about the credit reference agency, but I would actually have a rather wider concern about the open-ended nature of that provision.

[Lord Phillips of Sudbury]

To follow on from what the noble Lord has just said, I think that is why he and I and the noble Lord, Lord Brett, had an amendment asking for some oversight of the process. This is a vulnerable clause which involves discretions, and it needs some sort of review process to ensure that what should be done is done.

[Lord Hunt of Kings Heath]

Can I respond to that, as we are in Committee? The noble Lord raises an important point. I have no objection whatever to the general principle behind Clause 10, which seems entirely sensible and in the public interest. It is simply a matter of ensuring that there is due process and accountability.

[Baroness Hamwee]

My Lords, I wondered whether to table an amendment probing paragraph (i), but since the provision would require an order, I thought that that was the inbuilt protection which subsection (10) seems not to have.

[Baroness Neville-Jones]

My Lords, several questions have been raised. It is indeed the case that the contract with Experian was inserted in this Bill. We are transposing it, as it was negotiated by the previous Government. I do not think that it is contrary at all to the public interest, as it is a very reputable agency and, without doubt, it provides up-to-date and accurate information in a way that financial credit reference agencies are liable to have that information, which may be less up to date in departments of government or other organisations.

Other points were raised about the power of the Secretary of State or,

“any other person specified for the purposes of this section by an order made by the Secretary of State”.

That should be related to the question of how such orders can be made, under Clause 11, of which subsection (3) states that it has to be by affirmative order. So there would indeed be opportunity for debate. I do not think that this power could conceivably be exercised on an arbitrary or unaccountable basis.

[Lord Phillips of Sudbury]

There is a difference in how the power is granted, and the Minister is quite right in saying that the affirmative order is protection enough. But there is the practical issue of how the order is implemented. That is where one needs to come back to this matter of some sort of independent review.

[Baroness Neville-Jones]

I take what the noble Lord says. We come back in all of this to the relationship between the Information Commissioner, the operation of these Acts and the assiduity with which the data protection provisions are applied. The Secretary of State is in discussion with the Information Commissioner about precisely these kinds of issues to ensure that there is proper internal accountability and that he is satisfied.

I was asked how we could be certain that these powers of retaining information could be properly held and used and about the power to exercise spot checks. The noble Lord, Lord Brett, also asked a question in relation to that. The other day, we debated the different powers that would be used for different parts of the operation of this Act. If I remember rightly, a procedure is laid out that applies particularly to the destruction of information that is not part of the register but connected to the applications that go to it. They are covered by a destruction process and that process would apply in this instance because it would be in connection with the application process.

The noble Lord, Lord Phillips, asked whether there could be judicial input. I understand that a requirement to attend a magistrates’ court on every occasion that a person is working for the IPS has suspicion—I am sorry, I cannot read this. What we appear to need to do is to ensure that there is operational capability to deal with suspected offenders. I am afraid that that is not an adequate answer and I will try to clarify it in a moment. I wonder whether any Members have any other comments that they want to make.

[The Countess of Mar]

I was going to apologise for holding up the Committee, but my intervention seems to be opportune. I am puzzled because Clause 10 is about verifying information provided with passport applications and we are provided with a whole list of people who can verify applications. Why then do we need paragraph (i)? If there has to be an order made by the Secretary of State, and if that has to be debated in both Houses of Parliament, it will take time to verify information. Surely not every one of the others listed has to verify information. Surely only one or two of those people would do so. Why go to the length of having an order debated in Parliament in order to verify information on a passport? Will it apply to the passport of one individual, or will it be a block verification order?

[Baroness Neville-Jones]

I do not have the impression that paragraph (i)—

[Lord Phillips of Sudbury]

It is Clause 10(3)(i) at the top of page 6.

[Baroness Neville-Jones]

I am not quite sure what we are now trying to do.

[Lord Phillips of Sudbury]

I think that the point of this is that, before the Secretary of State can start demanding verification information from people, there must be statutory authority and that Clause 10(3)(i) is a longstop provision in case some other category of potential informants is thought by the Secretary of State to be necessary for the verification process. It seems logical, I must confess.

[Baroness Hamwee]

Will it be thought necessary or helpful if we find that a new organisation is holding information about citizens? I hope that we do not extend that category by much, if by anything at all.

[Baroness Neville-Jones]

I will endeavour to answer those two points. As regards the question posed by the noble Countess, Lady Mar, the distinction depends on the individual application and on the ability of the Identity and Passport Service to determine which source of information is best suited to the application. This is therefore permissive, rather than demanding that every single source should be applied to and used.

As regards the question posed by the noble Lord, Lord Phillips, on judicial input, I think that what we are saying here is that a requirement to attend a magistrates’ court on every occasion when a person working for the IPS has a suspicion that there is a problem is impractical. We need to be able to ensure that there is an operational capability to deal with suspected offenders. The provision as it stands replicates the power and ability that exist in the Data Protection Act, which also provides safeguards.

[Baroness Hamwee]

I think that it was my question, so I obviously I should go away and read the Data Protection Act. I have lost my bet because I thought that the debate would be over in about three minutes, but it has taken more than 30 minutes. I beg leave to withdraw the amendment.

Amendment 17 withdrawn.

Amendment 18 not moved.

Clause 10 agreed.

Amendment 19 not moved.

Clause 11 : Orders

Amendment 20 not moved.

Clause 11 agreed.

Clauses 12 to 14 agreed.

Schedule agreed.

Bill Reported without amendment.

Committee adjourned at 4.26 pm.

House of Lords

Wednesday 3rd November 2010 Lords Chamber

Wednesday, 3 November 2010.

15:00

Prayers—read by the Lord Bishop of Gloucester.

Middle East: Refugees

Wednesday 3rd November 2010 Lords Chamber

Question

15:06

Asked By

[Lord Hylton]

To ask Her Majesty’s Government whether they will work for a comprehensive agreement covering all refugees arising from the Middle East since 1948.

[Lord Wallace of Saltaire]

My Lords, there is a range of refugee problems in the Middle East, including those of the Kurds and the Iranians, mostly in Iraq. The two major refugee issues are of course the Palestinian refugees from Israel in a number of countries, and the 4 million Iraqis displaced both within Iraq and as refugees in surrounding countries. A comprehensive settlement of the Palestinian issue will have to include a settlement for refugees as part of the final agreement. The Iraqi problem depends on restoring stability in Iraq.

[Lord Hylton]

I thank the noble Lord for his reply. Does he agree that the Palestinian refugees registered with the United Nations number some 4.8 million, and that Syria, Jordan and Lebanon contain about 1.7 million Iraqi refugees? This amounts to a population larger than that of many small states. Therefore, will the Government work not only for the comprehensive agreement that he mentioned, but more specifically for the resettlement of these people who have suffered so much for so long?

[Lord Wallace of Saltaire]

My Lords, the Government are working with the UN High Commissioner for Refugees and the UN relief and rehabilitation organisations to assist these refugees. Most of the Iraqis wish to go back to Iraq when they can. We will have a Question tomorrow about continuing violence in Baghdad and elsewhere, which is part of the problem. For the Palestinian refugees, this is of course a much longer-term and much more complex issue that has to be part of the negotiations for a comprehensive settlement of the Israeli-Palestinian dispute.

[Lord Anderson of Swansea]

Does the Minister agree that it would be unwise to encourage expectations of a mass Palestinian return to Israel, as both sides now accept that only a limited number will be allowed to resettle in the event of an agreement? Does he also agree that Arab states should be urged to do more financially to help Palestinian refugees settle and have a decent standard of living, either where they are or in the territories?

[Lord Wallace of Saltaire]

My Lords, I think that it is recognised on all sides that not all Palestinian refugees will return home. That is part of the necessary compromise that will have to be in a comprehensive settlement. We all understand also that reaching a compromise will be very difficult, and that we will need to address the issues of compensation and of a moral acknowledgement by Israel of the suffering endured by Palestinian refugees.

[Lord Eden of Winton]

My Lords, in attempting to deal with the problem of refugees, comprehensively or otherwise, might it not be helpful if action were encouraged to prevent the creation of new refugees? I have in mind particularly the persecution of Christians in Iraq and in Iran.

[Lord Wallace of Saltaire]

My Lords, we have a Question on that tomorrow, and it is probably more sensible to leave discussion until then.

[Lord Clinton-Davis]

Will the noble Lord agree that Jewish refugees have also been threatened and menaced throughout the Middle East and have gone to Israel? Does he agree that it is imperative that there should be discussions between Israel and Abbas immediately to ensure that the Palestinians can create a viable second state?

[Lord Wallace of Saltaire]

My Lords, the Government agree entirely. We very much hope that the current negotiations will continue to make progress and we would be deeply disturbed if they were to break down.

[Baroness Falkner of Margravine]

My Lords, is my noble friend aware that organisations such as the World Zionist Organisation have had campaigns to encourage British Jews to move to Israel and the Occupied Territories of Palestine? What discussions are the British Government having with the Israeli Government, because many of these people risk contravening international law—the International Criminal Court Act 2001 and other protocols—by settling in the Occupied Territories?

[Lord Wallace of Saltaire]

My Lords, Her Majesty’s Government have made it perfectly clear that we are in favour of a two-state solution and that this two-state solution rests on the establishment of a viable Palestinian state. That means that a number of the settlements currently taking place on occupied territory will have to be removed.

[Baroness Symons of Vernham Dean]

My Lords, I think we are all aware that Palestinian refugees currently in Jordan are one of the most difficult and probably one of the most intractable of all the refugee problems in trying to settle the Middle East peace process. Can the Minister tell us what level of aid we are giving to the UN to sustain the Palestinian camps in Jordan? I am sure he will be very familiar with the camps and it would be interesting to know how much we are putting into them at the moment. Can he also tell us what direct discussions the Government are having with the countries of the Arab League, some of which are very rich indeed, about what aid they are prepared to make available both in budgetary and programme terms for resettlement in the future?

[Lord Wallace of Saltaire]

My Lords, I do not have the figures and will have to write to the noble Baroness with them. It is not only a question of the refugee camps in Jordan; as she will know, in many ways, the problems of the refugee camps in Lebanon and—worst of all—of those settled in Gaza are much more acute. I have seen Palestinian refugee camps in Damascus which I have to say were relatively well integrated into Syrian society. That seems to me very much the way forward. I agree with her that we should be asking members of the Arab League to provide more assistance.

[Baroness Deech]

Can the Minister give an assurance that he will in the mean time encourage that human rights prevail in the treatment of refugees in the Middle East? I am thinking in particular of the lack of rights of Palestinian refugees in Lebanon who are apparently unable to own property and who are excluded from healthcare. There is no reason why those rights should not be extended to them in the mean time.

[Lord Wallace of Saltaire]

My Lords, Her Majesty’s Government are strongly committed to human rights throughout the Middle East, including in the Occupied Territories.

[Lord McAvoy]

My Lords, we all support a comprehensive peace settlement between Israel and the Palestinians. Will the UK Government, in supporting that comprehensive peace settlement, indicate quite clearly that they recognise the acknowledged security interests of Israel? Will they also take the opportunity to impress on the Israeli Government that there is no security in ruling all land between the River Jordan and the Mediterranean?

[Lord Wallace of Saltaire]

My Lords, the Foreign Secretary is in the Middle East at the moment and is talking to members of both the Israeli and the Palestinian Administrations.

Businesses: Contracts and Payments

Wednesday 3rd November 2010 Lords Chamber

Question

15:14

Asked By

[Lord Steel of Aikwood]

To ask Her Majesty’s Government what steps they are taking to encourage large companies, with regard to contracts and payments, to act considerately towards small and medium-sized enterprises with which they deal.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)]

The Government support the Institute of Credit Management’s prompt payment code, which requires signatories to pay according to agreed terms and to give clear guidance to suppliers. The code is working—Experian analysis suggests that signatories represent around two-thirds of total UK supply chain value. We are also helping suppliers to help themselves through the managing cash-flow guides, which help suppliers to manage their customer relationships, payment terms and invoicing arrangements.

[Lord Steel of Aikwood]

My Lords, that is a most welcome and encouraging reply, following as it does on the policy of the previous Administration and the CBI and the Institute of Directors. Will the Government go a little bit further and consider establishing a blacklist of companies which fail to observe these exhortations when it comes to giving public sector contracts?

[Baroness Wilcox]

My Lords, the question was whether the Government will create a blacklist of firms which consistently act in an inappropriate manner. I do not think the previous Government did that and I do not think we will. The Government are working with the UK’s main business organisations and UK business to promote and encourage good practice. If the noble Lord knows of a practice that has been brought to his attention which is not being sorted, I hope that he will contact me to see whether my department can help in any way.

[Lord McFall of Alcluith]

My Lords, the situation is not working just now. Last year, NatWest research showed that three out of four small and medium-sized enterprises are suffering with a £63 billion mountain of unpaid bills. It is very important that we recognise that large firms, as Serco indicated, are working on the back of small firms to improve their cash flows. I think it is time for a level playing field between the public and private sectors. Can the Minister look at the prompt payment code that was introduced in 2008 and build on it so that we have well defined time periods for the private and the public sectors in order to get rid of the bullying that we saw the other day with Serco?

[Baroness Wilcox]

My Lords, the noble Lord raises two points. He is talking about the private sector and the public sector, which are not necessarily exactly the same. He will know about the work we have been doing in the public sector on speedy payments. The public sector is paying faster than ever before. Central government departments aim to pay 80 per cent of invoices within 10 days. There is now a contractual requirement for main contractors to pay their own suppliers within 30 days. With regard to the private sector, the law stands. We also have very big organisations, such as the CBI and the Institute of Directors, with which we work all the time, as did the previous Administration, to see whether encouragement can be given—not to intervene in that sector, as that would not be correct. I have been a small supplier to a large company. I would say that there needs to be more training and education and more pressure on small companies to ensure that, when they get wonderful contracts with big companies, they do not get overexcited and that they reward the salesman but do not reward the invoice clerk in the back office who gets the invoices wrong 30 per cent of the time.

[Lord Harrison]

My Lords, has the noble Baroness reflected on the solutions offered by the Federation of Small Businesses, to which I drew attention in a Question I asked last week, which included obliging firms to pay their subcontractors as quickly as the Government pay the contractors, thereby easing the cash flow of small businesses, which is such a vital advantage in this competitive market?

[Baroness Wilcox]

Yes, my Lords, I well remember that Question being asked by the noble Lord and the supplementary question. Central government is paying within five days. I also know that some of the people it is paying within five days are paying their people within 20 or 30 days of sight of invoice. We shall certainly look at all those contracts that have been set up as soon as they come to their due date. You can be absolutely certain that I, as a Business Minister, who has been on the receiving end of that, will ensure that the terms are right all the way through the system.

[Lord Butler of Brockwell]

My Lords, will the Minister say how the Government square their support for the prompt payments code with Sir Philip Green’s recommendation that the Government should pay their bills more slowly?

[Baroness Wilcox]

My Lords, I am a bit of an expert on Sir Philip Green’s report because I have read it now. His report says nothing specific about government payment terms. In interviews, he says that the norm in most departments is to pay suppliers in five days, compared with the standard 30-day-payment period for most private sector transactions and the 45 days demanded by some bigger companies like his own. If the Government demanded a minimum of 30 days of credit from suppliers, they would save hundreds of millions of pounds in financing costs. That is what he has said in conversation but his report actually says nothing at all about it.

[Lord Sugar]

My Lords, the business department—

[Noble Lords]

BIS!

[Lord Sugar]

Will the noble Lord, Lord Strathclyde, consider issuing vuvuzelas to his Benches? They would make a much better noise. In the document recently published by BIS, Backing Small Businesses, I have read many of the claims which the Minister has stated today about 80 per cent of invoices being paid in five days, prime contractors paying their subcontractors within 30 days, and 15 per cent of business being dished out by Government to small businesses. That is a restatement of what the previous Chancellor said in the Budget of 25 March this year. Do the Government have any of their own ideas of what they are going to do to back small businesses instead of restating policies that have already been implemented?

[Baroness Wilcox]

My Lords, the noble Lord, Lord Sugar, knows what a fan I am of his, so I will always try and please him. I am delighted to know that the previous regime did such work in this area and we intend to do good work to build on that. I hope he will give me time to get that all under way.

[Lord Cotter]

My Lords, can the Minister clarify one brief and concise point? When it comes to government contracts being given to big companies, is it not right and proper that those big companies should be required by Government to pay small suppliers within the same time that the Government undertake to do so?

[Baroness Wilcox]

I have sympathy with that and we are certainly looking into all the government contracts we have to see how they have been dealt with in the past. We can see that there is great room for improvement and I hope the noble Lord will follow my progress on this.

Coroners: Terminally Ill Patients

Wednesday 3rd November 2010 Lords Chamber

Question

15:22

Asked By

[Baroness Finlay of Llandaff]

To ask Her Majesty’s Government what steps they plan to take to decrease the variation in coroners’ responses to the anticipated deaths of terminally ill patients at home.

[The Minister of State, Ministry of Justice (Lord McNally)]

My Lords, the Government are committed to improving the coroner system. In taking forward the changes outlined in my Written Statement of 14 October, we shall be considering the secondary legislation and guidance which governs coroner investigations. The issue that the noble Baroness raises will be included as part of that work.

[Baroness Finlay of Llandaff]

I thank the Minister for that reply, but how will the Government detect, evaluate and deal with the poor performance of a coroner without the long awaited chief coroner? Quite specifically, what powers are in place to influence Greater Manchester’s coroners’ anomalous ruling that the expected deaths of terminally ill patients at home must be referred to the police if the GP is unavailable to write the death certificate, tying up between 4,000 and 8,000 hours of police time annually, and causing unnecessary distress to families who have complied with the patient’s wishes to be cared for and die at home?

[Lord McNally]

My Lords, as the noble Baroness will be aware, the coroners’ service is under local jurisdiction and the protocol established in Manchester is something that has been decided between the coroner’s office and the police in Manchester. It does give us concern and the department intends to issue guidance under its new powers which we hope will smooth out some of the variants in how coroners apply their powers. This is one of those that will be looked at.

[Lord Bach]

The Minister will know that the director of the Royal British Legion, no less, has said that the Government’s decision to scrap the new post of chief coroner is a deep betrayal of bereaved service families. Does he agree that during the passage of the Coroners and Justice Bill all sides of this House were as one in believing that not only was the reform of the coronial system an urgent necessity but also that the establishment of a chief coroner, along side a chief medical officer, with powers to set national standards, to lead, and to hear the new system of appeals, was at the heart of the reforms? Why have the Government taken the absurd and counterproductive step which, in the words of the co-director of INQUEST, renders the new model “completely hollow” before it has even started, and a step that has, moreover, managed so deeply to upset bereaved service families and the Royal British Legion?

[Lord McNally]

My Lords, I am sorry that the Royal British Legion has made that judgment. The decision not to go ahead with the chief coroner was made, as the noble Lord knows, mainly on financial grounds. The setting up of the post would have been expensive. The alternative that was put forward in my Written Statement is that we are going to take much of what was in the legislation in-house in the Ministry of Justice and do the tasks ourselves. I am well aware that in so doing we set ourselves a pretty important task because, as the noble Lord rightly said, when the Coroners and Justice Bill was going through this House all sides wanted to see an improvement in consistency in the coroners’ service. That is what we intend to do in-house and we will be judged on our performance.

[Baroness Gardner of Parkes]

Can the Minister tell me how lawyer coroners—I understand that most will be legally qualified but they will no longer be obliged to be medically qualified—will obtain assurance of the standards of the post-mortems that they commission?

[Lord McNally]

I understand that my noble friend in the Department of Health will be establishing the post of medical examiner. Medical examiners will be able to give this advice.

[Lord Walton of Detchant]

Does the Minister accept that very rarely at the time of a coroner’s post-mortem is permission sought for the retention of tissue samples and slides after the post-mortem? Such archive material is invaluable for research into human genetics and into the management of human disease. Will the Minister ensure that coroners are advised to seek such permission when coroners’ post-mortems are undertaken or at least consider amending the Human Tissue Act to make such retention of material obligatory?

[Lord McNally]

My Lords, as I said in my initial reply, my department is looking at comprehensive guidance to coroners. I note what the noble Lord has suggested, and I will make sure that that is considered as part of the guidance.

[Lord Christopher]

My Lords, will this review include some clarification on what is admissible as evidence in an inquest? I am aware of a very unfortunate case of a death where there had been a settlement and admission of responsibility, but the coroner would not allow evidence to that effect to be given.

[Lord McNally]

My Lords, I note what the noble Lord asks. I think I will have to take legal advice about how we should respond to that matter. I know that in looking at this review and at our powers, we are in contact with the Lord Chief Justice.

[Lord Phillips of Sudbury]

My Lords, I declare an interest as having been, a long time past, a coroner’s officer and having occasionally deputised for a coroner. I ask the Government to be very careful not to trench upon the independence of coroners who are judicial officers. All the advice and the rest of it that is being recommended should have respect for that crucial independence.

[Lord McNally]

I do not think there is any question of us trampling on the independence of coroners. What slightly surprised me when coming to this and looking at the file is the wide variation in the behaviour of coroners, which is not likely to produce public confidence. That was one of the reasons why the idea of a chief coroner was put forward. As I explained at the beginning of this exchange, when we looked at it, it proved to be too expensive, but the bulk of the suggestions and of the content of that Act will now be brought in-house. Judge us by what we do. We will follow the guidance of the Act in bringing consistency to the coroner system, but not on the basis of a rather expensive, at this stage in our careers, chief coroner.

Health: NICE

Wednesday 3rd November 2010 Lords Chamber

Question

15:30

Asked By

[Baroness Sherlock]

To ask Her Majesty’s Government which groups were consulted prior to the announcement that the National Institute for Health and Clinical Excellence was to lose the power to decide that some drugs may not be supplied by the National Health Service.

[The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)]

My Lords, it is important to make clear that the National Institute for Health and Clinical Excellence does not have any powers to ban the use of drugs in the NHS, so suggestions that this is a role that will be removed from it are based on a misunderstanding of the position. Our NHS White Paper makes it clear that the role of NICE will continue and, indeed, that it will be extended.

[Baroness Sherlock]

My Lords, I thank the Minister for that Answer. I am a little confused, but perhaps he can help me to understand the change. In the world that he envisages, is it intended that every single GP consortium will take its own decision about which drugs it is willing to fund? If that is the case, will it be about every single individual drug or treatment? And, if that is the case, can the Minister explain how he will protect patients from the uncertainty and confusion that must arise from a return to a postcode lottery of that magnificence?

[Earl Howe]

My Lords, currently the NHS is faced with the decision of whether to say in effect yes or no to a new drug at the price that is proposed by a pharmaceutical company. We want to change that so that the price of a drug to the NHS is based on an assessment of its value, rather than pharmaceutical companies being free to set whatever price they choose and expecting the NHS to pay. So value-based pricing, which is the term we have used, will ensure that licensed and effective drugs are available to NHS clinicians and patients at a price to the NHS that reflects the value that they bring. That should get rid of the postcode lottery.

[Lord Alderdice]

My Lords, of course we already have four NHSs in our United Kingdom. What discussions are there among the authorities of the four NHSs when decisions are being taken about medications of this kind?

[Earl Howe]

My noble friend is, as ever, on the case. My officials in the Department of Health are in active discussions with their counterparts in each of the devolved Administrations on the kinds of changes that we envisage to the pricing of medicines.

[Lord Turnberg]

Does the Minister agree that to devolve responsibility for prescribing expensive drugs to GPs faces them with a very difficult ethical dilemma? Should they prescribe a very expensive drug, costing thousands of pounds, with only marginal benefit for the heart-rending patient with cancer facing them, knowing that to do so may prevent them from funding 20 or 30 patients requiring eye operations or hip replacements or drugs for schizophrenia, or should they refuse that treatment? Have the Government thought through the implications of devolving the cost-benefit analysis that NICE does so well?

[Earl Howe]

My Lords, I think the noble Lord has perhaps misunderstood the purpose of the plans that we have set out. Prior to the introduction of value-based pricing, we will continue to ensure that the NHS funds drugs that have been positively appraised by NICE. I hope that that reassures him that clinicians are not going to be placed in an awkward position. We will be consulting on our plans for value-based pricing before the end of the year, but I can assure the House that the point of moving to a new pricing system is to increase patient access to new effective drugs. That is what we aim to do.

[Baroness Trumpington]

My Lords, my noble friend has already spoken about the time it takes to develop a drug—often many years. This costs money and accounts, in some cases, for the high price of the drug.

[Earl Howe]

My noble friend, with her experience, is of course quite right. I am told that it costs upwards of $1 billion to develop a new molecule and bring it to the market. It is a very expensive process. That is recognised in the freedom of pricing that currently exists for drug companies at launch and in the patents that they are able to enjoy in subsequent years.

[Lord Crisp]

My Lords, I declare an interest as I was in the Department of Health at the time that NICE was created. If the Minister accepts that the NHS, which spends upwards of £11 billion a year on drugs, is right to have a clinically-led method of assessing whether they work satisfactorily, will he confirm—there seems to be some confusion—that that will not be replaced by some hundreds of separate ways of doing the same thing? Will he also confirm that, whatever new arrangements he has in mind, the Government will speed up the process? There is sometimes that complaint about the NICE process at the moment.

[Earl Howe]

My Lords, we have been very clear that NICE, which enjoys international pre-eminence in the evaluation of drugs and health technologies, will continue to have an important expert advisory role, including the assessment of clinical benefits for new medicines. The noble Lord will know, I am sure, that in recent years NICE has done a lot to speed up its evaluations of new medicines and has introduced end-of-life flexibilities, for example, which have meant that patients have had increased and improved access to those new medicines.

Parliamentary Voting System and Constituencies Bill

Wednesday 3rd November 2010 Lords Chamber

First Reading

15:36

The Bill was brought from the Commons, read a first time and ordered to be printed.

Higher Education: Funding and Student Finance

Wednesday 3rd November 2010 Lords Chamber

Statement

15:36

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)]

My Lords, with permission, I will repeat a Statement made by my right honourable friend the Minister of State for Universities and Science.

“I would like to make a Statement on higher education funding and student finance. This follows the Statement made by my right honourable friend the Secretary of State on 12 October.

Our higher education system has many strengths, but also faces challenges—the need for more focus on the student experience, the need to widen access and the need for sustained funding. These challenges led the previous Government, on a cross-party basis, to set up the Browne review. We are grateful to Lord Browne for his excellent work. I think that he has made us all re-examine our positions.

On 12 October, my right honourable friend said that the coalition endorsed the thrust of Lord Browne’s report, but was open to suggestions before making specific recommendations, which would be radical and progressive. We have listened very carefully and with open minds. I can now give the details of our proposals.

First, we will introduce a progressive system of graduate contributions to the cost of their university education, with nobody having to pay up-front fees. Lord Browne suggested that there should be no cap on the graduate contribution. We believe that a limit is desirable and are therefore proposing a basic threshold of £6,000 per annum. In exceptional circumstances, there would be an absolute limit of £9,000. No publicly funded university will be able to charge more than this for its undergraduate courses. Since there will be a cap, we see no need for institutions to pay back a proportion of the graduate contribution as a levy to the Exchequer, as proposed by Browne.

We are also proposing a more progressive repayment structure. At present, graduates start repaying when their incomes reach £15,000. We will increase the repayment threshold to £21,000, and will thereafter increase it periodically to reflect earnings. The repayment will be 9 per cent of income above £21,000, and all outstanding repayments will be written off after 30 years. Raising the threshold reduces the monthly repayments for every graduate.

We will introduce a real interest rate on a progressive taper. For graduates earning below £21,000, the real rate of interest will remain at zero. For graduates earning between £21,000 and around £41,000, a real rate of interest will be tapered in to reach a maximum of inflation plus 3 per cent. When graduates are earning above £41,000, they will be making a full contribution to the costs of the system, but still incurring interest well below normal commercial rates. Under our proposals, a quarter of graduates—those on the lowest incomes—will pay less overall than they do at present.

The Government are committed to the progressive nature of the repayment system. It is therefore important that those on the highest incomes post-graduation are not able unfairly to buy themselves out of this progressive system by paying off their loans early. We will consult on early repayment mechanisms, similar to those paid by people who pre-pay their mortgages. These mechanisms would need to ensure that graduates on modest incomes who strive to pay off their loans early through regular payments are not penalised. For example, a 5 per cent levy might be charged on additional repayments each year over a specified amount such as £1,000 or £3,000. Alternatively, those on higher incomes—that is, over £60,000—who made an additional repayment could be required to pay a 5 per cent levy on this sum.

Whilst participation in higher education has improved in recent years, there has not been enough progress in securing fair access to some of our best known universities. We can make progress by improving the school attainment of pupils from disadvantaged backgrounds. That is why the Government are investing in a new premium for two year-olds and in the pupil premium. But we want that focus on improving the life chances of those from disadvantaged backgrounds to continue through to university. That is why, as previously announced by the Deputy Prime Minister, we will also establish a new £150 million national scholarships programme. This will be targeted on bright potential students from poor backgrounds to encourage them to apply to university and to meet their aspirations.

All universities that want to charge a higher graduate contribution than the £6,000 threshold will be obliged to participate in the national scholarships programme. We will consult students and university organisations on the details. We will look to increase the leverage of government funding by getting matched contributions from universities. Our current preference is for universities to offer scholarships to targeted students—including the principal beneficiaries of the pupil premium. That would mean that at least their first year is free. Other attractive ideas include expanding the model of a foundation year for young people with high potential but lower qualifications.

To ensure that the universities that charge tuition contributions above the £6,000 threshold take account of their particular responsibilities to widen participation and fair access, we will introduce a tougher regime of sanctions. Each institution will draw up a new access agreement with the Office for Fair Access. This would be expected to include activities such as outreach initiatives to attract more pupils to apply from disadvantaged backgrounds, and targeted scholarships and financial support for poorer students. OFFA will agree with universities a programme of defined progress each year towards their access benchmarks as calculated by the Higher Education Funding Council. If they are not making adequate progress towards these benchmarks, a mechanism will be established to allow OFFA to redirect a proportion of the income from contributions over £6,000 to specified access activities.

Our student support system is currently one of the most generous in the world. We will make it more progressive. Lower income students, while studying, will get improved help with their living costs. Students from families with incomes up to £25,000 are currently eligible for a maintenance grant, which is not repayable, of £2,900; we will increase this to £3,250. Those from families with incomes up to £42,000 will be entitled to a partial grant. There will also be increases in maintenance loans for students from families with incomes from £42,000 to £60,000. We will retain a higher maintenance loan for those studying in London.

All parties agree that the present system gives a raw deal to part-time students. They are particularly likely to be mature or disadvantaged students. Even the great higher education reports of the past, such as Dearing and Robbins, largely ignored them. Lord Browne has confronted the challenge head on. At last, under our proposals, part-time students will be entitled to a loan for tuition on the same basis as full-timers, and this support will be available to those studying for at least a third of their time, unlike the present grants for tuition which are available only to those studying for over half of their time.

Overall, this is a good deal for universities and for students. The bulk of universities’ money will not come through the block grant but instead will follow the choices of students. It will be up to each university or college to decide what it charges, including the amounts for different courses. All universities and colleges, whatever contribution they decide to charge, will be expected to publish a standard set of information about their performance on the indicators that students and their parents value: contact hours, teaching patterns and employment outcomes. We also propose to open up higher education provision to new providers, including further education colleges.

These proposals offer a thriving future for universities, with extra freedoms and less bureaucracy, and they ensure value for money and real choice for learners. We need to act quickly so that prospective students know where they stand. We intend to implement these changes for the 2012-13 academic year. We will therefore bring to the House our proposals on changes to graduate contributions before Christmas. Both Houses will have the chance to debate the proposals before a vote is taken. I am today placing in the Libraries of both Houses additional material that explains the modelling that we have done. We will also take powers next year to set a real interest rate for graduate contributions.

We will, as usual, publish the details of the university financial settlement for 2011-12 in our annual funding letter to HEFCE next month. We will therefore publish, later this winter, a higher education White Paper covering the wide range of long-term issues that arise from Lord Browne’s report. We hope to bring forward legislation in due course. Given the timescales, we would not expect to be implementing changes before the 2013-14 academic year.

Lord Browne’s report has rightly generated much debate. When the review was established exactly a year ago, it was on a cross-party basis. I hope that the Opposition will feel able to maintain that spirit. From our side, the two parties in the coalition have accepted the report’s broad thrust and are today putting forward a single, coherent and progressive policy. It will deliver a better deal for our students, for our graduates and for our universities”.

15:50

[Lord Triesman]

My Lords, I thank the noble Baroness, Lady Wilcox, for repeating the Statement and for providing another opportunity to look at this matter. I hope it is also an opportunity when some of the questions that have been pressing the whole way through might be addressed.

I probably ought to also say that, unlike normal circumstances where you see the Statement about half an hour or so before—it was in the other place earlier—we had what I ought to describe as the benefit of hearing it made by a Minister not responsible for this area at all, Michael Gove, on the radio this morning. I was surprised by that because I am an avid fan of the coalition document. I have read it many times and hope that I have become more illuminated as a result. I recall that on page 26 it talked about a very much more open and transparent parliamentary process in which it would not be the case that vital statements were made first for the benefit of the “Today” programme rather than in Parliament. I regret that this announcement was, because it diminishes the authority and the importance that we ought to place on this matter in Parliament.

We have had in effect four announcements on this subject in three weeks. The first, by the Secretary of State, welcomed the Browne report unreservedly—Browne was in. Then there was the formal Statement in which a number of the issues that the noble Lord, Lord Browne, had raised were thought not to be appropriate—he was out. Then we had the debate last week in which his status was restored once again—he was in. Now we have the whole of the mechanism in which there is going to be a cap, and a number of the other proposals that he made are out again. The process strikes me as more like the hokey-cokey than the making of serious policy. It also does not surprise me that we have arrived at this position despite the very clear view that had been expressed by at least one of the coalition parties. I wish briefly to quote its manifesto to its Members, because it must be important to stick to some kind of values in this. They said that they would:

“Scrap unfair university tuition fees for all students taking their first degree, including those studying part-time, saving them over £10,000 each”.

I will not carry on with the quote but there was also a “financially responsible plan” which dealt with the alternatives.

I once watched a very bold young man from this country go down the Cresta run as fast as he could on a bicycle. He did not get the whole way down. When I said it was an act of complete madness, I was told it was just an extreme sport. We have got into the period of extreme policy-making. It is not thought through. It has none of the fundamental elements in making vital policy for higher education. I appreciate that it has been welcomed by some institutions and I am hardly surprised. Anybody stripped of 75 to 80 per cent of their unit resource for teaching will welcome the lifeboat as their ship goes down.

I do welcome parts of the Statement. I welcome what is said about part-timers. The noble Baroness is right to say that that had the support of all parts of the House and it is true. I also welcome what has been said about foundation year development. That was always an area where a good deal more work would be useful. At the heart of this, however, it is so thoroughly piecemeal that it is about as sensible as going down the Cresta as fast as you can on a bicycle. There are no decisions on any of the mitigating factors which would produce the fairness that should go alongside—it is said—these highly inflated fee figures. The fee figures are there because they have to be—we know that prospectuses are about to be written—but none of the rest is there and there are no guarantees that any of the rest ever will be. Nothing is said about the way in which decisions among some universities to push toward fully privatised status will result from this, although it is quite clear from a number of vice-chancellors that they intend to do precisely that. In that sense, as we said last week, this is not about fees. It is about the ending of the concept of the public infrastructure role of universities. There is no serious debate on what that means or where it will lead. If we debated it, we might choose that road. What I know is that we have never once debated it.

I have looked through the Statement, as many noble Lords will have done. I can see now more clearly what a number of the figures are and, for those reasons, I shall make a couple of comments because I do not think that all the things said should pass unchallenged. I will turn then to the questions which, once again, I believe must be answered. I am astonished that the idea of treating the payment system like a mortgage system should have been raised at this stage without any firm information about whether it is going to be introduced and whether it would iron out unfairness. Saying that it is an attractive idea is quite different from introducing it. I am surprised by what is said about the “generous” increase in maintenance grants for lower-income students. The generous increase is £6.70 a week. I do not know what that buys nowadays—not a great deal, I suspect.

I turn to the questions which I believe must be answered today. I ask again about middle-income families and the longer time it will take for those in the second and third quartiles of income distribution to pay than those in the top quartile, because if the figures are as we believe it is not a progressive arrangement and could never be described as such. How much longer is it? I hope that the noble Baroness will not direct me to the BIS student loan repayment ready reckoner—the most obscurely written document that I have read in many a long year. Can she just tell us whether it is right, broadly speaking, that it would take someone from those two quartiles 14 years longer to make the repayment than somebody from the top quartile and whether it is the case that, unless you had some kind of mortgage penalty system to correct that, the outcome is as I have described?

I ask another question again. Are women, with the career patterns that they have—they are for reasons that we all know—being discriminated against and is that actionable discrimination? Is the assumption that higher fees will not adversely affect participation rates evidence-based or based on the anecdotes of some of those in the higher education system? I do not believe that there is good evidence, but I may well stand corrected. What is the Government’s impact study? What is the elasticity of demand? We should know that today.

What is going to be done about the arts, humanities and social sciences, which are the heart of our culture and, indeed, of world culture? The downgrading of these subjects to non-priority status is an astounding reversal of the very idea of a university. How will they be encouraged and protected as subjects? Will the Government fund the cash-flow and balance sheet deficits that will occur because there is a gap between the cuts that they are going to impose and the first receipt of these higher-level student fees, which are timed to come in in 2013? That is a penalty which no university could reasonably have anticipated. Will the Government pay it or will a still greater cut simply have to be absorbed? What do the Government recommend to make up the shortfall in the teaching unit of resource—approximately £1,500 per year—for those universities that face the cut and charge just £6,000? Is it okay, today, in our universities to slash the unit of resource in that way?

What are the Government’s plans for the problem of Islamic finance approaches to usury, for which most of the things here suggested are abhorrent? Will the Government tell us how they will handle the growing pressure from universities, freed of any significant government expenditure on teaching, to become private—the issue which I think lies behind all these announcements? Finally, will the Government tell us their view of the rate of return on investment in university teaching with the fee at its current level, and whether the damage to investment is something that this country really ought to avoid?

[Baroness Wilcox]

This is a big subject, my Lords, and I want to answer as many of the questions of the noble Lord, Lord Triesman, as possible. I thank him for his comments and for his questions on what is a very important subject. I want to avoid turning this into a yah-boo-sucks time; I do not think that that sits well in this House. I could talk about the fact that the Leader of the Labour party and his supporters do not speak from the same hymn sheet, but I do not think it is the right moment to be doing things like that. Instead, I shall try to answer some of the questions the noble Lord has asked me.

We feel that the Government are placing universities on a more stable footing and allowing institutions to flourish. Our universities, as we know, are internationally renowned, but many of the strongest have told us that they need further investment in order to maintain their position, and so it is that we are taking this brave new stance, based, of course, upon a piece of work commissioned from the noble Lord, Lord Browne, by the noble Lord, Lord Mandelson, and the Labour party, and supported by us at the time. We are basing this upon six principles that he outlined.

The noble Lord talked about the arts, humanities and social sciences. Does ceasing their funding mean killing them and sabotaging some of the key sectors to drive us out of recession? We do not think that we are cutting the income of these departments. They are just going to have the money flow into them from a different route; it is going to be directed by the choices made by students. Those courses will still be there; they will be well promoted, and we hope that the young at school will better understand what choices are available to them, so that they bring the money with them. It will flow into those departments, as it always has; it will just be coming from a different direction.

I was asked why we are being less generous than the noble Lord, Lord Browne, for people earning over £35,000. Is this not another hit on the squeezed middle? We are committed to ensuring that higher education is affordable for everyone. This is a system that provides adequate support for students from low-income and middle-income families, but is also financially sustainable for the nation. We will give more maintenance grant to those with household incomes up to £37,000 and make available some non-repayable maintenance grants for those with household incomes between £25,000 and £42,000. This means that, compared with now, there will be more overall maintenance support to those with household incomes up to £45,000.

This is a generous package that benefits the vast majority. More than half a million students, as I have already said, will be eligible for non-repayable grants for living costs, as they are now, and almost a million students will be eligible for more overall maintenance support.

It was asked, given that over half of undergraduates are women, what the differential impact of today’s announcement would be on men and women. It is no pleasure to any of us to know that women still earn less than men do in the marketplace, and I hope that we will be able, in the time that we are the Government of this country, to help that to change. Because of that pay differential, women are less likely to be high earners. They will pay less and their repayments will be frozen when they are not earning—when they are having children and taking time off—and because of the long repayment time, the chances are that after 30 years they will not have finished paying and therefore it will just fade.

What about loans from Muslim students who believe that it is wrong to take out student loans because they attract an element of interest, and the payment of interest is against Islamic Sharia law? We want a single student loan system that can meet the needs of the majority of students, of course. The Government heavily subsidise the student support system and will continue to do so; we do not make a profit from student support. In circumstances where students feel that loans offered by the Government are against their law, students can take out a Sharia-compliant loan offered by one of the commercial banks at the moment, such as the Islamic Bank of England, Lloyds TSB and HSBC. I have spoken to my Muslim friends about this and they do not seem as exercised about this as maybe we think they are, because they do not see that there is a profit element in it to cause them great distress. I hope that I have been able to answer that question.

I shall see if we have any more answers; it is easier if we can get more answered now. I was asked if we will do what the noble Lord, Lord Browne, says and allow private providers to access public funding. We want to remove any undue barriers and make it easier for private providers to enter the market. We are committed to a level playing field for all providers. This will mean more and better choices for students and better value for money through new and potentially innovative and lower-cost approaches to teaching. We will consult further on this through a higher education White Paper this winter.

I doubt that I have answered all the noble Lord’s questions, but I will write to him with any answers that I have not been able to give now. No doubt other noble Lords in the Chamber are looking forward to asking questions that I hope I will be able to answer on my feet; if not, of course I will write.

[Lord Desai]

My Lords, I welcome this—

[Noble Lords]

This side!

[Lord Desai]

Why?

16:06

[Baroness Sharp of Guildford]

My Lords, there is a good deal to be welcomed in the package that has been presented today. It is indeed a more progressive package than the current loan repayments scheme with its current level of fees. The extension to part-timers and the way in which the interest is being tapered off mean that, again, the cost to those earning less is going to be less. It is a very clever system, and the Government should be congratulated on what has been achieved here.

As the Minister knows, though, I continue to have considerable worries about the degree to which some of those earning at middle-income level will never repay the loan completely and will therefore be confronted for 30 years by a marginal rate of tax of approximately 40 per cent, by the time that you add on the 9 per cent. Has any thought been given to the disincentive effect of this higher marginal rate of tax on young graduates, in relation to either their not wishing to go to university or to their going abroad instead? The logical thing would be to take your loan and then dash off abroad. Given that the loans are to be paid also to EU students, what is the record to date of EU students repaying their loans? Are we likely to see many of them also absconding and not repaying their loans?

[Baroness Wilcox]

I am very grateful for my noble friend’s warm words. She has asked questions that I hope I will be able to answer for her. Middle income is obviously a worry. Yes, she is right; it will not be paid off by the end of the 30-year period. It will lapse.

As for how these changes will affect international students, the Government have made it clear that they want to continue to attract the brightest and best international students to the UK. EU students have a right to be treated equally as regards tuition costs. UK students benefit from the tuition support available in other EU countries.

Support for tuition has been available for EU students since 2006-07. This support is paid directly to the higher education institution not to the student. The overwhelming majority of overseas borrowers are honest and want to repay the loans that they have received. Generally, European Union students are young and mobile and, when they graduate, will have a significantly higher earning potential because of their UK higher education. We are obviously concerned that, if any students are due to repay and are not doing so, the SLC will be robust in tracking down the borrowers to get back the money that they owe. We will make sure that that is done.

Effective collection across the EU is underpinned by EC regulations, which allow the SLC to obtain judgments in UK courts that can be enforced by courts in other EU countries. We will use this whenever necessary. It is heartening to know that, generally speaking, the European Union students pay their bills. As to the other question, I will come back to my noble friend.

[Lord Desai]

I welcome the fact that the Government have gone half way to accepting my suggestion that they should not have a fixed limit of £6,000. They have not gone to £10,000, however, as I suggested. Is it not better for the Government not to have an upper ceiling at all and to allow universities to charge differentially for different courses? This would make allocations for universities easier. It would also make the Government’s job easier because otherwise there will be far too much rationing and control of universities. That will lead to some terrible mistakes, especially in subjects such as the humanities, which could be taught for much less than the kind of fees that the Government want to charge.

[Baroness Wilcox]

I wondered whether the noble Lord, Lord Desai, would ask why we rejected uncapped tuition costs. I wondered if the noble Lord, Lord Desai, would ask this. The noble Lord, Lord Browne, made important recommendations about the structure and level of graduate contributions. We have considered them carefully. However, on balance, we have concerns that uncapped costs would put off some applicants, particularly those from lower-income families. For UK and EU undergraduates, we are proposing a threshold of £6,000 for graduate contributions, with an upper limit of £9,000. All universities and colleges will be expected to publish a standard set of information about all the courses that they provide. Universities may set whatever levels they consider best meet their individual circumstances, with £6,000 being the level above which additional requirements on access will be set. There will be an upper level of £9,000.

[Lord Quirk]

I imagine that most people will welcome the fact that the Government propose to follow the Browne recommendations as regards giving help to part-time and mature students. However, is the Minister aware that one of those recommendations—namely, to tie eligibility for financial help to the UCAS tariff points system—would be detrimental to part-time students who, after all, constitute something like 40 per cent of the student population, and a large number of whom fall well below the number of UCAS tariff points that would attract student support? This recommendation may be fine for traditional universities but it surely is not fine for part-time students. Do the Government have any view on that yet?

[Baroness Wilcox]

I think the answer is no; I do not think that we have. I am sorry but I do not think that I can answer that at the moment.

[Lord Willis of Knaresborough]

Will my honourable friend the Minister answer a very simple question? I am sorry, I should have said, “my noble friend”. I apologise for that; I am very new to this place. The Government have confirmed today that new providers will come into the higher education market. She also confirmed that universities will be able to expand their student numbers according to demand. However, she said nothing about whether there will be an overall cap on the number of students. Unless there is a balance between the overall number of students going into the system and the resources which the Government are to make available in terms of loans and grants, the whole system is likely to collapse. Will the Minister say something about the total number of students that the Government will allow to enter higher education?

[Baroness Wilcox]

I am told that we are going to consult on this in the White Paper. Browne recommends allowing student numbers to grow. The current package should enable student numbers to be broadly maintained. However, we do not believe that we should set unsustainable targets for growing HE student numbers. This risks perpetuating the idea that the only positive option for an 18 year-old is a three-year academic course at university. We think that we should be concentrating more on breaking down barriers between academic and vocational education so that an apprenticeship and various other courses are considered as valid as a degree. As I say, we will consult on this in the White Paper.

[Lord Winston]

My Lords, I declare an interest as chancellor of Sheffield Hallam University. As I speak, thousands of students from both universities in Sheffield—Sheffield Hallam is Mr Nick Clegg’s constituency—are demonstrating against the Government’s plans. Will the noble Baroness be kind enough to tell us what plans she has as a Minister to engage students who would never have gone to university had they belonged to a previous generation as regards the fairness and acceptability of the Government’s plans for the funding of universities?

[Baroness Wilcox]

There is no doubt that there has been a big gap in recent times between universities and schools as regards careers advice and communication. We are committed to ensuring that students and their families know exactly what is available to them. As the noble Lord knows, I was for many years chairman of the National Consumer Council. Very often, the thing that constituted a barrier for people in this area was language. Often they did not understand exactly what was going on.

It is very important that we get universities to push back into schools—as they will—to ensure that schools well understand their requirements. We will get the business community to explain what qualifications it requires students to gain at university, or whatever other form of further education they are hoping to take part in. We are already starting to determine how we can best communicate what this change means and how empowering it will be for students. They will be able to ensure that they get the courses they want.

Universities will start to improve not just their academic performance but what they offer students to prepare them for life after higher education. After all, some students will be older, some will be younger and the way that all this is explained, and the way that we get it out there to the students, really requires a new look. We are excited about having the opportunity to do that.

[Lord Sutherland of Houndwood]

My Lords, the foundation years that were mentioned are one of the few ways that have been shown to work in dealing with the gaps in school education that sometimes afflict our young people. That being so, who will pay for these? Will there be a Government grant, or will there be an additional year’s burden on the student who has to contribute towards the costs?

[Baroness Wilcox]

I am sorry, but I may not have understood that carefully. If we are talking about fees, students will not pay any fees, of course, while they are students. Is that what the noble Lord is asking? They will not pay any fees at all until they are graduates.

[Lord Sutherland of Houndwood]

I ask permission of the House to restate the question. Courses that are foundation years often involve an extra year’s study. Who will pay for that? Will it be the state or the student who will incur an extra year’s debt?

[Baroness Wilcox]

I think that it may be as part of the national scholarship programme that we will engage with that.

[Lord Pearson of Rannoch]

My Lords, as we need to save money in our higher education system, may I suggest that the Government take a close look at the humanities departments of the former polytechnics? I ask the question against the background of my 10 years on the Council for National Academic Awards, which validated all the courses in the polytechnics until those were miraculously changed into universities in 1992. That experience led me to see that, although the former technical colleges continued to provide excellent quality after they were subsumed into the polytechnics, many of the new humanities departments—that is, the “poly” bit of the polytechnic experiment—did not. As far as I am aware, there is no quality control in this area. There is quality assurance, but that is a very different thing. I welcome the fact that the Statement says that all universities will be expected to publish standard information on employment outcomes. Will the Government ensure that this information reveals any weaknesses in the areas that I have mentioned, so that the huge sums of money that currently support such departments could be released for better departments and better institutions in the system?

[Baroness Wilcox]

I think that I agree with all of that. All universities and colleges, whatever contribution they decide to make, will be expected to publish a standard set of information about their performance against the indicators that students and their parents value. Listening to how the noble Lord described the matter from a polytechnics background—which is where I am from—I think that that will drive through very well, and I can only agree with him.

[The Earl of Selborne]

The Statement refers to the present system giving a raw deal to part-time students, and I think there will be general agreement around the House that this is correct. Clearly, what is needed is not just better part-time provision but much greater flexibility and much better contacts with universities and with industry. To what extent will the proposals deliver that?

[Baroness Wilcox]

The proposals are a good deal for part-time students. Institutions with large numbers of part-time students, such as Birkbeck and the Open University, have been poorly treated in recent years because of, for example, the previous Government’s block on second-chance education. We share the conclusion of Lord Browne’s report that the exemption from up-front charges should be extended to part-time students, who have been unfairly discriminated against hitherto. We will therefore implement his recommendations.

This is very good news for part-time students. I was a part-time student once, and you had to pay everything up front. I was able to do that, but for several people with me it became too much. It was a shame because we lost such talented people at that time. We are looking forward to implementing the proposals.

[Lord Richard]

My Lords, I have a fairly simple question. How on earth do you empower a student by doubling his debt?

[Baroness Wilcox]

You empower a student by allowing him or her to go through the whole of their university time without fear or worry for money. Only after they have started to earn more than £21,000 a year will they even start to pay back anything.

In fairness, we are looking at a very different way of thinking. The money will be returned as the people earn a great deal more. As we all know, anybody who has been to university will earn a lot more during their working life than if they had not. Very often, the money that has enabled students to go to and enjoy university has come from people doing jobs that do not pay a great deal, but those people are paying tax that feeds through to students. I refer to people who work in any one of a million jobs but who have not benefited from a university education. The money comes back eventually—slowly—through the system, and the next set of students go to university. It is important to look at this in the round.

[Lord Elystan-Morgan]

In relation to the capping of tuition fees, have Her Majesty's Government conducted any study of the possible and likely deleterious and injurious effect that this would have on higher education in Wales? If so, what conclusions were arrived at and what discussions were conducted with the Welsh Assembly and the Higher Education Funding Council for Wales?

[Baroness Wilcox]

I am afraid that I do not know. The devolved assemblies will carry on doing things in the way that they wish, and we will consult them. However, today I am speaking for universities in England. Of course, as time goes on and we go forward, we will debate and consult with all the devolved assemblies in Wales, Scotland and Northern Ireland to see how we can best work together and learn from best practice.

[Baroness Symons of Vernham Dean]

My Lords, the noble Baroness has done her best to answer the questions, but it might be helpful if she gets a rather fuller briefing before dealing with a Statement of such enormous importance.

I return to the point raised by my noble friend Lord Triesman. I am sure that she heard her colleague, Michael Gove, on the radio this morning. He announced the main points in his interview on “Today”. The Front Bench opposite has said all sorts of things about election promises, but one thing that is certain is that Ministers must abide by the Ministerial Code. Has the noble Baroness read the code? If she has, she will remember that Section 9.1 states:

“When Parliament is in session, the most important announcements of Government policy should be made in the first instance, in Parliament”.

That is an unequivocal statement that all Ministers must abide by. Will she tell us what in that unequivocal statement the Government do not understand?

[Baroness Wilcox]

I do not know the circumstances of the interview and I do not know whether it was leaked. Michael Gove made a very good statement. It has been a very busy day, we have a lot to do and the noble Baroness has been, as she always is, very gracious. However, I have read the Ministerial Code, so I do not think that she can find me wanting on that point. She may feel that my knowledge of the breadth of the brief that I have is not as great as that of others. In this House—as the noble Baroness knows from the debate that we had last week—we have some wonderful minds and noble Lords who represent some of the finest universities not only in this country but in the world. I have tried my best today to do what I could—it is a very big brief—and, if I did not answer as well as the noble Baroness hoped, I am very sorry. However, if anyone wishes to write to me with other questions, I will happily answer them.

The Browne report, which was commissioned by the then Labour Government and which we have supported, is ground-breaking stuff. We are only too pleased that the previous Administration commissioned the noble Lord to do this work. We have taken on board the six principles that he outlines. This is a very exciting way to take our country forward. The report talks about building the greatness of our nation for tomorrow's world and I do not think that I could end on any better line than that. We as the Government of this country will do our best to achieve that.

Subsidiarity Assessment: Food Distribution (EUC Report)

Wednesday 3rd November 2010 Lords Chamber

Motion to Take Note

16:30

Moved by

[Lord Roper]

To move that this House takes note of the Report of the European Union Committee on the amended Commission proposal for a Regulation of the European Parliament and of the Council amending Council Regulations (EC) No 1290/2005 and (EC) No 1234/2007, as regards distribution of food products to the most deprived persons in the Union (COM (2010) 486, Council Document 13435/10) (2nd Report, Session 2010-11, HL Paper 44).

[Lord Roper]

My Lords, with your Lordships’ leave I shall also speak to the second Motion in my name.

Your Lordships will recall that two weeks ago on 20 October the House was first asked to consider a report from the European Union committee with a reasoned opinion to the effect that in its view a European Union legislative proposal did not comply with the principle of subsidiarity. Our second report of this Session, which is the subject of these Motions, relates to a proposal concerning the distribution of food products to deprived persons in the European Union and contains the recommendation that the House should issue a reasoned opinion on it and on its subsidiarity. Our sub-committee on agriculture, fisheries and environment initially considered the proposal before it came to the Select Committee. The noble Lord, Lord Carter of Coles, the chairman of that sub-committee, is present today, but we have agreed that I should move these Motions.

I do not need to set out again today at length the legislative background, but I stress that through the second Motion today this House is again being asked to exercise new powers under the treaty of Lisbon that became available only on 1 December 2009. The deadline for submitting such a reasoned opinion to the authorities in Brussels is on this occasion 15 November, so we are in plenty of time to get it in.

I turn to the proposal assessed in our report. There is some history which I shall deal with briefly. The food distribution programme, to which the proposal relates, was introduced in 1987, and at that time its primary purpose was to help reduce stockpiles of basic commodities that had been purchased and brought into public intervention stores under the common agricultural policy in order to support prices on the European Union market. Stocks of butter, milk powder, beef, sugar, rice and cereals were released to charitable organisations in participating member states on an annual basis to distribute to the poorer sections of the community.

As your Lordships will know, successive reforms of the common agricultural policy in the 20 or more years since then have greatly reduced the level of intervention stocks, combined of course with the improvement in world commodity markets. As a result, the nature of the scheme has altered, with an increasing focus on purchasing products on the open market.

The current proposal, amending the regulations previously agreed for the scheme, has several objectives. These include formalising the provision for common agricultural policy funds to be used to purchase goods not just from intervention stocks but also on the open market: widening the range of goods that can be purchased in order to take into account nutritional balance; allowing member states also to give preference to food products of union origin; establishing three-year programmes instead of the current annual rounds in order to allow longer-term planning by member states and charities; introducing co-financing by participating member states, generally at a minimum of 25 per cent of eligible costs, with an annual ceiling of €500 million for co-financing from the European Union budget; and enhancing reporting obligations, both for participating countries and for the Commission.

In putting the proposal forward, the Commission has offered a number of justifications for it. They include addressing the problems of hunger, deprivation, poverty and social exclusion in the spirit of the treaty, which states that the Union’s aim is to promote,

“the well-being of its peoples”,

and,

“solidarity among Member States”,

and to contribute to meeting the CAP’s objectives of stabilising markets and ensuring that supplies reach consumers at reasonable prices.

The participation by individual member states in the scheme has always been on a voluntary basis and it will remain so under this proposal. The United Kingdom has not participated in the scheme since the mid-1990s and, in their Explanatory Memorandum to us, the Government have said that this has been because of dwindling UK intervention stocks and the bureaucratic overhead associated with ensuring compliance with the scheme rules in order to prevent fraud. They have also said that they are unconvinced of the merits or appropriateness of the revised proposal. In the Government’s view, the European Union should act only where there are clear additional benefits from collective efforts.

As regards the Commission's justification that addressing problems of hunger, deprivation, poverty and social exclusion can be considered to be in the spirit of the treaties, we comment that the spirit of the treaties can be perfectly well respected without European Union action and can, in any case, be promoted by the Union without following this legislative route. Member states are capable of acting individually to address the issues highlighted.

As regards the Commission's assertion that purchases from the market contribute to the objectives of the common agricultural policy, we see this as questionable, as the extent of such a contribution must depend on numerous factors, including the quantity of food purchased from the market, any reduction in purchases by deprived persons who become eligible for the scheme and the price paid. We see no reason at all why the Union is better placed to organise the purchase of products from the market than member states. We comment as well that the failure of member states to act is not in itself a reason for the Union to act. In any case, the voluntary nature of the scheme suggests that there is no demonstrable need for action, particularly at the Union level. We conclude that there appears to be no compelling argument to suggest that the Union is better placed than member states to ensure a food supply to its most deprived citizens.

We have ensured that the assessment that has been set out in our report has been communicated to national parliaments in other European Union member states. At present, we have heard that only the Swedish parliament may be considering the proposal from a standpoint that is close to ours. Unless several other chambers make similar moves in the next two weeks, the threshold for reaching the formal yellow card is, unfortunately, unlikely to be reached. In my view, that will not prevent the opinion of this House from having a political impact. I am glad to see the Minister nodding at that remark.

Let us be clear; the burden of our report is not to stand against measures to help the neediest members of our society, if appropriate, by providing them with food. We recognise that there may well be a need for such action, but we consider that any such action is best taken by national, regional or local governments, who can best assess the needs of their own populations and can also best design measures to meet those needs. The European Union scheme, which is the subject of this proposal, was devised more than 20 years ago in a very different environment, primarily as a channel for siphoning off surpluses from the common agricultural policy. Now it has largely lost that rationale, and the justifications which the Commission is advancing for its continuation seem to us to be ill founded and unconvincing. We see no necessary role for European Union action in this area and, accordingly, we see this proposal as incompatible with the principle of subsidiarity. I beg to move.

16:39

[The Earl of Caithness]

My Lords, I declare my interest as a member of Sub-Committee D. The noble Lord, Lord Roper, has given a very extensive introduction to this rather erudite matter. That is certainly going to shorten what I was going to say quite a lot and I am grateful to him. He is right to take us back to the history of the CAP, and it was perhaps right in the late 1980s and 1990s to utilise the surpluses that we had under the inadequate CAP policy of the time. But as he so rightly said, times have changed and reform of the CAP has taken place. I draw your Lordships’ attention to the committee’s report in 2008 on the future of the CAP, which states in paragraph 6:

“The mid-term review of the Agenda 2000 agreement resulted in the 2003 CAP reform, which marks the culmination of a gradual shift in farm support from product support to direct income support”.

So the CAP has changed, but that has not stopped some in the Commission trying to perpetuate the bad old ways.

A similar proposal to what we are looking at today was presented in the 2008-09 Session and the scrutiny reserve was lifted then. But the committee supported the then Labour Government in their opposition to the proposals and there was a blocking minority in the Council. Following discussions with the European Parliament, the Commission has tweaked its proposal and sent it back to us, and this is what we are discussing today. I would summarise the Commission’s proposal as grandiose empire-building by a few who wish to preserve their jobs in view of the 2013 spending review, which is coming up. I can see them all shuffling papers on their desks, looking to preserve their jobs.

There is no question in my mind that the justification put forward by the Commission is weak and very unconvincing. It fails on two grounds. It goes against the recent trend of CAP reforms, and there is the budget reform in 2013 that I have alluded to. It is quite wrong for the EU to be buying food on the marketplace rather than using intervention stocks. If the intervention stocks have dwindled, and rightly so, then the policy ought to be discontinued from the CAP point of view. If it is felt that this policy ought to continue, then—as the noble Lord, Lord Roper, said—it ought to be down to member states and Governments, but it is a social policy and not a common agricultural policy. It also fails on the grounds of subsidiarity because there is no justification that the Union can do this job better than member states. The fact that it is voluntary and that Britain has not been participating since the mid-1990s shows that it is not something the Union ought to take up.

I have two questions for the Minister. When we held this matter up for scrutiny a couple of weeks ago, we were informed that the Council had yet to adopt a position. I would be grateful if he could tell us what the position is in the Council and whether there is still a blocking minority for this, and whether the Government are still of the view that this is a social policy measure rather than a CAP measure.

16:42

[Lord Carter of Coles]

My Lords, I am grateful to the noble Lord, Lord Roper, for moving today's Motion. The EU Sub-Committee on Agriculture, Fisheries and Environment, which I chair, gave detailed consideration to the proposal in relation to the scheme for food for the deprived, which is the subject of the report now before the House. However, I am sure that your Lordships will share my appreciation of the knowledge and insight into the wider political and institutional context which the noble Lord, Lord Roper, has brought to this debate, not least in his role as chairman of the EU Select Committee.

It may be of interest if I quote from the website of the European Commission. The Commission's agriculture and rural development directorate-general states that the scheme was:

“Originally designed to provide surplus stocks of farm produce (‘intervention stocks’) to needy people, the scheme was amended in the mid-1990s to make it possible to supplement intervention stocks with market purchases in certain circumstances”.

In looking forwards, the Commission goes on to say, and this is very apposite:

“Now that surplus stocks are extremely low and unlikely to increase in the foreseeable future, the scheme should allow market purchases on a permanent basis, to complement remaining intervention stocks”.

I need hardly remind your Lordships of the consequences of the common agricultural policy 20 years ago when, as the noble Lord, Lord Roper, said, we had mountains of butter, milk, sugar, cereals and so on. At that time, it was a practical solution to let charitable organisations in participating member states distribute those goods to the poorest sections of the Community. For all that the process of reforming the CAP still has further to go—my sub-committee expects to look closely at reform options from the Commission at the end of the year—it is fair to say that the changes made since the 1990s have been constructive and far reaching. As the Commission has said, surplus stocks are now very low, and they are expected to remain low.

For the proposed EU scheme to work in future, food needs to be purchased on the market and then put into the distribution system. Twenty years ago, the scheme was based on the availability of surplus stocks; now, with no stocks, it looks as if we will just go out and purchase it. This transformation begs questions about the scheme's efficiency and about its relationship with the CAP. The Commission claims that the scheme helps to meet the CAP's objectives of stabilising markets and ensuring that supplies reach consumers at reasonable prices. We could discuss those claims, but they are not the issues on which this report turns. The central issue is our subsidiarity assessment.

Why should the European Union be considered to be in a better position to determine the nutritional needs of deprived members of member states' communities, and to respond to those needs, than national, regional or local governments? For example, here the Government have introduced the Healthy Start scheme, and I hope the Minister will say more about it. I mention it only because it seems to me to exemplify the role of a member-state Government in looking at the need in the population for which they are responsible and designing an appropriate scheme to meet those needs.

As we acknowledge in the report, member states' participation in the scheme is voluntary and, although the UK has not participated since the mid-1990s, the Commission states that 19 member states currently do. I am tempted to repeat the saying that there is no such thing as a free lunch, not because the scheme rests on cofinancing between member states and the Commission, but because, if we fail to flag up what we see as a failure to comply with the principle of subsidiarity, we risk paying a longer-term price in terms of blurring the lines between actions appropriate for EU involvement and actions which should rightly stay with member states at national, regional or local level.

The sub-committee was clear in its view that this proposal does not comply with the principle of subsidiarity, and I hope that your Lordships will share that view.

16:48

[Lord Teverson]

My Lords, I remember when the UK last participated in this scheme because I benefited from it. Before I receive commiserations from noble Lords, it was not because I was a poor member of the public who received the unfrozen butter that came out of cold stores in the south-west, but because I was a Member of the European Parliament representing Cornwall and Plymouth and it was a fantastic photo opportunity around Christmas time, when these schemes, whether at European or UK level, strangely came out. I was able to do a press release, and I was reported in the press as securing the south-west’s share of this bounty from the European Union. Unfortunately, I was not pictured distributing our share as Father Christmas, but it was a good wheeze then.

Things were very different at that time. There were surpluses within the common agricultural policy, and rather than export them and destroy the third world’s farming populations, we instead decided to try to save some of our own populations from poverty and starvation at Christmas, which I suppose was not a bad objective. Despite being one of the most pro-European Members of this House, I would say that one of the most important things about Europe is that it knows its limits. Certainly, even when I was a Member of the European Parliament, I voted against things like the working time directive and the drinking water directive, not necessarily because I was against them but because they were things that the European Union should not have been involved in. They should have been left to the member states, which were best placed to decide what was right for them. There is no better example of that than this regulation which is being discussed at European level. I should be very interested to hear from the Minister as to where those negotiations have got to.

I raise one other question, which perhaps is more to do with the administration of the House. Perhaps the noble Lord, Lord Roper, can inform me as to whether he believes that we now have procedures in the House suitable to ensure that whenever an issue such as this comes up again—exercising our judgment in terms of the yellow card procedure—we can do this quickly enough so that we can raise support among other national Parliaments within the European Union to make sure that our message is heard. I am disappointed that it is just the Swedes who are following our example—that is not a good sign—but I do not commiserate at all with the Members of the European Parliament in the UK this Christmas who will not have the opportunity that I had back in 1994.

[Baroness Howarth of Breckland]

My Lords, I declare an interest as new girl on Sub-Committee D, although I have spent a number of years on Sub-Committee G and on the Select Committee. One of the other things I have done in my life is to look at institutions and large organisations. One of the cultural problems of institutions is the difficulty they have in moving forward when times change. That is particularly so when there is no check on personnel or financial commitment. It is even more difficult to make organisations change when the issue looks like “a good thing”, such as this one; the distribution of food products to the most deprived persons in the Union. For someone like me from a social care background, that looks like a good thing. However, as we have heard, the programme began at a time when the excess of food stocks was purchased into public stores under the old common agricultural policy scheme and the temptation to continue the intervention into the affairs of member states by purchasing food from markets for distribution through the EU food programme is almost irresistible, certainly for those committed to work within the Commission.

However, as I said, having spent some years as chair of Sub-Committee G, and now as a member of this committee, I am more than aware of the danger of the Commission moving into areas best served by member states themselves. In Sub-Committee G, we were constantly on the alert for encroachments into health and consumer issues. I spent more than one afternoon thinking about the working time directive. Not to be misunderstood, I am a committed European. There is much we can do as a community to further the lives and interests of our citizens. Food safety and security are clearly such areas close to this debate, where the wider community can and does add value, but some things are not only the right and responsibility of member states, but are local within that state. The distribution of food to poor citizens is one of these.

Tim Lang, professor of food policy at the City University, defines food poverty in the UK as follows:

“Food poverty is worse diet, worse access, worse health, higher percentage of income on food and less choice from a restricted range of foods. Above all food poverty is about less or almost no consumption of fruit & vegetables”.

Other factors include access to a range of healthy foods in local shops, transport, fear of crime, knowledge about what constitutes a healthy diet and the skills to create healthy meals. Is that really an issue for Brussels?

For many years, I was a member of the board of the Food Standards Agency, the independent department set up to protect public health and consumer interests in relation to food. The FSA runs the annual Dame Sheila McKechnie awards for community food groups. I have seen at first hand what local action on food can achieve. Community food projects work to tackle food poverty in their local areas, giving the power of choice and change back to local communities. Projects include food co-ops, community cafes, cooking and nutrition programmes, and courses, markets, breakfast or lunch clubs, school tuck shops, peer training and any project which improves people’s access to healthy, affordable and sustainable food. It is about as local as local action gets.

Community food mapping can identify where food poverty exists. The technique uses local people’s knowledge to map food availability in a specific area. The results can be combined with data from other organisations, such as local authorities, the NHS and business—again, all local. The results can then be used to implement solutions to food poverty by designing initiatives tailored to those local needs.

One example is the North East Food Access Network, which is,

“a network of organisations and individuals promoting access to fresh, affordable, sustainable and culturally appropriate food in the North East region. It is a forum for the exchange of information and advice between projects and networks in the region. It aims to have an influential regional ‘voice’ on addressing the issues of ‘good food’ access for all in the North East and seeks to develop a co-ordinated regional approach to work around food and health”.

At times of austerity, such projects as these are vital to the life of local communities. Certainly, they could use more funding. One of my questions to the Minister is about how local community groups are going to be supported in the future. That would be of great value if it came direct without the added expense that must be involved in the Commission buying goods on the open market for redistribution, which, in addition, can easily distort the markets.

If we are to convince our citizens of the benefits of Europe, rather than it being seen just as an additional drain on the nation’s purse, we should focus EU efforts where they bring best value and doing those things that sovereign states cannot achieve alone. Food networks are local, direct and know their communities. They are not overbureaucratic and, consequently, are flexible in responding to need. Above all, they are transparent. We should leave them uncluttered by intervention by the Commission, however well intended. After all, we know that this kind of centralisation by any institution leads to more money being spent on staff to make assessments to decide on criteria, more forms, applications to be vetted, assurance schemes to prevent fraud and so on.

I would conclude that not only does there appear to be no compelling argument to suggest that the Union is better placed than member states to ensure a food supply to its most deprived citizens, it appears to me that to do so would divert resources from those in non-governmental bodies who do it so well. I support the Motion to issue a reasoned opinion.

16:58

[Lord Stoddart of Swindon]

My Lords, I have very often criticised the European Union Select Committee as being an expensive white elephant, but I am not going to do that today because it seems to me that it should have praise for the action that it has taken in this instance. Certainly, I shall support the Motion. I am also very pleased to hear so many people, including the noble Lord, Lord Teverson, and members of the committee, standing up for the nation state. In particular, the noble Baroness, Lady Howarth, criticised centralism and is in favour of localism. That is altogether good, but I am not at all sure that that is achieved through the European Union.

It is interesting that the committee is using the subsidiarity clauses. Of course, we have to go back to 1992, when the clauses were introduced into the treaty on European Union. Indeed, the treaty was sold by Mr Major to his own Back-Benchers by introducing the clause. We were assured at that time that that would put a brake on the European Union gaining more and more powers. I think that eight members of the Conservative Party were sacrificed—or at least given the sack—because they refused to support the Government, and the Bill only just made it through the House of Commons.

There have been far too few challenges. There should have been many more challenges to attempts—successful attempts—by the European Union to accrue more power to itself. There has undoubtedly been an insidious grab for power by the institutions of the European Union to achieve their aim of ever closer union—do not forget that the achievement of “ever closer union” is still in the Lisbon treaty; I do not know how close it is going to get, but the aim is there—and the emasculation of nation states.

The latest paper from the House of Commons Library shows just how much of our legislation, particularly in regulations, is coming from Europe. It gives the figure of 53 per cent. Some people think that the percentage is greater than that. Now, virtually no area of policy is untouched by the European Union leviathan, and the power grab has been given new impetus by the implementation of the Lisbon treaty, which significantly enhances the power of the European Union and its institutions. So it is indeed encouraging that the Select Committee is increasing its watchfulness to ensure that the subsidiarity provisions are respected.

I have concerns about the seemingly lax attitude of the Cabinet and the departmental Ministers in their surveillance of the extension of EU powers. I can only wonder how much influence they have on decisions that are taken. We do not often hear about COREPER—the Committee of Permanent Representatives—which, as I understand it, meets in secret and whose decisions are simply rubber-stamped by Ministers. I have heard that from the mouths of former Cabinet Ministers. Perhaps the new Administration will take a tougher line, but the activities of that very powerful committee should be transparent, and I do not believe that they are at all transparent at the moment. It should publish minutes setting out the positions taken by its members and how they voted. In the interests of parliamentary democracy, the United Kingdom members of COREPER should be seen to be accountable and subject to parliamentary scrutiny at Westminster.

Having said that, once again, I congratulate the committee, and I shall take pleasure in supporting the Motion.

17:03

[Lord Williamson of Horton]

My Lords, I, too, support the Motions of the noble Lord, Lord Roper, on the issue of subsidiarity arising on the amended Commission proposal on the distribution of food products to the most deprived persons in the Union. As in a similar case that we debated on 20 October, I consider that our EU committee has done well to examine the question of subsidiarity and to bring it to the attention of the House. It is worth recalling that subsidiarity did not feature in the original Treaty of Rome, but as the role of the Union developed, the member states decided that in cases of shared competence, a treaty provision was needed to police the division between legislative action by the Union and action by member states themselves. It is now a treaty requirement that in matters of shared competence, the EU can act only if and in so far as the objectives of the proposal cannot be sufficiently achieved by the member states. In the current state of public opinion, not only in the UK but also across the Union as a whole, it is important that the EU institutions should strictly respect this treaty requirement.

In addition, as a result of the Lisbon treaty this Parliament—under Article 5(3) of the Treaty on European Union and under Article 6 of the protocol, which has treaty force, on the application of the principles of subsidiarity and proportionality—can submit a reasoned opinion on Commission proposals to the European Parliament, the Council and the Commission. We are recommended to do so in this case and I agree that we should now make use of this provision.

There has been perhaps some exaggeration about the volume of our secondary legislation deriving from the EU. The figures that I looked at recently in the Library of this House show that the great majority of statutory instruments are of UK origin and that only a small number directly implement EU law. However, every EU legislative proposal which in our view does not comply with subsidiarity should be challenged. In the case before us today, the history, as other noble Lords have already said, is that from 1987 some excess intervention stocks of food were made available to deprived persons in the Union. In the circumstances of 23 years ago, that was sensible, and I am strengthened in my opinion by the fact that I was in the Commission at the time. That gives me a further reason for thinking that it was a good idea, as well as the advantages given to the noble Lord, Lord Teverson, in his role as Father Christmas at some stage.

However, radical reform of the common agricultural policy, which now bears little resemblance to the policy of the past, has removed almost all intervention stocks, and the welfare programme has turned to the market to buy food. The EU committee sees no compelling argument to conclude that the Union is better placed than member states to ensure a food supply to its most deprived citizens, if that is necessary, and accordingly considers that the proposal does not comply with the treaty requirement on subsidiarity. I support the view of the committee and, consequently, the two Motions tabled by the noble Lord, Lord Roper.

17:07

[Baroness Quin]

My Lords, like others, I begin by thanking the noble Lord, Lord Roper, and my noble friend Lord Carter of Coles for the work of the European Union Committee on this issue, and for the way that the subject has been introduced to the House. The noble Lord, Lord Roper, reminded us of some of the background considerations to the procedure that we will be adopting today, which are very much in line with the debate held last week on subsidiarity issues as a result of the committee’s report. It was the first time that this kind of procedure had been presented to the House. Furthermore, while the noble Lord, Lord Stoddart, and I often do not agree on European issues, I agree strongly that these provisions in the treaty are ones that should be used by national Parliaments. They were included to strengthen the role of national Parliaments in European scrutiny, so it is right that when either House of our Parliament feels that these issues are important, they should be fully aired and voted upon. Certainly, our own House of Lords committee has a very good reputation among national Parliaments throughout the EU for its scrutiny work. That is of long standing, as those of us who in the past were Members in another place or Ministers can testify.

Some of the considerations surrounding subsidiarity have been aired. It is felt it should come into play where legislation at EU level is unnecessary—although obviously the word “unnecessary” can be subject to different interpretations—where such activity can be promoted without following a legislative route and where it is better done by member states. As the Government put it in their Explanatory Memorandum,

“the EU should only act where there are clear additional benefits from collective efforts, or ‘EU added-value’, compared with action by individual Member States either individually or in co-operation”.

I believe therefore that the report makes a strong case. It is right to stress, as the noble Lord, Lord Roper, did, that the scheme is voluntary and that the United Kingdom has not participated in it since the mid-1990s. None the less, although we have not participated, as EU members we are fully entitled to make use of the provisions that are available today in making our views loudly heard about this.

I also accept the case in the report that confusion can arise from the parallel operation in a member state of a national scheme and an EU scheme. I also agree strongly that the extent to which purchasers from the market contribute to the objectives of the common agricultural policy in the way that is pursued at present is questionable.

When I first saw the committee’s report I was quite startled because, like others, I remember the circumstances in which this measure came into being. Like the noble Lord, Lord Teverson, I was also a Member of the European Parliament—indeed I was a member of the agriculture committee in 1987 when this issue first arose. I remember the senior role that the noble Lord, Lord Williamson of Horton, had in the European Commission at that time. As many noble Lords have pointed out, the circumstances then were very different from those of today. It was basically a measure to distribute high intervention stocks rather than purchasing food from the open market in the way that it has increasingly operated in recent years and seems likely to operate in the future.

I also accept the Government’s point that there are a lot of bureaucratic procedures involved in this process. It might be interesting if the Minister can say a little more about the costs of the scheme to those who choose to operate it and why that can be a disincentive to countries adopting the scheme in the way that it is currently provided.

I am glad that this debate is much more timely than last week’s debate. Because of the parliamentary Recess, the previous measure relied on the good will of the Commission to accept our view on subsidiarity. That is not a problem with this case, where we are in good time. I understand that, according to the Government, a final decision may not be taken until towards the end of next year. Perhaps the Minister can confirm that.

I agree that national Governments and also local and regional authorities are far more appropriate to deal with this kind of issue. I was glad that the noble Baroness, Lady Howarth, mentioned the north-east network in my own part of the country.

I hope that from what I have said so far it is clear that we support the work of the European Committee and support the Motions in front of us. The committee’s work is in line with the previous Government’s approach to this issue; there has been quite a history of consistency about this in the consideration in both Houses of Parliament in recent years. However, the House of Commons European Scrutiny Committee, which has also recently considered this subject, has injected one slightly different element into the discussion. This is perhaps worth raising here and asking the Minister to comment.

The European Scrutiny Committee in the other place comments that in its view the argument is more about competence than subsidiarity. The committee accepted that where intervention stocks are relied on for food aid the Commission is competent to act, because of the workings of the common agricultural policy, but where the food is sourced from the open market—as we have heard, that is increasingly the case—the link with the common agricultural policy is much more tenuous. Therefore there does not seem to be an appropriate legal base which would confer competence to act. This is an important point and it would be useful to get the Minister to comment on it. As I understand it, the Government have so far said that there may be an issue of competence, but that even if it was then ruled that it came within the Commission’s competence under the rules, there would still be an issue of subsidiarity. In that case, of course, the Government would strongly endorse the view of the European Union Committee in this House.

Could the Minister also say a little more, as other Members have encouraged him to do, about the support that we might receive from other countries in this area? In the letter that the Minister recently sent to the chairman of the European Scrutiny Committee, he talked about a small number of countries but certainly more than one—even though only one country has been mentioned here today. It would be useful for the House to be able to consider any further details that the Minister has about that. It would also be useful to know when the opinions of the European Economic and Social Committee and the Committee of the Regions of the European Union will be received and considered.

I noted that the noble Earl, Lord Caithness, saw at least part of the problem in a kind of grab for power and territory by the Commission. That might well be the case; however, the Commission makes the point in its Explanatory Memorandum that, as recently as 2008, 13 million people in the European Union apparently benefited from this scheme. Perhaps it would be interesting for the House to know where the majority of those people are. Is it in the new countries—the cohesion countries? Certainly, it seems that certain organisations and populations in the European Union were putting pressure on the Commission to continue this scheme, so perhaps it is slightly unfair to say, “It is just the Commission wanting to extend its territory”, although that may be an element in the equation. Also, has there been any pressure from charities in this country to participate, despite the consensus that seems to prevail that it is actually better to deliver such programmes nationally or even sub-nationally?

Finally, the Government make a strong case about this being a social measure and therefore not appropriate to the European Union. While I accept that argument on this occasion, I am sure that the Minister will not be surprised that I do not accept that all social measures are inappropriate at EU level. Indeed, to go back to the European Coal and Steel Community treaty of 1954, social measures were quite an important element in the help to the coal and steel community and to coal and steel-producing areas, so that actually has a long history within the European Union.

I note that, later on, the House will be looking at the European Social Fund after an excellent report that was also from the European Union Committee, so although our support for the Government’s stance on this occasion is genuine I hope that the Liberal Democrats in the coalition, despite the reservations about particular directives from the noble Lord, Lord Teverson, will none the less keep the pressure on the Government not to have such total hostility toward anything with a “social label” in the European Union. However, on this occasion, as happened last week, it is obvious that there is widespread consensus in the House and we are therefore happy to support both the work of the European Union Committee and its conclusions on this matter.

17:19

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Henley)]

My Lords, I join other noble Lords in saying how grateful I am to both the noble Lord, Lord Roper, as chairman of the EU Committee and to the noble Lord, Lord Carter of Coles, as chairman of Sub-Committee D, for this report. I make it quite clear at once, as I think our Explanatory Memorandum made it clear, that the Government share the committee’s concern that the regulation concerned is not consistent with the subsidiarity principle. That means that much of what I say may repeat what other noble Lords have said this afternoon, because there has been general agreement around the Chamber. Still, it is important that it is on the record that these are the views of Her Majesty’s Government.

As the noble Lord, Lord Roper, made clear, the then European Community’s food distribution programme was introduced back in 1987 and its main aim was to help run down the stockpiles of basic commodities that had been purchased into intervention stores under the common agricultural policy. The noble Lord, Lord Roper, went on to stress that it was the stocks of butter, milk powder, beef, sugar, rice, all those mountains and lakes that we remember—I cannot remember whether it covered wine lakes, but it did cover a whole variety of mountains and lakes—that were released to charitable organisations in participating member states annually to distribute to poorer sections of the community.

As has been made clear by a number of noble Lords, we in the United Kingdom last participated in the scheme in 1998—everyone referred just to the mid-1990s, but I can give the precise date. We withdrew both because of the sharp decline in intervention stocks in this country and because of the high administrative overheads, for government and charitable organisations alike, which made participation unattractive. I assure the noble Baroness, Lady Quin, that we still believe that, under the scheme that is being looked at at the moment, there would still be high administrative burdens, which would make it unattractive. I also assure her that we are not aware of any charitable organisations having asked us to participate in this scheme, or, for that matter, to go back into the scheme after the withdrawal by the previous Administration back in 1998.

The main purpose of intervention systems, as my noble friend Lord Caithness and other noble Lords made clear, is to support market prices. However, a side-effect—in practice, it turns out to be the dominant effect—is to encourage overproduction and distract farmers from making market-based production decisions. Successive reforms of the CAP have reduced the role of intervention and, together with improvements in world commodity markets, have resulted in significantly reduced EU intervention stocks. Consequently, the Commission proposes to adapt the scheme.

The main stated purposes of the Commission’s proposals are to align the legislation to the Lisbon treaty and to modernise the scheme. The CAP is now more market-orientated and price support will play less of a role in future, so, as I have said, the accumulation of large intervention stocks is less likely. The proposal therefore provides for CAP funds to be used to purchase goods on the open market and for a wider range of goods to be purchased by participating member states on the basis of nutritional criteria rather than limiting them to the products for which intervention applies. The other major change is the proposed introduction to the scheme of cofinancing by participating member states. Under current proposals, this will be a minimum of 25 per cent of the eligible costs, with lower ranges of cofinancing, such as 10 per cent, applying to more disadvantaged areas of the European Community.

As before, participation in the new scheme—I think the noble Lord, Lord Roper, made this clear—will remain voluntary, so that, even if it goes ahead, the United Kingdom will not be obliged to participate. Providing effective help to disadvantaged people is clearly an important objective, but, as the Explanatory Memorandum explains, we remain unconvinced of the merits or the appropriateness of the proposal. In particular, we believe that the expansion of the scheme to procuring goods on the open market will mean that the new scheme is essentially a social measure—that is an assurance I can give to my noble friend Lord Caithness—which, by its design, would make it a matter for member states to decide rather than for the EU itself.

In accordance with the principle of subsidiarity, a longstanding element of European treaties that is currently enshrined in Article 5 of the treaty on the European Union, the Government consider that the EU should act collectively only where there are clear additional benefits, or EU added value, compared with action by member states either individually or in co-operation.

We consider that social matters are a matter for individual member states, and that measures to assist the neediest members of society are more properly and efficiently delivered through domestic social programmes that take account of the prevailing situation and available funding in individual countries. The noble Lord, Lord Carter of Coles, for example, mentioned a scheme, Healthy Start, which is run by the Department of Health. I assure him that that scheme is still there; it is under review by the department and subject to a consultation about various changes in it.

I would like to mention national charitable organisations, such as FairShare. I visited one example of its outlets in the north-east, not far from the former constituency of the noble Baroness, Lady Quin. Many noble Lords will know of the valuable work that bodies such as FairShare can do in distributing food to the less advantaged. To return to the north-east, I was grateful for what the noble Baroness, Lady Howarth, said about the north-east food action programme. It is those kinds of measures—national from the Government, from local government and from charities—that we believe we should be looking to work. I commend those bodies to those who do not know about the sort of work that they do.

The proposal itself was discussed in the Agriculture and Fisheries Council on 27 September. That was followed, as I understand it, by technical consideration by officials. A number of policy and technical issues have been identified. At present—I give this assurance to my noble friend Lord Caithness—there is no qualified majority in favour of it. There might be a blocking minority against, but certainly I assure him that no member state at the moment actually supports the scheme; some oppose it for one reason, some for another. Also, as I understand it, the European Parliament has not yet given its opinion on the proposal.

The noble Baroness, Lady Quin, asked about the timescale. I assure her that we still have quite a long way to go before we get to any final decision, what with the European Parliament having to consider it and some sort of qualified majority having to be found on the Council, which does not seem likely.

In addition to subsidiarity, there are two main concerns among those member states. First there is the legal base.

[Baroness Quin]

I thought that the proposal reflected some of the amendments that had been passed in the European Parliament, so I am somewhat puzzled that the Minister says that the European Parliament has not considered it.

[Lord Henley]

As I understand it, the European Parliament has not yet considered the stage that we are currently at. It might be that it considered earlier examples of it. At the moment we are at the stage where it has been through the Agriculture and Fisheries Council, which talked in September about co-financing at the 25 per cent or 10 per cent level, but that has not yet gone on to the European Parliament. If I am wrong, I will write to the noble Baroness to correct it. My point is that we still have quite a way to go before any of this gets through, which is why it is important that the views of this House and another place—and those of 26 other parliaments and all the Houses in them, should they wish, although we understand that only Sweden is likely to do this at the moment—should come forward so that we can reach various red lights, green lights or whatever, as appropriate.

I return to the concerns of the member states. First, I was talking about the legal basis. The new proposal is made under Articles 42 and 43(2) of the treaty on the functioning of the EU. This is similar to the existing scheme. These articles would be appropriate if the predominant purpose of the scheme was the supply of food from intervention. However, given the expected focus of the revised scheme on the purchase of goods on the open market, it is very difficult to argue that its predominant purpose is in line with the use of these articles as the legal base. A number of member states share our concern about that.

Secondly, the concept of cofinancing, which I referred to earlier, is strongly opposed by a number of currently participating member states that believe that the scheme, quite naturally, should be wholly community-financed. The Government believe that, were the revised scheme to go ahead, cofinancing would be very important to ensure that each participating member state reaches an informed judgment on how best to support its deprived communities, and because it would likely improve the governance of the scheme.

In conclusion, I emphasise that Her Majesty’s Government have not taken part in the existing voluntary scheme for many years and have no intention of taking part in the revised scheme if it were adopted. Given that there is presently no qualified majority on paper in the Council, there seems little immediate prospect of the proposal—at least in its current form—progressing that far. The effect would be that the existing scheme would continue to operate. I understand that there is a challenge before the European Court of Justice on whether the legal base for the operation of the 2009 programme is appropriate. That has yet to be heard. The point remains that it is not an activity that is best undertaken at EU level or, in our view, an appropriate use of common agricultural policy funds. Therefore, I stress that I welcome the committee’s report and support the Motion on the reasoned opinion.

[Lord Roper]

My Lords, I can be rather brief in replying because all those who have taken part in this debate have supported the report and the Motion that I have moved. I was particularly glad to hear from the three members of the sub-committee, their chairman the noble Earl, Lord Caithness, and the noble Baroness, Lady Howarth, who were able to add on the general question. In the case of the noble Baroness, Lady Howarth, we were reinforced with her knowledge of local social projects. We were also very much helped by the fact that three Members of this House had been involved in the scheme at earlier stages. Therefore, the contribution of the noble Lord, Lord Teverson, with his fascinating aperçu of acting as Father Christmas, and of the noble Lord, Lord Williamson, and the noble Baroness, Lady Quin, were particularly useful in giving us the background to the scheme. I was glad to have the support on this occasion of the noble Lord, Lord Stoddart of Swindon. I hope he notes that this is one of the benefits of the Lisbon treaty that, as well as other sections, should be taken into account.

I was asked a couple of questions. Before coming to them, one thing that has not been stressed sufficiently is that, although we do not participate in the scheme, the UK contributes to the €500 million that comes from the European Community’s budget. Therefore, that should not be overlooked when we consider this matter.

The noble Lord, Lord Teverson, asked me whether the arrangements were satisfactory. The procedure in this House has been satisfactory. We have been found a date relatively promptly so that it can be debated in good time. I will say one thing that I did not mention initially. On this occasion, we consulted our colleagues in the committees of the devolved Assemblies and asked them whether they had any comments, because some of this is the responsibility of the devolved Governments. We have not had a response on this occasion, perhaps because of a shortage of time, but it shows that we feel that we have that responsibility in matters that are not a reserved responsibility for the UK Parliament.

On the consideration in other parliaments, we have communicated with them. In the 19 countries that are participating, people may not wish to upset a continuing Father Christmas role for their countries and might consider themselves rather unpopular if they were to raise issues of subsidiarity on something that might be seen locally as beneficial. I do not know. However, I believe that we were right—as has been shown by this debate—to put forward our reasoned opinion on this particular measure. I beg to move.

Motion agreed.

Subsidiarity Assessment: Food Distribution (Reasoned Opinion)

Wednesday 3rd November 2010 Lords Chamber

Motion to Resolve

17:34

Moved by

[Lord Roper]

To move to resolve that this House considers that the amended Commission proposal for a regulation of the European Parliament and of the Council amending Council Regulations (EC) No. 1290/2005 and (EC) No. 1234/2007, as regards the distribution of food products to the most deprived persons in the Union (COM (2010) 486, Council Document 13435/10) does not comply with the principle of subsidiarity, for the reasons set out in the 2nd Report of the European Union Committee, Session 2010-11 (HL Paper 44); and, in accordance with Article 6 of the protocol on the application of the principles of subsidiarity and proportionality, instructs the Clerk of the Parliaments to forward this reasoned opinion to the Presidents of the European institutions.

Motion agreed.

Private Finance Projects (EAC Report)

Wednesday 3rd November 2010 Lords Chamber

Motion to Take Note

17:35

Moved By

[Lord Vallance of Tummel]

To move that this House takes note of the Report of the Economic Affairs Committee on Private Finance Projects and off-balance sheet debt (First Report, Session 2009–10, HL Paper 63).

[Lord Vallance of Tummel]

My Lords, although I am no longer a member of the Economic Affairs Committee, I am pleased to introduce its report, Private Finance Projects and off-balance sheet debt, which was published in March while I was still chairman. Before I do so, I should declare an interest as a member of the supervisory board of Siemens AG, one of whose divisions has been party to a private finance project.

I am grateful to all the witnesses who made the report possible and especially to the National Audit Office for its valuable contribution. I should also like to thank Professor Paul Grout of the University of Bristol whose knowledge and experience were essential to our report. The topic is important and affects all of us, but the terminology is pretty turgid: neither private finance initiative, PFI, nor public private partnership, PPP, exactly fire the imagination. “Private finance projects”, or PFPs—the umbrella term that we adopted in our report—is scarcely more compelling, but it has the virtue of embracing both the PFI concept introduced by a Conservative Government and its PPP rollout, largely under a Labour Government. The term “private finance projects” also says what it means: doing public projects with private finance. I will use “PFPs” as a catch-all term today.

PFPs use private sector capital and skills to provide public infrastructure for a lengthy fixed period. Schools, roads and hospitals are typical examples. The public sector client pays the contractors fixed sums over about 30 years for design, build, maintenance and some services. This whole-life bundling of costs into one package sounds straightforward enough but PFPs are still controversial. Their defenders say that risk-taking private contractors bring to public procurement the rigour, efficiency and skills needed to get the most out of scarce resources and that they mostly deliver to time and to budget. Detractors say that PFPs are expensive, inflexible and do not really transfer risk from the public sector. It is not easy to show where the truth lies, since lack of data on the whole-life costs of traditional procurement hampers objective comparison. This sometimes encourages heated assertion rather than cool analysis. In our report we tried to take a balanced view of PFPs, but it can be only an interim assessment; no final verdict will be possible until the bulk of the PFP deals signed in the last decade or so have run their course. Even then, the success or failure of PFPs is likely to be judged on a case-by-case basis, with type of project and local factors helping determine how each is finally evaluated.

PFPs grew from a combination of circumstances arising in the post-war decades. Broadly, growth in publicly funded services and rising expectations meant that far more public infrastructure was needed, but over time the perception grew that traditional public procurement was inefficient. The public sector specified a project, private contractors built it and the public sector was then left holding the baby. There were delays, cost overruns, contractual disputes and chronic neglect of maintenance. At the same time, Governments trying to find resources to meet ever-rising demand were looking for better value for money. It was clearly in the public interest for them to look for a new and efficient approach to public procurement.

The beginnings of what became PFPs were in the 1980s, when use of private finance in public procurement was still hedged about with restrictions. Those restrictions were largely removed in the early 1990s as the Government set out to attract private capital. Typical PFPs bring together private contractors holding shares in a consortium—a special purpose vehicle, in the jargon—formed to carry out a specific public project. The contract bundles together construction and maintenance over a long period and is financed by the contractors, mainly through debt, in return for fixed payments over the years by the public authority. Although the PFP model emerged under a Conservative Government, its use became widespread under a Labour Government such that by 2009 there were about £64 billion-worth of PFP contracts in force. This rapid growth of private finance projects is striking. It is clear that PFPs have played a significant role in the expansion and renewal of the nation’s infrastructure. Most schools and hospitals are now procured through PFPs. It will be interesting to see whether this pattern of procurement continues under the coalition Government.

It is clear that PFPs have built much in a short time, changed the urban landscape and renewed much public infrastructure. It is also clear that PFPs are best suited to certain types of projects, such as roads, schools and hospitals, since they can be clearly specified and are of a size that the private contractor can readily finance. It was striking that very few of our witnesses wanted to go back to traditional procurement in areas where PFPs had become the norm. The PFP model has also been enthusiastically adopted by other countries. On the other side of the ledger, experience already seems to show that PFPs are not the right approach for very large, complex and uncertain projects, such as the renovation of the London Underground. However, even successful PFPs, built to budget and on time, are still at an early stage in their life cycle. Few have been running as long as a decade, whereas many of the contracts are for 30 years. It will be for our successors in the 2030s to draw up a final balance.

Meanwhile our report drew conclusions and made recommendations on the basis of experience so far. Here are some of them. Public authorities should be free to choose the procurement method that offers the best value for money. There should be no institutional bias for or against traditional or innovative approaches. There should be greater clarity about financial liabilities arising from PFPs, which should be published alongside the national accounts. Data should be collected on whole-life costs of projects procured by traditional methods, including maintenance and services over the years, so that there can be meaningful comparison with the value for money of PFPs. The pros and cons of establishing a national infrastructure bank, as a means of combining financing at government rates of borrowing with the rigor and efficiency of private-sector delivery, should be kept under review. The operation of the secondary market in PFPs—the buying and selling of PFP contracts—should be monitored for any signs of a drop in build quality where contractors are able to sell completed projects that they would otherwise have to maintain. The public sector should enjoy a fair share of the benefits from any refinancing of PFPs. We also recommended that the Government should monitor the risk of jeopardising the delivery of essential services where public authorities’ budgets were constrained and where the obligatory nature of payments under PFP contractual commitments might squeeze out other critical but discretionary expenditure.

I am glad to say that the then Government were commendably swift in producing their response to our report. They were positive about many of our recommendations, including the quantification and publication of the country’s PFP liabilities and the collection of comparable data on the costs of traditionally procured projects. The previous Government also declared their intention to establish a green investment bank, which would operate on a commercial basis and involve both public and private sector capital. However, that Government dismissed our concerns about the potential effect on the ability of public authorities to deliver essential services as inflexible PFP payments took a higher share of reduced budgets. We were told that PFP payments represented very little threat to the flexibility of the Government’s budgets.

There is now a new Government. We note the commitment by the Chancellor of the Exchequer to go ahead with a green investment bank, but we have heard little of the coalition Government’s approach to PFPs. Will they still have an important role in public procurement? How far will new private finance projects be constrained by the spending review? What will be the role of the green investment bank with respect to PFPs? Does the coalition agree that public authorities should be free to adopt whatever procurement method offer best value for money? Will the Government ensure that overall PFP liabilities are clearly quantified alongside national accounts? Do the coalition Government share the view of the previous Government that inflexible financial obligations under PFPs will not constrain the ability of public authorities to deliver essential services, even as the comprehensive spending review bites?

We will perhaps not hear all the answers today. That said, it is already clear that PFPs have been a bold innovation and that their impact will remain with us for many years, although, as I have indicated, it is too early for a definitive assessment. Meanwhile, it will remain important for Governments, including the current one, to keep looking for best value for money in public procurement and to keep trying out new methods. These might include: new combinations of private sector rigour and financial accountability with the public sector's ability to borrow cheaply; the extension of PFPs beyond construction, maintenance and ancillary services to include some of the core functions in health, education or even defence; and embracing a flexible approach that allows the choice of the procurement path best suited to each project. The guiding principle of procurement should always be to get the best value for the taxpayer, especially while money is tight. I beg to move.

17:46

[Lord MacGregor of Pulham Market]

My Lords, this was a most interesting inquiry and I was very glad to be involved in it. PFI, or PPP, has come a long way since its initial steps, and it was an appropriate moment to judge its successes and failings and to highlight lessons for the future. It was the first parliamentary inquiry since 2000, and the first comprehensive study outside government. We received a massive amount of evidence and I hope that our report will be a valuable source of information on the issues for national and local government, practitioners and academics. I thank our chairman, my noble friend Lord Vallance, for the excellence with which he chaired some complex hearings. I thank also our excellent special adviser, Professor Paul Grout, our committee clerk and the team.

My noble friend Lord Vallance gave a very clear introduction to the background, and covered some of our main recommendations. I agree with almost everything he said and will try not to go over the same ground, except where I have a particular point to make.

The response of the then Government was somewhat cursory and dismissive in places, with very brief responses to some important recommendations. It bore all the marks of being got out in haste before the election. I admit that they did it pretty rapidly. As my noble friend Lord Vallance indicated, we produced our report on 10 March and they responded on 7 April, so it was perhaps understandable that the response was cursory in places. For example, at the outset they said that PFI remains a “small” but crucial part of government investment in UK infrastructure. It is hardly small, given that by 2009 there were approximately 800 PFI/PPP schemes with a capital value of approximately £64 billion. The then Economic Secretary to the Treasury told us that 70 per cent of hospital schemes and 60 per cent of new schools were being delivered through PFI. However, I concede that the response of the then Government accepted a number of our recommendations.

We now have a new Government and I hope that the debate is a timely opportunity to set out the Government's approach to these issues, particularly bearing in mind something that we were very much aware of in our hearings and that we acknowledged in our report. I refer to the fiscally constrained environment in which we now live, the pressures on public expenditure and the impact of the credit crunch on the willingness of the banks to finance PPP/PFI deals, 85 to 90 per cent of the costs of which are usually met by borrowing.

My early involvement with PFI came with the Dartford Crossing in the mid-1980s. I was then Chief Secretary to the Treasury. That was an early example of a private finance project—not a PFI in the current sense—in what would traditionally have been a purely public sector and taxpayer-financed infrastructure scheme. I recall there was some discussion of whether it breached the Ryrie rules that any privately financed solution must be shown to be more cost-effective than a publicly financed alternative. In my view, going ahead with it meant that it was clearly built earlier than it would have been had it taken its place in the priority pecking order in the traditional way, and that was a real benefit. Of course, it was different from subsequent PFIs in that it was financed by tolls not taxation, and it has been very successful.

Subsequently, as Secretary of State for Transport from 1992 to 1994, I was much struck when I first arrived in the department by the average cost overrun on all road schemes of 28 per cent on the original contract. We introduced design and build, which brought the contractor much more into the development, design and construction of the project and helped to bring those cost overruns down. Subsequently, there was design, build and operate and I would very much have liked to have gone further to design, build, finance and operate—finance not through taxation but in schemes that were for motorways or motorway expansion by motorway charging. That was then a step too far for some of my colleagues despite the fact that I produced what I thought was a very good Green Paper, which I still stand by, and I hope that some day it will be done, not least when the infrastructure need on the one hand and the public expenditure constraints on the other make it more desirable.

From the early days, I was a strong supporter of the PFI concept and the report shows that PFI has gone a long way to improving this overrun problem. However, inevitably with a major new innovation one learns lessons as one proceeds and some of the critics of the early PFI projects gave evidence to our committee. Broadly, I think that on the key points that they and others made, lessons have indeed been learnt and implemented and I illustrate this with three examples from our report.

The first is on refinancing. In the early days substantial gains were made by the financial partners by refinancing at lower costs once the building project had been completed and some of the attendant risks had been removed. We drew attention to this in paragraphs 84 and 85 of our report. The National Audit Office particularly criticised the Norfolk and Norwich Hospital project and its refinancing. That was one of the very early ones. Refinancing by PFI partners after the building had been completed resulted in the public sector securing about only 29 per cent of the refinancing gain while increasing the contract’s termination costs. In the report, we welcomed the Government’s action to secure for the public sector a substantial share of refinancing gains. We believe that that has now been recommended and recognised and accepted.

Secondly, there is the question of lack of skills in government departments—inevitably in project management and contract negotiations in the early stages. Again we made a recommendation on this. We recommended that public authorities should do more to maintain and improve commercial skills of staff dealing with private finance projects, with emphasis on long-term contract management as well as contract negotiation. Again, I think the Treasury has recognised and acted on the importance of this point.

Perhaps the third and most important of all the lessons is the failure of the London Underground Metronet PFP, which as we say in our report gave private finance projects in general a bad name. It was of course an exceptional project because of the huge debt guarantees the Government gave—95 per cent of the banks’ loans being guaranteed—which meant that the transfer of risk to the private sector did not happen and the loss to the taxpayer was estimated by the National Audit Office to be between £170 million and £410 million. Unfortunately, the government response does not really deal with our recommendation that PFP should not be used where the state is guaranteeing large amounts and a high proportion of debt as a means to make highly geared PFP happen. The then Government’s response simply noted our views. I hope that the Minister will look at this one again.

Before I turn to what I may describe as the big issue, there is one other detailed recommendation to which I wish to refer. In recommendation 145 we suggested, as Sir John Bourn told us, that the credit crunch, through its limitation on access to funds, thus making them more expensive and available for a shorter period, has tended to reduce competition. We drew attention to one of the problems about the lack of competition related to the high bidding expenses involved in bidding for PFIs. Of course, reducing the competition for private finance projects would increase the cost to taxpayers. We recommended that the Government should examine possible mechanisms for encouraging competition, such as returning an element of bid costs. The then Government in their reply said that the Treasury was reviewing that and that it would publish its findings shortly. I may have missed it, so I ask the Minister whether that has happened and, if so, could he comment on it?

I turn from the detailed recommendations to what I might describe as the big issue. I was an early supporter of PFI, not least for the better project management it involves and the effect it has on maintenance. Quite clearly, one of the other benefits of PFI is that maintenance is contracted for a long period ahead—and all of us who in the past have been involved in public expenditure issues know very well that if the pressures on public finance are very high, maintenance is often the thing that is cut. One of the benefits of PFI is, of course, to be able to do that.

I became somewhat alarmed at the scale and speed with which the Labour Government over the years embraced PFI and appeared to run away with it. It looked like a big wheeze, getting the credit for substantially increasing capital expenditure but without regard to the implications for many years ahead. Also, many witnesses told us that when they approached local authority projects and other projects, the Government implied that there was no game in town other than PFI. It looked like typical off-balance sheet financing, particularly when so little information was available about the level and future consequences of that PFI expenditure. Just as in the private sector, where off-balance sheet financing led to so many consequences for companies and banks, were we building up equal problems in the public sector? The problem was that, in the early stages, we could not get at the figures. Much progress in the accounting for PFI has now been made. In the earlier years, when many of us were in Opposition, we were already expressing concern about increasing public expenditure, and we knew at that stage that this did not even include all the off-balance sheet financing expenditure. At least we know about it now.

Is my noble friend confident that we now have a clear picture of current and future liabilities, and is he satisfied that the response of the previous Government to recommendations 59 and 60 on this matter have been sufficient? Above all, will he look again at our recommendation in paragraph 24? In that recommendation we draw attention to the problem of the build-up of contractual commitments over the years. We advocated that the Government should monitor and control, year by year, the impact of PFI commitments on the budgets of departments and public authorities with a view to ensuring that delivery of essential public services in future years is not unduly constrained or jeopardised by such commitments. As we move into a period of public expenditure constraint, which looks as though it will be here for some years ahead, that becomes more important. The then Government tended to respond by saying that everything was very satisfactory, that there has been full publication of all the details and, after all, that these annual payments under PFI unit charges make up a very small proportion. I do not think that is fully satisfactory. We need to know, and I hope that this Government will look again at our recommendation in paragraph 24. We need to be sure that the crowding-out effect of these future liabilities will not have a major impact on future public expenditure projects. The government response was that if a project had been financed in the traditional way, then of course there would be maintenance requirements in future years. These maintenance requirements were sometimes cut and they will not now be.

Finally, I have one last question on our recommendation on a national infrastructure bank. We recommended that the pros and cons should be kept under review and the previous Government agreed with our recommendation. Can I ask my noble friend to what extent the green investment bank, now proposed by the Government, will meet our recommendation?

In conclusion, there is no doubt that the PFI/PPP project and the whole concept has been a welcome and successful development for all the reasons our report outlines. It has been for many up to now a somewhat esoteric area, perhaps accountancy-led and with, as my noble friend Lord Vallance said, pretty turgid terminology, but it is critical. It needs greater public debate and I am glad that our report has contributed to that. I look forward to my noble friend’s speech, not only responding to some of the questions I have raised, but also giving us some idea of how our new Government see the scope and scale of PFI/PPP in future years.

17:59

[Lord Lipsey]

My Lords, I was not on the Economic Affairs Committee for the whole of the period of this inquiry, but I was there long enough to appreciate greatly the qualities which the then chairman, the noble Lord, Lord Vallance, brought to its proceedings and which he again demonstrated in his admirably concise speech this afternoon. Our report is clear and I do not want to attempt another summary. Rather, I want to draw the attention of the House briefly to two things that it does not conclude—the two dogs, as it were, that did not bark in the night.

The first concerns the view put to us by a minority of witnesses that PFI and PFPs are taxpayer-unfriendly rip-offs. This was put to us—not, of course, quite in those terms—by, for example, the trade union UNISON and by Professor Allyson Pollock of Edinburgh University who writes a column to this effect in the Guardian every month or two which I always look forward to. As the chairman of the committee said, it is too early to be sure on a lot of these matters, but the gap between those who advance these arguments and the majority of our witnesses is a Grand Canyon. It would be to go too far to say that we refuted the arguments of the opponents and it is fair to note that many of the witnesses who gave evidence as to what a wonderful thing PFP was were at the same time lining their pockets from the proceeds of it. However, the evidence we received from the NAO, which I think can be taken as objective in this matter, seems to get it about right. The NAO said:

“Having examined many PPPs, we have concluded that private finance can deliver benefits, but is not suitable at any price or in every circumstance. It is one of many routes of delivery, which, when used for the right reasons and managed effectively, can work well. When it is used for the wrong reasons or is managed badly, it does not deliver projects well”.

That seems good judgment and it contains the view as to why the critics, in my view, are getting it wrong. What they tend to do is take the odd project that has gone wrong and present that as if it were typical. As every speaker has mentioned so far, the project that most obviously went wrong was the ludicrous London Underground project, which was far too complex to be done through this kind of contractual obligation. I do not expect to say this very often in my life, but Ken Livingstone was right and Gordon Brown was wrong. We need to balance those failures against the many successes and the general feeling that our public infrastructure is a great deal better at less expense and to greater benefit to the public as a result of these schemes.

The second dog that did not bark—the noble Lord, Lord MacGregor, just referred to it—is the case for a national infrastructure bank, often referred to as a national investment bank. Fortunately, they have the same initials so it does not matter—NIB. I noted that the noble Lord, Lord Myners, called for such an institution when he spoke in the debate on the comprehensive spending review on Monday. On this matter, the committee sat firmly on the fence. We resoundingly concluded that the pros and cons should be kept under review and, the nature of that recommendation being what it was, the Government cheerfully agreed with us. I do not think, however, that the recommendation quite captured the general tone of the group’s discussion. Some of us, at any rate, find it hard to see what it is, precisely, that such a bank would do. Is it going to lend at rates keener than private sector banks? If so, that distorts the market. If the rates are the same, why bother? Despite the failings of the banking sector over the past three years, not all of us are convinced that more publicly owned banking is the long-term answer to Britain’s economic problems. After all, the crash itself, to a great extent, owed its origins to the misdoings of two American public institutions—Fannie Mae and Freddie Mac.

The committee believes that this report represents a reasonable and balanced contribution to the ongoing debate about an evolution of a public finance initiative and so we commend it to the House.

18:05

[Lord Newby]

My Lords, I commend the committee on this extremely interesting and timely report and my noble colleague Lord Vallance for his clear introduction to today’s debate. I was amazed, in reading the report, to see that, despite the amount of political discussion there has been on the subject, there has been no comprehensive review of PFPs by any parliamentary body for a decade. This report certainly helps fill that gap. I was also surprised, as the NAO pointed out, that there is no apparent robust and systematic evaluation of the use of private finance at either a project or programme level across government. So it is no wonder that it has proved so difficult to form a definitive view of the effectiveness of PFPs and no wonder that so much of the political debate on the subject has been so ill informed.

However, the report points out that PFPs have a better record of being produced on time and to budget than traditionally procured projects. For the period ahead, as we look to radically update our infrastructure, private finance is clearly going to play an even greater role. One has to accept at the start, as the noble Lord, Lord Lipsey, pointed out, quoting the NAO, that this model does not work for everything. In some areas where it has been tried—London Underground being one example—it has failed pretty spectacularly. In other areas, such as defence and IT projects, the basic underpinning concept does not work very well because you cannot, at the end of the day, transfer the risk so the Government end up bearing the risk. So there are clear limits to where this approach is the most appropriate.

However, in many areas it clearly has worked relatively effectively and, given that the estimate of the infrastructure expenditure we need over the next decade in the UK is £400 billion, we are clearly going to need to look to sources of funding beyond general taxation to meet the majority of that. I wanted this afternoon to concentrate on looking at the funding of future infrastructure projects in the UK. In some respects the UK should be relatively well placed to attract the funds. In a report produced and published yesterday by Berwin Leighton Paisner, 85 per cent of the experts on infrastructure it surveyed believed that the climate for global investment in infrastructure would improve over the years ahead, and that the UK was considered the most attractive location for delivering infrastructure projects anywhere in the world, but that the availability of funds would be a major constraint. Fifty-nine per cent of the respondents to that survey saw PFP as being important or very important in stimulating demand for infrastructure investment.

In the report, the committee looks at potential sources of funding for infrastructure investments and specifically refers to pension funds as an area of potential. It is interesting that at the moment UK pension funds lag behind in the proportion of their funds that go into infrastructure investment. In the UK, only 0.5 per cent of pension fund investment goes into infrastructure compared with 2 per cent in the Netherlands, between 4 and 5 per cent in Australia and as much as 10 per cent in Canada, so there is clearly considerable scope if the structures are right for greater pension fund involvement in this sector.

There are clearly significant amounts of overseas funding looking for a home in UK infrastructure. I understand that the Mayor of London’s office is regularly approached by potential investors, including sovereign wealth funds, that are looking to invest in infrastructure in London because they see it potentially as an extremely safe, long-term bet. Does the Minister believe that at present there is an effective way of capturing approaches that are coming in to the UK, to the mayor’s office, to central Government or elsewhere, from sovereign wealth funds and others that are looking to invest in infrastructure? At the moment, I am not sure who I would tell any such person to approach in government, and I do not know how successful we have been in converting such approaches into the hard cash that we need.

A further area that is cut out for infrastructure expenditure is the sukuk model of Islamic finance. An asset-based approach to finance could be developed very significantly here. Given that that sector is increasing by 20 per cent a year globally and that there are already very strong links and a very strong Islamic finance sector in the UK, that is a specific area that we could look at further.

The noble Lord, Lord Lipsey, referred to the national infrastructure bank. The report refers to the European Investment Bank, which is committing €1 billion a year to the UK. There is a wonderful quote in the report from Mr Simon Brooks who said that it would be ridiculous to introduce an investment bank in the UK. He said,

“nobody in Europe needs to introduce a NIB because they have got us!”.

We may have the European Investment Bank, but if the sum total of its potential in terms of the UK is €1 billion a year, it is clearly not going to fill the gap. I am a lot less sceptical than the noble Lord, Lord Lipsey, about the potential of the green investment bank because, as the Wigley report pointed out, there are a number of areas of market failure in the area of infrastructure investment which can be met only by new mechanisms of financing, and the green investment bank is potentially one of them.

The big question about a lot of this kind of expenditure is that it will take place only with some sort of government guarantee: underwriting, a cap of risk or some sharing of risk. The obvious example is that if we are going to build the high-speed rail link with private finance, investors are almost certainly going to need to be guaranteed a baseline level of revenue if they are to invest the billions of pounds that will be required. I welcome the Minister’s view on this. The role of government is hugely significant here, not just because many projects will not go ahead at all unless there is an element of government underwriting, but because the cost of financing the projects will fall to the extent that government accepts some of the risk. I was interested and intrigued by paragraph 3.16 of the National Infrastructure Plan, which came out last week:

“Reducing the cost of capital by reducing the level of risk transfer to the private sector has the potential to achieve considerable cost savings. A one per cent reduction in the cost of capital on a total infrastructure investment programme of £500 billion is worth £5 billion per annum”.

That is significant money, and the attitude of government towards accepting risk will therefore be crucial. Unfortunately, having made that immensely interesting comment, the National Infrastructure Plan gives no indication of whether the Government are therefore going to take their own advice, but risk is central to infrastructure expenditure more generally and to PFPs in particular.

There is great potential in infrastructure expenditure and investment in future using the model that is described in the report if the Government and the private sector can build on experience to date and look to more flexible and innovative ways of developing it in future.

18:18

[Lord Tunnicliffe]

My Lords, it is the lot of a Whip, whether a government Whip or an opposition Whip, that by the time a topic has cascaded down to one’s level, one usually finds oneself talking about a subject that one had not heard about 48 hours before. It is therefore a refreshing change, although it is perhaps going to be a painful one, to find myself talking about a subject in which I have had very considerable personal involvement. I shall declare my interests in PFI; I was managing director of London Underground and subsequently its chairman between 1988 and 2000, a period in which it was a leading player in PFIs. London Underground bought a fleet of Northern Line trains on PFI, handed over management of its power and communications systems, both telephone and radio, to the private sector, had a very successful ticketing programme, to which I shall return, and had the infamous London Underground PPP, of which I will admit to being the architect. I say that because it has been explained to me that success has many parents, whereas failure is an orphan, so there will be little contention of my claim to be the architect of the London Underground PPP.

I shall touch on the contributions of other Peers before I start. I thank the members of the committee for the work they have done on this report, and the noble Lord, Lord Vallance, for his presentation of it. I am very respectful of the report and greatly welcome its contribution. I thank the committee for finding the new term—PFP—which I shall try to use in future in this confusing terminology. I shall touch on a number of the points made by the noble Lord, Lord MacGregor, but we have a joint confession to make that during that period he was at one point my boss, so there is some coresponsibility in this Chamber. I thank the noble Lord, Lord Lipsey, for his quote from the NAO. It is probably a good summary of where we are on what we now call PFP. It is like the curate’s egg, but there is a lot of good in this egg as well as some problems. On banking issues, I would be trespassing on areas where I have no in-depth knowledge. The noble Lord, Lord Newby, brought up risk. I shall spend a little time on it. It is ill understood in the realm where PFPs happen.

The Opposition’s position on the report is in many ways the Government’s, in so much as it is contained in HL 114. I am sorry that the noble Lord, Lord MacGregor, found the Government’s response dismissive. I will concede that on some issues there should have been more reflection and more depth, but one is between a rock and a hard place in trying to get the response out quickly—we are grateful for the commendation—and responding in depth. Tonight is only the beginning of what will be a continuing debate on how the new Government will respond to the issues brought out in the report.

The first area that I would like to touch on, which is touched on gently in the report, is what I will call government pressure on public sector managers to use the private road for procurement. In the 1990s—I will limit myself to that time because I have no direct personal experience—the pressure at official level was not gentle, it was brutal. You were flatly faced with the fact that if you wanted your project, it had to be done the private way. I tried all I could to make sure that our submissions were honest and fair and balanced, but when you think of that pervasive pressure right the way through the system, it is not surprising that questions are asked as to whether the right public sector comparator was used, et cetera.

Treasury pressure is touched on in the report, but possibly the strongest paragraph is paragraph 61 in which the Government are asked to commit to not bringing institutional pressure on parts of the public sector to use private procurement. So, the first assurance I seek from the Minister is that best value for money will be the principal consideration when deciding whether to use a PFP procurement road. In responding to that question, I would like him to reflect upon the need for there to be practical public alternatives if that evaluation is to be made in an even-handed way.

All Governments fail to see—they say the words but they do not enact them—that investment in infrastructure is investment in what makes our country work. That is quite different from present consumption. The actuality of finding the money for investments from public sources is extremely difficult for a public sector manager; he is driven in this private direction. It was seen as almost the only way for investment to be brought into the business one was responsible for.

It is extremely easy to talk about risk at a theoretical level, but in the real world it is not like that. When you have big projects and you are in the public sector, you do not say “you take the risk” and that is the end of it. In practice, with a big project you are in what I describe as a deadly embrace. Yes, the survival of your supplier depends on your behaviour towards them, how you push risk and how you prosecute the route, but your ability to trade tomorrow depends on that supplier. The worst example in my professional career was not in private sector procurement; it was in the acquisition of 85 trains for the Central Line. That company threatened to go broke about a year and a half into the project. Our problems were so extreme and our options so few that we seriously considered buying the factory off the receiver and going into train manufacture. In the end we did a deal with one of the co-parents and paid the money for a parent company guarantee to see the project through.

It is a fact of life that in these big projects risk migrates to the party of substance, and that is the public sector. The real risk transfer is extremely modest. The value of private sector initiatives is the way in which small behaviours are incentivised to the public good. I will touch more on that later. For this reason I question the value of the off-balance sheet charades that we have played in this area. The report very much gets to the nub of this. I confess that my Government did not perhaps answer these questions in the required depth. This is brought out particularly in paragraphs 59 and 60. I would like the Minister to answer the challenges in those paragraphs with much greater clarity and much greater depth. Public/private finance capital is, frankly, part of the real balance sheet, and at least it must be exposed in a clear way so that we can see what has happened.

The rest of the report shows guarded support for PFI. I share that view. We have had good experiences. One of the worst things about having Her Majesty’s Government as your banker is that they are stunningly unreliable. They will promise you money one year—sometimes just before an election—and suddenly it is withdrawn the next year. The ability through the PPP to assure a partnership and funding is very much demonstrated by today’s Oyster card. That development is possible because of a long- term relationship. That programme started 25 years ago. It was translated into the private sector in the late 1990s and flourishes because the private sector has money to develop it and because the partnership works relatively well.

Whole-life costings work. When we acquired the Northern Line trains we discovered, largely because it took them a year and a half extra to build the damn things, that for the first time in all the time we bought electric trains—and we have been buying them for 100 years—the manufacturer suddenly discovered that he could make them more reliable and easier to maintain, which was not exactly surprising because the manufacturer was going to make all the money out of the deal by repairing them and maintaining them. It was a complete re-design. The concentration of whole-life costing was absolutely invaluable.

Finally, I come to my experience, in a sense. The Underground PPP was a ludicrous failure and so on and forth, but its failure was more complex than the report suggests. I put that down to two things. First, the special purpose vehicle—Metronet in particular—was a very unsatisfactory business structure. We really should have seen that. We were trading with an enterprise that was owned by its suppliers, and its suppliers were making their profits between them and the enterprise, not through a share of the profits of the enterprise. Whenever you bring a consortium together, you must make sure that the owners make their profits in the consortium, not in the supply arrangements. Secondly, the Treasury guarantees were probably reasonable in the circumstances, but the Treasury did not have the right tools of transparency so that it could monitor the risk of those guarantees being called in. The conclusion I draw from this is not that we should not do big complex private deals—they may, in fact, be the right vehicle—but that public sector teams of extremely high quality are necessary to do such deals.

I would like an assurance—the noble Lord, Lord MacGregor, touched on this—that if the Government contemplate such a deal in the future, they will first make sure that they have a team of the weight, the intellectual horsepower, the experience and the breadth necessary not just to look at the lines of the deal, as lawyers do, but to see behind the deal and address how people are going to behave with the various incentives. I ask the Government not necessarily to be deterred by the LU experience but to learn from it. I hope that the Minister will take account of that.

The one area in which, from my experience, I thought the report was weak—I have a slight difficulty with this, because I have nothing to add to it—is the problem of the preferred bidder. The complexity of PFP deals means that they take a long time to put together and are quite costly. The private sector has this device of saying, “You have to come to a preferred bidder status with someone, otherwise we cannot afford to continue”.

It is a real dilemma. The case for having a preferred bidder makes sense, but the problem is that the reality of having an alternative goes out the window. I do not know how, in future, the public sector will be able to establish value during the preferred bidder stage, but be able to find an escape route. But the report lets the process off lightly by not going more into the trap of the preferred bidder. I hope that the Government will think more on that whole issue.

In conclusion, I welcome the report, which gives valuable input to the debate. I would ask the Minister to respond to the report and to the emphasis that I have made. I encourage him to use the report—I think that the noble Lord, Lord MacGregor, touched on this—as source material in the training of public sector teams involved in this work. This very good document, which covers the past, can help people to learn the skills necessary to ensure that the public sector will get best value out of these schemes.

18:30

[Lord Sassoon]

My Lords, I thank the then members of the Economic Affairs Committee for preparing such a thorough report on the use of private finance to deliver public projects. I extend my gratitude to all those noble Lords, whose contributions to today’s debate I have found invaluable. I spend a lot of my time here answering for things that are not in my direct area of policy responsibility, but I am pleased that on this occasion there were not 50 Members of this House talking about such areas, many of which I know little about, but half a dozen valuable contributions on something on which I know a little. I was a director of Partnerships UK between 1992 and 1996. It is also a pleasure and a daunting challenge to follow one of the world’s great experts on PFI—the noble Lord, Lord Tunnicliffe—and to have this debate kicked off by my noble friend Lord Vallance of Tummel, with whom I worked in a small capacity a number of years back when he was taking one of our biggest pieces of national infrastructure, British Telecom, into the private sector.

At the outset, I should stress that it is clear that public/private partnerships will continue to play an important role in underpinning our country’s future infrastructure. The noble Lord, Lord Lipsey, reminded us how much has been done. A number of times we have been reminded that this effort has gone through several Administrations, which have now been led by the three main parties in this country. We share a commitment to learning the lessons and making such projects better but also to continuing with them, which is what the committee’s report suggests. The report highlights where private finance has brought valuable disciplines to infrastructure planning and implementation.

Many of the questions and comments today have reminded me that there are quite a number of challenges to improve the model going forward. I will do my best to answer a number of those questions now, but I will write on points that I fail to pick up or where, on reflection, I could have given a fuller answer.

I turn first to some of the balance sheet questions—I ask noble Lords to forgive me if I do not refer to them by name each time on points that they have raised—which were brought up by my noble friend Lord MacGregor of Pulham Market and the noble Lord, Lord Tunnicliffe. We are constrained here because we are bound by European accounting requirements that set the framework for how each project is recorded in the national accounts. However, I recognise that these requirements can make it difficult to get a clear picture of the public sector’s commitments, which is something that we must remedy. It is the Government’s policy to ensure that future liabilities are made obvious to the public and that complex financial instruments, such as PFI, should not hide the true cost of investments that the Government have made. Such practices are completely out of step with our strong transparency agenda but also risk the endorsement of projects that do not represent good value to the taxpayer.

For that reason, we have already taken action to bring greater transparency to PPPs. It has been a long time coming, but I can confidently say that next year we will publish, for the first time, whole of government accounts, which will be prepared according to international accounting standards. This will ensure that the vast majority of PFI transactions will appear on balance sheet. In future, we will also publish details of all new government contracts valued at more than £25,000, including PPP agreements. This will enable members of the public to assess the ongoing costs of long-term commitments, and will complement the existing reporting of PFI commitments disclosed on the Treasury’s website.

A second area of concern to us and to speakers in this debate has been funding for local government and government departments. There were questions around ring-fencing, bias and so on. Ring-fencing, in particular, meant that government departments and local authorities could use PFI as a means to increase their budgets, with potential for diverting funds away from more beneficial areas—those which offered greater value for money. In answer to the question asked by the noble Lord, Lord Tunnicliffe, I stress that, in this regard as well as in other dimensions, the Government absolutely want to do whatever they can to remove any bias over alternative ways of public procurement, including over public versus private financing. We have already taken action to address the particular problem of ring-fencing by removing the existing ring-fence and transferring financial responsibility for the grants back to the relevant government department. This will place all procurement options on a level playing field and ensure that merit rather than increased budgets determine which projects should go ahead.

That leads me on to the impact of PFPs on departments. In answer to my noble friend Lord MacGregor’s concern, we will continue to monitor all PFI contracts and information on the flow of payments under those contracts. Of course it is the case that, following the spending review, the budgets for departments will be constrained. Our initial analysis, which we did in conjunction with the spending review, suggests that this should not cause any department a significant problem. However, we will continue to monitor the level of commitments that are being made.

Some speakers have stressed the need for a national infrastructure bank, while others have questioned it and I think that my noble friend Lord Newby offered some mixed messages. My noble friend reminded us of the strong private sector appetite for investment in infrastructure and drew particular attention to sovereign wealth funds. Certainly, my discussions with sovereign wealth funds—both here and on a recent trip to the Gulf—and my discussions with long-term investors, insurance companies and others suggest that there is a strong, latent demand. I can assure my noble friend that we are taking new steps across government to make sure that we co-ordinate our contacts with sovereign wealth funds and with a range of the largest actual or prospective inward investors into the UK. His point is well taken. He challenged me to say whether this has translated into action yet. Of course, it is early days, but we are certainly starting with the co-ordination so that we can understand what investors want and channel their appetite—in so far as it is in the Government’s gift to do that—appropriately. When I was in the Gulf, I had a couple of discussions with Islamic finance specialist houses, particularly in Kuwait, so I am well aware of their possible involvement in this area.

Against that background, we have to be careful—the noble Lord, Lord Lipsey, drew attention to this—that Government-backed loans, if and when they are necessary, which is still open to question, do not increase the incentives for the private sector to deliver value for money by transferring risk away from the private provider to the public sector. We must ensure that there is no crowding out of private investors by the Government reducing competition and stepping in where there is not a market failure. For that reason, it is our policy for the Government to make loans only where they do not risk undermining the wider market, or where such loan or construction of a particular financial instrument helps to address a specific market failure. In that spirit, we will look to target the green investment bank—which will initially have £1 billion of government capital and the possibility of proceeds from government asset sales but will not have a mega balance sheet—on helping to relieve particularly challenging areas of risk on projects, particularly at the front end or where new technology is involved. We will come forward with the design of the green investment bank by spring 2011.

I turn briefly to the question of project failures and guarantees, which was raised several times. It is important to note that PPP, including PFI, critically allows us to transfer substantially more risks to our partners than conventional procurement. As has been said, we should not shy away from taking on challenging and complex projects. However, I absolutely take the point made by the noble Lord, Lord Tunnicliffe, that we need appropriate expertise in government when we come to such projects. At the moment, there is nothing on the scale and complexity of Metronet in the pipeline, but when we contemplate such projects, yes, we absolutely need the expertise. That is why it was absolutely right of the previous Government to centralise the expertise in Infrastructure UK as an infrastructure financing unit within the Treasury, especially given the particular circumstances of the past couple of years. My right honourable friend the Chancellor confirmed at the time of the Budget that Infrastructure UK remains central to how we take our efforts forward. That is the best answer that I can give to the question about expertise, which we recognise.

My noble friend Lord Newby picked up on a point in the national infrastructure plan about risk transfer and the possibility of reducing costs. I point him to one area discussed in the report, which is whether we can expand the use of the regulated asset-based model as a way of attributing risk in a different way and bringing down the cost of capital. That is very much work in hand.

On the question of preferred bidders, PPPs are now sufficiently complex contracts that they have to be procured under the so-called competitive dialogue procedure. This prohibits any discussion of the scope or cost of the contract with the preferred bidder and was designed to stop the so-called deal creep that has been seen in the past. The Treasury will publish a review of the competitive dialogue procedure—that addresses part of the point made by the noble Lord—later this month.

The committee's report also highlighted the value that private sector expertise and due diligence bring to PPP. In that context, one specific point that was drawn to our attention was bid costs. That issue has arisen again, particularly in the re-review of projects that we conducted following the election and ahead of the spending review. Although government policy remains that bid costs should not be paid unless in exceptional circumstances, the Treasury review of competitive dialogue—which, as I said, is scheduled for publication in November—will set out details of our review of policy in that area.

To wrap up, I emphasise that public/private partnerships, including PFI, will continue to make a valuable and important contribution to our future infrastructure needs. There are more than 670 signed PFI contracts, and the spending review confirmed further new projects, including three maintenance projects and the Nottingham tram extension. However, I think that we all agree that PPP should be used only where it offers real value for money. In pursuit of that objective, we have taken steps, as I have described, to improve how we assess those partnerships. We have removed the financial incentives that unfairly encouraged the use of PFI over other delivery structures. I mentioned the steps that we have taken to drive forward transparency. We have set out the broader challenges facing our infrastructure in the first national infrastructure plan, to which my noble friend Lord Newby drew attention.

In conclusion, the Government absolutely acknowledge the points raised in the Economic Affairs Committee report about both the benefits that private finance projects bring and the drawbacks of the current system. We will continue to look at options to improve the way PPPs perform, building on the work that we are already taking forward. In the current climate, there is a particular need to get the best possible deal for the taxpayer, and we are completely committed to that. I welcome the conclusion of the committee's report. I thank my noble friend Lord Vallance of Tummel and the other members of the committee for it. I absolutely take on board the valuable suggestion of the noble Lord, Lord Tunnicliffe, that it should be used as source material for training people in government.

18:48

[Lord Vallance of Tummel]

My Lords, PFPs clearly present a complex set of financing and procurement issues, and it is relatively easy for them to become politicised—although not, of course, in your Lordships' House. The very adjectives “public” and “private” can produce knee-jerk reactions—a point to which the noble Lord, Lord Lipsey, alluded. As someone who has spent half of his career in the public sector and half in the private, I know that neither has all the answers. What matters in public procurement is to keep learning the lessons of the past, to keep experimenting with new ideas and, critically, to build up real procurement expertise in the public sector—a point made strongly by the noble Lord, Lord Tunnicliffe, and acknowledged by the Minister.

I am very grateful to the Minister for his thoughtful and positive response to our committee's report, and trust that he will keep it high on his agenda.

Motion agreed.

European Social Fund (EUC Report)

Wednesday 3rd November 2010 Lords Chamber

Motion to Take Note

18:50

Moved By

[Baroness Howarth of Breckland]

To move that this House takes note of the Report of the European Union Committee on Making it work: the European Social Fund (9th Report, Session 2009–10, HL Paper 92).

[Baroness Howarth of Breckland]

My Lords, I present this report as chair of the Social Policies and Consumer Protection Sub-Committee at the time when the inquiry was conducted and the evidence heard. I am grateful to my noble friend Lady Young of Hornsey, the present chair, for graciously allowing me to make this introductory speech. But then, she has inherited one of the best jobs in the House of Lords. During my time with Sub-Committee G, the staff, Kate Meanwell and Alistair Dillon, were always engaged and informative. I thank them both for that service, along with Talitha Rowland, the present Clerk to the committee. We were aided in the inquiry by our specialist adviser, John Bell, who helped to guide us through a mountain of information and complexity. I am grateful to them all.

The European Social Fund is one of the EU’s main structural funds and aims to improve employment opportunities for workers in the Union. Key to this role is the concept of developing individuals’ employability, above all through targeting the hardest to reach and the low skilled. The fund is worth €4.5 billion to the UK in the current programme, which runs from 2007 to 2013. This inquiry was conducted by the Social Policies and Consumer Protection Sub-Committee against the backdrop of the financial crisis and rising levels of unemployment, and the report was published in March. The committee undertook the inquiry with three aims: to assess the effectiveness of the fund both in terms of meeting its objectives and in responding to the financial crisis; to review its policy priorities in the context of the economic recovery and the imminent introduction of the Europe 2020 strategy; and to make recommendations on the long-term role and functioning of the fund.

The Committee heard evidence from a wide range of stakeholders, in addition to visiting ESF-funded projects. At the end of all of that, we were left in little doubt as to the worth of the ESF, which has particular benefits in terms of introducing new ideas, social inclusion and economic development. However, we concluded that there are a number of ways in which the ESF could be made more effective. Chief among these were that greater effort needs to be made to target the hardest to reach and that the achievement of soft outcomes, which help move participants towards work if not into full employment, need to be given greater value. We also drew attention to the need for flexibility, both mid-programme and regionally, to be assured. On the longer term functioning and role of the ESF, the committee considered that there should be closer alignment between the ESF and the European Regional Development Fund on the one hand and national job creation programmes on the other. This is vital to ensure that there are sufficient jobs for those helped by the ESF to take up. The committee also felt strongly that the ESF should continue to be available throughout the EU and should not be withdrawn from wealthier member states, because some of them may not remain wealthy. That was our main point of disagreement with the previous Government because there are pockets of deprivation in all countries.

We were pleased to note that the coalition Government, in their response to the report, agreed with the committee that the ESF should be focused on supporting the hardest to reach. These are the individuals who are furthest from the labour market and possess the fewest characteristics needed for participation in that market. They are also likely to be difficult to engage. There was broad agreement among our witnesses that the ESF was well placed to target these groups. We consider this to be particularly valuable work and have recommended that priority be given to safeguarding this aspect of the ESF’s role.

The committee had the opportunity to observe at first hand the hardest to help support provision when it visited a charity, Tomorrow’s People Trust, which works in the East End of London helping to tackle the cycle of unemployment. Its target groups include the over-fifties, those with disabilities or health problems, ex-offenders and the long-term unemployed. We welcome the Government’s agreement that work with the most disadvantaged and the least skilled should be the focus of the ESF, and we look forward to learning how this will be ensured in the next tendering rounds. The committee felt that the third sector is often particularly well placed to target these groups and we therefore also welcome the commitment in the Government’s response to encourage smaller voluntary organisations to participate in the programme and deliver contracts. Again, I would welcome further details as to how this will work in practice. Many small voluntary organisations felt that they had to pull out because they could not engage in the present arrangements.

The committee recognised that in many cases helping the hardest to reach will not necessarily lead to a tangible outcome such as employment during the life of the programme. Instead, there is a multitude of what I mentioned before—soft outcomes, which, although harder to measure quantitatively, are no less significant. These can include developing participants’ confidence, improving their ability to work with others—anger management was one example—and improving their timekeeping. My noble friend Lady Young talked of the young man who was just managing to get up in the mornings. These benefits were highlighted in a visit to Step Up, an ESF-funded project in Elephant and Castle which is targeted at 14 to 18 year-olds. These soft outcomes are important interim steps on an individual’s difficult journey towards employability. The committee was concerned that this should be sufficiently recognised in measuring effectiveness and that payment should not be withheld from providers unless they are successful in securing jobs for participants. This runs the danger of encouraging organisations to cherry pick participants who are closer to the labour market and easier to deal with. The committee felt that this danger could be overcome by improved measuring of soft outcomes and by placing a requirement on providers to collect such data in addition to hard outcomes.

The committee was particularly impressed with the potential of longitudinal cohort surveys to measure soft outcomes and, although the Government do not propose to make these compulsory, we were pleased to note in the Commission’s response that it intends to explore the potential of these surveys further. The Government also stated in their response to the report that soft outcomes are included in contracts “where appropriate”, with providers required to record them. Can the Minister tell us when such inclusion might be deemed appropriate and how such outcomes will be valued for the purpose of paying providers? Payment by results is a strong phrase these days, but we need to know what the results look like.

We also emphasised the need for the ESF to be sufficiently flexible in order to be able to respond to external factors such as the recent recession and to the different economic profiles of regions. The committee was pleased to note that the Government broadly accept its points, but I reiterate its recommendation that the reason for delay in the disbursement of extra funds resulting from the revaluation of the euro should be fully reviewed in order that lessons can be learnt.

I turn now to the future of the ESF. We were pleased to note that the committee, the Government and the Commission are all agreed that the ESF and other structural funds have a crucial role to play in making the Europe 2020 strategy a reality. Sustainable development is an important aspect of this, and the report places emphasis on green jobs and skills being recognised and given sufficient support. The committee’s report also recommends that job creation programmes, whether EU or member state funded, should be more closely aligned. In this context, we noted with interest the revised welfare to work programme which formed part of the coalition agreement. We would be interested to hear from the Government regarding the link between this programme and the ESF. We are particularly concerned that any uncertainty over the future work programme should not jeopardise ESF provision.

The report also recommended that the ESF and the European Regional Development Fund, the ERDF, should be strategically aligned. The Commission’s recent paper reviewing options for the EU’s post-2013 budget suggested the adoption of a common strategic framework encompassing the actions covered currently by the Cohesion Fund, the ERDF, the ESF, the European Fisheries Fund and the Rural Development Fund. Such a framework would, the Commission suggests, provide greater coordination and could,

“identify linkages and coordination mechanisms with other EU instruments such as programmes for research, innovation, lifelong learning, and networks”.

We would be interested to learn the Government’s position on this.

The committee remains convinced that the ESF has worth for all member states. Unemployment does not respect national boundaries and, as such, we believe that the ESF should continue across the EU wherever there is need. This was a point where the majority of our witnesses were in agreement, including the Welsh Assembly Government. Many of our witnesses also made the point that EU-funded projects provided a degree of security, with funding over a seven-year period, which was not available at member state level due to the unpredictability of politics and national priorities. We welcome the Government’s policy to maintain ESF provision in the UK over the next financial perspective but we are extremely concerned about their policy of advocating withdrawal of the fund from wealthier member states over time.

Our concerns here are twofold. First, we are in agreement with the Commission that the ESF is a valuable and concrete expression of solidarity among Europe’s citizens. Indeed, the committee recommended that awareness and visibility of the ESF should be improved. Secondly, it is not clear what would replace the ESF if funding were reduced or withdrawn. This is particularly vital given that ESF provision is, by definition, additional to existing national programmes. The previous Government were unable to give the committee any indication of this when questioned during the course of the inquiry and it is not covered in the coalition Government’s response to the report. I hope the Minister will be able to respond to that point today as well as providing clarity on the Government’s present position with regard to the future of the ERDF and the ESF in the UK budget review.

I look forward to hearing from other noble Lords and from the Minister how the ESF can be strengthened and improved and how the vital work it accomplishes with those who would otherwise be outside normal society can be assured for the future.

19:03

[Lord Liddle]

My Lords, I welcome this report and I thank the noble Baroness, Lady Howarth of Breckland, for her excellent speech in introducing it to the House. As a new boy, I have seen this afternoon two excellent examples of the work of the European Union Committee, which is, unfortunately, one of the few examples in the United Kingdom of an attempt to contribute to intelligent debate on the future of the European Union. It is a pleasure to participate in this debate.

I would like to make three points: first, to support the plea of the noble Baroness, Lady Howarth, for the Social Fund to be retained; secondly, to argue that its objectives should be aligned more closely with the Europe 2020 strategy; and, thirdly, to make the case that its delivery in the United Kingdom should be more flexible. I would like to tackle those points in reverse order.

First, on delivery, I read in the report the representations of the third sector, which feels that it is difficult to access Social Fund money for projects. I also read the views of the Local Government Association, which points out that current ESF management and delivery is far from perfect. The fact that ESF money is managed by a range of different government agencies means that local authorities find it hard to help prioritise the fund towards local need. The LGA goes on to give its view that councils, groups of councils or local enterprise partnerships should set the ESF strategic direction and ensure that it delivers outcomes that are relevant to that need. I would like to support that.

However, the local economic partnerships were but a gleam in the eye of the right honourable Eric Pickles when this report was prepared so it could not have considered that point. It seems to me that there is a strong case for the use of the Social Fund to be devolved to local level so that we get away from this silo delivery mechanism through the Department for Work and Pensions. That would fit in with the efforts of the Government to take forward the principle of Total Place so that all the various bodies that have something to do with helping the disadvantaged to gain skills—Jobcentre Plus, the Skills Funding Agency, the FE colleges, the police, probation, social work and all those sorts of groups—can combine their efforts in programmes on the ground. I ask the Minister what his view is of delivery and whether he sees a radical change away from the kind of centralisation that is pursued under the present arrangements.

Secondly, on objectives, the Social Fund is perhaps a case of not too little subsidiarity—which we debated earlier this afternoon—but too much, in the sense that member states throughout the Union basically use the money available under the Social Fund to supplement what are essentially national programmes. There is not real EU value added additionality. A big problem for the EU is that our national leaders put a lot of effort into devising things such as the Lisbon strategy, which is now the Europe 2020 strategy, which sets a comprehensive set of objectives for the European Union, but they do not ensure that there is a link between those EU objectives and processes—the guidelines, the monitoring mechanisms, the reports on member state actions that are produced in Brussels, the open method of co-ordination—and the way that the EU budget is spent. If there is to be more purchase over what happens in member states, there has to be that link between the EU budget and EU-agreed policies. When we look at the Europe 2020 strategy, we see that there are several items—youth on the move, new skills for new jobs and the platform against poverty—for which the Social Fund could be used.

I would like to draw particular attention to the platform against poverty. The Prime Minister signed up to this at the June European Council. For the first time, EU poverty targets will involve help to get the hardest-to-reach people into work as one of the methods of addressing poverty. If we sign up at EU level to these targets, surely we can also sign up for the proposition that the Social Fund should be retained and should be used in order to take forward those targets. What is the Government’s policy on that?

That brings me to the future of the Social Fund. I am a strong supporter of the existence of the structural funds and I do not agree with the view that HM Treasury had under the previous Government that we ought to try to get rid of them. I remember getting quite upset about that when the proposition was initially put forward. Just as I was about to send off some intemperate memo to the Prime Minister to say how wrong I thought that was, one wise official told me, “Oh, don’t worry, Roger, let them go and argue it. They’ll get nowhere because the Germans will never agree to it”. The Treasury thought that it had found some friend in the German finance ministry who thought that the structural funds should not be applied to the richer member states. Then they came up against the reality of German politics—remember that Mrs Merkel represents a constituency in the former East Germany, where these funds are important in demonstrating to the German taxpayer that they are getting some value from their contribution to the EU. I doubt that there is much real prospect of getting rid of the structural funds, but I would like to hear that from the Minister.

I would also like to hear a recognition from the Government that there is a real UK national interest in supporting the structural funds, in particular the Social Fund. That national interest is that we very strongly want to see a better functioning single market in Europe. However, the only way that we will win political consent for that objective is if there are accompanying social policies that deal with the problems of winners and losers in that enhanced single market.

These are my views: we should retain the Social Fund; it should be more closely aligned with EU policies; at local level, its delivery should be more flexible; and, we should also get away from the centralisation that characterises what now happens. With that, I commend this report.

19:12

[Lord Cotter]

My Lords, I, too, thank the noble Baroness, Lady Howarth, for opening this debate so well. I will do my best to follow on as a member of her committee that was. We are living through difficult times when social issues and the provision of jobs are more important than ever, so it is valuable and timely to be addressing the examination that has been conducted of the European Social Fund. Every possible initiative has to be sustained and encouraged; that is to say, in my view, to help in particular people into work.

There are many views and outlooks when it comes to this. For example, in evidence given to the committee in 2009, Off the Streets and into Work—one organisation among many that came to talk to us—said:

“As unemployment rates rise, there has been increased investment at national and regional level targeting support at those at risk of redundancy or who have recently lost their jobs. Whilst this is wholly reasonable and appropriate, there is a risk ESF resources will be diverted away for the long-term unemployed, many of whom face multiple and complex barriers to employment. We”—

that is, the organisation—

“firmly believe ESF resources should be used to address the needs of participants not well served by mainstream programmes. Without it, we will see a growing ‘underclass’ of the unemployed who are consistently overlooked by successive welfare to work initiatives.”

That is just a bit of the evidence that we had. We had much evidence that was of great interest.

I shall now raise a point that the noble Baroness, Lady Howarth, has already raised, since it needs emphasising: to look ahead. We in the committee and many witnesses were very concerned at the previous Government’s view that there should be an end to the availability of structural funds directed towards more prosperous states, including the UK, after 2013. It is great to see the then Minister in his place. I thought that he gave us very good responses on many points and I congratulate him, as I congratulate many people, on the contributions that they made to our deliberations. However, there is that concern. At the time, it was stated that there was no plan for how the ESF should be replaced, so I am not alone in wondering what approach the new Government will be taking, up to and beyond 2013, towards the Social Fund itself. We need to take advantage of every possible opportunity to create and encourage jobs. I hope that the Government will be taking this on board. That is why it is important for them to clarify their long-term objective on the continuation of ESF funding.

There is an immediate risk that the new Government’s welfare to work programme—now called the work programme—will be delayed next year. I may be wrong, but if it is it will leave a hiatus during which the role of the ESF may tail off and get lost. Will the Minister assure the House that any delay involved in introducing the work programme next year, were it to happen, will take proper account of the importance of the contribution being made by ESF funding to local programmes? The real value of ESF projects in the past has been their small-scale, bespoke nature, working with the hardest-to-reach clients in neighbourhood developments. There is therefore a risk or concern that smaller-scale projects could be put to one side and may not be concentrated upon as they should be. I have one more point for the Minister. Can he assure the House that ESF-type projects will not fall by the wayside because they are less able to produce clients who are able to get and sustain work?

Those are a few points to consider, but here I want to refer to a point that came up in the evidence to the committee. I know that the coalition Government are very committed to addressing the issue of bureaucracy. A number of people who came to the committee said that we must get the balance right between the need to ensure that projects will be delivering what is required, and so on, and keeping bureaucracy to the minimum. This debate has become more important than ever. A programme of necessary cutbacks is in hand but there can always be unseen, unanticipated and, indeed, unwanted consequences.

Recently, I saw for myself the great benefit obtained by small, local projects. In this case, it was a small wood recycling project in Weston-super-Mare, near where I live. It gets financial support, without which it would not be able to deliver what it is delivering: assistance in getting young people who have been unemployed for six months into work and in giving people with mental health problems an opportunity to get into work. It also assists people on probation who are having difficulty getting into work. That did not have ESF funding, but it is an example of the small projects that we need to keep our eyes on while ensuring that we keep them in mind. I hope that the debate today will help to stimulate and encourage schemes—in this case, obviously, those which are ESF-funded—and encourage the very necessary approach that we need in this country: to keep giving people the opportunity to get into work and to enable this country to offer employment to those many, many people who need it.

19:19

[Baroness Young of Hornsey]

My Lords, it is with a mixture of pleasure and sadness that I rise to speak in this debate. It is a pleasure to be once again participating in a debate on an EU Select Committee scrutiny report, led so ably by my noble friend Lady Howarth of Breckland, and it is sad because this is the last occasion on which the work of Sub-Committee G will have the benefit of her wisdom and leadership. I express my heartfelt thanks for all the support and guidance she has given me and other members of the EU Sub-Committee on Social Policies and Consumer Protection. She is right; it is a great job, but she has made it quite a hard act to follow, as experienced and diligent as she continues to be. We hope, although we are sad at losing her, that she is enjoying her move to Sub-Committee D on Agriculture, Fisheries and Environment.

I want to elaborate on some of the key points raised by my noble friend regarding so-called hard and soft outcomes. I should say here that although it is widely used, and although I use it myself, it is not terminology that I find particularly helpful. I also want to look in a bit more detail at the role of the third sector and sustainability.

Sub-Committee G recognises the value of the contribution of the ESF in its support of a variety of projects in different parts of the country. Based on the evidence, we concluded that it is an important component of the EU’s broader social and economic cohesion policy. As my noble friend Lady Howarth and others have stated, it is clear that we are facing huge economic challenges and such a backdrop must inevitably inform how we think across all categories of expenditure. Clearly, in such circumstances, it is all the more important that we gain maximum value for money.

I think it is worth mentioning here how useful it was to go and talk to participants in an ESF project. We visited Step Up at the Elephant and Castle, a project working with 14 to 18 year-olds, helping them to gain new skills and prepare for employment. The majority of the participants, when asked what they valued about the project, responded that the mentoring was very important. They very much enjoyed learning new skills and saw getting the educational qualifications needed for work—or for FE or HE—as really important to equip them for work, but they also saw it as important that they were helped to build up the confidence to aspire to something other than the route mapped out for those considered to be troublesome, difficult young people. This attitudinal change was crucial for them and very much a part of the work carried out at the centre.

The aim of working with those hardest to reach—those with the most difficulty in securing employment—is an aim that most of your Lordships would see as laudable and indeed essential, I am sure. Different agencies have different strengths, and this is an area where a multiagency approach, involving the Government, further and higher education, the third sector and the private sector, can have real benefits if appropriately organised. In particular, the third sector is well placed to make a substantial contribution to such programmes, as we heard from a range of witnesses and written submissions, as well as from noble Lords this evening.

Many witnesses pointed out that it is necessary to have a certain amount of bureaucracy in any programme of this sort, and we agree. Efficient bureaucratic processes serve as democratic checks on public spending. However, it is essential that these processes are proportionate to the size of the programme and help the programme to achieve its objectives, not hinder them. We recommended that the Government continue to press for the reduction in the 10-year record retention requirement for smaller organisations, whose valuable role should not be hampered by disproportionate audit requirements. We are pleased to note that the Government have assured the committee that they will continue to work for the rules on document retention to be simplified and proportionate when the structural fund regulations are renegotiated prior to coming into force in 2014.

One of our concerns is that the system of competitive tendering under cofinancing in England, while it has several merits, could lead to providers recruiting those participants who are easiest to place in the labour market; my noble friend Lady Howarth referred to that. This issue is linked to that of how the success and effectiveness of programmes is assessed. If the sole measurement of the success of a programme, and thus the basis on which providers are paid, is how many people end up in employment, it could lead to cherry picking. Of course, we understand that it is crucial that a funding programme seeking to get more people into a position where they can secure paid work delivers on that objective, and the number of people getting work as a result of participating in the programme is an objective measure of that.

However, as important as that is, by definition, many of the people who constitute what is called “hard to reach” will face a variety of enormous challenges in their quest for work. For example, someone for whom depression has meant that getting up, washing, cleaning their teeth, getting on a bus, communicating with people face to face, et cetera, whose problems are seemingly insurmountable, may take some while to reach the stage of employability. This does not mean that they will not benefit from an appropriate ESF programme. If at the end of a programme, that person is able to complete what seem to most of us to be ordinary, everyday tasks, it would represent a substantial step forwards—a step towards employability—but the person is not quite there yet.

How can we best capture the distance travelled by that individual? How can we appropriately recognise the work of a programme that enables such progress to be made? We accept that such questions are not easy ones and that it is crucial that providers are able to give a clear account, one as objective as possible, of what they think they have achieved. There are methodological evaluation models that can capture and measure this kind of progress, and these should be deployed where possible.

Our investigation led us to conclude that there is an excessive reliance on measuring hard outcomes, almost to the exclusion of soft outcomes. As we have said, we recognise that outcomes in terms of jobs secured are the ultimate and legitimate aim of ESF interventions but, particularly with the hard to reach, it is necessary to undertake intensive, intermediate work to improve employability.

Our report also recommended the use of longitudinal cohort studies, which would be useful in terms of capturing hard and soft outcomes from programmes but also, crucially, facilitate us in the assessment of the sustainability of hard outcomes, such as job retention and progression. The Government do not wish to introduce any new ESF data collection requirements for administrative and, I would imagine, financial reasons. Nonetheless, this is an important point, because so much is being invested in participants gaining work. If this work is short-lived—there would need to be a control study to check against average length of employment—and the participant is thrown back into low self-esteem, lack of confidence, et cetera, we would need to assess the success and value of that programme rather differently. In its response to this concern, the EC thinks longitudinal cohort surveys “highly relevant” to assessing the sustainability of hard outcomes. The Commission notes that some member states have been including this as an element of their evaluations since 2007, and that we could gain something from exploration of this issue. We await developments on this front with interest.

I also reiterate the strong view of the committee regarding the withdrawal of funds from richer states. Other noble Lords have spoken comprehensively about that and given a rationale, and I support those views.

Finally, focusing on sustainable development and the development of green jobs and low-carbon economies is vital globally, not just in Europe. This will be a crucial element when the priorities for the ESF in 2014-20 are being fleshed out and I agree with the noble Lord, Lord Liddle, that the alignment of the EU 2020 strategy with the ESF objectives is desirable. The issue of green skills and whether some regions in the UK are better suited than others to adapting to this agenda was one that arose. Given that the Government agree in principle that, within a reduced ESF budget for 2014-20, the most disadvantaged groups should be targeted for getting into work, what strategies will be put in place for ensuring that we have the right infrastructure to facilitate people in these priority groups to participate fully in and maximise the benefits of ESF programmes with a focus on green skills and jobs?

As the new chairman of Sub-Committee G on Social Policies and Consumer Protection, I look forward to working with colleagues following up on the issues raised in the report and the Government’s response to it.

19:28

[Lord Knight of Weymouth]

My Lords, it is a real pleasure to be able to speak in this debate about this useful and interesting report from your Lordships’ European Union Committee on the excellent work done by the European Social Fund. I join others in paying tribute to the work of the members of the sub-committee, led so ably by the noble Baroness, Lady Howarth of Breckland, who summarised her report so well earlier in the debate.

I confess to your Lordships that I find myself yet again in a slightly odd position in leading for the Opposition on a report that scrutinises my work when in government; indeed, I was the Minister who gave evidence to the committee back in February and approved the evidence given to the committee by the Government. In the circumstances, it is tempting to oppose by adopting what some would unkindly term the Liberal Democrat principle, by which I mean a graceful three-point turn under the excuse that the outcome of the election has changed everything. However, I have reread the evidence that I gave in the light of the committee’s conclusions, and was pleased to find that not only does it appear that at the time I might have understood these issues but I mostly agree with what I said back in February.

For the interest of the noble Baroness, Lady Young of Hornsey, I say that the area where I am most likely to reassess my position is around soft outcomes. As I have reflected back on my time as Schools Minister, I have also been taking more interest in assessment—what it is possible to assess and measure. I am now more persuaded that it is possible to assess some of these soft outcomes in a more objective way and show the progression that people are taking to get closer to the labour market, which is clearly an area of additionality that the European Social Fund is addressing. I also find myself in agreement with the Government’s response to the committee’s report. I am pleased that the transfer of functions from the Learning and Skills Council to the Skills Funding Agency, which was one of my main worries, seems to be working well.

On that basis, I could just sit down and leave it all to the Minister, but reading it all through again raised a series of questions about how the European Social Fund will operate alongside the changes that the Government are taking through. I gave the Minister advance sight of my speech this morning to give him time to assemble some pithy answers to my questions. These fall broadly into three areas: additionality under the work programme; how regional priorities will be set; and the integration of employment and skills programmes.

As the Minister knows, I support the principle behind the work programme. I hope that some of the work that I did as a Minister is helping him as he tries to implement it against a very tight timeframe in a difficult labour market, but I will not dwell on those concerns now. I would be fascinated, though, to hear his response to the worries of the noble Lord, Lord Cotter, around delays to the work programme. If he could clarify for the sake of all those who are concerned about the programme whether there is a delay, that would be exceptionally helpful.

What is relevant to this debate is that the European Social Fund funds must be additional to government spending plans. How will that work under the work programme? As I understand it, the work programme will be a single programme for all who can work. It will be designed so that contractors have significant incentives not to park customers who are particularly difficult or cream off profit by just focusing on those who are easier to help into work—the committee used the word “cherrypick”. If that were to happen, the programme would not be a success.

Those are the very issues that the committee asked me about in the context of ESF. Is my understanding of the work programme correct? If so, how will the Minister achieve additionality with the continuation of ESF under the work programme? If the work programme is to be for every sort of claimant, be they on jobseeker’s allowance or employment support allowance, and the contractor is paid on outcomes not inputs, how can the ESF work be additional? How does the Minister respond to the committee concerns around soft skills in the context of black box contracting?

I also noted the ending of the working neighbourhoods fund in the comprehensive spending review. As the Minister’s noble friend Lord Shipley said in Monday’s debate, this was not an easy cut to spot. He went on to say:

“The fund has been used across the country to tackle worklessness by investing in voluntary sector partnerships, thus securing additional leverage and ERDF matched funding. It has helped to address community health and community safety issues. It has tackled economic deprivation and has targeted resources to those young people not in education, employment or training. The fund, worth £0.5 billion, has vanished”.—[Official Report, 1/11/10; col. 1541.]

Like him, I too must declare that I am a vice-president of the Local Government Association. Given that the fund has “vanished”, how will the Minister deal with the likelihood that the ESF will be used to fund the same sort of work that was funded by the working neighbourhood fund? Will he not be highly vulnerable to the charge that the Government have cut this spending knowing that they can backfill with ESF programmes? Is that not counter to the additionality rules?

The second issue is about regional priority-setting. As the Minister knows, ESF is currently subject to regional priorities set in England by regional committees made up of the Skills Funding Agency, the regional development agencies, trade unions, government departments, local authorities and third sector representatives, and chaired by the government office of the region. As I made clear in my evidence to the committee, I think that this could be rationalised by merging it with the regional employment and skills boards, if the Commission were to agree that this met its audit requirements, which it may not. What I had not envisaged was a rationalisation as a result of the abolition of the RDAs, subject to the Public Bodies Bill going through—a dreadful piece of legislation that we will be debating fairly soon in this House—and the abolition of the government offices themselves. How, therefore, does the Minister see the regional priorities being set in the future? Who will sit on the regional committees? Does he agree with the LGA in its briefing for this debate when, as my noble friend Lord Liddle, mentioned, it says:

“Councils, groups of councils or Local Enterprise Partnerships should set ESF’s strategic direction to ensure it delivers outcomes relevant to local need”.

In its recent report, EU Funds and Place-based Budgets, the LGA argues that, first, the delivery of the main EU funds—the ESF, the European Regional Development Fund and the Rural Development Programme for England—should be joined up into a set of single programmes at the subnational level; and, secondly, within this framework, we should offer local partners the opportunity to manage local packages of EU funds, should they want to. Does the Minister agree? If so, again, how will it be additional to the previous working neighbourhood fund work carried out by local authorities but now cancelled? My argument for a long-term future without the ESF—which was trashed by the committee—centred on regional structures being in place. It is necessary to be close enough to the ground to identify pockets of need, but with enough of an aerial view to join up programmes strategically.

In the new Government’s response to the committee, they say:

“Over time, wealthier Member States should be phased out of the Structural Funds and funding focused on the poorest, enabling them to catch up with the average”.

We note the opposition to that position of the committee and everyone else who has spoken in this debate. In the absence of regional policy from the government office and the RDA, I cannot see how this renewal of the policy that I had to justify to the committee works. What are the Minister’s justifications for this long-term policy?

I want to ask about employment and skills integration. The Minister cannot be criticised for a lack of ambition or a drive to join things up. If he manages to pull off the work programme and the universal credit, it will be as a result of the most monumental effort and ambition. Is employment and skills integration also on his radar? Of course, the ESF does both. Can he see a way of commissioning them together from contractors in this programme and more widely as part of the work programme? Is that not vital in giving the contractors the tools that they really need to do the job?

This was a useful and authoritative report by the committee. It has allowed us to focus on the European Social Fund, which has done much to help those in our country who most need help from an active Government. The debate has also allowed us to ask the Government questions about its future, and I look forward to the Minister's considered response.

19:40

[Lord Freud]

My Lords, I thank the noble Baroness, Lady Howarth, for leading this evening’s debate on the European Social Fund. I also thank the other noble Lords who have contributed to this debate. The report and this debate are well timed. They come at the midpoint of the current 2007-13 programme, just at the time when negotiations are about to begin on the future of the EU budget and on the structural funds after the end of this particular programme.

Our approach to the European Social Fund is shaped by the coalition Government’s programme for welfare reform. We are transforming the welfare system—as the noble Lord, Lord Knight, mentioned just now—to encourage responsibility, to make work pay and to end the cycle of benefit dependency. The work programme within that ambition is a central pillar of our approach, aiming to move people back into the labour market where it will replace a series of programmes that have been built in the past. One of the elements of the work programme that is novel is its emphasis on sustaining people in the world of work for a much longer period than has been the practice in the past. It pulls in a unified structure that forces providers in practice to treat people as individuals and also gives providers the freedom to tailor the right support for the specific needs of those individuals.

So the question—and it is the question that the noble Lord, Lord Knight, put with his customary elegance—is what role the European Social Fund can play in that context. It is clear that competence for employment and skills policies rests at the national level, as does the primary responsibility for funding. The role of the ESF—as all noble Lords in this debate have pointed out—is to add value to the core offer that the member state provides. This poses what we will call the “Lord Knight challenge”. The ESF must fit the integrated approach that we are developing. It must not fund alternative programmes just for the sake of additionality.

The methodology with which we are introducing the work programme is through a framework for employment-related service. In practice, this is a pretty effective structure for integrating the European Social Fund with our national employment provision, while ensuring that the ESF remains additional. Let me spend one minute on the attraction of, and the opportunities provided by, the framework. Once you have a framework set up, and providers set up within the framework, it is permissible for any government or local authority organisation to use that same framework. It does not take a lot of imagination to see that one can start to channel different sets of funding to provide an holistic approach for particular individuals.

I pick up on the point that the noble Baroness, Lady Howarth, made so eloquently with her concern about cherry picking and that the most disadvantaged will not be looked after properly. One of the key tenets of the work programme is that we will have price differentiation to encourage providers who will see just as much profitability, ideally, out of helping the harder to help as the easier to help. That is the concept behind it. On top of that, when you have a framework construct, you can see other funding coming into the same place to help the even harder to help. It is potentially a most powerful tool for getting rid of silos and putting in money and extra resources to help the hardest to help. We will write to the noble Baroness with further details. Actually, we will write to the noble Baroness, Lady Young, with further details of the department’s next procurement round in due course.

Several noble Lords have referred to the role of the voluntary sector in the European Social Fund. We recognise that localised, specialised voluntary services are often well placed to address the complex barriers that prevent disadvantaged people returning to work. Again, the framework will allow smaller voluntary organisations to participate in consortia, to form partnerships or to act as subcontractors to deliver the work that the core work programme and the ESF contracts. This deals with the concern that my noble friend Lord Cotter raised about the position of voluntary groups.

Several noble Lords asked how the effectiveness of the social fund is measured. We agree with what several noble Lords have said: that there is substantial room for improvement, especially at the EU level. We will judge the success of the ESF by job outcomes. After all, the ESF is primarily a labour market and skills fund. Our objective is to help more people back to work and with the right skills. We make no apology for measuring performance primarily on hard outcomes, particularly hard outcomes around jobs. In this way we are closer to the noble Lord, Lord Knight, of February than the noble Lord, Lord Knight, of November. Having said that, we recognise that people will achieve soft outcomes on their journey to employment. I agree entirely with the noble Baroness, Lady Young, when she says that she has problems with this terminology of soft and hard. We are using it this evening, so let us stick with it.

The work programme that the ESF contracts will encourage sustainable employment. That is the Government’s stated objective. In practice, it will not be possible for providers to achieve that hard outcome unless they build the intermediate soft outcomes, so soft outcomes should not be an end in themselves. We need to see through the process where people go through the soft outcomes into the hard, measurable outcome. One of the keys in developing the work programme is to make sure that there is a financial structure that allows the provider to see the whole process through to the end, rather than chopping it up and looking at intermediate steps. It is much easier to lead the responsibility through the whole programme.

As the noble Lord, Lord Knight, of February would have said—or maybe even did say—the problem is that, unless one has an extraordinarily effective measurement tool, it is very easy to fall from soft outcomes into spraying money around ineffectively. We have just launched a longitudinal study to capture the status of leavers 18 months after their ESF provision to measure the sustained jobbed outcomes. We are also developing a quantitative impact analysis of ESF.

Several noble Lords referred to the administrative burdens on providers of the programme. We will continue to use the co-financing system to relieve providers of the burden of finding match funding and we will work with the Commission and other member states to seek to simplify EU rules. However, we must also ensure that there is rigorous financial management and control across all member states and that there is value for money for the taxpayer. We also believe that there should be greater flexibility within the overall focus of the European Social Fund on employment and skills. The fund needs to be more responsive to new policy developments, changes in the economy and local needs.

Concerning the future of the European Social Fund—I think that this issue was raised by all noble Lords who took part in the debate—I will respond first to points raised about the budget and then to the policy focus. The Commission published its communication on the EU budget review on 19 October. The Government welcome the Commission’s focus on the need for reform of the budget to support the EU’s priorities, in particular economic growth. However, the review does not go anywhere near far enough on recognising the economic and fiscal context. We need to see a much stronger focus on prioritisation and where savings can be made. The EU budget cannot be immune from the huge budgetary challenges facing EU member states. This will have implications for the structural and cohesion funds, including the European Social Fund. The funds should focus on stimulating economic development in member states where income per capita is far below the EU average, where there are clear economies of scale with respect to financial and institutional capacity, and where EU spending can significantly add value. Receipts in richer regions, particularly in wealthier member states, should fall significantly in the next financial period after 2013. The share of receipts going to the poorer countries should continue to rise, albeit within a smaller overall structural and cohesion fund budget envelope.

The committee’s report criticised the previous Government for seeking to withdraw ESF funding from member states. Under the coalition Government’s approach, a reduced ESF budget would continue to fund some activities in the UK in the next financial perspective. However, in the longer run we aim to phase out structural funds from the richest member states entirely, and end the recycling of funds between member states that have the capacity and ability to finance their own development.

A smaller budget will make decisions on the targeting of ESF even more important. The Government believe that in the next financial perspective member states should target ESF on the most disadvantaged groups, focusing on employment and skills. For us, this will mean ensuring that the ESF continues to complement the work programme. We will expect the European Social Fund to be consistent and coherent with our policies to help individuals make the most of their lives and to get Britain working again.

The noble Baroness, Lady Howarth, and my noble friend Lord Liddle referred to the strategic alignment of funds. We want better strategic alignment of the ESF with Europe 2020 and national policies, and especially so on challenges such as climate change. My noble friend Lord Cotter and the noble Lord, Lord Knight, pressed me on the timing of the work programme. I will not use the word “delay”, as they did. I assure them both that the work programme is on track to be delivered in the first half of next year, starting in the spring. They will be delighted to know that the Treasury, the DWP and the Prime Minister all vigorously support this programme.

The noble Lord, Lord Knight, made a pointed query about additionality and the working neighbourhoods fund. I assure him that we will not use the European Social Fund to backfill that fund. As he will understand, we are ending the piecemeal approach to employment programmes and integrating in an entirely different way. As regards his point on regional priorities, our focus is on local communities and individuals, not on regions, which we regard as artificial and bureaucratic. In our White Paper on local growth, published last week, the noble Lord may have noted our view that labour markets do not exist in the main at regional level, with the exception of London. Therefore, we will want to see the ESF responding to local needs, not to regional priorities.

I close by thanking noble Lords once again for a series of most constructive and thoughtful comments, including some pretty nifty and interesting ones from the noble Lord, Lord Knight, which I enjoyed answering. This evening’s debate has reinforced how complex some of the EU rules and principles can be. I can certainly think of better things to do than debate concepts such as EU additionality at this time of the evening—or at any time of the day for that matter. However, we need to make sure that the European Social Fund is integrated with our welfare reforms and is made to work for the most vulnerable. This may raise the question of whether the European Social Fund can be additional if it is also integrated, but then I suspect that additionality is in the eye of the beholder.

19:56

[Baroness Howarth of Breckland]

My Lords, I thank the Minister for that reply and all noble Lords who have taken part in the debate. I intend to be brief as, like the Minister, I am not sure that debating additionality at this time of night is what I prefer to be doing. However, as I am no longer responsible for this area of work, I want to speak for a couple of minutes and indulge myself on behalf of the noble Baroness, Lady Young, who will, I hope, get a further reply from the Minister on the issue.

The most difficult aspect of this rich debate is its complexity. If it is complex for us, it is even more difficult for all those organisations on the ground such as probation officers and others in local authorities and the voluntary sector—the noble Lord, Lord Liddle, mentioned those—to comprehend and to determine how the projects to which they are committed on behalf of some of the most needy people in our communities will continue. While we debate conceptual ideas of frameworks, longitudinal surveys and cohorts, which many of us have worked on and understand, it is crucial that those wonderful, ordinary folk—we met some of them—delivering programmes are helped to see how they can continue to do the work that they are doing. That is probably the most essential point.

I love the fact that the noble Lord, Lord Knight, has done a U-turn. I never thought that he was really convinced about this issue, so that is not a surprise. However, if a belief is growing that this ESF funding will not continue in the long term—and funds are very difficult for local authority organisations—it is crucial that we have some understanding of what will replace it if it comes to an end. If not, the projects will come to an end.

One of the other interesting moments we are in is that, because we do not have any picture of the welfare to work programme, or how the new employment frameworks will fit together, we cannot see into that future, just as all the people on the ground cannot. The sooner those things are in place, the sooner great anxiety among those ordinary folks will be relieved. At the moment, people in projects are asking me whether they will have to make their staff redundant—to issue redundancy programmes—in the next few weeks, because they do not know if they will receive grants and they do not know about their future. Those sorts of anxieties need to be removed when people are dealing with aggressive, mentally ill, depressed and deprived clients. It is enough to deal with that without the worries that we add to them.

I do not want to say more in terms of the intellectual debate we might have on additionality. I think it is far more important that we concentrate on the delivery to the folk who need it through the folk who are delivering.

Motion agreed.

House adjourned at 8.01 pm.