House of Commons

Tuesday 23rd November 2010 Commons Chamber

Tuesday 23 November 2010

The House met at half-past Two o’clock

Prayers

Tuesday 23rd November 2010 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Tuesday 23rd November 2010 Commons Chamber

The Secretary of State was asked—

[John Mann (Bassetlaw) (Lab)]

1. How many prisoners who have completed their tariff remain in prison for the purpose of public protection.

[The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)]

On 17 November 2010, 14,680 prisoners were serving an indeterminate sentence of imprisonment for public protection, or a life sentence in prisons or secure hospitals. Of those, 6,320 are held beyond their tariff expiry date, excluding offenders who have been recalled to custody following release.

[John Mann]

Those prisoners have been held in prison for good reasons and on good judgment. Does the Secretary of State intend, as is rumoured throughout prisons, to reduce the number of such offenders in prison? If so, how many sex offenders and violent criminals will be released back into our communities?

[Mr Clarke]

That rumour is probably on the hon. Gentleman’s website where I have seen that he is telling his constituents that I will release robbers, burglars, drug dealers and so on. Perhaps he will wait for the sentencing review, and stop living in a fantasy world. The indeterminate prison sentence has never worked as intended. The intention was that it would apply to a few hundred dangerous people who were not serving life sentences. The number is piling up, and more than 6,000 have gone beyond their tariff, but they will not simply be released. We will re-address the subject, and we will not release all the people he keeps telling his constituents we will release.

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

Will the Secretary of State look at the Prison Reform Trust’s report and specifically conduct a review of the social and financial costs and benefits of IPP sentences, and examine the available policy options set out by the trust?

[Mr Clarke]

We are taking a balanced look at the whole subject. The Prison Reform Trust takes quite the opposite view to that of the hon. Member for Bassetlaw (John Mann). It believes that those sentences should be scrapped entirely. It is critical of the way they work, and it is clear that they are not working as intended, but the Government are hoping to take a balanced view. We must obviously protect the public against dangerous people and the risk of serious offences being committed on release. On the other hand, about 10% of the entire prison population will be serving IPP sentences by 2015 at the present rate of progress, and we cannot keep piling up an ever-mounting number of people who are likely never to be released.

[Mr Jack Straw (Blackburn) (Lab)]

Does the Secretary of State accept that it is inherent in both life sentences and the concept of IPP sentences, which are widely supported throughout the Chamber, that many prisoners will be tariff-expired because the idea is that they are not released until it is judged that it is safe to do so? Does he also accept that although it is true that the precise construction of the clauses was inappropriate and led to some very short tariffs, since the changes that I introduced in 2008, the number of new IPP sentenced prisoners has dropped by 50% from about 1,500 to under 1,000 a year? Would it not be far better for public safety to let that work through instead of prematurely releasing such prisoners?

[Mr Clarke]

No, it has always been the case that some people are held indeterminately, and certainly those on life sentences. The purpose of IPP sentences was to have a sentence below a life sentence for dangerous people for whom life was not quite justified. The right hon. Gentleman will accept that such sentences never worked as intended, which is why, when he was Secretary of State, he introduced an Act of Parliament to try to correct some of the mistakes that had been made. We are now considering how the sentence works in practice, and we will introduce considered proposals in due course.

[Guy Opperman (Hexham) (Con)]

2. What proposals he is considering to increase the level of efficiency in the administration of justice.

[The Minister for Policing and Criminal Justice (Nick Herbert)]

Following the spending review, the Ministry of Justice must make a total budgetary saving, including resource and capital spending, of 25% in real terms between 2010-11 and 2014-15.

[Guy Opperman]

I remind the House of my former profession of barrister. Eleven years ago, the Labour Government introduced the Woolf reforms, which changed all manner of process in the civil courts. What detailed proposals does the Minister have for the same telephone case management in criminal work, particularly post-not guilty pleas, and after-guilty pleas and sending matters for pre-sentence report?

[Nick Herbert]

We are certainly interested in improving the efficiency of justice by looking at case management, and some encouraging pilots have been run in London, in which costs have been saved through integrated case management arrangements between the Crown Prosecution Service and the police. We are also very interested in employing the greater use of technology, such as virtual courts, and I would be very happy to talk to my hon. Friend about other ideas as well.

[Robert Flello (Stoke-on-Trent South) (Lab)]

In the name of so-called efficiency of justice, the Secretary of State has scrapped the post of chief coroner, a move widely condemned by organisations such as Inquest and the Royal British Legion. They point out that tens of thousands of people every year are forced to grapple with the archaic, unaccountable coroners system, which needs the reforms promised by the Coroners and Justice Act 2009. The Minister said that scrapping the chief coroner was necessary to save money, but what assessment has he made of the increased costs that will be incurred through the greater use of judicial review, which is bound to result from this short-sighted decision? May I invite the Secretary of State or his Minister to put on record now exactly what the real cost will be of that false efficiency? Or will he take this opportunity to reverse that misguided proposal?

[Nick Herbert]

We do not think that this was a sustainable proposal, with set-up costs of £10 million and running costs of £6 million a year. The important thing now is to reform the coroners system appropriately to ensure the efficient administration of justice in this area.

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

What steps are Ministers taking to ensure that savings do not simply become higher costs for other Departments or other parts of their own Department, whether in the context of magistrates court closures, which adds to police costs, or changes in the legal aid system that generate demand for expenditure elsewhere? Is there a mechanism for assessing how costs will fall elsewhere?

[Nick Herbert]

I agree with my right hon. Friend about the importance of ensuring that what he describes does not happen, but he will know that there is significant under-utilisation of magistrates courts. That is why we have had to take this action in consulting about closure, not least in relation to the Tynedale magistrates court, which is adjacent to his constituency in Northumberland and which is operating at a utilisation rate of only about two thirds.

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

3. What assessment he has made of the adequacy of the support given by the National Offender Management Service to children in young offender institutions who have been in care.

[The Minister for Policing and Criminal Justice (Nick Herbert)]

The National Offender Management Service has a responsibility to safeguard the welfare of all young people in custody, and all young offender institutions are regularly inspected by Her Majesty’s inspectorate of prisons. Revised guidance on the responsibilities of local authorities to support young people leaving care is due to be published shortly by the Department for Education. It will include a chapter dedicated to the responsibilities for supporting care leavers involved in the criminal justice system.

[Luciana Berger]

I thank the Minister for that reply. I recently met representatives of the Liverpool Children in Care Council and heard young people expressing concern about the level of support given to young offenders who are looked-after children. Typically, they do not have the same support networks that other young offenders have. Will the Minister now commit to revisiting this issue to ensure that vulnerable young offenders are given the help and support that they need to get their lives back on track?

[Nick Herbert]

I certainly agree with the hon. Lady about the importance of providing such support. Last week, I visited Feltham young offenders institution with the Mayor of London and saw how innovative arrangements to provide greater support and counselling for young people had a considerably reduced the recidivism rate on a particular wing in that institution. That shows that, with better rehabilitation, we can get better results. I would be very happy to talk to the hon. Lady about any specific ideas she might have for improving the system.

[Mr David Burrowes (Enfield, Southgate) (Con)]

Is it any wonder that children in care do not have the necessary continuity of support once they are in custody, given that the full financial responsibility of local authorities is lost at that point? Will the Government ensure that when such children in care are in custody, they are not out of sight, out of mind and off the financial books of the local authorities?

[Nick Herbert]

It is important to ensure that the incentives are right, that we deter the inappropriate use of custody for young people and that local authorities are fully focused on what they need to do to reduce recidivism before the use of custody becomes important.

[Mr George Howarth (Knowsley) (Lab)]

The Minister will be aware that, according to a written ministerial statement today, the Omand review of the case of Jon Venables was released this morning. It is 114 pages long. Is he also aware that my constituent, Ralph Bulger, the father of James Bulger, and his brother Jimmy Bulger knew nothing about the release of this report today until the media contacted them, asking for a statement on what they thought would be in this 114-page document? Can he ensure that this kind of thing does not happen again?

[Nick Herbert]

My understanding is that appropriate arrangements should have been made, and that Mr Bulger was aware of the report but not its release. I shall of course look into the matter, and I am happy to talk to the right hon. Gentleman about what went wrong, if something went wrong in this case.

[Sarah Newton (Truro and Falmouth) (Con)]

5. What recent progress he has made on reviewing his Department’s policy on unduly lenient sentences.

[The Parliamentary Under-Secretary of State for Justice (Mr Crispin Blunt)]

The powers of the Attorney-General and Solicitor-General to refer certain Crown court sentences to the Court of Appeal on the grounds of undue leniency are working well.

[Sarah Newton]

I am particularly concerned with the sentencing of people convicted of paedophilia and believe that the policy review should be based on evidence. What assurance can the Minister provide that data that the Ministry of Justice collects will separate crimes of paedophilia from all sexual offences as currently recorded? Without that data it will be difficult to review the appropriateness or otherwise of current sentencing policy.

[Mr Blunt]

I can well understand my hon. Friend’s concern. All offences of sufficient seriousness to be tried only in the Crown court can be referred through the unduly lenient sentences process to the Attorney-General or the Solicitor-General; and 17 of the 31 offences that are triable either way and listed in statutory instrument 2006/1116 refer to offences against children, which reflects how seriously the House takes the matter.

[Sadiq Khan (Tooting) (Lab)]

Thank you, Mr Speaker. You will be aware that on three occasions over the past two weeks the Secretary of State for Justice and the Deputy Prime Minister’s deputy—the Parliamentary Secretary, Cabinet Office, the hon. Member for Forest of Dean (Mr Harper)—have come to the Chamber and essentially repeated from the Dispatch Box announcements already made in the media.

I want to ask the Minister about reports in this Sunday’s papers on the Department’s sentencing plans. The current Prime Minister in March, the Conservative party manifesto in April and the Secretary of State in June all said words to the effect: “We will introduce a system where the courts will specify minimum and maximum sentences for certain offenders. These prisoners will only be able to leave jail after their minimum sentence is served by having earned their release, not simply by right.” Will the sentencing review ditch that policy or keep it?

[Mr Blunt]

I am afraid the shadow Secretary of State will have to wait until we produce the policy. It is entirely appropriate that it be presented to the House first.

[Sadiq Khan]

It is outrageous that we have to buy The Times and read The Daily Telegraph to see what the Government are planning. That is not new politics, that is not the way to do things, and the Secretary of State, who has been an MP for 40 years and served in three Cabinets, should know better.

The Minister ducked the previous question, but he and, indeed, the Secretary of State know that knife-crime cases cause real and lasting misery to the victims, to bereaved families and to communities. Before the general election and in their manifesto, the Conservatives were quite clear, because they said that

“anyone convicted of a knife crime can expect to face a prison sentence.”

We know what the press say their Government will do, but what will the Minister do in the sentencing review to be published next week?

[Mr Blunt]

This may be slightly tedious, but I must say again that the shadow Secretary of State will have to wait until the proposals are presented in a comprehensive fashion to the House. Of course, knife crime is an extremely serious offence, as we have acknowledged, but, as far as the precise proposals are concerned, the right hon. Gentleman, like everyone else, will have to wait until they are presented in a coherent fashion to the House first, as is appropriate.

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

6. What discussions he has had with the Deputy Prime Minister on the effects on prisons and prison staff of making arrangements for the implementation of voting rights for prisoners.

[Mr William Bain (Glasgow North East) (Lab)]

9. What discussions he has had with the Deputy Prime Minister on the effects on prisons and prison staff of making arrangements for the implementation of voting rights for prisoners.

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

10. What discussions he has had with the Deputy Prime Minister on the effects on prisons and prison staff of making arrangements for the implementation of voting rights for prisoners.

[The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)]

Ministers are considering how to implement the judgment of the European Court of Human Rights, and when decisions have been taken, they will be announced to the House in the usual way.

[Roberta Blackman-Woods]

I am sure the Secretary of State is aware that prison staff already have to deal with requests for further information about how voting rights will be implemented—not only from prisoners, but from local communities who have grave concerns about the matter. Will he meet a group of MPs for whom that is a particular concern, so that the needs of our constituents might be considered?

[Mr Clarke]

I will consider that request when we have announced our conclusions, which we will, to the House. The previous Government were incapable of taking a decision on the Hirst recommendation, which was made five years ago, and we are about to produce our proposals. I would point out that remand prisoners already vote, and always have voted; they vote by post, and it has never caused any difficulty. In the end, there is no suggestion that prisoners are going to be registered in the prison at which they are Her Majesty’s guests. Those that bother to get registered will be registered in constituencies scattered across the country. Of course I will consider the logistics if, after we have produced our proposals, it is apparent that any particular logistical problem will be posed.

[Mr Bain]

When the Secretary of State meets the Deputy Prime Minister, will he pass on the grave disquiet of the people of Glasgow that the 93 convicted sex offenders, 10 convicted murderers and 15 convicted attempted murderers in Barlinnie jail in my constituency have not been exempted from the Government’s review on the right to vote? The Secretary of State knows that neither the European Court of Human Rights nor case law from Strasbourg requires that such individuals should have the right to vote, so why do the Government not just do the right thing and rule it out?

[Mr Clarke]

There is no suggestion—and there never has been—that every prisoner is going to get the vote. It is not the Government’s consultation that is responsible, but a judgment given five years ago by the European Court of Human Rights—a Council of Europe institution —and we are now deciding how to implement it. I cannot anticipate the Government’s decision, which will be taken collectively by Ministers, but the idea that lots of murderers and rapists in Barlinnie prison are all going to be given the vote is, I suspect, rather fanciful.

[John Woodcock]

The Secretary of State must understand the grave concern about this measure from the public and, I hope, from both sides of the House. If the Secretary of State is clear that there is no suggestion that murderers and rapists will be given the vote, why will he not simply rule out at least those two categories right now?

[Mr Clarke]

The principal consideration is to take a decision and present it to the House. I am trying to shoot down some of the fanciful ideas that have been expressed. I understand the real concern about this: most of the House would have preferred not to change at all the existing ban on prisoners voting, but doing nothing—the previous Government’s position—and allowing solicitors to go running around prisons signing up prisoners to get compensation for having their civil liberties denied is piling up quite a bill. I can assure the hon. Gentleman that Ministers will very soon resolve any uncertainty.

[Mark Pritchard (The Wrekin) (Con)]

But is there not a contradiction at the heart of the Government’s policy? Currently, all Members of Parliament represent all prisoners living in prisons within their constituency, yet the Secretary of State has said that they will be represented by Members of the constituencies where they were last registered. That contradiction needs to be resolved if representation of prisoners by prisoners is to be taken seriously.

[Mr Clarke]

I think there is some confusion in the House about the convention that applies, which both I and my hon. Friend should resolve—although it is not my responsibility to resolve it. I take the view that I represent my constituents when they are in prison wherever it is that they are imprisoned, but I know that other MPs take the view that they represent every resident of a prison in their constituency. Perhaps we should resolve the parliamentary conventions on this matter at the same time as we have a look at which prisoners might have voting rights.

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

In considering the Government’s policy on this thorny issue, will the Secretary of State, if he has to abide by the ruling of the European Court of Human Rights, restrict the right to vote to those prisoners at the lowest level of seriousness—for example, those dealt with by the magistrates courts for summary offences only?

[Mr Clarke]

This applies only to prisoners—obviously, people who have not been in prison do not lose their vote at all. We have to comply with the judgment of the Court. The problem is that this extremely annoying issue will become even more annoying to the public and everyone else if we simply do nothing and wait until some huge financial judgment is made against the taxpayer, which will turn the present public anger into fury. That is why we are going to bring forward considered proposals. At the moment, someone not sent to prison does not lose their vote—irrespective of what other punishment they receive in their summary trial.

[Mr David Ruffley (Bury St Edmunds) (Con)]

The Hirst judgment says that article 3 of protocol 1 of the European convention on human rights obliges this House to give some prisoners the vote; as we have heard, it also gives rise to financial compensation to some prisoners who have been denied that right. Although I sympathise with my right hon. and learned Friend, does he accept that there is an intellectual case for, in time, bringing powers back to Westminster in this area by repealing the Human Rights Act 1998 and withdrawing from the European convention of human rights?

[Mr Clarke]

There has been another British case today, which has clarified the situation slightly and has underlined the fact that the Government have discretion on how to comply with their obligations. In due course, obviously, we shall establish a commission on how best to give effect to our human rights obligations in this country, but that will not happen until at least next year.

The coalition Government do not intend to withdraw from the European convention on human rights, which was imposed by the victorious British on the rest of Europe after the war in order to establish British values across the countries that were recovering from fascism and was drafted largely by Sir David Maxwell Fyfe, who put what he thought were the best principles of British justice into it.

[Andrew Rosindell (Romford) (Con)]

7. What steps he is taking to increase the number of prison places.

[The Parliamentary Under-Secretary of State for Justice (Mr Crispin Blunt)]

Our current plan is to build the prisons to which we are contractually committed. On the basis of current policies, we expect prisoner numbers to rise from about 85,393 last Friday to about 88,000 in 2015, and we expect the implementation of the proposals that will be outlined in the forthcoming Green Paper to reduce that number to about 3,000 fewer than today’s figure. We will always provide enough prison places for those who the courts judge should receive a custodial sentence.

[Andrew Rosindell]

Notwithstanding the Government’s efforts to stabilise the prison population, will the Minister assure us that those who commit crimes and deserve to go to prison will continue to do so?

[Mr Blunt]

Yes.

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

The Minister will know that it is a basic human right for people to be incarcerated as near as possible to where they reside. When will the Government comply with that basic requirement by providing a prison facility for north Wales, especially as we understand that Shrewsbury prison is to be closed? Such a prison would serve the whole of mid-Wales as well as north Wales, and, as the Minister knows, its establishment is long overdue.

[Mr Blunt]

I am not sure that I recognise that as a basic human right, but it is certainly operationally sensible. Providing support for prisoners when they are incarcerated away from their families is an important part of assisting their rehabilitation into society. However, speculation about which prisons might or might not close in future is not appropriate at this stage. We will conduct a review of prison capacity in the light of the Green Paper and the responses to it, and only at that stage—

[Mr Speaker]

Order. I think that we have the drift of the Minister’s answer. We are grateful.

[Tim Farron (Westmorland and Lonsdale) (LD)]

Surely the reoffending rate is a critical factor affecting the number of prison places that are required. Restorative justice programmes such as that of the Sycamore Tree foundation, which operates at Haverigg prison in Cumbria, are both inexpensive and highly effective in reducing reoffending. What steps is the Minister taking to increase the number of restorative justice programmes in Britain’s prisons?

[Mr Blunt]

I suggest to my hon. Friend that he can look forward to the Green Paper with great interest.

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

According to the latest figures, more than half the prisons in England and Wales are officially overcrowded. If the Minister is ultimately successful in reducing the number of prisoners, what will his priority be—to close prisons or to reduce overcrowding?

[Mr Blunt]

It is a bit rich for the right hon. Gentleman to ask that question. As a former Prisons Minister, he bears part of the responsibility for the level of overcrowding that we have inherited.

Sadly, the answer is that we are not in a position to create enough prison places to be able to address the problem of overcrowding. That will probably have to wait for more economically propitious times. It will take us a while to get the economy into the shape that will enable us to deal with the prison overcrowding that we have inherited.

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

8. How much was spent on legal aid for cases in respect of immigration appeals in the last 12 months.

[The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)]

In 2009-10, overall legal aid expenditure on advice and representation in immigration and asylum appeals was £85 million. I should, however, point out that it is not possible to identify expenditure for initial advice separately from expenditure before the immigration and asylum tribunal in cases in which both advice and representation are provided.

[Mr Evennett]

I thank the Minister for his response. Can he confirm that, under the coalition Government proposals, immigration cases will be taken out of the scope of legal aid?

[Mr Djanogly]

Yes, I can confirm to my hon. Friend that we are consulting on removing all immigration matters from the scope of legal aid, other than for those in immigration detention. That means removing matters such as varying leave to remain—for example, if a foreign student wants to change their visa to get permission to work instead, or, indeed, to stay here for longer. Such cases will no longer be at the taxpayer’s expense.

[Keith Vaz (Leicester East) (Lab)]

One of the ways in which we can cut down on waste in the legal aid budget is to address no-shows by Home Office officials at immigration hearings. Can the Minister tell me the number of cases in which Home Office representatives do not turn up to these hearings and the cost of that to the legal aid bill, or will he write to me with that information?

[Mr Djanogly]

I will write to the right hon. Gentleman with that information, but I can tell him that it is an issue. Defendants’ representatives not turning up for hearings is also an issue.

[Mr Andy Slaughter (Hammersmith) (Lab)]

Responding to Lord Carter’s 2006 review of legal aid, the Minister said it put very vulnerable individuals at risk, that people were not being represented and that the structure was “being destroyed”, and he concluded:

“I would say it’s a meltdown.”

Carter reduced the budget by about 5%, whereas the current Government’s Green Paper cuts civil legal aid income by 42%. How would the Minister describe that?

[Mr Djanogly]

The important point to make is that the last Government did, indeed, look at legal aid: they had more than 30 consultations over a five-year period, including Carter. The result of that was that providers and those in receipt of legal aid were lost within the system and did not know where cuts were coming from, and what we are doing now is putting forward a comprehensive review of legal aid, whereby providers and all stakeholders will be able to see their position within the system—and as a result the consultation will be accurate.

[Mr Slaughter]

Well, we can all make what we will of that, but the fact remains that more than half a million people who may have unfairly lost their job, their income, their right to decent housing or access to their children—or, indeed, who may have been deported from the country, as the Minister has just said—will now go without advice or representation, whereas criminal legal aid and some of the high-cost advocates earning more than £900,000 a year are largely untouched. The Secretary of State said in his statement on these measures that it was important to strike a balance. Does the Minister not think that the balance has been got wrong in this case?

[Mr Djanogly]

I refer the hon. Gentleman to the consultation document, which has clearly got a section on very high-cost cases, and on which we have significant proposals. More particularly, the Labour manifesto said it wanted to cut legal aid, so if he is going to talk about our cuts, perhaps he might like to say where he would be making cuts in legal aid.

[Katy Clark (North Ayrshire and Arran) (Lab)]

11. What recent discussions he has had on the provision of services to people who have experienced trauma as a result of a miscarriage of justice.

[The Parliamentary Under-Secretary of State for Justice (Mr Crispin Blunt)]

We want to help people who have suffered trauma as a result of a miscarriage of justice to access support that ought already to be available, for instance through the national health service. We will work with the Department of Health, other Departments and the voluntary sector to that end.

[Katy Clark]

I thank the Minister for that answer. I recently met the Miscarriages of Justice Organisation, as constituents of mine have been affected by having been wrongly imprisoned for lengthy periods. I understand that under the previous Government, the Justice Ministry was looking at how better to provide support services to such people. Is that work still going on, and will the Minister be willing to meet me and other Members with constituents who have been similarly affected, because we are not dealing with this issue well enough at present?

[Mr Blunt]

I am afraid that we have concluded that, due to the extremely challenging financial climate, it no longer makes sense to go ahead with the work started by the last Government on identifying the unmet medical needs of those who have suffered a miscarriage of justice because there are not going to be additional funds to meet those needs.

[Mark Durkan (Foyle) (SDLP)]

Despite that answer, will the Minister still agree to meet those interested MPs, because in a previous answer he said the Government would ensure that services were available through the NHS, whereas the fact is that they are not? These particular needs can best be met—and most effectively and most cost-efficiently—by having a more discrete system, and it would pay the Minister and the Department to meet these MPs and MOJO.

[Mr Blunt]

I am, of course, very happy to meet parliamentary colleagues to discuss this issue. Meetings are due between Ministry of Justice officials and those in the Department of Health to see how matters can be improved. I am sure that those discussions will be improved by the knowledge that I will gain from colleagues, so I am happy to have the meetings.

[Christopher Pincher (Tamworth) (Con)]

12. What steps he plans to take to fulfil the aspiration in the coalition agreement to increase the efficiency of the legal aid system.

[The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)]

The consultation document “Proposals for the Reform of Legal Aid in England and Wales”, published on 15 November, sets out proposals to make the legal aid scheme more efficient. We looked from first principles at its scope, the eligibility rules, and the fees paid to lawyers and other providers of legal aid. We looked at alternative sources of funding, and we are also consulting on reducing administrative bureaucracy and making the system simpler to operate.

[Christopher Pincher]

I am grateful to my hon. Friend for that answer, but will he take this opportunity to make it clear that the issues raised by Des Hudson of the Law Society are unfounded, that access to justice will still be available for people who really need it and that worthy organisations such as Citizens Advice are valued by this Government?

[Mr Djanogly]

Yes, we are certainly very keen to work with voluntary organisations such as Citizens Advice to ensure more efficient and focused provision of legal aid, and included in that will be our proposals for a civil law telephone gateway service. By refocusing legal aid we aim to ensure that taxpayers’ money will be prioritised to help the vulnerable receive the legal support that they need.

[Mr Jamie Reed (Copeland) (Lab)]

The Secretary of State will know that proposals to close both the county court and magistrates court in my town of Whitehaven have been met with widespread anxiety and have been condemned by the local bench and local solicitors. Will he agree to meet us, so that he can learn at first hand just how ruinous the proposals would be if enacted?

[Mr Djanogly]

The courts consultation closed in mid-September. We have been examining the significant number of responses and will be reporting back to the House on them before the new year. I am sure that the representations that the hon. Gentleman has made on his local courts will be examined and, following our decision, I would be happy to meet him.

[Nick Smith (Blaenau Gwent) (Lab)]

13. What recent estimate he has made of the number of offenders with an alcohol dependency.

[Mrs Jenny Chapman (Darlington) (Lab)]

17. What recent estimate he has made of the number of offenders with an alcohol dependency.

[The Minister for Policing and Criminal Justice (Nick Herbert)]

In a survey carried out in 2005-06, 23% of prisoners sentenced from one month to four years reported having drunk alcohol four weeks prior to custody and said that they would find it quite difficult or impossible to stop drinking. We also estimate that 37% of offenders subject to community orders have an alcohol-related problem linked to their offending and their risk of reconviction.

[Nick Smith]

I thank the Minister for that reply. Given that alcohol misuse is estimated to cost £7.3 billion in crime and antisocial behaviour, and that it was a factor in 18,000 incidents of violent crime in Wales in 2008, can he assure the House that help for prisoners with alcohol problems will be given the same priority as help for offenders with drug problems?

[Nick Herbert]

It is important that alcohol problems are tackled, both among offenders given community orders and those in custody. We know that treatment for alcohol problems is cost-effective; the United Kingdom alcohol treatment trial found that for every pound spent on treating problem drinkers £5 is saved on costs to health, social and criminal justice services. That is why, in the long term, providing such services on a payment-by-results basis is the answer.

[Mrs Chapman]

Given the undeniable link between alcohol misuse and crime, does the Minister believe that someone’s being excessively drunk is seen as sufficiently aggravating by the courts when they pass sentence?

[Nick Herbert]

We have not received any representations to the contrary. These matters can be considered by the Sentencing Guidelines Council, and we believe that sufficient powers are available to the courts. The important thing is that when offenders are sentenced, they should receive adequate treatment—that applies both to community and jail sentences—so that addiction can be dealt with.

[Richard Harrington (Watford) (Con)]

14. When he expects to publish his proposals on the future of sentencing policy.

[The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)]

We intend to publish a Green Paper setting out proposals on sentencing and rehabilitation in December.

[Richard Harrington]

On a recent visit to the Hertfordshire probation trust in Watford, I was impressed by the efforts it has made and the success it has achieved in reducing reoffending rates. The staff told me, in particular, of their view that short-term prison sentences were detrimental to those efforts. Will the Secretary of State come to Watford to meet them, so that he can share those experiences?

[Mr Clarke]

I am grateful for that invitation; I have already received a letter. I shall do my best, although I am not quite sure when I will get to visit the probation trust. The Government are placing particular emphasis on rehabilitation and on reducing our quite appalling reoffending rates, as we have ever since my right hon. Friend the Minister for Policing and Criminal Justice led for us on this matter in opposition. I accept that a great deal of good work is being done on the ground now and obviously we will have to build on it. I quite agree with my hon. Friend the Member for Watford (Richard Harrington) about the ineffectiveness of some short sentences, because nothing whatever is done when people go out of the gate once they have finished their sentence, but I am quite clear that we cannot get rid of all short-term sentences. I have always believed that for a certain number of cases no alternative is reasonably practical for magistrates.

[Mr David Hanson (Delyn) (Lab)]

The crimes of child abduction, gross indecency with children, sexual activity with a child under 13, sexual assault of a female and sexual assault of a male have all attracted custodial sentences of six months or under in the past year. Will the Lord Chancellor give a commitment that under the sentencing review none of those crimes will be subject to community-based sentences, as he has proposed potentially in comments that he has made to date?

[Mr Clarke]

I have no idea why the heart of our sentencing reform is described by sections of the press and some Members of Parliament as just getting rid of all short-term sentences and replacing them with community sentences. I have no doubt that there is an important role for community sentences, and we must make them more credible, more punitive and more effective—some of them already are. The important thing is that every case should receive the right sentence based on the facts and the offender in order to protect the public. That will be the underlying aim of the entire sentencing review.

[Dr Sarah Wollaston (Totnes) (Con)]

15. What assessment he has made of the effects on the NHS of removing clinical negligence from the scope of legal aid.

[The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)]

Clinical negligence cases against the NHS are funded approximately 50:50 between legal aid and no win, no fee agreements with lawyers. We will be interested to understand through our consultation the specific impact on the NHS of the removal of clinical negligence cases from the scope of legal aid, which should save some £17 million to legal aid. However, we also estimate that our proposals to reform no win, no fee conditional fee agreements will save around £50 million each year to the NHS in reduced legal costs.

[Dr Wollaston]

Could reducing legal aid for clinical negligence lead to an upsurge in no win, no fee deals and an increase in the compensation culture?

[Mr Djanogly]

My hon. Friend is right to point out that changes in one area can have knock-on implications in another area. It is important to point out that that is precisely why we put out the legal aid consultation document on the same day as Sir Rupert Jackson’s proposals on no win, no fee agreements. The two can be weighed up together and the consultation will therefore take a holistic approach.

[Stephen Timms (East Ham) (Lab)]

On legal aid, the Minister has spoken today about working with voluntary sector organisations. Community Links’ welfare advice service in my area has seen 9,000 people so far this year. It is very cost-effective and has been paid for until now by legal aid. Under the Minister’s proposals, it will not be in the future. How will that work be supported by the Government in the period ahead?

[Mr Djanogly]

People have the option of getting conditional fee agreements, also known as no win, no fee agreements. They can go to a lawyer and that lawyer will take a view on the chances of success. The question that must be asked—we will be very interested to hear the responses to it during the consultation—is whether, if the private sector is not prepared to take on the risk, the public sector should be prepared to do so and what proportion of that risk it will be prepared to take on.

[Robert Halfon (Harlow) (Con)]

Following my question to my right hon. and learned Friend the Lord Chancellor and Secretary of State for Justice during his legal aid statement, is there not a danger that, given the complexity of clinical negligence cases, the most vulnerable will not have access to no win, no fee simply because such companies will not offer their services to them?

[Mr Djanogly]

There will still be power to grant legal aid in exceptional cases where a CFA will not be available, although that power will be restricted. The fact remains that CFAs will still be available for people with no ability to fund their cases so that they can take proceedings.

[Tony Lloyd (Manchester Central) (Lab)]

16. What estimate he has made of the reduction in the number of family law cases that will be eligible for legal aid during the period of the comprehensive spending review.

[The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)]

We estimate that removing from the scope of legal aid most private family law cases, except for those involving domestic violence, forced marriage and international child abduction, would reduce the number of people receiving advice under the legal aid scheme by about 211,000 annually and of those represented in court by just under 54,000 annually. Together, those figures represent an estimated annual saving of £178 million. However, we have also decided to retain legal aid for mediation to help separating couples sort out their issues without the courts where possible.

[Tony Lloyd]

The Minister’s last point is very important. In many such private cases, child-protection issues arise. Can he give the House an absolute guarantee that private cases in which child protection becomes an issue will still receive legal aid? If not, these cost savings will be at the expense of our children’s future.

[Mr Djanogly]

Absolutely; where a public family law matter arises, that case will remain within scope. If a child is subject to being taken away from their parents, legal aid will be available.

[Mrs Jenny Chapman (Darlington) (Lab)]

T1. If he will make a statement on his departmental responsibilities.

[The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)]

Following the conviction of Jon Venables on 23 July for possessing and distributing indecent images of children, I commissioned Sir David Omand to undertake an independent review into the management of Jon Venables from his release from local authority detention in June 2001 until his recall to custody on 24 February 2010. Today, I have placed a copy of Sir David’s report in the Library. Sir David has concluded that Jon Venables was effectively and properly supervised at an appropriate level and frequency of contact, having regard to the particular circumstances of his case. Sir David also concludes that no reasonable supervisory regime would have been expected to detect his use of the computer to download indecent images. The report contains a number of recommendations on the future management of this and similar cases that will be taken forward by the National Offender Management Service.

[Mrs Chapman]

Nineteen-year-old Scots Guardsman Andrew Gibson was killed in a Darlington nightclub. Yesterday, the Attorney-General said that he was unable to refer what many view as an excessively lenient sentence of just two and a half years to the Court of Appeal. Will the Secretary of State undertake to investigate the awarding of lenient sentences in which alcohol is an aggravating factor?

[Mr Clarke]

The Attorney-General has a power to exercise in these cases and he has to exercise it in his quasi-judicial role by making a proper judgment and not just reacting politically. I understand the hon. Lady’s concern about that case, but sentences are normally imposed by the court that has had the opportunity to hear all the evidence, facts and information about the accused person. The Attorney-General takes seriously his responsibility to step in where a mistake seems to have been made and ask a higher court to consider imposing a more serious sentence. I cannot claim to exercise any control over him in that regard; it is his difficult judgment to take in each case.

[Andrew Rosindell (Romford) (Con)]

T2. The Lord Chancellor will be only too aware that one of his key responsibilities is looking after the Crown dependencies of Jersey, Guernsey, the Isle of Man, Alderney and Sark. Will he explain to the House why the Crown dependencies were yet again refused the right to lay a wreath on Remembrance Sunday this year? Will he address this issue to ensure that next year they can do so like other countries in the Commonwealth?

[Mr Clarke]

My right hon. Friend Lord McNally has the responsibility and the honour to lead on matters concerning Crown dependencies, which I assure my hon. Friend he takes very seriously. I keep discovering that he has made visits to the Crown dependencies to discuss these matters. I was quite unaware of this problem and I shall make inquiries of Lord McNally and those responsible for the ceremony about the background to this issue of laying a wreath on behalf of the Channel Islands and the Isle of Man.

[Sadiq Khan (Tooting) (Lab)]

The Secretary of State announced in the House last week—a day after ITN—that significant sums of money were to be paid to British residents and citizens who were detained at Guantanamo Bay, and he explained the factors behind the decision. Does he agree that there is an urgent need to resolve the claims of British victims of terrorist attacks overseas and will he commit today to such compensation being paid as a matter of urgency?

[Mr Clarke]

The right hon. Gentleman rightly expresses irritation about leaks to newspapers and the television, and I assure him that I share all that irritation. [Interruption.] If I were indulging in the kind of masterful spin-doctoring of the previous Administration, I would have trailed them better than occurred either in the newspapers or ITN. I made the statement when I did because I was told that ITN had carried the news the night before. I assure the right hon. Gentleman that, if he helps me to find out where the information is coming from, I will take appropriate steps.

On compensation for victims of terrorism and crimes, we are having to review the criminal injuries compensation scheme. We are having to look at the prospects for the compensation for terrorism scheme. The fact is that we were left with a system of criminal injuries compensation that was not working. We have enormous liabilities piling up for which the previous Government had not made adequate funds available, so we have hundreds of millions of pounds-worth of arrears of claims.

[Sadiq Khan]

That is a different issue.

[Mr Clarke]

It is not a different issue. They are related issues and we will give our conclusions in due course.

[Several hon. Members]

rose—

[Mr Speaker]

Order. There is a lot of interest and little time. From now on, we need short questions and short answers.

[Andrew George (St Ives) (LD)]

T3. What assurance can Ministers give my constituents in west Cornwall that the legal aid reforms published last week will not adversely affect the coverage of, or reduce access to, legal aid, particularly in civil and family proceedings?

[The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)]

The hard facts are that the amount of legal aid being paid out in civil cases will be reduced. As part of the Government’s savings of £2 billion, £350 million is subject to be taken out of legal aid by 2014-15. That means that we will focus legal aid on the most vulnerable who need legal representation.

[Toby Perkins (Chesterfield) (Lab)]

T4. A number of professionals have contacted me about their worries that, once the Youth Justice Board disappears, there will be a lack of co-ordination and an increase in reoffending by young people. Can the Secretary of State give any reassurance to those professionals that when their work disappears inside the Ministry of Justice, that co-ordination work will still be taken seriously?

[The Parliamentary Under-Secretary of State for Justice (Mr Crispin Blunt)]

Yes, I can give the hon. Gentleman that assurance. As the Minister with responsibility for youth justice, I will make sure that the functions carried out by the Youth Justice Board will be properly executed within the Ministry of Justice. The Youth Justice Board has done good work, but now it is time for Ministers to take direct responsibility for the work.

[Priti Patel (Witham) (Con)]

T5. Families in Witham town are concerned about the presence of paedophiles and sex offenders, and the risk that they pose to children in our local community. What steps is the Secretary of State taking, in conjunction with other Government agencies, to ensure that my constituents are protected from those dangerous individuals?

[The Minister for Policing and Criminal Justice (Nick Herbert)]

My hon. Friend might know about the child sex offender disclosure scheme, which is being extended to 24 police forces, having been successfully piloted in 11 police force areas. It allows members of the public to ask the police to check whether people have contact with their children at risk. They have already successfully protected children and provided considerable reassurance to parents.

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

T6. It is clearly inappropriate for convicted criminals to celebrate Christmas with raucous parties in prison. Is the Secretary of State certain that present Ministry of Justice guidance will prohibit such activity this Christmastime?

[Mr Clarke]

I hate to tell the hon. Lady that there are no good parties going on in prisons to which I can invite her over Christmas. The whole story about parties was faintly ridiculous. The announcement by the Under-Secretary of State for Justice, my hon. Friend the Member for Reigate (Mr Blunt) did not mention parties and had very little to do with parties. Time was—I can remember from my youth—when a popular song began with

“The warden threw a party in the county jail,”

but we do not approve of that kind of thing nowadays.

[Bob Russell (Colchester) (LD)]

Every suicide is a tragedy, but particularly in prisons it is more harrowing for the family, other prisoners and the prison staff. With that in mind, can one of the Ministers give an update on the programme of installing safer cells?

[Mr Blunt]

About 6,200 safer cells have been provided since 2005. I acknowledge my hon. Friend’s consistent interest in that. Our objective is to make sure that safer cells are available in all circumstances for offenders deemed to be vulnerable and to require such accommodation.

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

T7. It was as recently as 30 June, when the Government had had nearly two months to examine and find how unexpectedly bad the public finances were, that the Secretary of State said that he would explore “proposals to restore public trust through minimum/maximum sentencing”.Can he tell us what has changed since then?

[Mr Clarke]

Not much has changed. We are exploring proposals of all kinds. We are about to produce a Green Paper in December, and as is always the case—there is nothing new in this—people try to guess what might be in it. Some people make informed guesses, some make uninformed guesses and some get it right. The hon. Gentleman will have to wait until December to see our final judgments about how best to reform a sentencing system which is over-complicated, difficult for the judges to understand and ripe for reform, and which is completely failing to protect the public by getting reoffending rates down to a sensible level.

[Jack Lopresti (Filton and Bradley Stoke) (Con)]

Recently, a group of Travellers was served with an eviction order from the site next to St Peter’s, a new school in my constituency of Filton and Bradley Stoke, only for another group of Travellers to move in as soon as the site was vacated. Will the Minister look at the law in question to see whether it can be changed so that it is site-specific, rather than applying to individuals in certain cases?

[Mr Blunt]

I am grateful to my hon. Friend for the question. We are already looking at the law on squatting; this, in a sense, is an associated issue. I shall be happy to examine it as well.

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

T9. As part of the review that the Secretary of State is carrying out into implementing giving prisoners the right to vote, will he consider the issue as, in some ways, a positive opportunity to prepare them for reintegration into society? How is he approaching that?

[Mr Clarke]

Of course we would welcome prisoners preparing in any way for rehabilitation as honest citizens in society. I wait to see how many prisoners will actually take advantage of the opportunity when we decide the extent to which we have to go to comply with the Court judgment. It is conceivable that in some cases the vote would widen the mind of prisoners and prepare them for taking on the obligations of citizenship. I actually do not think, however, that we should take that too far.

[Duncan Hames (Chippenham) (LD)]

The Government intend to amend the law on the prosecution of universal jurisdiction offences. Does the Lord Chancellor agree that it would be unseemly for decisions relating to those prosecutions to rest with the Law Officer who is also a politician, as would be the case for the Attorney-General?

[Mr Clarke]

The consent of the Director of Public Prosecutions is what we are contemplating. The Government have committed themselves to that. This is a question of arrest; we are looking at citizen’s arrest. We want to keep the right of citizen’s arrest but we do not want it to be a publicity stunt based on inadequate evidence, so we are contemplating making it subject to the DPP’s consent. We are simply trying to find the legislative time to do it. The Government have committed to doing this as rapidly as possible.

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

Can the Justice Secretary tell us how many times he or his Ministers have spoken to the Scottish Justice Minister about prisoners voting rights?

[Mr Clarke]

I have written to Kenny MacAskill and I see him from time to time. I have not yet got a response, but I expect to be in close contact with the Scottish Government when we make any change, because I suspect that it will apply to the entire United Kingdom.

[Andrea Leadsom (South Northamptonshire) (Con)]

Last Friday, a 16-year-old boy in my constituency was horrifically beaten and stabbed outside his school in full view of his classmates. Does my right hon. and learned Friend agree that we need to reserve the harshest penalties for those who viciously wield knives and to make sure that there is a strong deterrent against doing so? That young man lost his life as a result of that horrible crime.

[Mr Clarke]

I am, of course, shocked to hear of the outrageous nature of the crime in my hon. Friend’s constituency. We have to make sure that all our sentencing proposals give the courts all the powers they need. It is a question of how to set out the severity of the appropriate sentences, at the same time leaving the court in the end to decide on the exact sentence, based on the circumstances of the case and the offender. Although the recent habit—particularly under the last Government, who produced 21 different criminal justice Bills—was to keep producing very elaborate rules, in my experience judges do not need to be told that an offence of the kind described by my hon. Friend deserves the full force of the law and the severe punishment that the public would undoubtedly expect for such a case.

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

Is not the vote for prisoners a dyed-in-the-wool Lib Dem policy? Is that not the real reason why the Secretary of State will not stand up for us and tell the European Court that the ruling is simply unacceptable to the British people and the vast majority of our MPs?

[Mr Clarke]

It is not a dyed-in-the-wool Conservative policy, it is true, but it should be the policy of every responsible Member of the House to accept that we have to comply with a judgment of the European Court, because nobody is advocating withdrawing from the convention. The hon. Gentleman’s party accepted that. His party never repudiated the judgment; it always accepted that it was going to have to give votes to prisoners. It wasted five years and two consultation exercises, however, because it was incapable of taking a decision in advance of an election—or at all, as it happened.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

On a less controversial subject, what scope is there for mediation in family law cases, and will such cases continue to qualify for legal aid?

[Mr Djanogly]

We have taken the view that mediation should be retained within the scope of legal aid, and we think that it should be thoroughly encouraged. Too often, people take the course of court when they should look towards sorting out issues between themselves, and mediation will play a big part in enabling them to do that.

[Mr Jack Straw (Blackburn) (Lab)]

On prisoner voting, will the Secretary of State have the grace to accept that before the election, given the implacable opposition from the whole of the Conservative party from top to bottom, with the then shadow Justice Secretary describing the proposal as “ludicrous”, and deep and profound concern on our Back Benches, it was not that one did not want to do something, but that there was no way in the world that such a measure would have passed through this House?

[Mr Clarke]

I am relieved to hear that the right hon. Gentleman, my predecessor, was so implacably determined to press on with this issue throughout his five years. He should perhaps have a word with the hon. Member for Birmingham, Selly Oak (Steve McCabe), who could explain how committed he was. I am impressed that it was solely the opposition of Conservative Front Benchers that caused this five-year delay. I suspect that the right hon. Gentleman was having difficulty with Downing street and the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) and others in coming to any decision about anything, or doing anything about it, before the general election. [Interruption.]

[Mr Speaker]

Order. There is so much noise in the Chamber that the hon. Member for Hertsmere (Mr Clappison) could not hear me call him.

[Mr James Clappison (Hertsmere) (Con)]

Can my right hon. and learned Friend take the time to remind the House which party was in power when the Human Rights Act 1998 was incorporated into British law, and, more pertinently, who was the Secretary of State responsible for it?

[Mr Clarke]

It was certainly the Blair Government who introduced the Human Rights Act. I regret to say that I cannot remember who the Secretary of State was, but it was probably the right hon. Member for Blackburn (Mr Straw). Actually, he probably has more things to answer for than that, but that was certainly one of the things that he put on the statute book.

[Natascha Engel (North East Derbyshire) (Lab)]

Will the Secretary of State meet me to discuss setting up an employers liability insurance bureau to ensure that victims of asbestos-related diseases who cannot trace either employer or insurer are compensated? I am sure that if he will meet up with me, I can fill him in and persuade him why it is so important.

[Mr Clarke]

The Under-Secretary of State for Justice, my hon. Friend the Member for Huntingdon (Mr Djanogly), will probably be in touch with the hon. Lady to deal with that suggestion. There are obviously very difficult issues involved in these asbestos claims—they troubled the previous Government, and there have been decisions for the courts. We will therefore consider her suggestion with interest; it has been made before, but we will consider it again and come back to her.

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

The Government are rightly focused on getting more people who are out of work into work, but a particular group of concern is ex-offenders. Will the Government, as part of the big society, continue to support charitable organisations such as the Apex Trust, which does a wonderful job in getting those offenders back into work?

[Mr Blunt]

I can give my hon. Friend that assurance. One of the mechanisms we will use is payment-by-results schemes to turn offenders into taxpayers. That means that there will be rewards both for stopping offenders reoffending and for getting offenders into employment.

Controlling Migration

Tuesday 23rd November 2010 Commons Chamber

15:33

[The Secretary of State for the Home Department (Mrs Theresa May)]

With permission, Mr Speaker, I would like to make a statement on immigration.

Controlled migration has benefited the UK economically, socially and culturally, but when immigration gets out of control, it places great pressure on our society, economy and public services. In the 1990s, net migration to Britain was consistently in the tens of thousands each year, but under Labour, net migration to Britain was close to 200,000 per year for most years since 2000. As a result, over Labour’s time in office net migration totalled more than 2.2 million people—more than double the population of Birmingham.

We cannot go on like this. We must tighten up our immigration system, focusing on tackling abuse and supporting only the most economically beneficial migrants. To achieve that, we will have to take action across all routes to entry—work visas, student visas and family visas—and break the link between temporary routes and permanent settlement. That will bring significant reductions in non-European Union migration to the UK and restore it to more sustainable levels. We aim to reduce net migration from the hundreds of thousands back down to the tens of thousands.

On the work routes to entry, all the evidence shows that it is possible to reduce numbers while promoting growth and underlining the message that Britain is open for business. After consulting widely with business and with the Migration Advisory Committee, I have decided to reduce economic migration through tier 1 and tier 2 from 28,000 to 21,700. That will mean a fall of more than a fifth compared with last year in the number of economic migrants coming in through tiers 1 and 2, excluding intra-company transfers.

Business groups have told us that skilled migrants with job offers—tier 2—should have priority over those admitted without a job offer, who are in tier 1. I have therefore set the tier 1 limit at 1,000, a reduction of more than 13,000 on last year’s number. Such a sharp reduction has enabled me to set the tier 2 limit at 20,700, an increase of nearly 7,000 on last year’s number.

The old tier 1, supposedly the route for the best and the brightest, has not attracted highly skilled workers. At least 30% of tier 1 migrants work in low-skilled occupations such as stacking shelves, driving taxis or working as security guards, and some do not have a job at all, so we will close the tier 1 general route. Instead, I want to use tier 1 to attract more investors, entrepreneurs and people of exceptional talent. Last year, investors and entrepreneurs accounted for fewer than 300 people, and that is not enough, so I will make the application process quicker and more user-friendly, and I will not limit the numbers of those wealth creators who can come to Britain.

There are also some truly exceptional people who should not need sponsorship from an employer but whom we would wish to welcome to Britain. I will therefore introduce a new route within tier 1 for people of exceptional talent—the scientists, academics and artists who have achieved international recognition, or are likely to do so. The number will be limited to 1,000 a year.

Tier 2 has also been abused and misused. Last year more than 1,600 certificates were issued for care assistants to come to the UK. At the same time, more than 33,000 care assistants who were already here were claiming jobseeker’s allowance, so I will restrict tier 2 to graduate-level jobs.

We have listened to business and will keep intra-company transfers outside the limit. However, we will place a new salary threshold of £40,000 on any intra-company transfers of longer than 12 months. Recent figures show that 50% of intra-company transfers meet those criteria. That will ensure that those coming are only the senior managers and key specialists who international companies need to move within their organisations.

I should like to thank the Migration Advisory Committee for its advice and recommendations. Next year, I will ask it to review the limit in order to set new arrangements for 2012-13.

However, the majority of non-EU migrants are, in fact, students. They represent almost two thirds of the non-EU migrants entering the UK each year, and we cannot reduce net migration significantly without reforming student visas. Hon. Members and others might imagine that by students, we mean people who come here for a few years to study at university and then go home. However, nearly half of all students coming here from abroad are actually coming to study a course below degree level, and abuse is particularly common at those lower levels. A recent check of students studying at private institutions below degree level showed that a quarter could not be accounted for. Too many students at lower levels have been coming here with a view to living and working rather than studying, and we need to stop that abuse.

As with economic migration, we will therefore refocus student visas on the areas that add the greatest value, and in which evidence of abuse is limited. I will shortly launch a public consultation on student visas. I will consult on restricting entry to only those studying at degree level, but with some flexibility for highly trusted sponsors to offer courses at a lower level. I will also consult on closing the post-study route, which last year allowed some 38,000 foreign graduates to enter the UK labour market at a time when one in 10 UK graduates were unemployed.

Last year, the family route accounted for nearly 20% of non-EU immigration. Clearly, British nationals must be able to marry the person of their choice, but those who come to the UK must be able to participate in society. From next week, we will require all those applying for marriage visas to demonstrate a minimum standard of English. We are also cracking down on sham marriages, and will consult on extending the probationary period of settlement for spouses beyond the current two years.

Finally, we need to restrict settlement. It cannot be right that people coming to fill temporary skills gaps have open access to permanent settlement. Last year, 62,000 people settled in the UK on that basis. Settling in Britain should be a privilege to be earned, not an automatic add-on to a temporary way in, so we will end the link between temporary and permanent migration.

I intend to introduce these changes to the work route and some of the settlement changes from April 2011. I will bring forward other changes soon after. This is a comprehensive package that will help us to meet our goal of reducing net migration, at the same time as attracting the brightest and the best, and those with the skills our country needs. This package will serve the needs of British business, it will respond to the wishes of the British public, and it will give us the sustainable immigration system that we so badly need.

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

Let me start by thanking the Home Secretary for the—rather late—advance sight of her statement, for coming to the House this afternoon in person, and for clarifying the confusion caused by the misleading leak of the contents of her statement to the BBC this morning. The Home Secretary is right to say that migration has made, and continues to make, a vital contribution to the economic vibrancy, business strength and vitality of our country. She is also right to say that it is essential for migration to be properly controlled, for reasons of economic well-being and social cohesion. But the question is: how? The Labour Government put in place transitional controls on EU migration, a suspension of unskilled work permits, a tough but flexible points system to manage skilled migration, and tighter regulation of overseas students. They closed 140 bogus colleges, and imposed new citizenship requirements on those seeking settlement.

At the general election, the leader of the Conservative party proposed to go further in two key respects. First, he proposed a new target to reduce net migration to the

“tens of thousands by 2015.”

To meet that target, he pledged a cap on immigration, which he said would be tougher than the points system. At the time, the leader of the Liberal Democrat party said:

“We can’t come up with promises like caps which don’t work”.

He then agreed to the cap in the coalition agreement. Since then, the Government have been in wholesale retreat, and today they are in wholesale confusion over this policy. The Confederation of British Industry, the chambers of commerce, universities, Nobel prize winners, and UK and foreign companies—large and small—have all highlighted the huge damage that the Government’s proposals would do to investment and jobs.

The Home Affairs Committee and the Migration Advisory Committee have said that the proposed cap applies to only 20% of non-EU migration. As a result, we have had the unedifying sight of the Prime Minister hinting at concession after concession—in the face, we read, of opposition from the Home Secretary, thanks to the excellent public lobbying and guerrilla tactics of the Business Secretary, who, sadly, is not in his place this afternoon. In his use of such tactics, he is less Stalin and more Trotsky—and certainly not Mr Bean.

Today the Home Secretary has come to the House to confirm the details of the retreat. We will keep a close eye on her proposals to see how they affect business and science. None the less, we join business representatives in welcoming her decision to exempt intra-company transfers of workers. What has caused confusion is this morning’s briefing to the BBC that the total cap would be 42,700 work permits. Her officials then had to clarify the fact that there is no such cap on that scale. She has now said that she will allow 21,700 tier 1 and tier 2 work permits, but with no cap on migration caused by intra-company transfers. If the number of intra-company transfers goes up, will she put in place an offsetting cut in tier 1 and tier 2 work permits? If not, and I very much hope that she will not, will she confirm that her supposed cap is a con, a guess and a fig leaf—in fact, no cap at all?

The permanent secretary revealed today that 9,000 jobs will be lost from the Home Office, the bulk of which will be from the UK Border Agency. Will the Home Secretary confirm that she can implement the policy that she has outlined today, and keep our borders secure, with those cuts? On family reunification she had nothing new to say—no target—and on overseas students she announced no action, just another consultation.

I have learned in the past few weeks that it is a mistake to ask the right hon. Lady a long list of questions, but there is one question to which it is vital that she should give an answer this afternoon: is it still the objective of the Prime Minister and the Government to cut net migration to the tens of thousands by 2015? In her statement she repeated the goal, but she omitted to put a date on it. Will she reaffirm the 2015 promise? In recent months—on VAT and tuition fees—the Deputy Prime Minister has got into a habit of breaking pre-election promises. Can the Home Secretary reassure us that the Prime Minister has not caught the same disease? This is a simple question. Is the “tens of thousands” pledge still binding by 2015—yes or no?

[Mrs May]

I thank the right hon. Gentleman for that response. During the Labour leadership campaign, he said:

“as many of us found in the election, our arguments on immigration were not good enough.”

Listening to him today, I realised that Labour’s arguments on immigration are still not good enough. He made a number of claims about what the Labour Government did on immigration, including the claim that they introduced transitional controls when new member states entered the EU. I seem to remember that when the first tranche of new member states entered the EU, that is precisely what they did not do, despite every blandishment from the Conservatives to encourage them.

The right hon. Gentleman then said that the previous Government took action on the points-based system limits. I accept that, but what happened? They closed tier 3 of the points-based system of entry into the UK, but nothing else, so when tier 3 shut down, the number of student visas went up by tens of thousands. That is why this Government know that when we deal with one part of the immigration system, we must act across the whole of it.

I made the figures for the tier 1 and tier 2 caps that we are introducing absolutely clear in my statement. The right hon. Gentleman asked whether the UK Border Agency could manage the cuts and keep our borders secure with the changes in personnel that will be made, and the answer to that, unequivocally, is: yes, it can.

Finally, the right hon. Gentleman asked me to confirm what I said in my statement, which is that we aim to reduce net migration from the hundreds of thousands back down to the tens of thousands—[Hon. Members: “When? By 2015?”] If he is to criticise the Government’s plans on immigration, the right hon. Gentleman must have a plan. So far he does not even have an immigration spokesman, let alone an immigration policy. The British people, who according to his own words felt that Labour was no longer on their side and no longer stood up for them on immigration, will not listen to him until he has an immigration plan.

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

If the cap is set too low—in other words, at a level that stops UK businesses creating wealth and jobs—or too high, how quickly can it be adjusted, and how will the adjustment process work?

[Mrs May]

We are confident in the work that we have done, and in the fact that we have got the cap—and, crucially, the changes to policy—right. The announcement is about not just the figure, but the change in policy. The Migration Advisory Committee will undertake an annual review, so it will be able to advise the Government on what the figure should be in future, after considering how behaviour has adapted to the policy changes that we are introducing.

[Fiona Mactaggart (Slough) (Lab)]

The right hon. Lady says, “We will end the link between temporary and permanent migration.” How can temporary migrants, whether spouses or workers, earn permanent settlement?

[Mrs May]

I am grateful to the hon. Lady, because she gives me the opportunity to say that we will be making initial changes to the settlement proposals, but that we also intend to consult more fully on exactly how we will introduce changes to settlement more widely. The initial changes will relate to the language requirements, but we will also look at the salary levels required for a sponsor to bring somebody in for settlement, and at the criminality thresholds. Those are the immediate issues that we will consider. I also intend to ask the Migration Advisory Committee to do some more work on changing the settlement requirements in the longer term.

[Nicholas Soames (Mid Sussex) (Con)]

I congratulate the Home Secretary and the Minister for Immigration on this admirable programme and the excellent start made. May I press her a little further on the breaking of the link between settlement and people coming here to work temporarily? At what stage does she expect to introduce the measures necessary to achieve that?

[Mrs May]

I thank my hon. Friend for that question, and echo his thanks to my hon. Friend the Minister for Immigration for his sterling work. We are keen to look at these other routes, particularly the settlement route, as well as at the other aspects, and over the coming months, as I indicated in response to the hon. Member for Slough (Fiona Mactaggart), we will be asking the Migration Advisory Committee to consider the matter so that we can introduce the changes. I hesitate to put an absolute date on that, but I hope that we will be able to announce something next year.

[Keith Vaz (Leicester East) (Lab)]

The Home Secretary is more famous for her footwear than her headgear, but may I welcome the exemptions to the cap that she has announced today? The Home Affairs Committee made recommendations on intra-company transfers and elite scientists, and this is the right approach for the immigration policy that the Government have decided to pursue. On students, however, she will not be able to tackle the issue of bogus colleges unless she accepts a previous recommendation by the Committee to restrict the use of the word “college”. It is because this word continues to be used that people enter this country and pursue non-educational courses. Will she please look into that? Will she also examine how the whole administration of the immigration system operates in relation to illegal immigration?

[Mrs May]

I thank the right hon. Gentleman for his question. His turn of phrase encourages me to enjoy my time in front of the Home Affairs Committee when that happy occasion next comes around. He also made a serious point about his Committee’s past recommendations on this issue. We will certainly look at his specific suggestion. We need to consider a number of ways of ensuring that students coming to the UK are genuinely coming as students and to institutions properly offering an education and providing a qualification. This is not just about the immigration system, but about the reputation of the UK, because we do not want people to come here thinking they are coming to a college on an educational course, but then find that they have come to something quite different.

[Mr Stewart Jackson (Peterborough) (Con)]

I generally welcome my right hon. Friend’s statement—but on EU migration, are we not in danger of ignoring the lessons of the past six years, when we imported more than 1 million low-wage and low-skilled workers, despite having 5 million of our own citizens on out-of-work benefits? Will she also explain why importing highly skilled workers is practical, when we have record numbers of UK and British graduates who could and should do those jobs?

[Mrs May]

My hon. Friend is right about the need to ensure that people in the UK are skilled enough to take up the work available. The figures show that EU-UK immigration and emigration numbers have broadly balanced out, and that net migration is coming predominantly from outside the EU. Our immigration policy has to fit in closely with the skills agenda that my right hon. Friend the Business Secretary announced last week. On occasions, however, there will be highly skilled workers with a specialism that a British company needs—in areas such as the energy sector, for example—and it is right for Britain to be open for business, and for us to allow companies to grow by introducing those workers into the UK.

[Mr Frank Field (Birkenhead) (Lab)]

Given the views that were so robustly expressed during the general election campaign, I welcome, on behalf of many of my constituents, the Home Secretary’s statement. Will she bear in mind another of their views, which is that they are now aware that the population of this country is primarily pushed by immigration? Will she tell us more certainly when she will return to the House to give a statement on breaking the link between coming here to work, which is often welcome, and almost automatically getting the right to citizenship?

[Mrs May]

I am grateful for the right hon. Gentleman’s comments, and for his work, with my hon. Friend the Member for Mid Sussex (Nicholas Soames), on settlement in the UK. They have both done a lot of important work in highlighting the issue. I am afraid that I will disappoint the right hon. Gentleman in not being able to give him a date when I will come to the House, but I assure him that I will do so in due course, to show how we will be able to change that route. As he said, the British public were absolutely clear that the Government should do something about this matter. They saw a Labour Government who did not do anything about immigration. We are a Government who will deliver for the British people.

[Several hon. Members]

rose—

[Mr Speaker]

Order. A great many Members are seeking to catch my eye, and I should like to accommodate as many as possible, so brevity from the Back Benches and the Front Benches alike is required.

[Henry Smith (Crawley) (Con)]

I warmly welcome my right hon. Friend’s statement. She correctly mentioned student visas, and then mentioned consultation. Given that we have had 10 years of almost mass immigration, will she assure the House that that consultation will be swift?

[Mrs May]

I am happy to assure my hon. Friend that we will issue that consultation very shortly, and that we want to be in a position to make changes to student visas next spring.

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

The immigration cap may be designed for the south of England, but it definitely does not fit Scotland. Does the right hon. Lady not even start to understand and appreciate that Scotland has a different range of population and demographic issues? How can immigration caps possibly help Scotland, which is suffering from structural depopulation?

[Mrs May]

This proposal will help all parts of the United Kingdom, because it does two crucial things. It meets the British people’s need to see us controlling our immigration system, but it does so in a way that will enable business to bring in skilled workers. Many businesses in Scotland have spoken to us about the need to bring in skilled workers—in the energy sector, for example—and I believe that they will welcome our decision today.

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

Specifically on the energy industries, on which so many jobs in my constituency depend, I welcome the flexibility and movement. Will the Home Secretary assure those industries that small companies in the supply chain will not face too bureaucratic a process for tier 2 applications, and that intra-company transfers will not be so time-limited as to make projects impossible to deliver?

[Mrs May]

I am happy to give the comfort that my hon. Friend asks for. Indeed, we will look at the administrative process for tier 2 applications to ensure that they involve as little bureaucracy as possible, with small companies particularly in mind. I hope that he will see some benefits from that.

[Mr Denis MacShane (Rotherham) (Lab)]

I wonder how many of us would be sitting here today, if in the 20th century our parents and grandparents had had to go through the sieve that the Home Secretary is putting in place to slow down the number of people coming to the UK. Does she agree, and will she say so more strongly, that the arrival of 10% of the English population in the form of Huguenots enriched Britain, that Jews who came here enriched Britain, and that Muslims and Pakistanis in my constituency have enriched Britain, and will she be very careful before she gives any comfort to Migrationwatch, the British National party and the United Kingdom Independence party, and their horrible anti-immigrant line?

[Mrs May]

I have to say that several of the groups that the right hon. Gentleman has mentioned came here as refugees, and we are not talking about the asylum system today. We do need to examine the operation of our asylum system to ensure that it operates swiftly in the interests not only of the UK, but of those who are seeking asylum. However, that is not what we are debating today.

[Mr Peter Bone (Wellingborough) (Con)]

Hon. Members will be delighted that the Home Secretary has announced this policy to the House first, and that the BBC was so wonderfully misinformed this morning. In Wellingborough, immigration is the No. 1 issue, but my constituents are more concerned about people coming from the European Union. I wonder how that question is going to be addressed.

[Mrs May]

Unlike the last Labour Government, we have been absolutely clear that, for any new member states entering the European Union, we would apply transitional controls.

[Mr Dave Watts (St Helens North) (Lab)]

Are not these proposals a damp squib that will have no real impact on the number of people coming to Britain? Bearing in mind that the Government have already ruled out EU migrants, intra-company transfers, students, sportsmen and women and anyone in the arts, who is left?

[Mrs May]

Labour Members really are going to have to get their story in order as to exactly what they want to do on immigration. We want to ensure that Britain is open for business and that we can bring in skilled workers, which we will be doing, but that we can put in a cap that enables us to reduce net migration into this country. That is what the British people want, and it is what this coalition Government will deliver.

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

May I welcome the statement as representing a constructive way forward? Does the Minister agree that foreign students should leave the country and reapply if they want to change their course or apply for a work permit?

[Mrs May]

My hon. Friend has raised an important point. One of the issues around students relates to those who come here to study one course and then move from course to course in order to be able to stay here. We will be looking at that issue in the consultation, and I can assure him that the proposal he has just made is exactly the kind of thing that will be in the consultation.

[Jim Shannon (Strangford) (DUP)]

The Home Secretary has suggested that there might be some concessions for those involved in the fishing industry. By and large, I welcome the proposals put forward today, but she has mentioned a concession of a year until September 2011 in regard to work permits for Filipino fisherman. Would she be prepared to consider extending that arrangement for another year, given that the fishing industry feels that it cannot do without it?

[Mrs May]

I think that we will have to look at that matter again closer to the September 2011 deadline. I simply say to the hon. Gentleman that the more exceptions to the rules that people claim, the less effective the overall rules will be. We are absolutely clear that, within the rules that we have set, there are groups of very specialist workers. A number of issues have been raised with me about people with very particular skills who are needed by certain industries, and who we believe can come in, within the routes that we are setting out.

[Mr Aidan Burley (Cannock Chase) (Con)]

Tony Blair’s adviser once said that the sharp increase in immigration over the past 10 years was partly due to

“a driving political purpose: that mass immigration was the way that the Government was going to make the UK truly multicultural”.

Can the Home Secretary confirm today that so-called social objectives are no longer acceptable as a reason for immigration, and that it should be based instead on the economic benefits that immigrants can bring to this country?

[Mrs May]

As I said at the beginning of my statement, controlled migration can benefit this country economically, socially and culturally, but we are absolutely clear, in looking at the routes into the country for economic migrants, that the people who are coming in will bring a genuine economic benefit to the UK.

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

Does the £40,000 figure for intra-company transfers refer only to salaries or to salaries plus benefits?

[Mrs May]

In line with current arrangements, there will be some allowance for allowances.

[Mark Reckless (Rochester and Strood) (Con)]

Immigration from Ireland to the UK has doubled from 7,000 to 14,000 as the euro crisis has developed. Will the Home Secretary confirm that, as well as having a legal right to come, those young people will be welcomed to our shores, and that we will continue to create the jobs that they need?

[Mrs May]

My hon. Friend raises an interesting point that will be in many people’s minds, given the situation in Ireland at the moment. Of course, movement is available within the European Union area, and movement from Ireland into the UK has been long standing.

[Mike Gapes (Ilford South) (Lab/Co-op)]

What procedures and resources will be available for enforcing these proposals, given that one of the problems, under successive Governments, has been people overstaying when their visa has expired?

[Mrs May]

One of the issues that we will look at among specific groups, such as students, is the number of people who overstay. That is one of the problems and abuses of the system, but, unlike the previous Labour Government, the current Government are committed—in addition to what we are doing on immigration—to proper UK border controls, through our work to ensure a UK border force.

[Mr James Clappison (Hertsmere) (Con)]

May I warmly welcome the sensible decisions that my right hon. Friend has taken? Does she agree that, although the economic migration that she intends to permit is clearly of benefit to the nation, a population pushed up to 70 million is not? That is the inheritance she faced, on official figures, from the policies of the Labour party.

[Mrs May]

I thank my hon. Friend for his intervention. It is clear that, if we take no action, the numbers of net migrants to the UK are likely to continue to be about 200,000 a year. We think that we need to do something about that, which is why we are introducing the package today and will be introducing further measures on other routes of entry.

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

English language schools in my constituency contribute more than £100 million to the local economy, yet they face real difficulties because of the uncertainty surrounding the student visa system. Will the Secretary of State ensure that a cost-benefit analysis to the UK economy of overseas students who study at our schools is carried out? What words of reassurance can she give to bona fide language schools that there will be a swift resolution to the issue?

[Mrs May]

A number of hon. Members from all parts of the House with English language schools in their constituencies have raised the question of such schools. We take the issue very seriously, and one aspect of the student visas consultation will be aimed specifically at such schools and how we can introduce to the system some changes that will benefit them.

[Gavin Barwell (Croydon Central) (Con)]

I thank my right hon. Friend for her statement, which will be welcomed in my constituency by people of all backgrounds and political persuasions. In particular, I welcome the exemption for wealth creators and the re-focusing of tier 1 on eminent scientists. Will she tell the House a little more about how the 1,000 limit will work?

[Mrs May]

We are finalising the details of exactly how the 1,000 limit will work. We are also considering a role for bodies, such as research councils, in confirming those people who would be of benefit. We want to include not just those who are at a point in their career when they are known to be great scientists, artists and so forth, but also exceptionally talented people who are at the beginning of their careers.

[Derek Twigg (Halton) (Lab)]

The Home Secretary says that the aim is to reduce net migration from the hundreds of thousands to the tens of thousands. Will she specify when she intends to do so? I thought I heard her say 2015, but doing that while slashing the border agency staff who need to do the job of policing is not going to wash with the British public.

[Mrs May]

I had answered the point about what I said in relation to tens of thousands, and I answered the shadow Home Secretary’s point about the UK Border Agency. As I said, we will be able to deliver the policy through the agency, and we will be able to ensure that the agency can deliver on its requirements, and we as a Government are committed to reinforcing our border security by introducing a border police command in the new national crime agency.

[Stephen Lloyd (Eastbourne) (LD)]

There are many approved, well-established and highly reputable English language schools in my constituency. I support much of the statement’s content, but I am profoundly concerned about any further delay in sorting the problem with people coming to the UK to study English at such schools. I urge the Home Secretary to agree to meet me, a cross-party delegation of MPs and the Immigration Minister as soon as possible, because many companies and businesses in Eastbourne and throughout the UK are suffering badly. I urge her to grant me that opportunity.

[Mrs May]

I am well aware that my hon. Friend has made significant representations on that point, as have other Members. Indeed, I believe he has already met the Immigration Minister. I would be happy to meet a group of MPs to discuss the matter, and, as I said in response to the hon. Member for Brighton, Pavilion (Caroline Lucas), we are very well aware of the point, which has been well made by many Members. We are conscious of the economic benefits of English language schools and some of their very specific issues with particular students from particular countries. We are looking at how we can address that issue in our student visa proposals, but I would be happy to meet a group of MPs.

[Kerry McCarthy (Bristol East) (Lab)]

I agree entirely with the need to take swift removal action against people who overstay their work or student visa entitlement, but this country has a problem with people who have overstayed for many decades and have given birth to children who are now adults. Can anything be done to regularise their situation so that they can go into legitimate employment without having to go through all the same hurdles and costs of applying for citizenship that others do? This represents a real barrier for those people.

[Mrs May]

We inherited the legacy programme from the last Government and had to deal with a significant backlog of cases, some of which related to people who have lived here for many years. Their cases had simply not been tackled with the right and proper degree of speediness. As the chief executive of the UK Border Agency confirmed to the Home Affairs Select Committee, we aim to finish that legacy programme by next summer. Looking to the future, we need to ensure that we do not get into the situation again of allowing people to come here and making them wait many years for an answer from the Government as to whether or not they can stay.

[Stuart Andrew (Pudsey) (Con)]

It is a disgrace that last year 1,600 visas were granted to people who wanted to work in care homes when there are 33,000 care workers claiming jobseeker’s allowance. Does my right hon. Friend agree that this is a kick in the teeth for those unemployed care workers, proving that her proposals are exactly the right policy to introduce?

[Mrs May]

I absolutely agree with my hon. Friend that this is the right policy for us to introduce. Many people, not just care workers, are unemployed, yet they have to see care workers being brought in from overseas. Of the many graduates in the UK, one in 10 are unemployed six months after their graduation. Last year, however, I believe that 38,000 overseas students stayed here after their graduation to work in the UK. We need to deal with that and we also need to ensure that we get the skills training right for people in the UK. The action we have taken on immigration today is not just an indictment of the last Labour Government’s failure to do something about the problem, but is also a very sad commentary on their failure to deliver a proper skills agenda for the UK.

[Paul Blomfield (Sheffield Central) (Lab)]

May I press the Home Secretary on the issue of language courses? I am thinking particularly of Sheffield International college in my constituency. With its 1,000 students, it plays an important role in the local economy and as a feeder institution helping students to proceed on to our two universities. All that makes an enormous economic contribution.

[Mrs May]

I thank the hon. Gentleman for echoing the importance of this issue, which was also raised by the hon. Member for Brighton, Pavilion and by my hon. Friend the Member for Eastbourne (Stephen Lloyd). As I said, I am happy to meet a group of MPs to discuss English language schools. We know how important that issue is and we are looking to address it through consultation.

[Robert Halfon (Harlow) (Con)]

May I congratulate my right hon. Friend on her statement and tell her that my constituents will welcome the move away from expressing rhetoric about British jobs for British workers towards taking substantive action? Nevertheless, many people in Harlow will be concerned that their jobs are being given away, particularly by big companies like the major supermarkets, to temporary migrant workers. Will my right hon. Friend set out how her measures will help this situation?

[Mrs May]

I believe that our measures will help because they will tighten up the provisions to ensure that the people who come into this country under either tier 1 or tier 2 are the skilled workers that companies need, not those coming here to do low-skill jobs. We will also tighten up on the intra-company transfers route through the salary threshold so that that route is available, as it was always intended to be, for senior managers and people with specialist skills rather than for people doing low-skill jobs.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

May I concur with what has already been said about the position facing English language schools? It is a difficult position and it needs to be addressed urgently. This country is already losing custom as it goes to other countries—we are not the only country where English is spoken—so I urge the Home Secretary to do something about the problem quickly. Otherwise, areas like mine, where English language schools contribute significantly to the local economy, will suffer.

[Mrs May]

There may be other hon. Members who wish to raise the issue of English language schools from their constituency viewpoint. Let me say to the hon. Gentleman, as I have to others, that we are well aware of this issue and we are looking to address it as we deal with student visas. Although many English language schools offer a very good product and are of significant economic benefit to the UK, I also need to point out that this sector of the economy is not completely free from abuse. Sadly, some schools do damage to others by setting themselves up as English language schools and then not offering the right services.

[Sajid Javid (Bromsgrove) (Con)]

I welcome my right hon. Friend’s statement, but does she agree that as well as controlling immigration, we should do more to ensure that those who settle here and integrate with us respect our culture, traditions and values, and make greater efforts to learn our language?

[Mrs May]

I think it is important for people who come to live here in the United Kingdom to be able to participate in society. That is why next week we are introducing an English language test for those who wish to come here to join a spousal partner. I think it only sensible for someone who is coming to live here to be able to speak English, and thence to participate in society.

[Mr Ian Davidson (Glasgow South West) (Lab/Co-op)]

I welcome the statement in general terms, but I do not believe that it goes far enough. There is still uncontrolled migration from the European Union, certainly to my constituency, into which have come a substantial number of unskilled and semi-skilled European workers who are undercutting the unemployed work force. What steps will the Home Secretary take to ensure that some curbs are placed on those people?

[Mrs May]

I hear what the hon. Gentleman says. He has a record of having taken a rather different view from the Front Bench Members of his party when it was in government. As I have made clear and as the figures show, the vast majority of net migration is from outside the European Union. The flows into and out of the country of British and EU citizens balance out, and have done so for the past few years. As for the future, the Government have made it absolutely clear that if there are any new member states, we will exercise transitional controls.

[Gordon Henderson (Sittingbourne and Sheppey) (Con)]

Does my right hon. Friend recognise that many British workers in the IT industry are very concerned about losing their jobs as a result of intra-company transfers? Can she reassure them that she will crack down on the abuse of the system that has been witnessed by some IT companies?

[Mrs May]

As I said in my statement and have said in response to a number of questions, we are tightening the rules relating to tier 2 entry to the United Kingdom, as well as those relating to intra-company transfers. We will ensure that those who come here really are the skilled and highly skilled workers who are needed. However, my hon. Friend’s point echoes one made by a number of other Members about the need to ensure that businesses in the United Kingdom seek the skills that are available here.

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

I should hate to misrepresent the Home Secretary. To avoid confusion, will she tell us whether she will reduce net migration to tens of thousands by 2015—or has she just dropped the Government’s specific commitment to that date?

[Mrs May]

We have been absolutely clear about our aim in regard to net migration, and we made it absolutely clear in the coalition agreement that we were committed to introducing an annual limit on non-EU economic migration. That is what we are doing today. [Interruption.]

[Mr Speaker]

I call Paul Uppal. [Interruption.] Order. I am quite worried about Opposition Front Benchers. They are in a state of quite extraordinary excitement, but I want to hear Mr Uppal.

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

Thank you, Mr Speaker.

Immigration cases take up most of the case load at my weekly surgery, particularly during the summer months, when the wedding season and many other family occasions take place. Will the Home Secretary and the Minister for Immigration, my hon. Friend the Member for Ashford (Damian Green), consider pinning down responsibility for sponsorship when people come here to visit their families on such occasions? That would tackle head-on the problem of absconding, fraud and overstaying. The last Labour Government examined the matter when immigration was an issue, but they ducked it and chose not to do anything about it.

[Mrs May]

My hon. Friend has made an interesting suggestion. When we consider the issue of family visas, we will be happy to accept representations from him on that and any other ideas that he may have.

[Mark Durkan (Foyle) (SDLP)]

Will the Home Secretary say more about how she believes that the needs of particular sectors of the economy, and the pressures on them, can be properly respected and responded to within the new annual limits? Is a regional dimension built into any of the Government’s proposals? We know that before the election the Liberal Democrats spoke of huge regional issues relating to immigration. Does the new regime take any account of the needs of, and the pressures on, particular regions?

[Mrs May]

The proposals I am setting out today apply to immigration policy across the United Kingdom. To respond to the hon. Gentleman’s first point, I am confident that the needs of particular sectors will be met through our changes to tier 1, tier 2 and the intra-company transfer route. We have listened very carefully to business, and the CBI recently said it thought that

“a workable...solution would encompass…protection of sponsored work permit numbers as a priority ahead of those without a job offer”,

which we have done. The CBI also said that by

“prioritising the demand-led part of the system—Tier 2—in this manner the government will be able to deliver on its goal of reducing net migration without damaging business”,

which, again, is exactly what we have done.

[Mr Dominic Raab (Esher and Walton) (Con)]

I welcome the statement. Does the Home Secretary agree that the UK economy’s dependence on skilled labour from abroad highlights two of the starkest failures under the last Government: the promotion of welfare dependency, and the failure to improve skills and training?

[Mrs May]

My hon. Friend is absolutely right, and it is important that we see the policies announced in the statement in the context of our welfare reform policy, the Work programme to be brought in next year, and the Business Secretary’s proposed skills agenda, which he introduced in a White Paper last week.

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

During last Thursday’s immigration debate, the Home Secretary’s departmental colleague, the Under-Secretary of State, the hon. Member for Old Bexley and Sidcup (James Brokenshire), said:

“We therefore aim to reduce net migration to the levels of the 1990s—tens of thousands, not hundreds of thousands, each year by the end of this Parliament.”—[Official Report, 18 November 2010; Vol. 518, c. 1120.]

The end of this Parliament will, of course, be in 2015. May I offer the Home Secretary another opportunity to confirm categorically that that is still her Government’s policy this week?

[Mrs May]

I say to the hon. Lady that it is the position—[Interruption.] Listen very carefully. I will say this only once: we aim to reduce net migration from the hundreds of thousands to the tens of thousands by the end of this Parliament.

[Harriett Baldwin (West Worcestershire) (Con)]

Returning to the issue of student visas, we have quite a few boarding schools in West Worcestershire, such as Malvern college, St Michael’s college in Tenbury Wells and Malvern St James college, which attract students from all around the world. They are highly trusted sponsors, but they are already finding that the system is slowing them down. Can the Home Secretary reassure these colleges that the process will become faster?

[Mrs May]

I am happy to give my hon. Friend that reassurance. While we are consulting on focusing the student visa route on universities, further education colleges and degree level courses, highly trusted sponsors will be able to offer courses at below degree level, and I would expect that the schools to which my hon. Friend has referred would be able to continue to offer courses because, as she says, they are highly trusted sponsors.

[Mr William Bain (Glasgow North East) (Lab)]

Two months ago, UK executives at Toyota told me of the benefits for their company and the wider British economy of the transfer of knowledge and skills through intra-company transfers. Will the Home Secretary publish the economic analysis that I am sure she has performed of the impact on growth and output of restricting intra-company transfers of longer than 12 months to those on salaries of more £40,000?

[Mrs May]

I gave some figures in my statement, and I am also happy to be able to say to the hon. Gentleman that the Minister for Immigration met representatives from Toyota to discuss their particular needs, and I understand that they were comfortable with our proposals.

[Andrew Griffiths (Burton) (Con)]

I congratulate the Home Secretary on having the grit and determination to introduce this important proposal. She rightly pointed out the kinds of abuse we saw under the previous Government in respect of programmes such as the student visa scheme, which meant that many people were here who should not have been. What measures are her Department taking to ensure that those who are here illegally are removed—and removed quickly?

[Mrs May]

We are considering the measures that could be taken against those colleges or so-called colleges that just enable students to come here to work and then stay on, rather than be removed. As I said in answer to a number of other hon. Members who raised this or similar issues, this Government are committed to strengthening our borders through the border police command within the national crime agency.

[Mark Pritchard (The Wrekin) (Con)]

I welcome the Home Secretary’s statement. I just hope that the consultations do not take too long and that the whole House will have an opportunity to debate all these issues in detail, probably with an immigration Bill. Given the rampant abuse of tourist, student, work and family visas, is it not time that an incentive is provided for those tempted to overstay or those who have overstayed by saying that they can return to their country of origin voluntarily or be barred from re-entering this country for at least 20 years? That would be an incentive that would work.

[Mrs May]

I think I will take that as my hon. Friend’s contribution to our consultation exercise on student visas.

[Michael Ellis (Northampton North) (Con)]

I congratulate the Home Secretary on this statement. The shadow Home Secretary has apparently admitted in the media that the Labour party, when in government, made a mistake in 2004 by not applying transitional controls to enlargement of the European Union then.

[Ed Balls]

indicated assent.

[Michael Ellis]

I see the right hon. Gentleman nodding. Can my right hon. Friend assure the House that such transitional controls will be applied to any further enlargements of the European Union?

[Mrs May]

I am very happy to give my hon. Friend that commitment on any future new member states entering the European Union. I am fascinated that the shadow Home Secretary stood up in response to my statement and claimed that the previous Government had introduced all these transitional controls, yet now we hear that he says they made a mistake in not doing this properly.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

I warmly welcome my right hon. Friend’s statement, which will go a long way towards assuaging the concerns of my constituents. They are not so worried about business people being here for two or three years; they are worried about the permanent settlement that automatically seems to be granted when someone has lived here for four years. Can she give further assurances about the criminality aspect, because that is another great concern in my constituency?

[Mrs May]

We are indeed looking at the criminality criteria for entering in order to tighten them up; we want to look at people’s records when considering who can enter the UK. We think that that is an important element that we should be looking at, and I know that the issue has concerned a number of people.

[Dr Sarah Wollaston (Totnes) (Con)]

Has the Home Secretary made an estimate of the number of sham marriages, particularly those to EU migrants to the UK? What further measures will she take to deter this and punish those responsible?

[Mrs May]

I do not have an estimate of the number of sham marriages, but I am happy to say to my hon. Friend that the UK Border Agency was very active in stopping sham marriages over the summer; we had a very big crackdown on them. Many people were concerned and surprised to see that a Church of England vicar was caught and arrested for helping sham marriages to take place.

[Christopher Pincher (Tamworth) (Con)]

Last and most certainly least, I welcome my right hon. Friend’s statement. Does she agree that, although the large-scale import of cheap labour may keep the lid on wage price inflation, it also keeps a lid on productivity because business men who feel that they can import cheap labour are less incentivised to be productive? Does she agree that that is not a competitive model and that the Government should not turn a blind eye to businesses that try to import cheap labour?

[Mrs May]

I have said in some of my conversations with businesses that it is important that they look to ensure that they encourage and provide the training for skills growth and development here in the UK. That is important, as it is in the UK’s interests, the individual’s interests and the interests of those businesses.

[Mr Speaker]

I must thank the Home Secretary and colleagues for their co-operation, as a result of which in 40 minutes of Back-Bench time we managed to get through 44 Back-Bench questions and answers. It shows what can be done when we put our minds to it.

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

Excellent chairing.

[Mr Speaker]

Well, I am always grateful to the hon. Gentleman for his unfailing support and I heard what he said.

Points of Order

Tuesday 23rd November 2010 Commons Chamber

16:29

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

On a point of order, Mr Speaker. Of course, I commend your chairing. Given that we have just witnessed a U-turn on a U-turn, I am tempted to ask whether you might allow the Home Secretary to start again, but I fear that that might be ruled out of order.

On a more serious point, may I ask whether the Home Secretary contacted you today about the leak of her statement to the BBC? Did she explain why the statement was leaked to the BBC, and do you think it would be appropriate for her to explain to the House why the details of her statement were leaked to the BBC this morning?

[Mr Speaker]

I sometimes wonder whether these generous initial remarks are a ruse by Members to get me on their side, but I am grateful to the right hon. Gentleman. I was not contacted by the Home Secretary about the matter to which the right hon. Gentleman refers, but he makes his point with force and clarity. I am always concerned that the House should hear key announcements first. However, I would say that when different numbers are being bandied around that is sometimes a sign of a matter for debate rather than a point of order. However, I shall keep my eyes and ears focused firmly on these matters because the House must hear first.

[The Secretary of State for the Home Department (Mrs Theresa May)]

Further to that point of order, Mr Speaker. As you have more or less indicated, I think that the Home Secretary—

[Ed Balls]

Shadow.

[Mrs May]

After 13 years in opposition, as the right hon. Gentleman will discover, one sometimes makes these mistakes. The information that the BBC had was wrong and I am happy to say to the House that any information on the BBC first thing this morning was nothing to do with the Home Office.

[Mr Speaker]

I am grateful to the Home Secretary, and I am glad that we are not going to suffer an identity crisis for any length of time. I would simply say to the House that I think we will leave it there. We have had an exchange, concerns have been expressed and the Home Secretary has made her position clear.

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

On a point of order, Mr Speaker.

[Mr Speaker]

If the hon. Gentleman has a totally unrelated point of order, I am happy to hear it.

[Pete Wishart]

The BBC may or may not have got the Home Secretary’s statement, but the smaller parties most certainly did not get a copy of it in advance. The Government have been pretty good at getting statements to us recently. Will you ensure that the smaller parties, such as the Labour party, get a copy of the statement in advance of its being given?

[Mr Speaker]

In so far as I could fully hear the hon. Gentleman—I apologise if I failed to hear him, but there was quite a lot of noise in the Chamber—I would simply reiterate that there are certain requirements of courtesy on Ministers. Generally speaking, the requirements are complied with and I know that it is always the intention of Ministers to do so. Generally speaking, that happens and if it did not in this case, that was a mistake.

[Mrs May]

indicated assent.

[Mr Speaker]

The Home Secretary nods assent to that proposition. I hope that such a mistake will not happen again.

[Ed Balls]

rose—

[Mr Speaker]

The right hon. Member for Morley and Outwood (Ed Balls) is insatiable today.

[Ed Balls]

Further to that point of order, Mr Speaker. Having heard the Home Secretary’s remarks, I fully accept that it was not her or her Department who made this leak. I hear you saying two things from the Chair: first, that these leaks are undesirable and, secondly, that they are even more undesirable if people get the numbers wrong when they are doing the leaking.

[Mr Speaker]

The question of whether it was or was not a leak remains undetermined. All I can say is that I am Speaker of the House, but I am not Sherlock Holmes. Moreover, as usual, the right hon. Gentleman has used his ingenuity to put his point firmly on the record. If there are no further points of order, perhaps we can come to the ten-minute rule Bill, for which the promoter and some of his supporters have been eagerly waiting.

Grandparents (Access Rights)

Tuesday 23rd November 2010 Commons Chamber

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

16:33

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

I beg to move,

That leave be given to bring in a Bill to give grandparents rights of access to their grandchildren in certain circumstances; and for connected purposes.

Although this might be entitled the Grandparents (Access Rights) Bill, it could just as easily be renamed the grandchildren’s rights Bill. If the Bill progresses, it will increase the rights of grandchildren to access their grandparents.

I want to thank many of the campaigners who were involved in this campaign, which has gone on for some time, including my predecessor as MP for Brigg and Goole, Mr Ian Cawsey, who moved a similar Bill a couple of years ago that was sponsored by you, Mr Speaker. A number of organisations are involved, including the Grandparents Association and I also want to draw on some of the work undertaken by the Centre for Social Justice. Above all, I want to pay tribute to my constituent, Dorothy Fagge, who has been a dedicated campaigner on this issue for a number of years, having twice been to court to access two different sets of her grandchildren. I shall talk about Dorothy’s experience in a moment.

Some 1.3 million families in England use grandparents as the primary source of care for about 1.8 million children, offering a saving to the taxpayer of about £4.8 billion a year given the average cost of child care. That would equate to a cost of about £92 million a week to the public purse.

The Grandparents Association estimates that about 1 million children do not see their grandparents because families have separated or lost touch. For me, the role that my grandparents played in my childhood and until they passed away was incredibly significant, and its value cannot be quantified. There is strong evidence regarding the value of grandparental involvement, particularly in the lives of adolescents, in reducing adjustment difficulties when marriages or partnerships fail. That was reported a few years ago in a national study, “Involved Grandparenting and Child Well-being”.

That view is shared not only by those who have an interest in this area and have campaigned on it, but by young people. A study that was quoted in the Centre for Social Justice’s family law and children report showed that 75% of young people said that a grandparent was the most important person, or one of the most important people, in their life. A sample of 1,500 young people showed that grandparental involvement in schooling and education is linked to lower maladjustment scores and fewer contact problems and that being able to talk to a grandparent is linked to their having fewer emotional and behavioural problems.

As I have mentioned on numerous occasions, before I came to the House I was a schoolteacher. I taught in a number of very deprived communities in Yorkshire and we sometimes found that grandparents were the sole point of contact in a child’s life, acting as an anchor or rock. Often, when all else around was failing, the grandparents were the only people left standing for that young person. Sadly, grandfathers are sometimes the only male role model many young people encounter.

The value of grandparents can never be underestimated. I cannot put that point better than Pam Wilson of the Grandparents Action Group UK, who has stated:

“Grandparents are a link to the past and a bridge to the future, for family history and medical details. To give a child a sense of belonging from the roots of their family.”

Similarly, Peter Harris who was formerly the Official Solicitor and is now with the Grandparents Association, has said:

“Grandparents are known to provide care for grandchildren more extensively than other relatives, and we believe that this puts them in a special category.”

I believe that grandparents should be placed in that special category.

Grandparents can face a number of legal problems, particularly when they have been denied access to their grandchildren as a result of bereavement or divorce. With bereavement, the surviving parent might find a new partner, which might involve the grandchildren being introduced to a new family. Over time, the family might move and grow ever more distant from the bereaved grandparents. With divorce and separation, the grandparents are often forced to take sides and it is human nature for them to side with their own child. That can lead to children being used as a weapon in particularly acrimonious divorces or separations. Access is often denied or, even worse, traded for financial reasons.

All that places grandparents in an incredibly difficult position. Currently, the law is not necessarily on their side. There is no automatic right for a grandparent to go to court to seek contact with their grandchild. In fact, they must seek the court’s permission to seek access through it. The process can be long winded and very expensive. This morning, I spoke to Lynn Chesterman of the Grandparents Association, who told me that the average cost of such a process is about £20,000. That option might be accessible for better-off grandparents, but there would be no possibility of those from more deprived or poorer backgrounds pursuing it.

My constituent, Dorothy Fagge, whom I mentioned earlier, was able to go to court and use substantial amounts of her own finances to gain access to her grandchildren, which had been denied to her in two different circumstances, one of which was incredibly tragic. Despite all her resources and her ability to pay for legal representation, it took her more than a year to gain access.

This is not an easy situation to address. I understand that, and there will always be cases in which contact with grandparents is not desirable, but the courts must determine that. However, I seek through the Bill some changes to the law to protect grandchildren in gaining access to their grandparents. I would like to see an automatic right for grandparents to seek contact through the courts so that they do not have to go through the double process of having to seek leave first. I hope that, through the review undertaken by the coalition Government, there will be moves to establish some form of early mediation to sort out contact issues, such as happens through the Australian family mediation centres.

It has also been suggested that there should be a presumption in law that children have a right of access to their grandparents, subject to the appropriate protections I mentioned earlier. One recent proposal, which is worthy of further investigation, is that children should have, at the very least, an automatic right to letterbox contact with their grandparents while proceedings in the courts are progressing. In the case of a bereaved grandparent, there is a strong argument that the grandparent, who is often the child’s only link to that side of the family, should inherit the right that previously existed for the parent.

I know that this is not an easy issue, and that the Government are already examining it through the family law review, which is due to report next year. As I said at the beginning of my speech, my grandparents were incredibly important to me. I know that for many people the role that their grandparents play in their lives is one that they value for the rest of their lives. It is appalling when grandchildren are used as a tool in divorce or in separation. That is why I would like to see implemented the changes that I have outlined, so that we can better protect the rights of grandparents and of grandchildren.

Question put and agreed to.

Ordered,

That Andrew Percy, Tracey Crouch, Justin Tomlinson, Tom Blenkinsop, Mr Gregory Campbell, Karen Bradley, James Wharton, Greg Mulholland, Chris Skidmore, Martin Vickers, Mr Brian Binley and Craig Whittaker present the Bill.

Andrew Percy accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 17 June, and to be printed (Bill 110).

National Insurance Contributions Bill

Tuesday 23rd November 2010 Commons Chamber

Second Reading

[Madam Deputy Speaker (Dawn Primarolo)]

Before I call the Minister, I inform the House that Mr Speaker has not selected the reasoned amendment tabled in the name of the Opposition.

16:44

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

I beg to move, That the Bill be now read a Second time.

The Bill before us consists of two parts. The first part introduces a 1% increase in the rate of national insurance contributions from April next year, as announced by the previous Government, although let me assure my right hon. and hon. Friends that we will reverse the impact of this jobs tax through an increase in the employer national insurance threshold. We have already announced the increase in the income tax personal allowance.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

I thank the Minister for giving way. What is the net impact on employers of the 1% increase offset by the increase in threshold? What is the impact on individual businesses?

[Mr Gauke]

Compared with the plans that we inherited, the impact of the increase in threshold will be such that employers will pay £3 billion less in employer’s national insurance contributions. The overall reduction of the burden on employment will be £6 billion as a consequence of the overall package.

[Mr David Hanson (Delyn) (Lab)]

Will the Minister confirm, however, that about £1.4 billion is not being compensated for by the threshold? I want us to be clear. He says that he has offset the threshold, but he has offset only about £3 billion, not the whole amount of the rise.

[Mr Gauke]

The fact is that the Labour party would have raised the full amount. We are offsetting £3 billion, which will be most helpful for employers whose employees earn under £20,000. The package is good for employment and, given the fiscal mess that we inherited, I am very proud that this Government are able to reform national insurance contributions exactly as we set out in our manifesto at the general election, and in the coalition agreement.

As far as we can deduce it, the Labour party’s position is that it wants to do more to reduce the deficit by raising taxation and it does not believe in increasing VAT, which will bring in £13 billion a year. We can assume only that it would favour greater increases in national insurance contributions than it had already set out.

We are not going to take any lectures; this Government have managed to reverse a very painful and damaging policy that would have meant employers’ contributions rising for every single employee paying national insurance—and in a way that would have damaged jobs in this country.

[Mike Gapes (Ilford South) (Lab/Co-op)]

Is the Minister aware that the proposals in the Bill discriminate against many areas—in London, in particular—with above-average unemployment? Will he explain to people in my constituency, where according to the Library there is already 6.6% unemployment, why on earth the national insurance contribution holiday does not apply to them?

[Mr Gauke]

The hon. Gentleman brings me on to the second part, to do with the national insurance holiday, which applies on a regional basis. If I can develop my arguments, I will turn in some detail to the precise point that he has set out.

[Stephen Pound (Ealing North) (Lab)]

rose—

[Mr Gauke]

I will give way to the hon. Gentleman, but before I do, may I congratulate him on his long-delayed but much-deserved promotion to the Labour Front Bench?

[Stephen Pound]

That is extremely generous of the Minister. All I can say is that if he was surprised, imagine how I felt.

The Minister just gave the figure for receipts following on from the increase in VAT. Are his figures based on current patterns of consumption or on an anticipated level of consumption? Most economists would say that the VAT increase will depress demand and reduce consumption.

[Mr Gauke]

The sums are based on the assessment made by the independent Office for Budget Responsibility at the time of the Budget. I hope that that provides some clarification to the hon. Gentleman.

Part 1 of the Bill provides for changes, which the previous Government announced in two instalments, to national insurance contributions from next April. Initially, a 0.5% increase in rates was announced in the 2008 pre-Budget report. That was then changed to a 1% increase in the pre-Budget report of the following year.

I am sure that Members will remember that reversing the most significant impacts of those rate rises was a key issue at the general election. The Federation of Small Businesses said that the policy would cost 57,000 jobs. Thirty business leaders supported our campaign to reverse the policy. When the letter from those 30 business leaders—many other business leaders followed shortly—was published, Tony Blair apparently considered that for Labour the game was up. Thankfully, he was right, and we now have in place a Government who are determined to bring down the deficit but also to put in place conditions favourable to private sector-led growth.

In June, we announced our plan to reverse the most damaging aspects of Labour’s jobs tax. There was a choice how best to do this—for example, we could have cancelled the rate and threshold rises—but we have chosen the option that best protects low earners. In the emergency Budget, my right hon. Friend the Chancellor confirmed that national insurance contribution rates would rise by 1%, that the personal allowance would increase by £1,000 from next April, and that the employer national insurance contribution threshold would rise by £21 a week plus indexation. The reform of employer national insurance contributions is exactly as set out in the 2010 Conservative party manifesto.

The Bill sets out how these rises will apply to the main rates of class 1 national insurance contributions. The employer rate will rise from 12.8% to 13.8% and the employee main rate will rise from 11% to 12%. The 1% increase will also apply to class 1A and 1B contributions that are paid on benefits in kind and pay-as-you-earn settlement agreements. The same 1% rise will apply to class 4 contributions paid by the self-employed, which will rise from 8% to 9%. Taking into account the increase in the personal allowances and employer threshold, the net effect of these changes will reverse the damaging £6 billion-a-year net increase in the cost of labour planned by Labour Members. Our package of measures entirely reverses this increase.

Compared with the plans that this Government inherited, no changes are being made to the rates. More than £3 billion a year is being returned to employers through the threshold increase, and even more to individuals through the increase in the personal allowance. Our actions will mean that some 880,000 low earners in the UK will be taken out of income tax altogether.

[Mr Love]

The hon. Gentleman mentions low earners. Of course, the thing that the Conservatives did not put in their manifesto was that they would raise VAT. They talked about national insurance being a tax on jobs, but is it not correct to say that the rise in VAT will destroy more jobs than the national insurance increase would have done?

[Mr Gauke]

No. We agree with the view of Tony Blair and, apparently, the previous Chancellor of the Exchequer that VAT is the right tax to raise if one wants to get a substantial sum of money. The hon. Gentleman will find that most economists take the view that in terms of the impact on jobs, increasing employers’ national insurance contributions is far more damaging than any increase in VAT.

As a result of the package of measures that we are putting in place, employees earning under £35,000 a year will pay less in income tax and national insurance contributions overall, and employers will pay less national insurance on employees earning under £20,000 a year. As well as the 880,000 low earners taken out of income tax, almost 1 million low earners will no longer pay national insurance contributions, while the number of low earners for whom employers pay no national insurance contributions will rise by about 650,000. It is also worth mentioning that people who will now be exempt from paying national insurance will retain the same entitlement to contributory benefits. However, tackling the deficit remains the priority, and the benefits to low earners could be achieved only through the increase in national insurance contribution rates included in the Bill. This decision is fair and progressive, and it will help to support the poorest and most vulnerable in society.

Let me turn to part 2 of the Bill. In the June Budget, my right hon. Friend the Chancellor announced an employer national insurance contribution holiday for new businesses in countries and regions with a high dependency on the public sector. This holiday will apply across Wales, Scotland and Northern Ireland and many regions of England—the north-east, the north-west, Yorkshire and the Humber, the west midlands and east midlands, and the south-west. Those areas have a higher proportion of jobs in the public sector than the rest of the country, and as we take the much-needed steps to rebalance our economy, it is vital that they benefit from additional support.

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

There is no doubt that one welcomes this package of measures, which will help the lower paid in particular. However, will my hon. Friend revisit the Government’s decision to exclude businesses in the south-east from the national insurance holiday? Otherwise, it could be seen to discriminate against local entrepreneurs there and hit the areas that need higher employment.

[Mr Gauke]

I understand my hon. Friend’s point, but the fact is that we have limited resources and have inherited a legacy in which the private sector is relatively strong in some areas, such as his constituency and mine, but much weaker in others. At a time when we cannot rely on massive public spending, and when the public sector will have to find economies, it is perfectly reasonable that we have adopted the approach of focusing on areas where there is high dependence on the public sector.

[Stewart Hosie (Dundee East) (SNP)]

I am very supportive of the proposal in general terms, but when the Government came to their decision on it, did they consider extending it to existing businesses with very small work forces of one or two people as opposed to simply new starts, and did they consider what the cost of that might have been?

[Mr Gauke]

The focus of the policy has always been on start-up businesses. It is an attempt to encourage new businesses to be set up, given where we are in the economic cycle and the need to encourage private sector growth. That is why the Conservative party’s policy before the general election was focused on start-ups. After the election we considered how best to introduce the policy, and came to the view that we should include the regions where the private sector was at its weakest.

[Penny Mordaunt (Portsmouth North) (Con)]

If the scheme cannot be extended to an entire region, does the Exchequer Secretary accept that there will be pockets of that region, such as my constituency, that would benefit massively from it? The area has historically had very low new business start-up rates and would benefit from what I think is an excellent scheme. When I asked his Department about the costs of administering the scheme in such areas, it said that they would be prohibitive, but I cannot understand why that would be. Can he elaborate on that?

[Mr Gauke]

If we were to choose precisely where the policy applied on a much more closely defined geographical basis, we would have difficulties such as distortive behaviour, problems in enforcing the policy, the bureaucracy that may be involved, the need to establish where a company’s principal place of business was, and the difficulty of policing the scheme. Also, labour markets tend to be somewhat larger than constituency or even local authority areas. My hon. Friend is right to highlight the circumstances in Portsmouth, but there are neighbouring seats with a very low level of public sector employment and quite a high level of private sector employment. Such labour market flexibility can exist.

[Mr Andrew Tyrie (Chichester) (Con)]

I take my hon. Friend’s points about the limited resources, the risk of bureaucracy and the difficulty of policing the scheme, but Robert Chote, while he was still at the Institute for Fiscal Studies, described the regional relief scheme as

“complicated…prone to avoidance and oddly targeted.”

I have had a number of representations to that effect. What assurance can my hon. Friend give that the scheme will not be accompanied by an enormous amount of extra regulation and a much higher compliance burden?

[Mr Gauke]

My hon. Friend raises a fair point. We are determined that in administering the scheme, Her Majesty’s Revenue and Customs will adopt a light touch as much as possible. The problems of bureaucracy and avoidance would be much greater if we tried to drill down to constituency or local authority level as opposed to regional level. I assure him that our assessment is that gains for participating businesses will greatly outweigh any administrative costs that they may face.

[George Hollingbery (Meon Valley) (Con)]

It occurs to me that this is a particularly prescribed aspect of the Bill with three particular areas identified. Will the Minister consider taking powers to himself that allowed him not just to exclude areas, but to keep a register of those he felt could be excluded, therefore allowing some flexibility? Should labour markets deteriorate markedly in certain areas, he could then revisit his decision and decide to support certain areas.

[Mr Gauke]

What we must bear in mind is that we have limited resources. If we were to extend this measure to every part of the country, the cost would increase by around 70%—in other words, £660 million over the course of three years. For the reasons that I set out, it would be difficult to drill this down to very precise areas.

[Mr Love]

rose—

[Mr Gauke]

I must make some more progress.

If we are to move to a model of economic growth founded on private sector enterprise and investment, it is important that we encourage the formation of new business. For that reason, the holiday applies only to businesses that have been set up since 22 June, the date of the Budget. To ensure affordability, the holiday is limited to the first 10 employees taken on in the first 12 months of business. For each of those workers, the holiday will last for a single year, unless the closing date for the scheme—5 September 2013—is reached before the 12 months is up.

[John Cryer (Leyton and Wanstead) (Lab)]

I have listened very carefully to the Minister. Some 40% of the people in employment in my constituency work in the public sector. I represent some of the most deprived wards in London, which means some of the most deprived in the country, yet my constituency will be excluded from the holiday, whereas certain leafier parts, outside London and the south-east, will be included.

[Mr Gauke]

A labour market is not restricted to particular constituencies. The fact is that the private sector is much stronger in London and the south-east and East Anglia, and it is right that we focus this help at a regional level.

[Charlie Elphicke (Dover) (Con)]

I welcome this measure. It is just the thing to spur on the private sector. In evidence to the Treasury Committee, Alan Clarke said that it was a “particularly encouraging measure”. Mr Whiting, of the Chartered Institute of Taxation, said that it was a

“worthwhile experiment for the small, new business with new employees.”

This is just the sort of measure to encourage the private sector that the House should be passing.

[Mr Gauke]

I am grateful for that intervention. We have to build this private sector recovery. This measure is a useful contribution, particularly to those regions where the private sector is not as strong as elsewhere. It is a transitional measure, scheduled to end in three years. We are committed to monitoring and evaluating its effectiveness over that period to ensure its success.

It is not our intention for this policy disproportionately to benefit businesses that employ highly paid staff. For that reason, the maximum amount that an employer can profit from any single employee is limited to £5,000. That cap ensures that the policy will not distort European Union markets and that it complies with state aid legislation. We do not expect any significant competitive disadvantage to arise either for existing businesses or for new businesses in regions where the holiday does not apply. The Bill also makes provision for the administration of this measure. Businesses benefiting from the holiday can withhold the employer contributions from the monthly payments they make to HMRC. If the payment cannot be withheld, the businesses can apply to HMRC for a refund. That will help to minimise employers’ costs as well as the costs of delivery.

The Government expect that hundreds of thousands of businesses will benefit from the measure over the next three years. In the Budget, we estimated that new businesses would save hundreds of millions of pounds worth of national insurance contributions during the lifetime of the scheme, giving them the ability to hire more staff, expand their business or invest in the recovery.

[Jeremy Lefroy (Stafford) (Con)]

The Government correctly emphasise the importance of the voluntary sector, and it is likely that there will be a surge in the number of charities that are set up. I declare an interest as a trustee of Stafford Works, which is a new charity. Will the Minister confirm whether charitable trusts and companies are included in the scope of part 2 of the Bill?

[Mr Gauke]

A charitable entity that is located in one of the relevant regions and that carries on a trade, vocation or business will benefit. That is likely to apply to, for example, shops that are run by charities. Such entities must meet that criterion to benefit, but not all charities will necessarily do so.

[Mr Hanson]

Will the Minister tell the House, for the sake of clarity, how many businesses have to date applied for the holiday?

[Mr Gauke]

At this early stage, we have had around 1,000 applications, but we expect more as awareness of the policy becomes greater and as businesses contact their professional advisers. We are keen to publicise the policy, and I encourage hon. Members for any of the relevant regions to notify businesses in their areas. The Government and our policy aim to help businesses and those who want to start a business and get it going. In contrast, the previous Government increased such taxes. Start-up and existing businesses throughout the country faced rising taxes and employers’ national insurance contributions, which was a particularly deeply damaging tax.

The Bill is an important part of the Government’s plan to reduce Labour’s taxation, help those on the lowest incomes, and support private enterprise and employment in the parts of the country that need them most. It is a simple and important Bill, and I commend it to the House.

17:04

[Mr David Hanson (Delyn) (Lab)]

I am grateful to the Minister for his exposition of the Bill. We will test aspects of it in Committee and at other stages in its passage. As he said, it divides effectively into two parts. The first part is the increase in national insurance contributions by 1%, which we will support because we want to ensure that we protect services and support our economy. The second part introduces a three-year regional national insurance holiday for new employers. As the Minister said, many businesses will qualify for their first 10 employees in their first year of business; I shall return later in detail to the question of the regions and areas that will not qualify.

Let us first consider the national insurance contributions. The Minister rightly said that this policy was set out both in the Labour manifesto and elsewhere in the period before the general election in May. My right hon. Friend the Member for Edinburgh South West (Mr Darling), the then Chancellor, announced in the pre-Budget statement on 9 December 2009 that the previous Government would increase national insurance contributions by 1% to protect public services. We had a choice, and we were straight about it both before and during the election. Raising national insurance contributions was a tough decision, but we ensured that we would protect those earning less than £20,000 a year.

The Conservatives condemned that national insurance rise throughout the election, but—surprise, surprise!—they have now decided to go ahead with it. In the Conservative manifesto, which I have come to recognise is not worth the paper it was written on, the party committed itself to raising the thresholds for national insurance by £24 a week, the upper earnings limit by £29 a week, and the secondary threshold at which employers start paying national insurance by £21 a week. I look forward to seeing the details in the secondary legislation.

My intervention on the Exchequer Secretary showed that although the Government are raising the thresholds, there is still a shortfall of about £1.4 billion in employer national insurance contributions. The Labour party was open about that in the run-up to, and during, the general election, but the Conservative party was not. In my view, this is all smoke and mirrors.

[Mr Gauke]

Page 8 of our manifesto stated that we would

“raise the secondary threshold at which employers start paying National Insurance by £21 a week.”

The secondary legislation will increase the secondary threshold at which employers start paying national insurance by £21 a week, so we are doing exactly what we said in the manifesto.

[Mr Hanson]

But there were no caveats about a shortfall in the Budget proposals of about £1.4 billion. I think it is smoke and mirrors—and, as my hon. Friend the Member for Edmonton (Mr Love) said, it is coupled with the increase in VAT from next year. The VAT rise will impact more than three times as much as the increase to national insurance contributions would have done, and will affect 250,000 jobs.

[Charlie Elphicke]

Will the right hon. Gentleman give way?

[Mr Hanson]

I will give way to the hon. Member for Dover (Charlie Elphicke); the national insurance holiday will not apply in his constituency.

[Charlie Elphicke]

The right hon. Gentleman is right that the national insurance holiday will not apply in my constituency—a matter that I regret. Nevertheless, I welcome the fact that 1,400 of the least well-off people in my constituency will be taken out of tax altogether. It seems that he opposes the increase in the personal allowance and would rather cut national insurance, which we originally planned to do. Instead, we are helping the least well-off. Surely he would welcome that.

[Mr Hanson]

I look forward to the hon. Gentleman going back to Dover to explain why he is supporting not only a Bill that does not give a national insurance holiday to his constituents, but the VAT rise elsewhere in the Budget proposals—we need to look at that in the round—which will impact on pensioners, the low paid and everybody in his community. This is not a topic for today, but the debate on the national insurance rise was open and honest on our side. During and after the election, the Conservative party argued against the rise, but it is now implementing it. On top of that, it is not meeting the objectives in its manifesto and has increased VAT. I think that a VAT rise is a regressive tax policy that will hit the poorest hardest, but that is the choice that the Conservative party has made.

I want to focus most of my remarks on the second part of the Bill. The decision to introduce a regional employer national insurance holiday is welcome, but it specifically excludes new businesses in Greater London, the south-east and the eastern region. We tabled a reasoned amendment that has not been selected, but which would have declined to give a Second Reading to the Bill because of those exclusions. I sense that the hon. Members for Portsmouth North (Penny Mordaunt), for Meon Valley (George Hollingbery) and for Basildon and Billericay (Mr Baron), who spoke earlier, will have expressed their concerns about how the choices on the national insurance holiday were made. [Interruption.] The Economic Secretary to the Treasury says that we would have increased national insurance contributions across the board.

[Madam Deputy Speaker]

Order. We cannot have comments shouted across the Floor from a sedentary position. It makes it very difficult for Hansard to record our proceedings, particularly when the comments are then referred to without having been recorded. Will the hon. Lady make her point from the Dispatch Box, so that the right hon. Gentleman can answer it?

[The Economic Secretary to the Treasury (Justine Greening)]

My point was that the Labour party would have increased NICs for absolutely everybody.

[Mr Hanson]

The hon. Lady knows that that was a clear and honest policy that we put to the electorate. The Government have now introduced proposals for a national insurance holiday for new businesses in certain regions. I will explore shortly why we think that that choice is unfair in the context of the resources the Government are trying to save.

[Justine Greening]

Can the right hon. Gentleman tell us whether it is still his party’s policy to go ahead with those NIC rises?

[Mr Hanson]

I have said what I have said. We were open and honest during the election campaign, and we will support the rise proposed in the Bill, because we expected to do that. During the election campaign, the Economic Secretary and the Exchequer Secretary attacked the NIC rise without proposing the alternative that they have seen through in practice.

Let us put that aside, because the key issue before the House is the payment holiday. We do not believe that it is being proposed fairly, honestly or openly, and we do not believe that it will help the poorest and most deprived areas of the UK, which in great part are excluded from the scheme. Of the top 12 most deprived local authorities on the economic deprivation index, no fewer than seven will be excluded from the payment holiday. The seven boroughs of Hackney, Newham, Tower Hamlets, Islington, Barking and Dagenham, Haringey and Lambeth are excluded from the scheme.

In his written statement on 6 September, the Exchequer Secretary said:

“The Government are determined that all parts of the UK benefit from sustainable economic growth”.—[Official Report, 6 September 2010; Vol. 515, c. 1WS.]

If we are having a holiday from national insurance contributions, I do not understand how excluding those areas from the payment holiday will do that.

I want to challenge the Government’s logic. They claim that the reasoning behind the policy is that areas outside London, the south-east and the east are more reliant on public sector employment. Will the Exchequer Secretary confirm that that is his logic?

[Mr Gauke]

indicated assent.

[Mr Hanson]

The Minister has confirmed that. Tomorrow’s business leaders who want to start businesses in the constituencies of Oxford East, of Luton North, of Lewisham East, of Canterbury, of Southampton, Test, of Eltham, of West Ham, of North Thanet, of Hackney North and Stoke Newington, of Tooting, of Islington North, of Dulwich and West Norwood, and of Brighton, Kemptown will miss out. I mention those constituencies specifically because they are in the top 10% in the country with the highest percentage of public sector employment.

As the hon. Gentleman knows, there are 650 constituencies. His policy is supposed to help compensate for possible loss of employment in the public sector. Those concerns have been reflected today, and I pay tribute to the hon. Members for Portsmouth North, for Meon Valley and for Basildon and Billericay, who have defended their constituencies and raised their concerns about how the policy will be applied.

If there is to be a holiday, it can be applied in different ways. It could be applied regionally, as the Minister has done, or on the basis of unemployment levels or regional levels of public sector employment per constituency, instead of the blanket regional approach that the Minister has chosen.

[Mel Stride (Central Devon) (Con)]

The shadow Minister has heard that rolling the scheme out across the entire country would cost an additional £660 million. Will he explain whether he would propose to raise that by increasing our deficit, by cutting expenditure—in which case what expenditure would he cut—or by raising taxes, in which case what taxes would he raise?

[Mr Hanson]

That is a fair and valid point. Yesterday, in reply to a parliamentary question, the Minister emphasised the cost of the scheme for the regions covered. My purpose today is to challenge the Minister’s logic for allocating the resources for the payment holiday to the regions that he has selected, because that distribution does not necessarily reflect the level of deprivation or public sector employment. The cake that the Minister has allocated may be sliced in several ways, but he has sliced it to exclude the constituencies represented by my hon. Friends in London and those who represent seats in the south.

[Barry Gardiner (Brent North) (Lab)]

Will my right hon. Friend give way?

[Mr Hanson]

How can I resist my hon. Friend from London?

[Barry Gardiner]

Is my right hon. Friend aware that Tottenham, which has the eighth highest number of jobseeker’s allowance claimants in the country, will not benefit, although Tatton, which has the 509th highest number of JSA claimants, will receive the NI break? Is that fair?

[Mr Hanson]

My hon. Friend makes a very valid point. I do not begrudge the people of Tatton anything, and I will tell him why. I was once a Labour councillor in the Tatton constituency. I represented the ward of Rudheath and Whatcroft, and I was the leader of the Labour council that covered half the constituency at that time. I have absolute faith in those areas, but there is deprivation in Tatton. In fact, Neil Hamilton, a former Member of this House for that area, was my pair when I first came here. Such is life! But that is another story.

Tatton has one of the lowest levels of unemployment in the country. That constituency, which is represented by the Chancellor of the Exchequer, will get the benefit of the national insurance holiday to start 10 employees, but Portsmouth North will not. Neither will Brent North, Edmonton or Lewisham. The constituency of my hon. Friend the Member for Leyton and Wanstead (John Cryer) will not get that benefit either—

[Stephen Pound]

Neither will Ealing.

[Mr Hanson]

Indeed, and neither will the constituencies of my hon. Friends the Members for West Ham (Lyn Brown) and for Ilford South (Mike Gapes). We are talking about encouraging growth and promoting job opportunities, and how we split the cake is very important, as the hon. Member for Central Devon (Mel Stride) has pointed out. My hon. Friend the Member for Brent North (Barry Gardiner) mentioned the different figures for jobseeker’s allowance across the country. We need to address those significant differences.

[Mr Love]

For the record, unemployment in my constituency is about the 50th highest in the country, and my constituents want to know why they will not be getting the benefit of these measures in the Bill. The fallacy behind the Government’s argument is that the affluent part of the region will raise employment in my constituency, but all the evidence shows that there are hard-core pockets of unemployment, and that even during the economic good times over the past 13 years, unemployment there did not come down. The only way to address that fallacy is to apply the provisions of the Bill to all the regions of the country, as my hon. Friend suggests.

[Mr Hanson]

I am grateful to my hon. Friend. The question that the Minister needs to reflect on, here or in Committee, is how we should split the national insurance holiday cake. There are many ways of doing that, but his way is unfair to the areas of greatest need, to the areas with the highest public sector employment, and to areas that contain seas of prosperity as well as deprivation.

The Minister has mentioned areas of high public sector employment, but I have already shown him the fallacy behind his argument as it affects many of our constituents throughout the country. Figures for jobseeker’s allowance show that the rate of unemployment is currently higher in London than in the south-west, part of which is represented by the hon. Member for Central Devon, in North Wales, where my constituency is, or in Scotland, where it is 3.8%. Unemployment is also higher in London than in the east midlands or the north-west—[Interruption.] The Economic Secretary to the Treasury did not take your strictures to heart, Madam Deputy Speaker. She is continuing to heckle from a sedentary position. I would be happy to give way to her if she wants to intervene.

However we measure unemployment, the levels of jobseeker’s allowance claims in London are higher than in the south-west, Wales, Scotland, the east midlands and the north-west. Indeed, they are above the UK average. That is a key point when we are thinking about how to divide the cake up.

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

I must say that the enthusiasm being shown by the right hon. Gentleman, and by so many Opposition Members for this fantastic Conservative policy, or coalition policy, on national insurance holidays is absolutely heart-warming.

[Mr Hanson]

The hon. Gentleman will know that North West Leicestershire will benefit from the scheme, but I hope that he will look slightly beyond the confines of Leicestershire and talk to the hon. Members for Portsmouth North, for Meon Valley and for Basildon and Billericay, who have all expressed concern about the proposals.

[Charlie Elphicke]

rose—

[Mr Hanson]

Perhaps the hon. Gentleman can tell us whether he is in favour of his constituents not having this benefit at this time.

[Charlie Elphicke]

I spoke on the subject of regionalisation in the Finance Bill, and we have to take the rough with the smooth. Does the right hon. Gentleman welcome the fact that in places such as Delyn, 500 new jobs have been created in the past six months? In Dover 500 new jobs have also been created in the past six months. Across the country as a whole, about 300,000 new private sector jobs have been created in the past six months. Does he not welcome that?

[Mr Hanson]

I think I know Delyn better than the hon. Gentleman. If he would like to come to me to talk to the 320 people who lost their jobs yesterday at Headland Foods in Flint, I should be happy to discuss the issue. That happened only yesterday in my constituency, so I will not take any lessons from him about what happens on my patch in north Wales.

I will tell the hon. Gentleman straight away, however, that West Ham has 6.8% unemployment, Tottenham 7.4% and Camberwell 6%. That is more than three times the level of unemployment in Tatton, in Richmond (Yorks), represented by the Foreign Secretary, and in Derbyshire Dales, represented by the Government Chief Whip. Indeed, it is four times the level in Sheffield Hallam, represented by the Deputy Prime Minister. All those areas will benefit from the scheme, while areas of severe deprivation in London will not.

Let us look at the constituencies of coalition Cabinet members. Berwickshire, Roxburgh and Selkirk has 2.8% unemployment, North East Somerset has 1.6%, Tatton has 2.1%—

[Jacob Rees-Mogg (North East Somerset) (Con)]

Will the right hon. Gentleman give way?

[Mr Hanson]

In a moment. [Interruption.] Not North East Somerset. The hon. Gentleman knows that I meant the Defence Secretary’s constituency. I am sure that the hon. Member for North East Somerset (Jacob Rees-Mogg) will eventually make the Cabinet, however, because he is an assiduous attender of the Chamber.

Richmond (Yorks) has 1.8% unemployment, Derbyshire Dales has 1.6%, Rushcliffe has 2%, Sheffield Hallam has 1.8%, Sutton Coldfield has 2.6%, North Shropshire has 2.7%, and Inverness has 2.3%. All the Cabinet members representing those constituencies will benefit from the payment holiday, while colleagues representing seats in Walthamstow, Islington, Mitcham, Luton North, Luton South, Tottenham, Tooting, Dulwich, Streatham, Hampstead, Vauxhall, Hammersmith and the two in Hackney will not.

If we are to make the scheme fair, taking the point that the hon. Member for Central Devon made, we should divvy up the benefits that the Government are bringing forward in a way that tackles the central issues of deprivation and unemployment.

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

We as a party welcome the initiative, and I am sure the Government will be happy to hear that. It is an important countervailing measure, and we need further such measures. Have the Opposition assessed how much it would cost to roll out the scheme as they suggest in their amendment, and how that would be funded?

[Mr Hanson]

If the scheme were applied to Greater London, the east and the south-east, and taken up at the level that the Minister expects, it would—according to figures that he gave me only last night—cost about £660 million. He says that there are about 1,000 interested companies to date, but I do not know what the take-up would be.

The cost could be offset by new employment and new taxes, because let us remember that the scheme under discussion is for new businesses, so the holiday period offset will be a cost to the Treasury, but it could be offset by increased growth, increased taxation paid by individuals who are employed and by the increased growth of businesses. The cost of the scheme downstream, at the end of the three years, is debatable, but, equally, there are ways in which we could divvy up the money that the Minister has allocated to the regions of Wales—one of which the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) represents—and all others. We could think about whether to divvy them up differently, so as to tackle areas of high unemployment in London or—if the Minister’s criterion is high public sector employment—areas with high public sector employment, such as those that I mentioned. They are in the 10% of areas with the highest such employment, and include seats that the current scheme will not cover.

[Andrew Bridgen]

Will the right hon. Gentleman clarify his statement? Did he just suggest that we cut taxes to increase growth in order to increase the tax take overall? If so, I welcome the right hon. Gentleman as a believer in the Laffer curve.

[Mr Hanson]

The hon. Gentleman knows that the Opposition have a growth strategy. We had one prior to the election.

The measure under discussion has been proposed to give new businesses a national insurance holiday to help them with their costs for three years. The Minister estimates the costs for the three regions as £650 million to £660 million, based on the scheme’s anticipated roll-out in those regions. My simple point is that these are new employment jobs and new businesses, so they will presumably entail new employment areas and new people employed to fill them, who will pay new taxes. All that is part of the growth strategy, which will be hit hard by VAT increases and public spending cuts. That is a separate issue.

If we are thinking about a payment holiday, the question for me is whether it will achieve its objectives by being available in the areas of the highest public sector employment, or whether it will go to areas such as Tatton, Richmond or other wealthy areas of the north and midlands. In those areas jobs will be created, but the people who most need them will not be able to get them. That is the crucial issue for debate.

Without making a party political point of it, I would argue that Government Members have participated constructively both in previous debates on this subject and in today’s debate. John Walker, the chairman of the Federation of Small Businesses has said:

“With small firms in the South East most likely to be working below capacity, this shows how wrong the Government is to not include this vital region, as well as the East and London, in its proposals for a National Insurance holiday for start-up businesses.”

I have already said that we are not going to vote against the Bill—although if the reasoned amendment had been selected we would have voted for that. However, it is important both to consider the issue in the round and for the Minister to reflect on the concerns expressed, by his hon. Friends as well as by Labour Members, about the application of the national insurance holiday.

At the same time as implementing this Bill, the Minister is scrapping completely the regional growth strategy for different departments, and scrapping the regional development agencies and replacing them with local enterprise partnerships, which in my view will not help with regional development to the extent that we would want. The Under-Secretary of State for Defence, the hon. Member for Mid Worcestershire (Peter Luff) has said that that sends out the wrong message about the work that has been done.

We need to look towards a better application of this policy, and the Minister needs to reflect further on the concerns expressed in our debate. Although we will disagree politically, I am most interested in ensuring that any national insurance holiday is of benefit to the people who most need it. Sadly, the Bill misses the mark in that respect, and fails to address those key issues.

I repeat that we will give the Bill a fair passage and not vote against it this evening. We welcome the rise in national insurance, which we too would have implemented. We welcome the holiday provisions as far as they go, but they need further reflection, so we will take every opportunity in Committee to try to persuade the Minister to look at more imaginative schemes, which might use the same amount of money in different ways, or extend the holiday to areas where it would be a valued resource and help reduce unemployment in the constituencies in the south-east, London and the east that most need that.

I hope that what I have said is helpful to the Minister. I look forward to spending the next few weeks in Committee with him, just as I have spent the last few weeks in Committee with him and his colleagues on various other Bills. To make a wholly non-partisan point, the Treasury appears to be one of the busiest Departments at the moment, and we are all having fun. I am sure that our discussions will shortly continue elsewhere.

17:33

[Michael Fallon (Sevenoaks) (Con)]

I am not alone in finding that a rather disappointing response—an untypically disappointing response. Part 2 of the Bill introduces something that the Labour Government never introduced in their 13 years in power, yet the minute we introduce it, they say: “Well, it doesn’t really go far enough”. We have heard 25 minutes of “We want a better Bill, but we never backed it”. Labour has still not proposed to make this provision part of its own policy, yet it wants it extended to other parts of the country.

Unlike the Labour party I welcome part 2, comprising clauses 4 to 11, just as I welcome any reduction in the burden of taxation on small businesses, even if it is described—rather unfortunately, I think—as a “holiday”. Only in the weird and wonderful world of Her Majesty’s Revenue and Customs could the process of allowing a business to keep more of its own income and turnover be described as some sort of holiday. I rather regret that this phrase has now crept into the legislation. Small businesses pay too much tax, so anything we can do to reduce that burden has to be helpful. Why? Because the bulk of private sector job creation has come, and will continue to come, from small companies. Sadly, it is large companies that continue to reduce their costs, to strip out unnecessary manpower and to outsource various functions, while it is small businesses that have been, and will be, the engine of job creation.

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

Is not the main engine for job growth among small and medium-sized enterprises the expansion of existing SMEs rather than the creation of new ones, although of course that is an important engine as well? Does the hon. Gentleman favour the extension of the measure to new employees of existing SMEs? As he may know, and as I know from personal experience, starting a business involves a number of risks, and obviously this is one of the factors. An established SME could probably do much more with the “holiday”.

[Michael Fallon]

I was about to suggest that the measure might well be extended. It is true that job creation comes from existing small businesses, although it also comes from new ones. I think that we can find some common ground in that regard.

I have three main reasons for supporting the Bill. First, I believe that it is the right way to help small businesses. It is not the only way, but I do not think that the other ways that have been tried in the past—grants, loans, business link services, and a great deal of bureaucracy—are nearly as effective as allowing small businesses to keep more of their own money, and to employ more people more cheaply. Given that a Government cannot create jobs, this is the easiest, simplest and most effective way of encouraging businesses to take on more people.

My second reason for supporting the Bill, which is directly relevant to the intervention from the hon. Member for Swansea West (Geraint Davies), is that it is clearly future-proof. I note that the Opposition do not oppose it, either in principle or in detail; indeed, they want to extend its provisions throughout the country. If it turned out to be spectacularly successful—and none of us in the House knows yet whether it will—its provisions could be extended. At present, the scheme applies only for the first year of a new business, it is open for only three years, it applies only to the first 10 employees, and it applies only to the regions that we have been discussing.

If we discovered that the Bill really did encourage the creation of more jobs and did not divert employment from existing businesses, it would be perfectly possible—once the economy had recovered, we had closed off the deficit that we inherited, and more money was available—to extend the scheme in different ways. It would be possible, for example, to apply it to the first two years of a business. It can take longer than a year for a very small business to establish itself. It would be possible to keep the scheme open for the whole of the current Parliament, matching the reductions that are sadly necessary in public sector employment to encourage private sector employment alongside it. It would also be possible to apply it not simply to the first 10 employees but to, say, the first 20 or 30. I see nothing particularly magical about the step change involved in employing that 11th person. And yes, if the scheme really was working, it might well prove desirable and cost-effective to start extending it to some of the other regions. I note that the three excluded regions contain the south-east—my own region—East Anglia and London, which currently contain half the number of all our small businesses. If small businesses had already been successful in those regions, perhaps, if costs allowed, it might be possible to extend the scheme in four or five years’ time if it worked particularly well.

[Stewart Hosie]

The hon. Gentleman said that there was no step change between the 10th and 11th employees, and he was right. However, there is a huge step change for a sole trader taking on his or her first employee. Does the hon. Gentleman think that, if the scheme were rolled out in the way that he suggests, it should be rolled out to existing sole traders taking on their first employee, which involves a huge commitment?

[Michael Fallon]

I am not sure whether someone would remain a sole trader in those circumstances, but it is true that becoming responsible for someone else’s payroll is often the most difficult step for those who are self-employed or trading on their own account. I certainly think that we should explore that possibility further.

The third, and final, reason why I support the Bill is an entirely different one. The Bill is quite rare in that it recognises the rights of non-workers. I have never forgotten an encounter I had when I was representing a north-east constituency. It occurred at the height of the engineering recession of the early 1980s, when the jobcentre manager in Darlington said to me, “There’s plenty of work about, Mr Fallon, but very few jobs.” What he meant by that was, of course, that the labour market had fossilised. So many restrictions and costs were involved in hiring extra labour that it was too expensive and too risky for firms to take on more staff. Of course, the previous Conservative Government addressed that through a range of liberalisations that tackled areas such as employee rights, access to tribunals and restrictive practices, and I think that a Government need to do that every few years. They need to look again at the balance between those who are fortunate enough to be in the labour market and enjoying the various job protections that this House has given them successively over the years and those who are excluded from the labour market, because those who are excluded have rights too. If we make it increasingly difficult for companies to fire people, then we inevitably make it increasingly difficult for companies to hire people. If we build in unlimited awards for various types of discrimination—sexual discrimination, for example—we discourage firms from employing more women. There is a balance to be struck therefore, and I think that needs to be reassessed every few years.

Small businesses in my constituency tell me that at present they will do almost anything they can to avoid taking on new people, partly because of the difficulty of getting rid of them if they turn out to be unsuitable or unreliable or if they are not prepared to work hard enough, and partly because of the administrative costs piled on them by the last Labour Government through, for instance, needing to check student loan repayments, child care reliefs and immigration status. When we consider measures such as those in this Bill, we need to be thinking all the time about how we can make it easier for businesses to employ people.

This is a short Bill, and it would be wrong to overstate its effects. It must be considered in the context of the other measures to help small businesses, such as the reduction in their corporation tax rate, which I welcome, and the extension of the guarantee scheme. I suspect that the Bill will prove to be successful however, and, if so, I hope that it will be the start of a much wider and deeper process of removing the barriers to growth, such as the thicket of regulation our small businesses have to struggle through and the heavy burden of taxation that still inhibits too many of them. I welcome the Bill.

17:43

[Mike Gapes (Ilford South) (Lab/Co-op)]

I wish to concentrate on the situation facing my constituents and many others in London. The House of Commons Library has published a note that is of great help to all who take an interest in the subject of today’s debate, and it says that, on the basis of International Labour Organisation measures of unemployment, the highest rates are in London, the north-east and Yorkshire and the Humber, where the figure is 9%. However, although the north-east and Yorkshire and the Humber are to benefit from the measures in question, London is entirely excluded.

As has already been made clear, a number of boroughs and constituencies in London have very high levels of deprivation and unemployment. My borough, the London borough of Redbridge, does not feature as one of the most deprived boroughs overall, but there are wards within it, including three in my constituency, that are in the lowest decile for deprivation and need. Therefore, the impact of any changes that discriminate against Londoners, against small businesses in London and against ethnic minority businesses in London—the population distribution in this country means that London has a much greater concentration of people from all ethnic minorities—has to be borne in mind. These proposals are inherently discriminatory; they are discriminatory in their own terms and they therefore need to be seriously questioned.

The Federation of Small Businesses has sent me some information about this matter. It points out how more than half the firms in London, 64% of small businesses in the south-east and 58% of firms in the east of England are likely to operating under capacity. It states that the regional discrimination involved in these proposals is based on

“a crude assessment as it does not account for areas within these regions that would really benefit from policies that would help bolster employment.”

If the FSB opposes the proposals, why on earth are the Government not listening to it, given that they claim always to be listening to small businesses? As I speak, the Essex FSB is having a meeting, which I am obviously not able to attend, and one of the issues it will discuss is precisely this discrimination against the east of England, the south of England and, in particular, London.

[Richard Harrington (Watford) (Con)]

The point needs to be made that the Minister has explained that a significant extra cost would be involved in making this a national programme. As the Member of Parliament for Watford, an area that faces significant unemployment problems, I would say that it would be very nice to have this programme, but the Minister has explained that the cost involved would be more £660 million. I am pleased to see this principle being used, because I believe that selective regional policy can be used in the future. I hope that the Government’s localisation agenda will mean that holidays and similar tax benefits for rates will be extended to specific areas. But for the moment, because of the mess that the Labour Government left us with—

[Madam Deputy Speaker]

Order. The hon. Gentleman will resume his seat. Interventions are supposed to be brief.

[Mike Gapes]

I suggest that the hon. Gentleman should perhaps make his own speech, rather than intervene on mine.

The FSB makes clear its concern about not only the regional variation, but the fact that the proposals do not deal with existing firms. My right hon. Friend the Member for Delyn (Mr Hanson) also made that point from the Front Bench. The FSB says that

“surveys have found that 57% of small businesses without employees would like to employ in the future, which could create…800,000 new jobs”.

It also points out that many small businesses do not survive for more than two or three years, so by discriminating against existing small businesses that have just been established the proposals are another difficulty for that sector. The FSB claims that, on average, its 213,000 members each employ seven members of staff and that most employ five or fewer. It points out that if they were able to get the support that is being made available only to certain businesses in certain regions, there would be the potential for much greater assistance. Therefore, the essence of the proposals is that if the Government are going down this route, they are doing so in a way that discriminates against certain regions and certain communities in the country, and that discriminates between different businesses.

The essence of the proposal, we are told, is that we are all in this together but, sadly, it is yet another example of where we are not. We are all in it together, but we are not all getting the assistance to deal with the problems that the Government will create when they slash the public sector.

17:50

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

I am delighted to have the opportunity to contribute to this debate and I offer my wholehearted support to the Government for this excellent Bill.

On part 1 and the increases in rates, a point that has not been made but that is worthy of comment concerns the timing. Opposition Members had considered the increase when we were at a flaky stage in the recovery of the economy and when there was concern that there might be a double-dip recession. To move the timing from June of this year to April of next year is to be commended and it is absolutely the right and responsible thing to do.

My speech will focus principally on part 2 and the so-called “holiday” for new businesses, a provision that I wholeheartedly support. It is absolutely right that new businesses should be given a helping hand, particularly now. I am fortunate that my constituency of Newton Abbot is in Devon and therefore in the south-west, which means that my new businesses will benefit from these new measures. The Government estimate the benefit across the country at £940 million. That is well worth having and I am delighted to see Opposition Members supporting it. The cost in the grand scheme of things is relatively small and the administration costs of £12 million can be set against the overall administrative costs for this tax, which stand at £1.54 billion. The estimated benefit for individual businesses will be £2,000 per business with a rough administration cost of £166. That strikes me as very good value for money.

I want to take up a point that has been made by a number of Members on both sides of the House. In my view and, clearly, that of others, micro-businesses desperately need help. In the south-west, 91% of businesses employ only five people—small businesses that are a large part of the business community. In my part of the world, issues will arise because of the changes to the public sector, so helping micro-businesses will be very important because it is more likely than not that, because of their sheer number, they will take on those who are made redundant and the NEETs, as we call them—those not in employment, education or training—who clearly need a helping hand.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Has the hon. Lady realised that the proposed holiday does not apply to existing small businesses?

[Anne Marie Morris]

I thank the shadow Minister, but that is precisely my point. I would like to ask the Treasury and the Treasury team to extend the provision to those businesses in the fullness of time.

In particular, we should clarify what we mean by a micro-business. The European Union defines it as a business with 10 employees and a turnover of less than £2 million. For my money, that is a very big business. In my part of the world, micro-businesses are really very small. The hon. Member for Dundee East (Stewart Hosie), who is no longer with us, suggested that we might think about a small business of two employees that was considering adding one extra employee. The point was that it is a big step for a sole trader or husband and wife team to take on that extra member of staff, and it is there that we need the help.

I suggest that the Treasury urgently considers extending the provision to micro-businesses, not in this Bill but in a future Budget. I cannot see why micro-businesses should not be covered across the country rather than in regions. My plea is that micro-businesses, which are different to small businesses, should be properly represented and that we should consider what we in this Parliament mean by a micro-business rather than necessarily taking the European definition. We should also consider what help we can give them.

As for the point made by the hon. Member for Ilford South (Mike Gapes), it is not just about tax assistance, but about regulatory assistance. Some very small businesses are drowning in legislation, much of which is simply not appropriate for them.

[Justin Tomlinson (North Swindon) (Con)]

My hon. Friend is making some excellent points, which, as someone who used to own a small business, I recognise. Micro-businesses also have the opportunity to take on apprentices, and we should encourage small businesses to take advantage of that.

[Anne Marie Morris]

I thank my hon. Friend for that contribution and I absolutely agree.

I ask the Treasury team and the Minister, after the successful outcome of this measure, urgently to consider extending it in the next Budget to micro-businesses and to introduce a proper definition of a micro-business. I think that they need particular help and support.

17:56

[Heidi Alexander (Lewisham East) (Lab)]

I want to make only a brief speech and, like some other speakers, plan to limit my remarks to part 2 of the Bill, which deals with the national insurance holiday for businesses that start up outside London, the east and the south-east.

A national insurance holiday for some new businesses but not others is misguided. I have two main reasons for believing that. First, there is the basic issue of fairness. Under the Government’s proposals, a new business setting up in Leamington Spa, for example, could benefit from savings of up to £50,000 in its first year of operation, but the very same business starting up in my constituency of Lewisham East would get nothing. The businesses might be exactly the same and they might employ exactly the same number of people and have exactly the same turnover and profit margins, but one stands to get a kick-start of thousands of pounds in its first year and the other does not. I cannot help but think that that is blatantly unfair.

New businesses in Lewisham struggle to survive at the best of times: only 59% are still operating after their first three years as opposed to a UK average of 65%. If we add into the mix the state of the economy in Lewisham, we see that the policy seems even more misguided. The claimant count in my constituency has risen by 2% in the last year, whereas in Leamington Spa it has fallen by 25%.

The shadow Minister, my right hon. Friend the Member for Delyn (Mr Hanson), has already spoken about what the policy is meant to do. The stated aim of the payment holiday is to encourage the creation of private sector jobs in regions that rely on public sector employment. Presumably, that is an attempt to do something to offset the huge job losses that the Government are choosing to inflict on councils, police forces and primary care trusts up and down the country. So, one might be forgiven for thinking that the policy would apply to those areas that have the highest proportions of their work force employed in the public sector. One might think that the holiday would apply to the same areas as those that are eligible to bid for the Government’s new regional growth fund, but, no, that would be a logical step. Instead, the Government have decided to exclude London from their national insurance holiday and thereby exclude many communities that are highly dependent on public sector jobs—the very communities that are grappling with the uncertainty that the Government’s approach to public services has created.

Let us take as an example the area I represent in south-east London. The public sector accounts for 38% of all jobs in Lewisham, a figure that is 11% higher than the national average. If we take the boroughs of Lewisham, Southwark, Lambeth and Croydon together, we realise that the public sector work force amounts to 185,000 people, significantly more than the public sector work force of the whole of Tyne and Wear.

Lewisham also has more people chasing local jobs than almost anywhere else in the country. In October, there were more than 587 vacancies in Lewisham compared with 9,475 jobseeker’s allowance claimants. Let me again compare the situation with that in north Warwickshire, where there were 1,507 vacancies in October and 1,018 people looking for work. I accept that the labour market works very differently in London from elsewhere, and I am all for people getting on their bike, the bus or the train to get a job. Indeed, that is what most of my working constituents do every day. However, the fact that Lewisham has more people chasing local jobs than virtually anywhere else in the country says something very important about people’s experience when they go to the jobcentre in my constituency. For every job in Lewisham there are 16 people claiming JSA. Every week, without fail, I have someone asking me to help them in their search for work. These are not workshy individuals, but people who desperately want to get a job to provide for their family. The jobs are not there at the moment.

By not providing the same concessions to businesses in Lewisham as to new businesses elsewhere in the country, the Government are effectively limiting the prospects for my constituents who want to find work. Let us not forget that even in London it is necessary to stimulate employment in the sub-regional economy. Public sector jobs are often local to where people live, so mums and dads who face being made redundant by local councils will be keen to find local work that will fit around their caring responsibilities. Why are the Government intent on making it harder for them to find work in new private sector enterprises by excluding London start-ups from the national insurance concession?

Lewisham is part of London but its streets are not paved with gold. This is where the Government have gone wrong. Not all London is like Notting Hill. Yes, London has the City and is home to Canary Wharf, but it also has some of the most desperate examples of poverty in the UK. One in five Londoners earns less than a living wage and in inner London 20% of the population has 60% of the total income. The worst-off of the richest 10% of Londoners have wealth 273 times greater than that held by the best-off of the poorest 10%. The fact that London is home to the country’s major financial centres should not mean that my constituents are disadvantaged or that if they want to set up a business, they are treated as second-class entrepreneurs. It should not mean that hundreds of people who are fearful of losing their job in the public sector should have a lesser chance of getting a job in a new business start-up because of where they live.

In London, we know that an axe has been taken to the London Development Agency and that councils across the capital have lost local authority business growth incentives scheme money, which many ploughed back into supporting local businesses. We also know that the VAT increase will hit many small businesses very hard. Now, to add injury to insult, the Government want to support new businesses only in other parts of the country. That is not fair, it is misguided and I urge the Government to think again.

18:03

[Julian Sturdy (York Outer) (Con)]

I am delighted to contribute to this important debate. It is essential to assist economic recovery by incentivising entrepreneurship and private sector-led growth and I make no apologies for supporting the coalition Government’s focus on encouraging our small and medium-sized businesses, which this Bill does in abundance. The Bill’s benefits are threefold. First, it will contribute to the Government’s wider economic recovery programme through a small increase in national insurance contributions. Secondly, it will promote and support small businesses and entrepreneurship. Thirdly, it will fulfil the coalition’s pledge to raise the threshold of income tax personal allowance.

Like other hon. Members, I shall focus my contribution mainly on the second of those benefits—the so-called national insurance holiday for small businesses. First, however, it might be useful to take stock of the history of NICs. This form of taxation was introduced in 1911 before being expanded in 1940 to help fund the national health service. The scheme has always consisted of benefits financed by contributions from earners, employers and others. NICs have always been flexible and responsive to the wider economic situation and thus linked to the ever-changing needs of society. Given the wider economic outlook and the appalling financial legacy that we have inherited, it is absolutely right that we now consider increasing these rates. However, as a low-tax Conservative, I hope that the actions we take to repair our broken economy today will be replaced with lower taxation policies across the board in future.

Turning to the scheme’s main benefits, I am absolutely delighted that the Government have already taken measures to make Britain a more business-friendly country once again. The Bill adds to the welcome return to promoting and encouraging entrepreneurship rather than suffocating businesses with endless regulation and red tape, as sadly occurred too frequently in the previous decade. By raising NICs, we will encourage the creation of private sector jobs in regions that are too reliant on public sector employment by reducing the cost of employing staff in new businesses.

NICs will be abolished for the first 10 jobs created in new start-up enterprises during the first 12 months of the business. As we have heard, the exemption will be available for new businesses within a three-year qualification period. Such measures will save businesses vital cash, thereby encouraging further growth and new employment opportunities, which are vital at this time. Early forecasts suggest that about 400,000 employers will claim the holiday, covering 800,000 employees. The average benefit per business will be about £2,000, as my hon. Friend the Member for Newton Abbot (Anne Marie Morris) has mentioned. The total cost to the Treasury is estimated at about £940 million.

[Barry Gardiner]

The hon. Gentleman will know that the October 2010 claimant level for JSA in his constituency was 901, but the figure for my constituency was about two and a half times that. Why does he think that his constituency and his benefit claimants should benefit from the holiday period while mine should not?

[Julian Sturdy]

I think that the hon. Gentleman is talking about the regional aspect of the measures, which is important and has already been raised by some Members. I shall address that issue and if he wants to intervene on me again, I shall be more than happy to take his intervention.

As we appreciate the cost of the scheme to the public purse, it is only right to drill down into the specific details. There are many concerns about the holiday provision not applying to three English regions—Greater London, the south-east region and the eastern region. I accept that this limitation might seem unfair, particularly to those right hon. and hon. Members who represent such areas, but we live in extremely difficult economic times and the woeful financial legacy will limit our ability to extend the holiday relief to every part of the country. That is regrettable, but it is a fair compromise. It is well-known that the gap between the northern and southern economies is widening and has been for the past 13 years, so it is essential that the coalition focus on closing the gap by encouraging new private sector-led growth in the north.

An unhealthy dependence on the public sector has blighted many northern towns and cities for too long. Alongside the creation of local enterprise partnerships and the regional growth fund, it is essential that private enterprise be given a boost in northern cities—such as mine, York, I confess. Economic recovery will take place only if the private sector leads the way. Only private sector expansion in the areas that are most dependent on the public sector will ensure that the recovery leads to sustainable, long-term stability in local economies. Sustainability is key.

I am sure the holiday aspect of the Bill will be welcomed by many small businesses throughout the country. It has already won the backing of the Federation of Small Businesses. I know that Opposition Members say that that is not the case, but I believe it is, although the federation raises concerns about the length of the relief and the number of firms to which it will extend. Although my support for the Bill remains unequivocal, I must confess that I share some of those concerns, while understanding the financial constraints placed on the Government.

I fear that we might be slightly short-sighted in limiting access to expansion to new firms alone, and in allowing new firms to claim it only during the first year of their business operations. I admire the way in which the coalition has governed thus far with a long-term prospect. I ask the Front-Bench team to review through the same visionary lens the time scales and business exemptions from the contributions holiday over the course of the next year or when the financial position allows. My hon. Friend the Member for Newton Abbot raised that point, referring to micro-businesses, and I agree wholeheartedly with her comments.

In conclusion, I strongly believe that the Bill sends out exactly the right message from the Government to budding entrepreneurships. This is positive Government-led action that our small and medium-sized businesses will welcome. More broadly, this action must be supplemented by Britain’s banks. Put bluntly, too few small and medium-sized businesses are receiving flexible finance. Members in all parts of the House should unite in urging the banks to free up vital cash flow. The new emphasis on bank lending, alongside the measures contained in the Bill, will ensure that our private entrepreneurs receive practical assistance in a true time of need.

The Bill will play a vital role in our economic recovery and future growth, and I will strongly support it.

18:11

[Barry Gardiner (Brent North) (Lab)]

The Exchequer Secretary commended the first part of the Bill by saying that it was fair, that it was progressive and that it supported the poorest in society. In so commending the first part of the Bill, he damned the second part, because he could not say that the second part of the Bill was fair, progressive and supported the poorest in society. That is the essence of the Opposition’s argument this evening.

The second part of the Bill is incoherent in principle and in practice and, worse than that, it is ineffective in practice. Let us look at the fundamentals. Who is it that leads us out of recession? I am happy to make common cause with Members on the Government Benches and say that it will be the private sector, in particular small and medium-sized enterprises, that will lead us into the growth that this country badly needs. Why is it, then, that the holiday provision is given precisely in those areas where private sector growth has been proven year after year not to take place?

We know, and it has been a cause of problems to us, that it has been in London and the south-east that small businesses set up and grow. That has been the engine of the private sector in our economy, yet instead of seeking to use that to advantage, the second part of the Bill is incoherent in principle because it denies that region the holiday and because it denies those potential businesses the benefits that will be made available in parts of the country that have been proven not to be able to utilise them, and therefore not to be able to bring us out of the recession and be the engine of growth that we all want.

The hon. Member for Sevenoaks (Michael Fallon) made the point that to extend the holiday to London and the south-east would cost £660 million. Of course, there will be a cost to the scheme, wherever it is put in place, but presumably that cost is seen as an investment to achieve the growth and dynamism in the economy that will return that investment multiplied to the Exchequer. Yet £660 million is not being invested in the very parts of our country where we know from experience that the private sector is most likely to give the maximum returns to the public purse. That is incoherent.

Now let us look at whether the measure is incoherent in practice. The Budget documentation quoted in the explanatory notes to the Bill states:

“The Government’s strategy to support private sector enterprise in all parts of the UK aims…to encourage the creation of private sector jobs in regions reliant on public sector employment, through reducing the cost to new business of employing staff”.

Yet we have heard this evening that that is not the case. There are parts of London and the south-east that are far more reliant on public sector employment than parts of the country that will receive the benefit from the holiday. That is incoherent and wrong.

My hon. Friend the Member for Lewisham East (Heidi Alexander) made the pertinent point that the Bill was unfair in another respect, and one can only marvel at that unfairness coming from the Conservatives. The unfairness is that the Bill is anti-competitive. My hon. Friend presented the straightforward example of two companies alike in all that they do, except that one will get a £50,000 benefit in its first year of operation which is not available to the other—and that from the party which believes in free markets and in abolishing anti-competitive practices? How can those on the Treasury Bench put that forward as a coherent philosophy?

[Mel Stride]

Does the hon. Gentleman accept that the purpose of the holiday, as we are calling it, is to try to compensate for a reduction in the size of the public sector in certain parts of the country, rather than targeting it specifically, as he and other Opposition Members seem to be suggesting, at areas of higher unemployment?

[Barry Gardiner]

The hon. Gentleman suggests that what the Government are seeking to do is compensate in some way for the decimation that they believe they will cause to employment in those areas. We share a belief that the Government’s cuts will have that decimating effect on employment in those areas. Where we differ is that the hon. Gentleman believes that the measures will in some way compensate for that, whereas I am pointing out that in other parts of the country, precisely in those areas where they are not to apply, they would have a greater effect in boosting the economy.

The hon. Gentleman may say that the measures will have a marginal effect in mitigating the increases in unemployment which he knows will come from his Government’s policies. I do not believe, and I am confident that he does not believe, that they will totally compensate for those. But the most important thing is to get our economy moving again; after all, that is why we are making those public sector cuts in the first place. If we are focused on economic regeneration, we must seek to make that investment where we know it will achieve the maximum return.

[Justine Greening]

Can I get this clear? Is the hon. Gentleman saying that Government should not try to help regions that need infrastructure improvement and are currently less productive? Should we simply not invest in them?

[Barry Gardiner]

I try to keep debate in this Chamber at a rational and reasonable level. I try not to play silly party politics or create a straw man simply so that I can knock it down. If the hon. Lady wishes to play those games, let her intervene on somebody else. It is really puerile to start talking in those terms; she knows that that is absolutely not my purpose at all.

The hon. Lady should consider her policies—not only these, but those that relate to VAT—and the effects that the Chartered Institute of Personnel and Development has said they will have. John Philpott, the chief economic adviser to the CIPD, said just a few days ago that:

“we are looking at something like 900,000 job cuts in the private sector as a result of both spending cuts and the VAT hike.”

That will be the effect of the hon. Lady’s policies. Of course I want that effect to be mitigated as far as possible, and for her to intervene on me in that ridiculous way, asking whether I am suggesting we should not try to mitigate the effect of her own policies—the loss of 900,000 jobs —is ludicrous.

In contrast to the hon. Lady, the hon. Member for York Outer (Julian Sturdy) was extremely reasoned in responding to my intervention on him. He accepted that there was unfairness in the Bill and that that unfairness was “regrettable”. My point is that although it is regrettable, it is not inevitable. We do not have to cut the cake or make the investments in this way.

In a rather partisan speech, the hon. Member for Sevenoaks (Michael Fallon) derided my right hon. Friend the Member for Delyn (Mr Hanson). He said that my right hon. Friend was suggesting that the Government were not going far enough. It is not a matter of not going far enough with the holiday; it is a matter of the Government’s being fair, equitable and effective. The Government cannot and should not take these decisions in an arbitrary fashion; they should take them on the basis of equity and effectiveness. The Bill does not enable that.

18:24

[Mel Stride (Central Devon) (Con)]

The hon. Member for Brent North (Barry Gardiner) referred to the regrettable consequences of Government policy in terms of unemployment. I believe that, in large part, the entire Bill is regrettable because it introduces rises in national insurance for employers and employees, on businesses, at a time when we look to them for growth, as the hon. Gentleman rightly points out. But the reason for that is the policies pursued by the previous Government. Because of the hour, I do not intend to rehearse those this evening, save to point out that we have ended up in a situation where the interest alone on the money that we owe is £43 billion a year—more than we spend on education and defence. That is a national disgrace.

I welcomed my right hon. Friend the Chancellor’s Budget of 22 June, particularly the balance that he struck between seeking reductions in expenditure and accepting that we have to raise certain taxes. He weighted it far more towards the former than the latter, which has to be the right policy. The hon. Member for Brent North is right: the Office for Budget Responsibility itself has said that 500,000 jobs will be shed as a consequence of the fiscal consolidation in the public sector, and PricewaterhouseCoopers has suggested that perhaps another half a million private sector jobs will go as a consequence of that. We need to create jobs in the private sector.

According to the Treasury, in the past six months 300,000 jobs have been created in the private sector, so the capacity is there. It was as inevitable as it was regrettable that national insurance would go up. Labour first started talking about increases in national insurance as far back as the latter part of 2008. Of the three major taxation streams going into the Treasury, national insurance is the second most significant. In fact, in 2009-10 £150 billion was raised from income tax, £96 billion from national insurance and £70 billion from VAT. National insurance is efficient to collect, and in 2011-12 we will raise £9 billion as a consequence of the increases. In my opinion and that of many economists, the rise was totally unavoidable.

I wholly welcome one aspect of the Bill—well, not so much the Bill but the secondary legislation that will be enacted later—and that is the increase in the threshold for employers’ national insurance to £21 per week above indexation. I welcome that because it will take some of the pressure off our employers.

National insurance, however, is not a good tax; as we know, it punishes those who employ people rather than taxing the earnings from straightforward investment, which does not employ people. I urge the Government’s Front Benchers to make sure that, when the recovery gathers pace and we start to get the deficit down, national insurance for employers and employees should be right at the top of the list of taxes that we seek to reduce.

I welcome the national insurance holiday, about which much has been said in this debate, and particularly its targeting of new businesses. It should reach about 400,000 new businesses and about 800,000 new employees. I say that as somebody who set up his own small business, starting from scratch 20-odd years ago, and built a company both here and in the United States. One of the most important and fragile moments of a company’s growth is that very starting point; that is when a company is most vulnerable. The help will be hugely welcome.

To my horror, I have found myself being slightly persuaded by the right hon. Member for Delyn (Mr Hanson), as he started to open up the discussion about whether the holiday should apply across the entire country or whether, as I think he was suggesting, it might be applied in a different way, to pick up areas in the south-east, Greater London or the eastern region that might value the help more than other parts of the country. I would like to think that Government Front Benchers might think about that aspect a little further, although I suspect that when we start to try to cherry-pick small parts of the country, we will end up with a highly complex and potentially very expensive scheme. However, I would like to think that we might consider the matter in Committee.

I also welcome the fact that this is retrospective legislation that applies to companies set up since the emergency Budget in June, and that it is not prescriptive in the sense of requiring a certain type of employment in order for companies to qualify. There was a scheme in the 1990s to get the long-term unemployed back into work that was not nearly as successful as it might have been had it not been so prescriptive.

I am pleased that the Government, in recognising the importance of business, also set out in the Budget reductions in corporation tax in steps from 28% down to 24% over the period of the comprehensive spending review, with the small business rate falling to 20%. That will give us one of the lowest levels of corporation tax in the G20, and the fifth lowest in the G7.

I have some concerns about the national insurance holiday. We must ensure that we avoid so-called recycling whereby, for example, companies set themselves up as apparently a new business although they have been operating before, or come into the market as a new business and then close down and rebrand themselves. I note that clause 5 deals with that issue. My plea is that we do not make the whole operation unduly onerous and complicated for businesses that wish to take advantage of the scheme. My hon. Friend the Member for Chichester (Mr Tyrie) spoke in particular about the importance of keeping complexity down. The tax code in this country now runs to 11,000 pages. We have enough complexity—we do not need more.

The Bill also deals with EU regional funding constraints. Under articles 107 and 108 of the treaty on the functioning of the EU, companies are not permitted to receive more than €200,000 in state aid over a three-year period, given the regionality of the way the scheme works. Clause 8 seeks to handle that. Again, it is imperative that whatever information HMRC requires from those companies is kept to the minimum so that the system is not bogged down in red tape.

[Chris Leslie]

Has the hon. Gentleman had an opportunity to look at the regulatory impact assessment describing the steps necessary to implement the NI holiday, which is estimated on the Treasury’s own figures to cost £22 million? A lot of companies will have to use manual processes instead of the software that they had used to pay their national insurance, and it will require 240 extra staff at HMRC to administer the scheme.

[Mel Stride]

The hon. Gentleman adds to my point. Indeed, I believe that the cost to HMRC will be £12 million, and the cost imposed on business is estimated at £75 million. I accept that that is a large amount of money in the context of a scheme that is effectively injecting £940 million. It is therefore most important that we keep complexity and red tape to an absolute minimum.

It is important to ensure that this incentive is well advertised, given that it is permissive in allowing companies to apply for it but is not necessarily automatically granted. The HMRC material refers to advertising it on Business Link websites, and so on. If we are to get up to 400,000 businesses involved—1,000 are involved at the moment—we will have to advertise this nationally with a push to ensure that it is taken up. In particular, we need to ensure that we lower the proportion of so-called dead-weight businesses that are taking it up—in other words, those that would have employed additional people even in the absence of the scheme. It is really important that we give this a wholehearted push.

I welcome the national insurance holiday provisions in the Bill. I agree with my hon. Friend the Member for York Outer (Julian Sturdy) that it is important to consider other aspects such as encouraging lending and getting the Bank of England issuing credit condition surveys in which it talks about the banks lending again. We also need to cut back on red tape. This is a big opportunity to get back to a culture that is positive about new business. I should like us to have the kind of culture that we had in the 1980s, when we were open for business and companies were being set up. That is when I went out there and set up my business and created wealth and employment for people. That is the aspect of the Bill that I wholeheartedly welcome.

18:34

[Jim Shannon (Strangford) (DUP)]

I have always been a very practical person. I ran my own successful business for some 25 years before handing the work over to my son. I am the first to acknowledge that in order to spend money one must have money coming in as well, because if one does not have that, one does not have a business. I live in the real world in the area that I represent, with unemployment and bills, and with families struggling and businesses barely surviving. I fully grasp the very tenuous financial position that we find ourselves in as we try to claw our way out of the deficit. I accept that Government, the coalition, and all of us together have to be involved in that and make a contribution towards it.

I welcome the range of packages that the coalition has brought forward through the Bill, which will directly help the lower paid. That is positive, and I am glad to see it. The national insurance contribution holiday is also a positive move. However, I feel that I have to comment on behalf of people who may not always see the benefit of these measures—those to whom I have spoken over the past week in anticipation of this debate, who have concerns and have asked me to convey them in the House tonight. I understand that this further tax hike is a blow to some of the people I represent—the middle classes and the self-employed. They see it as such, and I have to say so. The rise in national insurance for employers and employees will dissuade some employers from offering additional hours.

A perhaps forgotten and ignored issue is the impact on the morale of people in such businesses who do not see the benefit in the proposals before us. There is no better way of illustrating a case than taking an example from my own constituency. Just in the past few days, I had the opportunity to speak to a young married couple who have two children. They are both working. They are not entitled to housing benefit, so some years ago they bought their own house, and they have a fairly large mortgage. For them, the cost of living has increased dramatically. The husband is self-employed, and he cannot raise his prices in line with the prices coming in, because then he would not have any business. Indirect taxation has risen, and risen again. His business has suffered because people simply do not have the money to decorate their homes, which is what he does. The wife received a rise, with the additional pressure and workload that came with it, yet they find that being on the borderline of the new tax threshold means that they are scarcely better off. They are just on the wrong side of that tax threshold. The frustration they expressed to me demonstrated the sobering reality of how some people see the future of their business.

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

People such as my hon. Friend’s constituents are looking forward to the increase in personal allowances to which the Government are now committed, which is a good thing. However, given the increase in national insurance contributions, the anomaly is that such people will find it even more difficult to move out of recession.

[Jim Shannon]

I thank my hon. Friend for his comments, which are very positive. I think that if everyone sat down for a moment and looked at their own constituency, we could all replicate this situation everywhere across the whole United Kingdom.

The couple who came to see me did not have any help when their boiler broke, their car broke down, or the heating bills came in: they had to manage all that themselves. That puts things into perspective. They did not ask for a handout, or believe that they were entitled to one. They simply asked me whether I could do something, as the Member for Strangford, to represent their viewpoint in this Chamber, and that is what I intend to do. This is an example of the low morale of a hard-working family who feel that they are swimming against the current. I would always caution that we should ensure at all times that people feel that it is better to work, and these people have that work ethic, which is good news.

I know that Government Members will say that this is “only” a 1% increase in national insurance contributions, and that is true. Let us remember, though, that it is to be coupled with an increase in university fees. It must also be coupled with an increase in tax on oil, which results in higher petrol and diesel costs across the whole United Kingdom, particularly in Northern Ireland. We have the highest price for diesel and petrol in the whole UK, and the VAT increase in January will add to the price hikes and the pressure on families.

As a balanced individual who can see the good element in the Bill, I point out that the fact that new businesses will get help with their first 10 employees’ contributions is good news. However, I have to ask: what about the small and medium-sized businesses that are currently struggling, such as the one run by the couple I mentioned? To them, a £2,000 bonus would be the incentive to keep pouring their energy into their business. Many other businesses in my area would love to have that opportunity as well. I ask the Economic Secretary whether there is any scope for businesses that have opened in the past few years to avail themselves of help that could save businesses and jobs, and subsequently ensure that their revenue continues to go into the contributions pot.

The hon. Member for Newton Abbot (Anne Marie Morris) hit upon an issue that other Members have also mentioned, and I agree with her comments. I believe that small and medium-sized businesses need help. I do not believe that that can be done through the Bill, but I would like them to receive some contribution and help as a next stage. Perhaps the Economic Secretary will indicate whether and how that can be done, and on what time scale. It is imperative that we in this House have a full grasp of what is intended in the next period, so that we can go back to our constituents and let them know.

It is not in my nature to oppose anything simply for the sake of it. That is not how I work. However, I honestly believe that many people are on the brink, and I have to say so. Consideration must be given to small and medium-sized businesses and those with a small number of workers. I know that money has to be raised and that someone has to provide it. That is the purpose of the debate. What I do not know is why it has to be the same people who provide it all the time. That is what has happened. The self-employed, the middle class, and small and medium-sized enterprises that exist today must all be part of the equation. On behalf of the people of Northern Ireland, and of my constituency in particular, I ask the Economic Secretary to consider those matters fully.

18:42

[Stephen Pound (Ealing North) (Lab)]

A common theme running through the debate—almost the golden thread of it—has been that of not seeking to oppose for the sake of opposition. Of course, I entirely subscribe to that emotion. However, although I rejoice in seeing a sinner repentant, and the Conservative party being converted once more to the policy of Keynesian fiscal incentives, I feel that the Bill is in many ways a disincentive and, even more seriously, a crude, clumsy and extremely complicated one.

Much has been made of geography and the fact that large parts of the country are excluded from the glorious sunshine of this Bill’s benefits, which will cause flowers to bloom and businesses to leap, as from the brow of Jove, into the marketplace fully formed. The excluded areas are not just the leafy shires where the only concern is getting one’s second au pair, or third Range Rover. They are also places such as Milton Keynes, Medway—Medway!—Portsmouth, Reading, Slough, Southampton, Luton, Peterborough and Thurrock. It is true that the Bill also excludes parts of the south-west London-Surrey border where people are so wealthy that they can afford the luxury of electing Liberal Democrats, but in excluding such a large area the Government are assuming that within the eastern region, the home counties and London there exists a seething tide of entrepreneurial energy, ready to burst forth at any minute, that needs no assistance.

The hon. Member for York Outer (Julian Sturdy) said that there was a message coming from the House tonight. Well, the message is, “London, the home counties, East Anglia: get lost. You can manage on your own, you don’t need any help.” That is desperately crude. In times of tight margins, small incentives make a huge difference. The geography of this country is so tight and small that whereas Hampshire is excluded from the benefits of the Bill, Dorset and Wiltshire are not. One does not have to read one’s Blackmore to know that the boundaries and borders in those areas are very close and tight. Is the coalition Government’s aim to empty out as much of London, the home counties and East Anglia as possible and send everybody flooding to Somerset, Wiltshire and Dorset?

[Jacob Rees-Mogg]

Hear, hear!

[Stephen Pound]

We have had some very successful imports from there in the House, particularly from North East Somerset. None the less, I am not entirely convinced that it should be the policy of Her Majesty’s Government of the United Kingdom to act in that crude way.

Talking of crudeness, advancing the idea that we can somehow assume that people will not move into a low-tax zone, like one of those Chinese economic zones, is simply not being serious about the realities of modern business. There are no Liberal Democrats in the House tonight—a happenstance that will doubtless be replicated on a longer-term basis after 2015. One thing that they tried, in one of their strange, clouded pipe dreams during the election campaign, was the suggestion that we could have geographically specific immigration—presumably with border posts on the M1, so that certain parts of the country could benefit from immigration while other parts could not. A quick glance at the map of this country shows that that simply is not possible. We will immediately have the difficulty of disincentivisation occurring in the south-east, while the benefits are transferred to the rest of the country.

The Bill is also ferociously complicated. Everybody thinks they know what a new business is, but nobody can define it. We heard in an intervention by the hon. Member for Newton Abbot (Anne Marie Morris) that apprentices are not covered.

I turn, as ever I do, to the explanatory notes, which have been written in the most extraordinary way. We read about Roy the carpenter; Sam the noble publican wishing to hand his business on to Tom; and Rosie and Jim the plumbers—none of whom is included in the Bill’s provisions. We read of an extraordinary ménage in what I had previously thought was the rather dull world of accountancy, in which Alan, Ben, Charles and David decide to link up with Ellen and Frances. In doing so, they also bring in a mutual friend, George. That is experience beyond that of most Members.

My particular favourite example is almost a Mills and Boon novel: John and Paul the dentists, who have been partners for many years but fall out. One imagines John and Paul, their eyes meeting over the face masks as they attend to a cavity together, their latex-covered digits brushing against each other. Then, one day, they fall out and set up alternative dental practices. John and Paul, once so close, are close no more. The explanatory notes should be published by Mills and Boon, not by the House of Commons.

After all those examples, what do we find? We find that the complicated reality of new businesses is such that the coda to that great, glorious, rather romantic tale is, to quote paragraph 46:

“The intended effect of this provision is that a person will be prevented from enjoying a holiday if, before beginning to carry on a business, the person enters into arrangements that mean that at some point after the person’s business has started he may undertake activities carried on by another business and, had the person been undertaking those activities at the time the business was started, a holiday would not have been allowed.”

That is reductio ad absurdum. How can we possibly even begin to take seriously a Bill that, leaving aside the romantic dentists and Rosie and Jim the entrepreneurial plumbers, creates such an incredibly complicated mechanism? That is not what we should be doing.

The Economic Secretary, as ever, cuts to the heart of the matter. I have great admiration for her. She is no stranger to the streets of Acton, where first we met. She had a reputation then for striking through all the persiflage that normally infests this place like wisteria—if that is not a painful subject for the Conservatives. She asked earlier, “Would it be better for this holiday to be extended across the whole country, or is it better for it to go to two thirds of the country?” I have to say that it should be all or nothing. The minute we try to set up those complicated differentials, there are immense problems. Why could the measure not be applied sectorally? Why could we not choose a particular sector and incentivise it? I am talking about those that employ large numbers and have a proven track record of entrepreneurial success. Why could we not continue with the enlightened work of the previous Labour Administration and provide start-up support for capital equipment and allow deferred VAT payments?

There are so many things that we could have done. What we have before us is probably—I say probably—rooted in decency and good, honest Keynesian politics. However, it has become so complicated that I fear that there will be very few businesses leaping to life in Liverpool, Manchester, Rotherham or wherever. There are some entrepreneurs in London who may say, “Without that additional advantage, why not relocate not only outside London but outside the UK?”

The hon. Member for Central Devon (Mel Stride) said that he was as comfortable operating a company in this country as he was in the United States. People will look at this measure in the context of a global economy. What we have here is crude, complicated and unfocused. I am not entirely sure that it will be the agency that will kill unemployment and bring us all into some glorious new future. I appreciate that hundreds of new civil servants will be employed to make this system work, and I welcome that; we need more work. How tragic is it that this Bill—the Bill to encourage the private sector outside the home counties—will end up employing more civil servants in London and, almost certainly, not providing that great entrepreneurial spark in the rest of the nation?

18:52

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

As a new Member of this House, I am learning an awful lot of lessons, including the one that says never attempt to follow my hon. Friend the Member for Ealing North (Stephen Pound) at the end of a long debate, so I will keep my remarks characteristically short.

Like many Members, I was surprised to find myself as one of the MPs for the greater south-east—a new region of which we are all delighted to be a part, particularly those of us in the east of England. Joking aside, this Bill will have a serious impact on my constituents in Luton South. Luton is my home town; it is a jewel in the east of England and businesses like it.

A 2010 survey showed that access to a strategic road network, rail networks and Luton airport and its proximity to London are all great for business. None the less, we have problems, too. Even as a jewel in the east, we suffer from unemployment. Jobseekers’ allowance claimants form 7.5% of the population—it has risen over the past couple of years—compared with an average of 4% in the wider east. Median earnings are £350 a week in Luton compared with £410 a week in the rest of the east.

The east is a vastly disparate area. I am reminded of that when it takes me two and a half hours to drive to Norwich and two hours to Cardiff. It is a vast area as well, but it gets the same blanket national insurance conditions under this Bill, which is surely unfair.

Being at the margins of the east is also a problem. Those same road and rail networks that make Luton an attractive place for business can help its creative work force to leave—and to receive a £50,000 golden hello for setting up a business elsewhere. If the purpose is to encourage jobs in the non-excluded areas rather than in the greater south-east, then areas at the margins will be disproportionately affected. For places such as Luton it is a double whammy because there will be public-sector job losses over the coming years and a less competitive environment in which to establish a new business. Indeed, it is a triple whammy because Luton’s great road and rail networks will encourage people to move 15 or 20 minutes away to establish their business, and the area will lose valuable new jobs at a time of rising public sector unemployment. That is why I sponsored early-day motion 537, which said:

“That this House notes that the Government’s decision to introduce a Class 1 Employer National Insurance exemption for new businesses in regions other than the East, South East and London will have a negative effect on growth in those areas collectively termed the Greater South East; further notes that in areas which border, or have good rail and road links with non-Greater South Eastern town and cities, the strategy positively encourages entrepreneurs to start new businesses away from their own communities, breaking community ties and vastly increasing unemployment; and further notes that the same strategy fails to recognise the vast disparity within the Greater South East region, where some towns and cities experience levels of unemployment and deprivation that are equal to or worse than the parts of the country that will benefit from this scheme.”

The disparity within regions is the key point. Luton’s businesses will be hit hard as will others across the south-east. Potential new businesses will be affected. Some 82% of Luton’s businesses employ fewer than 10 members of staff, which are exactly the sort of operations that this policy is meant to help in other parts of the country. Again, more than four-fifths of local businesses do not have sites elsewhere in Luton. These are Luton-based businesses run by Luton people, and they will be hit before they even have the chance to get started.

The Government argue that anything other than the binary distinction between south-east and the “other” would be too difficult a distinction for the boffins at the Treasury to work out. In response to the hon. Member for Gosport (Caroline Dinenage), the Exchequer Secretary said that the measure

“is targeted on countries and regions within the UK where reliance on public sector employment is at its highest. For practical reasons the Government have no plans to introduce national insurance contribution exemptions for smaller geographical units.”—[Official Report, 10 November 2010; Vol. 518, c. 359W.]

I hope that in Committee, the Government will be open to considering different models or different, more graduated distributions of the national insurance holiday schemes. Changing the ratio is the stated ambition of the Bill. The data for it exist for local authority areas, which are explicitly listed by name in the Bill. Will the Government choose to look at that as an option for applying the changes? My constituents in the Luton local authority would be extremely grateful if they did so.

In summary, the Government have chosen to favour some people, some businesses and some communities over others. Although I understand that there are pros and cons to such an approach, to apply that choice as a blanket holiday over vast swathes of the country, meaning a £50,000 golden hello for some businesses just 15 or 20 minutes away from the borders of my constituency, will have a negative effect on Luton South. Such an approach does not fulfil the other part of the Government’s stated bargain, which is that if a business loses out by having higher national insurance rates on new start-ups, that will be offset by living in an area that is already doing better when it comes to higher public sector employment. As we heard from my hon. Friend the Member for Luton North (Kelvin Hopkins), his constituency is in the top 10 seats for public sector employment rates, so his constituents will be affected.

In short, if the Government scheme is to favour some areas over others, and it does not work, it will be a waste of money and parliamentary time. If it does work, it will hit my constituents hard and unfairly—judged by the Government’s own criteria. A reasoned amendment will not be moved tonight, and Opposition Members will not oppose the business as it goes forward. We accept that responsible national insurance increases will be required to address the deficit. None the less, I hope that the Government will have the courage to look at the distribution of this holiday so that the hard-pressed and creative people of Luton are not the victims of a Tory triple whammy.

18:59

[Chris Leslie (Nottingham East) (Lab/Co-op)]

I congratulate my hon. Friend the Member for Luton South (Gavin Shuker) on his comments. In a nutshell, he has summed up many of the problems and inconsistencies in the Bill. It seems that it has something of a split personality, which has been caused by the Government trying to face in two different directions simultaneously. At the election, many people thought that the Conservatives were promising to reverse entirely the national insurance rise. We consistently heard from the Prime Minister and the Chancellor on that issue. Unfortunately, the public did not see the small print that existed at the time.

The Government are merely chipping away at those national insurance changes, and only for employers. That may not actually be a broken promise, but they have rowed back from the impression that they gave to the public. They let everyone think that they were against the change to national insurance, but they never actually intended to reverse it. It is fascinating to see them attempt to cover up that particular shortcoming with the partial increase in the employer national insurance threshold coupled with what most hon. Members, including most Government Members, have described as a complex and insubstantial national insurance tweak that applies to some entrepreneurs in some parts of the country, welcome though it will be to many of them. Political acrobatics have resulted in a contorted Bill, as my hon. Friend the Member for Brent North (Barry Gardiner) argued when highlighting the incoherence of the Bill.

It is true that the previous Labour Administration were prepared to take tough decisions on tax and national insurance, because the banking bail-out required us to raise funds to compensate. The hallmark of political parties is the choices that they make on taxation and expenditure. This Government have chosen to cut severely investment in public services and to raise VAT to 20%. A Labour Government would have chosen a steadier and more sustainable approach to deficit reduction, but national insurance changes would have been part of that.

We chose the national insurance route rather than the VAT route for very good reasons. Slightly contrary to the point made by the hon. Member for Newton Abbot (Anne Marie Morris), the national insurance changes were not going to be made in June; they were always going to come in from next April, by which time we had hoped that the recovery would be well under way. Unfortunately, the Conservatives and Liberal Democrats have chosen to go for the VAT increase. That will hit slightly earlier, albeit by only a few months, but the economy will feel it like a punch in the stomach. Their VAT jobs tax could have a greater impact on employment, which it will hit significantly, than the national insurance changes. The CIPD, to which many hon. Members referred, predicts that around 250,000 private sector jobs will be affected, and possibly lost, by the VAT increase, which is just around the corner.

[Barry Gardiner]

Will my hon. Friend none the less acknowledge that the hon. Member for Newton Abbot (Anne Marie Morris) made a pertinent suggestion? She identified the phase of business development that could give maximum benefit to the Treasury—when very small businesses are growing into small to medium-sized businesses, rather than when businesses are growing from zero to micro.

[Chris Leslie]

Perhaps I got the wrong end of the stick from the hon. Member for Newton Abbot when she made that pertinent point about micro-businesses. The Bill perhaps does not capture the benefit to the economy that small businesses have in that phase of their development. I hope that she will be a member of the Public Bill Committee that considers the Bill, although interestingly, as has been pointed out, perhaps some of the questioning from Government Members might prevent them—mysteriously—from being selected for membership of that Committee. We shall see.

The Prime Minister said before the general election that VAT is

“very regressive, it hits the poorest the hardest, it does, I absolutely promise you”.

The Government have chosen a path that will hit employment, jobs and businesses very hard indeed. That should be borne in mind when we consider the Bill. It is odd that this Bill is separate from either of the Finance Bills. I have not quite figured out the Government’s tactics, and perhaps they had not quite worked out what they were going to do. In that wider context, it is necessary to compare their choices in VAT against the national insurance changes.

Hon. Members mostly spoke about part 2 of the Bill, which includes the concept of a national insurance holiday. Such a holiday is, of course, superficially attractive, but there are reasons to be concerned about the poor design of the measure, which applies only to new businesses and not to existing firms. That is important. Many businesses could be under the misapprehension that they will qualify, and a lot of effort and time will go into contacting Business Link and the Treasury to find out whether the measure applies to them, and many will be disappointed.

The proposal is complex because of the limited time and extent of the scheme. It applies only to a small number of employees and there is a convoluted application process. Government Members pointed out that efforts need to made to ensure that the measure is as simple as possible. The Bill will require HMRC to take on 240 extra staff—I am not sure that they will be additional staff, especially given that HMRC is cutting numbers—and we will press the Minister on that extra complement in Committee. Businesses could apply for the national insurance holiday but not get it because they have to swim for hours through treacle to get someone in the Treasury to pick up the phone. That could be a significant problem.

The Minister gave a vague figure when asked how many people had applied since the scheme started in September. Very few people are aware that the scheme exists, and it has hardly been advertised—[Interruption.] I am glad that Liberal Democrat Members have joined us in the Chamber, even if they are just passing through, because they have been conspicuous by their absence. Perhaps that is related to their embarrassment over the VAT comparator.

My hon. Friend the Member for Ilford South (Mike Gapes), who highlighted the discriminatory nature of the national insurance holiday proposal—it affects some parts of the country but not others—and my hon. Friends the Members for Lewisham East (Heidi Alexander) and for Ealing North (Stephen Pound) pointed out the unfairness of a crude system that will exclude the east of England, London and the greater south-east, as my hon. Friend the Member for Luton South called it. That will cause significant disquiet, and many new entrepreneurs in those parts of the country will complain. Legitimately, they will not understand why they are excluded while reasonably affluent areas of the country outside the greater south-east—Chester, Worcester, Harrogate, York Outer, Tatton and Richmond, to name areas at random—will be eligible for the benefits. My hon. Friend put things perfectly when he said that the boffins at the Treasury ought to be capable of understanding the distinction between the greater south-east and other parts of the country. Of course they are capable of that, and we will seek to make amendments to deal with that problem in Committee.

Unfortunately, this small and partial measure—a national insurance holiday for some businesses in some parts of the country—reveals first of all the Government’s complete failure to develop a regional growth strategy, especially for the English regions. They have taken the knife not only to regional development agencies, but more importantly to the budgets at their disposal to help to build SMEs and provide the infrastructure necessary for businesses to survive. We know that for every £1 spent through the auspices of RDAs, £4.50 of benefits accrued to the regional economies. The Government disregarded evidence from the National Audit Office. They have damaged the prospects for growth in our economy, but particularly in those parts of it that have not benefited from the historic engine of growth that has surrounded London and the south-east. The Government’s alternative —these local enterprise partnerships, which are unfunded, and only partially covering the country—is a poor substitute for a proper regional economic strategy. Nearly 21 million people and 780,000 businesses will not be covered by the LEPs, the Business Secretary has described them as “chaotic”, and Richard Lambert of the CBI has called the process a “bit of a shambles”.

That sums up the Government’s lack of a growth strategy. We know that they have pulled the rug from under the growth White Paper that was meant to be forthcoming. They did that because they have no clear idea of how to drive growth: they are fixated on austerity alone and have no solutions for the long-term course of our economy. That is a great pity. The regional growth fund has been hacked down to a pathetic size, with few opportunities for small and medium-sized enterprises to apply for support under it. In many ways, therefore, small firms have been cast to one side, with perhaps a few crumbs from the table made available for them as a result of this Marie-Antoinette strategy of the Ministers—“Let them eat cake” seems to be the approach they are willing to take.

The hon. Member for York Outer (Julian Sturdy) rightly pointed out that the Government should be trying to make the banks lend more and give more support to SMEs, making inroads into that desert of loan and credit available to them. We know from the Chancellor’s statement at Treasury questions last week and from Ministers’ comments that they have gone soft on the banks in a number of ways, particularly on the coalition commitment to restart net lending targets for the banks in which they have a shareholding. They have decided now to row back from their commitment to institute those net lending targets, and I urge hon. Members, particularly Government Members, to ask serious questions of Ministers about why they are not prepared to ensure that the banks play their full part in repairing the economy.

I would not like to think that we cannot trust the Chancellor to fulfil some of the pledges to lessen the impact of these national insurance increases. As we know, the Government have already reneged on the commitment on employee national insurance changes, even though the press reported before the election that the Conservative party would do so. It is true that in many ways the personal allowance changes deal with some of these elements, but only in part—there was a commitment on national insurance as well, but it folded and absorbed it into that change. Again, it raised people’s hopes before the general election, but has not fulfilled them.

In particular, the Government are not fully offsetting these changes for employers, which will be a surprise to many people. Before the election, the Conservative party gave the impression that it was fully against the 1% increase and that it would repeal it entirely. [Interruption.] Ministers seem to think that they were going to repeal it entirely. As I see the measures, the impression they gave—[Interruption.] There was small print, it is true, but that was not the impression given. The £4.5 billion change is offset by the £3.1 billion increase in the threshold for employers on national insurance, so there is a deficit of £1.4 billion in the compensation that the Government will not be giving to employers. This is a question not necessarily of a broken promise, but of an impression that many people had that the Government were going to end the jobs tax, as the Prime Minister and Chancellor characterised it. As ever with this Government, however, when we look at the small print, we see that those changes will not be forthcoming.

We have not seen the secondary legislation yet. I would like to know when the Minister will introduce it. Presumably on Monday—traditionally the time of what was the pre-Budget report—we will hear from the Chancellor about the threshold changes and the indexation elements of these changes. Ministers have said they are going to add £21 to the employer threshold, but what will be the indexation? Will they follow the long-standing traditions of the Rooker-Wise amendment when it comes to allowance and threshold changes and follow the retail prices index option, or will they row back again and go for the cheaper consumer prices index option? In other words, will they be giving with one hand, through the threshold change, but taking with the other, by only opting for CPI?

This debate has revealed significant concerns among Government Members about the crude discrimination shown against London, the south-east and the east of England. The Bill reveals a lack of a proper strategy for growth, especially in the English regions, and the Government have revealed their preference for regressive taxation, particularly VAT, which will harm businesses and raise unemployment. We will certainly need to see serious improvements in these measures in Committee.

19:15

[The Economic Secretary to the Treasury (Justine Greening)]

We have had an interesting debate and I am grateful for hon. Members’ contributions, especially that of the hon. Member for Ealing North (Stephen Pound), who provided the most entertaining canter through an explanatory memorandum I have listened to in years.

At the beginning of the debate, my hon. Friend the Exchequer Secretary explained that the Bill contains two important measures: an increase in national insurance contributions and a regional employer national insurance contributions holiday for new businesses. Both are part of the Government’s plan to reduce the burden of labour taxation, reducing obstacles for those who want to recruit and retain staff. It is worth stressing that the clauses are part of a much wider package of reforms to help businesses and ensure that Britain is again open for business. The reforms are designed to reverse the most damaging aspects of Labour’s ill-conceived jobs tax. I listened with care to the contributions from Labour Members, but members of the public listening will have found it easy to forget that the Labour party left office with unemployment higher than when it entered.

Nevertheless, I am pleased that the debate has led to so many Opposition Members—and, indeed, Government Members—recognising that the best way to kick-start new business, as the hon. Member for Lewisham East (Heidi Alexander) put it, is to ensure that businesses are not over-taxed. In fact, the hon. Member for Ilford South (Mike Gapes) was extolling the virtues of low tax on businesses. That is why the Bill is so important. Were the coalition Government not in power, rather than corporation tax on businesses going down, it would have gone up, and rather than the national insurance burden, particularly on small businesses, being held down, it would have risen remorselessly.

The hon. Member for Nottingham East (Chris Leslie) talked about a split personality, but it is probably fairer to level that charge at the right hon. Member for Delyn (Mr Hanson), who, on the one hand, wanted to raise national insurance for all employers, but, on the other hand, complained that the tax break we wanted to introduce to reduce national insurance was not fair because it did not apply to all regions. He cannot have it both ways.

[Mike Gapes]

I am glad that the hon. Lady was listening so carefully to what I said. She refers to unemployment, but will she confirm that 3 million more people were in work when the last Government left office than when they entered?

[Justine Greening]

A lot of people would debate who those jobs were taken by. In reality, unemployment was higher—every Labour Government leaves office with unemployment higher than when they entered.

I want to talk about some of the most important aspects of the Bill. Employers will be £150 better off each year for each employee earning above the threshold. There will be an increase of 650,000 in the number of employees in respect of whom employers pay no national insurance contributions. Compared to this year, employers will pay less national insurance contribution in respect of those employees earning under £20,000. In fact, low-earning employees will also be better off, because the point at which they start to pay national insurance contributions is also going up—by about £23 per week. By reversing the planned employer national insurance increases, this package will help to maintain the UK’s attraction as a place to do business. In doing so, it will support the Government’s aim of creating a fairer and more competitive tax system. The national insurance holiday will help with the transition to a more sustainable model of economic growth, encourage private sector enterprise and investment where it is most needed, create jobs in some of our poorest regions, and encourage people to become business people, entrepreneurs and wealth creators—the very people who will lead the recovery.

Those points were made eloquently by my hon. Friend Member for Sevenoaks (Michael Fallon) and later by my hon. Friend the Member for York Outer (Julian Sturdy), who also talked about the burden of red tape, which is another matter that the Government are keen to reduce for businesses. My hon. Friend the Member for Central Devon (Mel Stride) talked about the need to support business, and to create new jobs and the positive culture that we need to engender throughout the country. That is absolutely what the Government want to do.

The Bill should be seen in the context of wider measures. The Government have taken several steps to support business. In the emergency budget we announced measures to reduce corporation tax, not raise it on large companies year on year. We announced measures to reduce the small companies rate of corporation tax. The hon. Member for Strangford (Jim Shannon) talked about what we can do to help small companies and new companies. He was right, and that is precisely why, instead of increasing corporation tax on those companies, we preferred to try to ensure that they can enjoy a rate decrease.

We have gone further. The regional growth fund will benefit all communities in our country. The capital infrastructure plan was announced as part of the spending review, and more capital will go into supporting our country’s infrastructure than would have happened under the previous Government. We have published the local growth White Paper.

[Chris Leslie]

In the hon. Lady’s list of Budget changes, what will be the impact of the VAT increase on employment?

[Justine Greening]

Clearly, that must be seen in the context of our desperate need to tackle the fiscal deficit that the Labour party left us. It is one reason why our overall plan is not just to support business—that is clearly how we will grow our economy back to the healthy state that it needs to get to—but, as the hon. Gentleman pointed out, to make our numbers add up across the board. We must get rid of the structural deficit that his party handed over to us.

We believe that the package of measures is right, the OECD has said that it is moving in the right direction, and it has been welcomed throughout Europe. If the hon. Gentleman is saying that we should not increase VAT, that prompts a question. His right hon. Friend the Member for Edinburgh South West (Mr Darling) was interviewed recently and said that the Labour party would have increased VAT, so we cannot accept the hon. Gentleman’s comments that his party would not have increased it. There is a blank piece of paper, and at the top are the words, “Labour economic strategy”. It is time for the Labour party to start to become credible by trying at least to pull together and to plan for our economy. Most people will put the contributions about jobs and the complaints about reductions in national insurance not going far enough in the context of a party that has absolutely no alternative plan for managing our economy. They will realise that its arguments are not credible.

The regional aspect of national insurance policy must be seen in the context of the broader package to support business. The level of VAT registrations in different parts of our country and the number of jobs created in different parts of our country show that we need to ensure that we can stimulate growth, particularly in the communities that can benefit most from it. The policy should be looked at not in isolation, but in the context of the broader tax reductions on business and the rise in the personal allowance for employees. Nearly 900,000 of the lowest-income workers in our country will be taken out of income tax altogether. The vast majority of people will benefit from our proposals, and under the Bill many of them will be small businesses with a handful of employees.

[Barry Gardiner]

I do not think I heard a single speech from either side of the Chamber that suggested in any way that those benefits should not flow to certain businesses. The question that was repeatedly asked and that the Economic Secretary and her colleagues failed to answer is why those businesses are favoured, not only when they are specifically not the ones in the areas that will produce the economic growth that she indicates is required from the policy, but because of the manifest unfairness that will result from their distribution.

[Justine Greening]

I realise that the hon. Gentleman takes a different view about how to target the policy. I happen to believe that he is wrong. We recognise that there needs to be some targeting, but the way in which he would have done that would have been unwieldy and unaffordable. In the context of our broader measures to reduce corporation tax instead of allowing rises, which would have happened under the Labour party, and the measures to take the lowest-income employees in our country—nearly 900,000—out of income tax altogether, we are trying to strike a balance, and I believe that we have struck the right balance.

I have no doubt that we will continue the debate in Committee, but we must be pragmatic. I draw attention to the hon. Gentleman’s attempts to target policies when the Opposition were in government. They faced difficulties with their changes during their final years in office. Under the deprived area fund, and the neighbourhood renewal fund, which became the working neighbourhood fund, some communities that had previously received funding were cut off. We want an overall package that supports business across the board, while retaining an element of support targeted at the regions that we think need to benefit most from the next economic upturn. That is what the Bill is doing.

The package of reforms of which the measures in the Bill are part will benefit individuals and employers throughout the country, and help us to achieve the twin objectives of creating a fair and competitive UK tax system. The burden of labour taxation will be reduced by more than £6 billion a year in a way that will help the lowest earners in Britain and protect lower-paid jobs.

The national insurance holiday provides targeted support to new enterprises, and encourages people to set up their own businesses and to employ new staff. It is an important part of our economic strategy to help the parts of the country that are most reliant on the public sector, and to ensure that we make the transition to a more sustainable model of growth and employment as smooth as possible. The Bill will ensure that as the recovery takes hold, all parts of the country will benefit. It will enable a reduction in taxation on labour nationally, and provide extra support in targeted areas. It will be good for growth, and for jobs. I commend this Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

National Insurance Contributions Bill (Programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7),

That the following provisions shall apply to the National Insurance Contributions Bill:

Committal

1. The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

2. Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 9 December 2010.

3. The Public Bill Committee shall have leave to sit twice on the first day on which it meets.

Consideration and Third Reading

4. Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.

5. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

6. Standing Order No. 83B (Programming committees) shall not apply to proceedings on consideration and Third Reading.

Other proceedings

7. Any other proceedings on the Bill (including any proceedings on consideration of Lords Amendments or on any further messages from the Lords) may be programmed.—(Norman Lamb.)

Question agreed to.

Business without Debate

Tuesday 23rd November 2010 Commons Chamber

Delegated legislation

Tuesday 23rd November 2010 Commons Chamber

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Nuclear Energy

That the draft Nuclear Decommissioning and Waste Handling (Designated Technical Matters) Order 2010, which was laid before this House on 18 October, be approved.—(Norman Lamb.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Environmental Protection

That the draft Producer Responsibility Obligations (Packaging Waste) (Amendment) Regulations 2010, which were laid before this House on 26 October, be approved.—(Norman Lamb.)

Question agreed to.

Internet Pornography

Tuesday 23rd November 2010 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Norman Lamb.)

19:29

[Claire Perry (Devizes) (Con)]

I am grateful for the opportunity to debate this matter tonight. I thank Members on both sides of the House who have either made time to attend the debate or expressed support for my proposal since it was announced yesterday. I am asking for a change in regulation that would require all UK-based internet service providers to restrict universal access to pornographic material by implementing a simple opt-in system based on age verification.

The internet is a phenomenon that has changed our lives. I well remember my new year’s resolution in 1996, which was to get to grips with this thing called the internet. Since then, there has been a massive growth in the size and complexity of the online world. In Britain today, more than 19 million households—73% of the total—have access to the internet, and the speed of access and complexity of content are growing all the time.

Children, with their annoying ability to be early adopters of new technology, are particularly heavy users of the internet, with 99% of 12 to 15-year-olds, 93% of eight to 11-year-olds and 75% of five to seven-year-olds saying that they use it regularly. We know that many obtain access in an unsupervised way, which is not surprising, given that 31% of 12 to 15-year-olds have internet access in their bedrooms. We also know that many children use this either knowingly or unknowingly to access pornography.

Pornography is one of the most widely available forms of content on the internet, representing 12% of the estimated 250 million global websites. Studies suggest, shockingly, that one in three British children aged 10—a third of our British 10-year-olds—have viewed pornography on the internet, while four out of every five children aged 14 to 16 admit to regularly accessing explicit photographs and footage on their home computers. The world has really changed.

[Fiona Mactaggart (Slough) (Lab)]

I am very glad that the hon. Lady is raising this important issue tonight. Does she see, as I do, a connection between the figures to which she refers and the research by the End Violence Against Women coalition that suggests that a third of young girls experience unwanted sexual contact at school?

[Claire Perry]

The hon. Lady makes an excellent point, as always. I will speak in a moment about the unpleasant impacts of access to pornography on our young girls and boys.

The numbers that I have just cited are drawn from a relatively small sample, but more extensive studies suggest that almost 60% of children aged nine to 19 had viewed online pornography and that the rate of unwitting or unwanted exposure was increasing sharply. I know that many parents will have had that sickening feeling as their child clicks through, quite innocently, to a website after searching for a particular term. For example, a search for American Girls—a series of wholesome, culturally appropriate dolls—can end up at the American Girls website, which is certainly not a wholesome place to be. It is truly shocking how easy it is to access that kind of information.

These statistics are simply red-lining a problem that every parent recognises—namely, that our children are viewing material that we would never want them to see, especially at such a young age. So what can we do about it? The current way of controlling access to pornographic material on the internet is via safety settings and filtering software, installed and maintained by users—parents, teachers and carers across the country. Unfortunately, however, through technological ignorance, time pressure or inertia or for myriad other reasons, this filtering solution is not working. Even among parents who are regular internet users, only 15% say that they know how to install a filter. It is unfortunately also the case that our children know better than we do how to circumvent the filters, while the constant changes in internet technology and content mean that they can quickly become outdated.

I would like to raise two key issues about the current, unsatisfactory situation. The first, as the hon. Member for Slough (Fiona Mactaggart) has just pointed out, is that access to pornography has a profound and negative effect on our children. Against the backdrop of a drip-feed of sexualisation that promotes pole dancing as healthy exercise for young girls and high-heeled shoes as appropriate footwear for six-month-old babies, the availability of soft-core and hard-core pornography in our homes is damaging our children.

Yesterday I attended a Safermedia conference sponsored by my hon. Friend the Member for Enfield, Southgate (Mr Burrowes), and heard compelling evidence of this damage, including the explosion in the number of children in this country being referred to addiction clinics with a “pornography problem”, and the fact that many studies demonstrate that watching internet pornography contributes to people seeing women as sex objects, increases sexual risk-taking such as having unprotected or anal sex, and relaxes the boundaries of sexual violence in a completely unacceptable way.

It is of course the ease of access to unimaginable acts of sexual violence and depravity on the internet that causes the greatest problems for parents. We all know what happens when a bit of innocent investigative clicking leads us to images that are truly sickening. Phillip Hodson of the British Association of Counselling and Psychotherapy sums this up very appropriately when he says:

“The entire history of human perversion and sexual deviation is there at your fingertips and a great deal of it is free.”

The second problem in the current system of internet provision is the presumption that it is entirely the consumer’s responsibility to safeguard their family from harmful imagery. I am a fervent supporter of personal responsibility and have an innate dislike of Big Brother regulation, but there is a form of content delivery in this country that, in contrast to the internet, is either regulated by the Government or has a successful self-regulation model that does not appear draconian or heavy-handed. Our television viewing is restricted by sensible Ofcom guidelines, including section 1, which says that material equivalent to the British Board of Film Classification’s R18 rating must not be broadcast at any time, and that adult sex material cannot be broadcast at any time other than between 22.00 and 05.30 hours on premium subscription services or on pay-per-view or night services, which have to have mandatory restricted access, including PIN verification systems. We all accept such regulation of our television viewing quite happily.

What we see on our cinema screens is subject to regulation by the British Board of Film Classification, and we have accepted that for years. Our high street hoardings and general advertising are regulated by the Advertising Standards Authority, which displayed its teeth recently by removing posters from the Westfield shopping centre. Government guidelines inform newsagents’ displays of lad magazines and porn magazines. Even the mobile phone industry, which has arguably seen even more change than the internet in the past 10 years and whose products are increasingly used to access the internet, has introduced a reasonably successful self-regulation model that requires an adult verification check before users can access inappropriate material on the internet.

[George Hollingbery (Meon Valley) (Con)]

Carphone Warehouse is conducting a campaign on this issue, working with Professor Tanya Byron who has been working with the Government in this area for three or four years. A survey conducted by Carphone Warehouse found that 85% of children did not have parental controls activated on their mobile phones, 81% of parents felt that they needed to know more about how to deal with this problem, and 48% of parents wrongly thought that it was impossible for their child to download adult content on their mobile phone. I welcome the efforts being made by the mobile phone companies—there is no doubt that they have tried hard—but does my hon. Friend agree that there is still a great deal more to be done?

[Claire Perry]

As always, my hon. Friend makes an excellent, fact-filled point. I agree that although the self-regulation model is better than the one that pertains for internet service providers, there is much more to be done.

Why should internet service providers be any different from other content providers? Why is the onus on parents, teachers and carers to act as web guides and policemen? Where is the industry responsibility?

Three objections are usually raised when changes such as I am proposing tonight are discussed. The first is that any restriction on access to pornography on the internet is an infringement of free speech. I hope I am no Mary Whitehouse figure, although she was right about many things, but the nature of the internet has led to a proliferation of imagery and a discussion of sexual practices which is quite mind-boggling in its awfulness. I will not read out some of the information that was provided at the Safer Media conference yesterday, but I, at the age of 46, was introduced to sexual practices—one or two clicks away—that I have never heard of and simply cannot conceive of having my daughters view. It was simply sickening.

It is simply beyond belief that people can find sexual pleasure in viewing images of children, men and women being subject to the worst sexual degradation and violence. If that is our definition of free speech, the definition is wrong. That is not the purpose of tonight’s debate, however. I do not propose to reduce or restrict inappropriate content for adults who access the internet; I would simply like to make it more difficult for our children to access that material.

The second objection to my proposal is that it is too costly and too difficult to implement—that it is a regulatory burden on a struggling industry. That is a red herring. Although the content of the internet is generated out there in the wild west on millions of international websites, access is concentrated in the hands of a small number of companies. The Digital Economy Act 2010 states that there are 450 fixed internet providers in the UK, but that the top six, which include household names such as BT, Virgin, TalkTalk, BSkyB, Orange and O2, have more than 90% of the market share. That is not a large group of companies to deal with and regulate. Notably, the combined revenues of that business model are more than £3 billion a year, so it is a deeply profitable industry in which to engage.

Another concern is the definition of pornography. If we are to have an age-verification system, how do we define pornography? We already have perfectly workable definitions of adult content provided by the Obscene Publications Act 1959, and provided and used by Ofcom in the television industry. The required blocking technology is available in distributed form, with the onus on parents and users to implement it, but one does not need to be Bill Gates to pull the whole thing into a more sensible system of internet regulation.

Interestingly, although the official view of the Internet Service Providers Association—confusingly named ISPA—is that any official restrictions would be hugely expensive, technically difficult and open to circumvention, one provider, TalkTalk, proposes to provide a ratings system in the new year, with an opt-in system including U, 14, 18 or unclassified ratings similar to those of the British Board of Film Classification. Although that is a responsible and welcome step which I commend, it is a voluntary system, again with the onus on parents to sign up. Surely it would be better for TalkTalk to offer a default U setting and then allow an opt-in to more advanced levels.

[Nick Boles (Grantham and Stamford) (Con)]

Does my hon. Friend agree that this is simply a matter of consistency? We think it perfectly reasonable for Governments to pass laws that prevent young people from accessing damaging things such as cigarettes and alcohol, but pornography is just as damaging, if not worse, because damage to the mind can be permanent, whereas damage to the body can be temporary and recovered from. As a matter of consistency, therefore, Governments should act as she suggests.

[Claire Perry]

I thank my hon. Friend for making his usual deeply eloquent and relevant points. He is right. We have thrown up our hands, put the issue in the “too hard” basket—forgive the pun—and basically said that this is something Governments should not regulate. I believe it is.

The third objection to such proposals is that if we have age-verification software, children will just lie about their age and access the information anyway. The previous Government sensibly introduced workable age-verification restrictions on online gambling sites in 2005, however—an excellent model that works well and searches financial and electoral databases to verify that users are old enough to enter the site and engage in the gambling within. It is a workable model, the previous Government introduced it, and they are to be commended for doing so.

Britain has taken steps towards internet safety before. The industry acted independently and responsibly on child abuse imagery by setting up the Internet Watch Foundation, which finds sites displaying abuse that the industry then works to block. We have led the world in introducing that technology, and the people and organisations involved are to be strongly commended. It has been a huge success: the amount of child sex abuse content reported or found to be hosted in the UK has dropped from 18% to less than 1%; and 95% of our broadband services use that blocking technology. It can be done.

The right hon. Member for Blackburn (Mr Straw) is also to be commended for introducing the Criminal Justice and Immigration Act 2008, which brought in a ban on the possession of extreme pornographic material. That is highly commendable, but of course the content is there on the internet and available for viewing by us and our children with one or two clicks of a mouse.

All that progress has been made, but regulating internet access to inappropriate content continues to stump successive Governments and, in my view, the industry. I believe the time has come to stop ducking an issue of enormous concern to parents, teachers and carers throughout the country. We are often ridiculed for raising it, barraged with information on why the internet should be treated differently, bamboozled with the problem of international co-operation and told that it is our responsibility and no one else’s to keep our children safe,

I beg to differ. It is time for Britain to take a lead on the matter and for the Government, with their commitment to family-friendly policies, to act. Without action, and with technological convergence, we will increasingly be able to access internet pornography and all internet content via television, raising the prospect of this damaging and degrading material, which is shocking enough when viewed as thumbnails or on an A4-sized computer screen, being piped into our homes and displayed in high-definition glory on 4-foot-wide television screens.

The arguments for passive acceptance and self-regulation are past their sell-by date, and it is time to regulate the provision of internet services in this country. We already successfully regulate British television channels, cinema screens, high street hoardings and newspaper shelves to stop our children seeing inappropriate images, and mobile phone companies have come together to restrict access to adult material, so why should the internet be any different?

British internet service providers should share the responsibility for keeping our children safe, and there should be an opt-in system that uses age verification for access to such material. I urge the Minister to engage with the internet service providers to set a timeline for those changes and, if they will not act, to move to regulate an industry that is doing so much damage to our children.

19:47

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)]

May I say how grateful I am to my hon. Friend the Member for Devizes (Claire Perry) for raising this important subject and giving the House the opportunity to debate it? She put her case incredibly forcefully. We are used to saying that we are middle-aged when policemen start to look younger. Perhaps we can add a new phrase to the lexicon: when we start saying Mary Whitehouse was right, we might be approaching middle age. My hon. Friend’s points were very well made, and chime very much with my thinking.

The subject of this debate has been misleadingly referred to as the regulation of access to pornography on the internet; what we are really talking about is ensuring that we can protect not only children from accessing unsuitable adult material, but adults from the extreme versions of pornography—to which, I am glad to say, my hon. Friend only alluded. As she said in her opening remarks, the internet is fast becoming the dominant medium not just in this country but all over the world. Moreover, as she noted at the end of her speech, when it converges with television it will become all pervasive. The struggle to deal with what one might loosely call internet regulation is something that we are having to come to grips with very rapidly as the internet advances so speedily.

I found out to my cost only last week, after making a speech on net neutrality, that anyone who ventures into the vexed subject of internet regulation, in the broadest sense, can set a number of hares running. There are many people who believe that the internet should not be regulated at all. This Government’s position is that the internet should be lightly regulated, so that we benefit from many of the advances that have come about from a lightly regulated internet. Although we are focusing in this debate on the internet’s negative aspects, it is important to remember that a lightly regulated internet has brought transformative companies to the web. As we learned from a piece of research published a couple of weeks ago, in just 15 to 20 years, internet commerce has come to represent something in the order of 9% to 10% of our economy.

This remains a very serious subject, which deserves very serious consideration. As with any area of life, it is vital that children and the vulnerable be protected. Where there is harm and safeguards are not heeded, we need effective sanctions to prosecute illegal acts.

Before addressing my hon. Friend’s specific points, it might be helpful to set out the issue in the broader context of the Government’s approach to the regulation of adult material in general. It is important to remember that we regulate adult material, regardless of the medium through which it is transmitted or published. The Government’s policy is that controls on published material, including material published online, should strike a balance between freedom of expression and protection of the public. It should also be proportionate to the potential harm caused.

Clearly, there is material that should not be published at all. This is covered by the criminal law. All material published or broadcast in the UK is subject to the Obscene Publications Act 1959, under which it is a criminal offence to publish any article or image considered to be obscene. The Act also applies to the distribution of material on the internet or by mobile phone. It is important to note the general principle that an action that is illegal if committed offline is also illegal if committed online. Just because it is on the web does not make it all right. This applies both to the distribution of illegal material and to harmful behaviour.

[Claire Perry]

I am grateful to the Minister for launching into what sounds as if it will be a full and reasoned argument, but is it not the case that there have been almost no successful prosecutions of British companies within our criminal jurisdiction domain—I am thinking particularly of the Perrin case, but also subsequent cases—and that it is almost impossible to apply international law to shut down what we know to be blatant breaches of the regulation governing “appropriate adult material”?

[Mr Vaizey]

I shall come to the point that the web is global, so there is an international aspect to these issues. On the specific question of whether there have been prosecutions, it is not necessarily the case that the number of prosecutions reveals the effectiveness of an Act. The existence of an Act might often be enough to keep people within the relevant boundaries. As my hon. Friend says, the internet is a global phenomenon and people can access content from other jurisdictions. I will address that point in a few moments. As she rightly points out, I am trying to build a reasoned argument.

[Jim Shannon (Strangford) (DUP)]

Does the Minister agree that this is a worldwide phenomenon, not just a United Kingdom matter? It is often other countries in the world that originate those websites, and then they are broadcast in the UK. What steps does the hon. Gentleman envisage us taking with other countries, whether those be Brazil, Spain or elsewhere, to ensure that we do not allow access to such material in the UK?

[Mr Vaizey]

I am coming to self-regulation, which is what I understand my hon. Friend to be calling for on the part of our internet service providers, to prevent access to inappropriate content. It is obviously not for this country to change the obscenity or pornographic laws in other jurisdictions, but it is important to recognise that we are dealing with content from beyond our own jurisdiction. Let me press on. I shall make my argument before accepting further interventions, so that hon. Members will be in a position to see the argument in the round.

On 26 January last year, Parliament further strengthened controls in the UK by making unlawful extreme pornographic material, including pornographic material containing explicit sexual violence that is life-threatening or likely to result in serious injury or bestiality. The Government also increased the maximum penalty for offences under the Obscene Publications Act from three to five years’ imprisonment. Under the Protection of Children Act 1978, as amended, the UK has an absolute prohibition on the taking, making, circulation and possession with a view to distribution of any indecent photograph of a child under 18. Such offences carry a maximum sentence of 10 years’ imprisonment.

There is also a law against the distribution of indecent images of children. Section 160 of the Criminal Justice Act 1988 makes the simple possession of indecent photographs of children an offence, and it carries a maximum sentence of five years’ imprisonment. In this context I am delighted to be able to welcome the appointment of Peter Davies, the new chief executive of CEOP—the Child Exploitation and Online Protection Centre. I want to pay tribute to the work of his predecessor, Jim Gamble, as well as to the outstanding work of CEOP in tackling the sexual exploitation of children.

My hon. Friend also referred to the work of the Internet Watch Foundation, which I am due to meet shortly to discuss self-regulation of the internet. As she pointed out, the IWF was set up in 1996 by UK ISPs to enable members of the public to report child abuse content in newsgroups or websites hosted anywhere in the world, as well as obscene content hosted in the UK. If that content is considered potentially illegal, the IWF passes the details to the UK police to start action against the originators, and will seek to get the material taken down at source or ask ISPs to deny access to the websites concerned.

I am very interested in the work of the Internet Watch Foundation, because I believe that it provides a model that is now well established and working effectively. The issue I particularly want to discuss with the IWF is whether its work, which has hitherto focused on child abuse content, can be widened to cover some of the other issues that my hon. Friend has raised this evening.

As the hon. Member for Strangford (Jim Shannon) pointed out, access to online pornography is not a problem for the UK alone. We have to recognise that the internet is a global network. This brings with it real challenges to the effective regulation of access to pornography. The overwhelming bulk of obscene material published on the internet originates abroad, sometimes in countries that do not share our approach to such material. It is simply the case, and has been for many years, that much pornographic material that it would be illegal to publish in the UK remains legal to publish in many other European countries, and even in the United States.

The UK ISPs take a responsible approach to the content that they host, both of their own volition and in co-operation with law enforcement and Government agencies. Where they are advised that content that they host in the UK contravenes UK legislation, they will readily remove it.

My hon. Friend talked about an age-verified opt-in procedure for internet access to pornography hosted in the UK. This is already the case, although my hon. Friend made her own forceful argument that it might not be effective enough. The managers of websites featuring mature content have a legal responsibility to indicate clearly on their front page that those sites are unsuitable for anybody under the age of 18. Additionally, when websites charge for access, they must place their adult content behind a credit card barrier, to reduce further the risk of children and young people accessing it. We will continue to consider how that protection might be made more effective.

[Ms Louise Bagshawe (Corby) (Con)]

Is the Minister aware of the private Member’s Bill proposed by the hon. Member for Swansea West (Geraint Davies), which is designed to remove the anonymity of prepaid credit cards for purchases under £100, whereby such material can be anonymously purchased by under-age people—or by anybody else? That is important, because it is what drives the child pornography industry.

[Mr Vaizey]

That is a very interesting point, and I suspect that the consumer credit Minister is aware of it. I will certainly sit down with him and discuss whether there is a read-across into the issue we are discussing this evening.

As I said earlier, a UK-based website was recently forced to take down its front page because it hosted adult content that was accessed by under-18s. That shows that there are some examples where this is working.

[Claire Perry]

I am sorry to be constantly interrupting the Minister, because I know that he has a great deal of material to get through, but I think that he is going down the dead end of focusing on content. As he said, much of the content is provided and hosted by websites that are outside the United Kingdom’s jurisdiction. We all know that the age 18 verification is simply a figment, and that there is almost no way of enforcing it.

The Minister has cited one website, but there are more than a quarter of a billion websites in the world, of which more than 10% are pornographic. I firmly believe that the onus of responsibility lies with the six British companies that are piping 90% of the content into our homes to provide some sort of opt-in software, so that we need not chase the red herrings of random porn websites in jurisdictions over which we have no control.

[Mr Vaizey]

I hear what my hon. Friend says, and I will address it in a moment, but first I want to talk about the UK Council for Child Internet Safety. I do not think that this is a dead end, because UKCCIS does incredibly important work. It focuses on content, self-regulation and joined-up government. Although, as I have said, we have a legal framework, that framework alone will not keep our children safe online. Real, effective protection for children can be achieved through parents, charities, industry, law enforcement authorities and Government working together. That is why Professor Tanya Byron—to whom my hon. Friend referred—was asked to take charge of an independent review on child internet safety, which led directly to the launch of UKCCIS.

UKCCIS is chaired by Ministers from the Department for Education and the Home Office, and Ministers from other Departments, including mine, attend its meetings regularly. It brings together more than 170 organisations from across industry, including internet service providers, the third sector, law enforcement authorities and the devolved Administrations, so that they can take positive steps to help children to stay safe online.

I assure my hon. Friend that the Government are working with the internet industry, through UKCCIS, to create an online environment in which children are protected from potentially harmful or inappropriate content. We want our young people to develop the knowledge, skills and resilience that will enable them to avoid accessing such content, and, if they do come across it, to avoid it in future and report it to the appropriate authorities when it causes major concern. UKCCIS is also working to encourage parents to take responsibility for what their children see online. I hear what my hon. Friend says about the need for ISPs to block this content, but I think it important for parents to take responsibility, and to use the filters and parental controls that are available in current technology to prevent their children from accessing harmful material.

My hon. Friend pointed out that people access pornography not just through their computers, but through their mobile phones. That is another issue to which I am hugely sympathetic, and it has been raised with me in my capacity as a constituency Member of Parliament. As my hon. Friend said, all UK operators operate a parental control regime on mobile phones that should prevent access to over-18 sites. It is set as a default on all phones when they are purchased, and it is for the consumer to request its removal, subject to proof of age. Ofcom provides detailed information on parental controls and access to adult content on its website. However, that goes only some way to protecting young mobile users from harmful content. Unfortunately, it is not possible to tackle content that is shared via bluetooth, for example, on a phone-to-phone basis. That is why the work of organisations such as UKCCIS is so important

What causes me to have a huge amount of sympathy with what my hon. Friend has said is the fact that I do not subscribe to the view that internet service providers are simply dumb pipes. In opposition and now in government, I have waged something of a campaign to that effect. According to one school of thought, ISPs are there simply to channel the content to homes, and should not interfere with what goes down their pipes. It is often said that asking them to do so would be the equivalent of asking Royal Mail to open every envelope and parcel and have a look at the contents. In that context, the hon. Lady rightly identified a red herring in relation to both expense and the idea of regulation. I also believe that we should not over-regulate the internet, and that self-regulation should be the first stop before we consider Government regulation or legislation. However, I think it should be put on the record that ISPs can play a role, and, indeed, have played a very effective role in combating child abuse content online.

[Matthew Hancock (West Suffolk) (Con)]

I commend my hon. Friend the Member for Devizes (Claire Perry) on initiating such an important debate so early in the evening. I am glad that the Minister has enunciated the principle that ISPs are not merely a pipe through which information flows, but he has not taken the opportunity to point out that they could do more. Will he take that opportunity now?

[Mr Vaizey]

Now I understand why my hon. Friend is regarded as a rising star. I was about to say that ISPs could do more. My hon. Friend’s anticipation of my next sentence was almost uncanny, especially as I am now speaking off the cuff rather than from a prepared text.

We have seen that ISPs can do very effective work in removing child abuse websites. We also know—and I mentioned this during my speech on net neutrality last week—that they can manage the traffic that crosses their network in order to give their consumers a good service. A couple of weeks ago, I held a round table with ISPs and rights holders from the music and film industries and from sport to discuss what measures we could take to provide more legal content as the Digital Economy Act 2010 comes down the line. It seems to me that, given that rights holders are fully aware of the websites that are distributing their content illegally, ISPs could do more in that regard. However, what I learned from the meeting was that it is important to arrange for people to sit around a table, discuss the issues, and seek ways in which we can work together to make the system operate effectively.

After that meeting, which was productive—I felt that in two hours we had made substantial progress—I made it absolutely clear that I would follow it up. It would not be a one-off meeting that we would forget about, perhaps returning to it in a year’s time. I should like to offer the same opportunity to my hon. Friend the Member for Devizes, and perhaps to my hon. Friend the Member for Enfield, Southgate (Mr Burrowes) and other interested Members, as well as to charities and other organisations that are involved in the debate.

If we do have such a meeting, it must not interfere with, or cut across, the important work that UKCCIS is doing. However, I think it important for the side that is concerned about the issue—which consists of most of us, especially those of us who are parents—to sit around a table with ISPs, air their concerns, ask questions, and establish what further action they can take, and for the ISPs to respond. I assure my hon. Friend the Member for Devizes that if we have such a meeting, I will not leave it there. We will see what progress we make, and we will follow it up.

[Claire Perry]

It is uncanny how the Minister is anticipating my questions. I can see why he is a risen star.

I should welcome the opportunity to participate in such a round table, and I know that many other Members would as well, but does the Minister agree that it must not be simply more jaw, jaw? What we need is a time frame for improvement. I think that there is now almost universal acceptance that we have a huge problem. The fire is burning out of control, and we need to be specific. We need to say, “Clean up your house within a certain time, or we will come and clean it for you”.

[Mr Vaizey]

The House will unite in describing me as a risen star. It would probably be accurate to say that I have risen as far as I am going to rise.

I certainly agree with my hon. Friend that it should not be just jaw, jaw. I do not want to set any hares running, which is what I seem to do every time I talk about anything to do with the internet, but I think that the meeting with the rights holders and internet service providers was productive both because it was probably the first time they had sat around a table with an honest broker—me, representing the Government—sitting between them, and because we have the Digital Economy Act 2010 on the statute book, controversial though it is. If anyone ever wants to start a Twitter storm, they should write something about net neutrality or the Digital Economy Act. Especially if they write that they are in favour of that Act, they will then see what comes.

It is important that we impress upon ISPs that we take this issue very seriously. Trite though it may sound, it is also important for people to know that sitting around a table and exchanging views can be an effective means of getting across both the views of the ISPs and the huge concern expressed by my hon. Friend the Member for Devizes on behalf of her constituents and the country at large. She has made this an important issue and raised it in Parliament. It is perfectly legitimate for the ISPs to raise issues such as costs and regulation because although, as my hon. Friend pointed out, they make £3 billion in profit, it is important also to remember that we, as users of the internet, rely on them to make those profits so that they can invest in the broadband infrastructure and we can have the best superfast broadband in 2015.

[Peter Bottomley (Worthing West) (Con)]

The debate is concentrating on the issue that matters most, which is extreme pornography. We are not concerned about nudity or ordinary sex. Most of us have a naked body, and very few of us inherited celibacy from our parents. The Minister mentioned the Royal Mail. Sending pornography through the mail is illegal. Can the Minister say whether the six ISPs who are currently providing the channels in question are the organisations who came to his meeting, and if they were not, will he have them in as well please?

[Mr Vaizey]

We had four of the main internet service providers, I think. I do not want to get too carried away and go to the other extreme. The ISPs in the UK do act to take down illegal content where it is pointed out to them, and they do hugely important work in taking down child abuse images. With the greatest of respect to my hon. Friend, who has inadvertently signed an early-day motion put forward by a Labour MP calling for an open internet—a slight distortion of my speech on net neutrality—we are, to a certain extent, talking about ordinary sex. We are talking about preventing children from having access to inappropriate content, and how we can work with ISPs to make it that little bit more difficult for them to do so.

My free-wheeling conclusion to this speech has probably not been helpful, so it might be helpful if I pull together a coherent final few remarks. We believe in an open lightly regulated internet. The internet is, by and large, a force for good. It is central to our lives and our economy, and a Government have to be wary about regulating or passing legislation. Nevertheless, the advent of the internet has brought a number of problems. One of them is the proliferation of images of child abuse, which I believe is being dealt with extremely effectively through the Child Exploitation and Online Protection Centre and UKCCIS, with the co-operation of ISPs. ISPs remain under an obligation to take down illegal pornographic content, which can extend beyond child abuse images, but there remain, from my position as a Minister, two issues. One of them is access to illegal content in terms of music, film and the creative industries, on which I am working with ISPs and rights holders. I take the second issue very seriously as a constituency MP alone: how we can work harder to ensure that it is more difficult for our children to come across inappropriate adult content? I firmly believe we can make progress, in co-operation with the ISPs, and that we can proceed on the basis of self-regulation. As I have said, I think it is important that we meet and sit around a table to exchange views, and I look forward to brokering such a meeting with my hon. Friend the Member for Devizes and a number of organisations she deems to be appropriate.

Question put and agreed to.

20:14

House adjourned.

Ministerial Correction

Tuesday 23rd November 2010 Ministerial Corrections

Tuesday 23 November 2010

Foreign and Commonwealth Office

Tuesday 23rd November 2010 Ministerial Corrections

Cyprus

The following is an extract from a closing speech given during the Westminster Hall debate on resolution of the situation in Cyprus by the Minister for Europe, the hon. Member for Aylesbury (Mr Lidington) on 16 November 2010.

[Mr Lidington]

We have given particular support to the work of the European Union’s Committee on Missing Persons and we donate to its annual budget. As hon. Members know, the CMP has so far found just under 700 sets of human remains, both Greek and Turkish Cypriot.

[Official Report, 16 November 2010, Vol. 518, c. 232WH.]

Letter of correction from Mr David Lidington:

An error has been identified in the 10th sentence of the fourth paragraph of the closing speech of 16 November 2010.

The correct sentence should have been:

[Mr Lidington]

We have given particular support to the work of the United Nations Committee on Missing Persons and we donate to its annual budget. As hon. Members know, the CMP has so far found just under 700 sets of human remains, both Greek and Turkish Cypriot.

Westminster Hall

Tuesday 23rd November 2010 Westminster Hall

Tuesday 23 November 2010

[Mr Mike Weir in the Chair]

High Speed 2

Tuesday 23rd November 2010 Westminster Hall

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

09:30

[Steve Baker (Wycombe) (Con)]

I am grateful for the opportunity to open this Adjournment debate on the principal infrastructure project of our time: High Speed Rail 2. It is a pleasure to serve under your chairmanship, Mr Weir.

The railway system of Great Britain is the oldest in the world. It developed from a patchwork of private local rail links provided by entrepreneurs, and via amalgamations, temporary state control, nationalisation, highly regulated privatisation and part-renationalisation it became today’s system, which is, as one of my colleagues on the Transport Committee has said, “neither fish nor fowl”.

It seems that this country has tried every conceivable governance model for rail, yet the subject remains contentious. I should like to deal with three questions. First, should a high-speed rail route run through Buckinghamshire—specifically, the Chilterns area of outstanding natural beauty—against the wishes of local people? Secondly, should any area of the country be forced to accept high-speed rail? Thirdly, if transport resources and capital are scarce, what is the best approach to relieving that scarcity? I intend to demonstrate that High Speed 2 should not be run through Buckinghamshire or any area of the country and that a new, more classically Liberal and Conservative approach should be taken towards British transport policy.

I acknowledge the help and support of my Buckinghamshire parliamentary colleagues in preparing this speech. However, I have not sought their approval for this final version. My colleagues in the Government have emphasised that their opposition does not necessarily extend beyond the route. I also acknowledge the large number of high-quality submissions I have received from the people of Buckinghamshire. I am sorry that time has prevented me from including all their important points.

I should like to make clear my support for the Government’s intent. I am certain that the Government—the Transport team in particular—are fully committed to this country’s economic renewal and all-round success, and I applaud them for it. I am most grateful to the Secretary of State for confirming that the public consultation will cover not just the route, but the strategic case for high-speed rail. I am relieved that the Government will make their arguments with an open mind. I shall try to do likewise.

First, on local issues, should a high-speed rail route run through Buckinghamshire, specifically the Chilterns AONB? The Chilterns AONB is a rare, precious landscape benefiting not just those who live there but the millions who visit every year from across the country, particularly, due to its proximity, from London. I have lived adjacent to the AONB for almost three years and can confirm that it is one of Britain’s most beautiful and ecologically rich landscapes.

The preferred route of HS 2 crosses the AONB at its widest point, in contradiction to the policy followed for HS 1. In Kent, the route of HS 1 was amended to avoid the North Downs AONB. By contrast, HS 2 appears to have been deliberately routed through the least spoilt, widest part of the Chilterns.

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

My hon. Friend mentioned High Speed 1. HS 1 was introduced in Gillingham and Rainham, in Kent, about a year ago and there are lessons to be learnt from that. Does he agree that a new fast service should not be introduced at the expense of the existing train lines? The number of services from Gillingham to Victoria and Cannon Street stations was cut. Lessons have to be learnt. The routes, services and timetable cannot be changed at the expense of HS 1. Another lesson has to be learnt in terms of cost and affordability: HS 1 fares in Kent have increased by 30%.

[Steve Baker]

I agree. I shall return to the economics of HS 1 later.

Some 59 different protected species have been recorded within 1 km of the route of HS 2. The recommended route involves tunnelling directly through an aquifer, risking reducing the water table and exacerbating low flow in the Chess and Misbourne. It also risks possible contamination of the ground water. The environmental impact of the recommended route of HS 2 would be enormous. I am therefore calling for an official environmental impact assessment of the preferred route well in advance of the planned consultation, so that interested parties can fully digest its findings. In Kent, the route was altered to run beside the existing M20, a major strategic transport corridor, which reduced incremental noise pollution and landscape damage. I am surprised that a similar approach has not been adopted for HS 2. The M40 in my constituency is infamous for its proximity to housing and for its meandering path.

Opposition to high-speed rail is substantial in Buckinghamshire. On 7 November, an HS 2 rally took place in Great Missenden, where more than 2,000 people demonstrated their opposition. At the rally, the noise that HS 2 will make was played to the audience. Many were shocked by what they heard. The noise over the speakers may or may not accurately represent what HS 2 will sound like, but it reinforces the need for HS2 Ltd or the Department for Transport to provide noise maps and proper analysis of the noise impact that people will face. HS2 Ltd said, in a letter dated 8 October about noise assessment studies:

“On the subject of noise assessments, an Appraisal of Sustainability is currently being finalised and will be published ready for the launch of the consultation in the new year”.

We are impatient. It is now well over a month since then, but there is no sign of any further information. It is unacceptable for HS2 Ltd to keep delaying this important study.

Part of the planned preferred route slices through a corner of my neighbouring constituency at Denham in Buckinghamshire. The route enters the constituency through a site of special scientific interest in the Colne valley. There is no doubt that the railway line, which at that point would be on some type of viaduct, will have a seriously adverse impact on the environment. For example, the railway would culvert the River Colne along a several hundred yard stretch in an area where there has been a long struggle to maintain the rural aspect of a river valley that has significant environmental importance. With all this in mind, will the Minister please ensure publication of the environmental impact assessment at the earliest possible moment?

There is no benefit to Buckinghamshire from accepting high-speed rail. The project would have to be bullied through against the well-grounded wishes of those affected, causing not just the environmental damage described but also infringing the property rights of large numbers of people. Doing so would thoroughly undermine the Government’s commitment to increasing people’s power over their own lives. From Buckinghamshire’s perspective, the answer to whether HS 2 should run across the county is, of course, a resounding no. Buckinghamshire people are bound to object to a programme that would merely blight our beautiful county and trespass on local people’s businesses and the quiet enjoyment of their homes. I find myself asking, “Should any area of the country be forced to accept high-speed rail?”

Having had the privilege of living in many areas of the country throughout my adult life, it is my view that Buckinghamshire’s arguments would find parallels in most parts of the country, particularly those with designated areas of outstanding natural beauty. Why should anyone tolerate the demolition of their home or business? Why should anyone accept the ruination of a swathe of countryside? Why should anyone agree to so much noise and disruption? The answer, of course, lies in the national interest.

To justify so grotesque an intrusion into property rights and local collective enjoyment of the natural environment, the Government must be certain that the benefits of HS 2 to the whole nation would far outweigh the high costs that would be imposed along the route. Clearly, if a high-speed rail network will usher in a new age of incomparable prosperity for the whole country, regenerating the industrial north and reuniting it with the south, we must all support it.

[Jo Swinson (East Dunbartonshire) (LD)]

I congratulate the hon. Gentleman on securing the debate. He makes a strong case, as one would expect from a constituency MP working on behalf of his constituents. Does he accept that there may be some benefits for his constituents? The alternative to high-speed rail is that people do not travel or—more likely—that journeys are made by air or by road. That has an impact on the environment in the form of air pollution, for example, and noise nuisance, which might also affect his constituents.

[Steve Baker]

I am grateful to the hon. Lady for her intervention and I will return to some of those points, in particular how we make a judgment between road, rail and air travel.

If it is not true that high-speed rail is in the national interest, and if such a project will offer only marginal and uncertain benefits at vast expense, it would be in no one’s interest. I am delighted that the Government wish to ensure the prosperity of the whole nation, but it has not been demonstrated that HS 2 will deliver that. To justify such a grievous impact on the people and landscape of Buckinghamshire—and indeed along the entire length of the route, wherever it is located—the Government must place the economic and environmental case for the programme beyond all doubt. I do not believe they have yet done so.

High-speed rail is not commercially viable, so the expense is justified with a wider cost-benefit analysis. That analysis relies on assumptions, including excessive demand, generous benefits and a flawed analysis of the alternatives. I shall only touch on each point today, but I am sure that campaigners will furnish us with full details during the course of the inquiry.

The projected increase in demand is open to challenges that include demand saturation, a broken relationship with GDP, out-of-date data, neglect of new technology, and inadequate anticipation of competition from classic rail—a problem that blighted HS 1. The case for benefits neglects the fact that many of us work on the train, and it depends on implausible levels of crowding. The Department for Transport’s alternative, Rail Package 2, is paid too little attention, despite meeting demand with less crowding than would occur should the HS 2 programme go ahead. At £2 billion, the package is much less expensive. It is better value for money and capable of incremental delivery, setting it free from the risks associated with long-range economic forecasting. Rail companies could lengthen trains to nine, 10 or 11 cars. That would increase capacity from 294 to 444 seats—an increase of 51%. Unused first-class capacity could also be swapped for standard seats, thereby further increasing total capacity.

It is a myth that the UK lacks a fast national railway network; we have had one for a long time. We have routes capable of 125 mph, with quicker rail journey times between the capital and the five largest cities than in other major western European countries. For instance, the average journey time in the UK is 145 minutes. It is 151 minutes in Spain, 184 in Italy, 221 in France and 244 in Germany. In short, it appears that for £2 billion, the Government could have a complete, low-risk but unglamorous solution to the problem of rail capacity, and rather sooner than HS 2 could be delivered. Therefore, I am not convinced that £30 billion—or more—of taxpayers’ money would be wisely risked on HS 2.

[David Mowat (Warrington South) (Con)]

Does my hon. Friend accept that every infrastructure investment and transport initiative imaginable could, in the short term, be done more cost-effectively with the sort of incremental approach he has just mentioned? That does not take away the need to think strategically, and occasionally to do things that are more than just incremental.

[Steve Baker]

My hon. Friend makes an interesting point that we should explore at some length. In the final part of my speech I shall set out why I think we have been taking the wrong approach to infrastructure in this country.

Targeted investment in existing infrastructure would ultimately offer greater benefits to the whole country not served by HS 2, including the south-west, south Wales, East Anglia and the north-east. Such an approach would provide a visible demonstration of productive investment during a time of austerity. I am aware that the environmental case for HS 2 can be similarly attacked, but given the time, I shall simply quote Mr Steve Rodrick, chief officer of the Chilterns Conservation Board:

“The case for HS 2 is largely built on capturing the internal aviation market, but 80% of all journeys between Manchester and London already involve the train…These trains will use double, possibly triple, the energy of normal trains. Where’s that energy going to come from? You either have to bank on nuclear coming on stream or, more likely, power stations running on fossil fuels, which will involve significant carbon emissions.”

I also recommend Christian Wolmar’s 15 September article for RAIL magazine, which states that the arguments against HS 2 are mounting. His tour de force concludes by explaining that HS 2 would absorb money that would otherwise be spent on classic rail in an environment of reduced funding. He writes:

“We cannot have it all. Let’s work to protect what is essential, rather than trying to reach for the moon.”

Finally, I will turn to rail policy and transport strategy in the round. If transport resources and the necessary land and capital are scarce, what is the best approach to ensure optimal resource allocation? It has long been argued by the Conservative party, as it was once argued by Liberals, that unhampered social co-operation in the free market is the most efficient and effective way to allocate resources and relieve scarcity. With that in mind, I asked the House of Commons Library to prepare a summary entitled “Price controls and state intervention in the rail market.” It is not, of course, a simple statement that there are no price controls or state interventions in the rail market; it is six pages long and covers passenger franchise specification, the control of fares and rolling stock procurement. It also sketches the process of almost continuous organisational change that has dogged rail since nationalisation in 1948. Contemporary rail is not characterised by property rights, freedom to contract, open competition and unhampered prices.

My task today is not that of setting out a new free market transport strategy, and I will not pretend I am able to do so. However, I wish to emphasise that rail, and road transport in particular, are not capitalist systems in the conventional sense but hybrid systems of heavily regulated and subsidised public and private companies. We have inherited a rail system whose franchise agreements descend into such detail as specifying a “biennial talent management programme” and even “time with your manager sessions.” That is not freedom to contract, and clearly rail operators are not free to set market fares.

Of course, I do not want fares to rise any more than my colleagues do, but we should admit that the rail system does not operate in a free market and that therefore economic calculation is likely to be hampered, if not irrational. We simply cannot know whether today’s rail economics are optimal, but it seems likely that they are not.

[Jo Swinson]

The hon. Gentleman is making the point that the current rail network is not a truly free-market, capitalist system, but will he not accept that there is a role for the state to play in markets where there is market failure—for example, where there has to be a national network—as has been well documented by many economists? Will he also confirm that he stood on a manifesto platform at the election that promised to

“begin work immediately to create a high speed rail line connecting London and Heathrow with Birmingham, Manchester and Leeds”

as the “first step” towards achieving a vision of a

“national high speed rail network to join up major cities across England, Scotland and Wales”?

[Steve Baker]

I am most grateful to the hon. Lady for giving me an opportunity to deal with that point, in which I see she takes some pleasure. In the first place, I note that economists take a range of views on these matters, and mine are perhaps rather more free market than most. On the second point, about the manifesto, Conservative candidates across Buckinghamshire stood for election saying they would oppose HS 2 and knowing that that was in contradiction to the manifesto. I personally made it clear at the time that I would oppose HS 2.

If it is true that economic calculation is likely to be hampered, if not irrational, under the present system—I am certain that it is—we should not be surprised that there is so much disagreement about economics in respect of rail. We should not be surprised when the Institute of Economic Affairs estimates that the return on HS 1 is less than half of 1% of the Government’s investment per year. Nor should we be astounded that some markets for high-speed rail already show signs of saturation. For example, demand on the lines from Tokyo to Osaka and Brussels to Paris is not growing anywhere near as fast as forecast. According to the Financial Times, China is reviewing its high-speed rail plans for affordability and practicality. Its latest high-speed line is operating at less than half capacity, and it is projected that the lines will never make enough money to repay the large loans used to build them.

I shall leave the last word on the economics of high-speed rail to the IEA’s Dr Richard Wellings, who wrote in relation to High Speed 1:

“Perhaps an unsubsidised international service could just about cover maintenance costs, with the sunk capital effectively written off. But far better returns could almost certainly be achieved by shutting down the line and disposing of the assets—which include substantial plots of land, tunnels under London and the Thames, and large amounts of scrap metal.”

HS 2 should certainly not be driven through Buckinghamshire, where it would have an egregious effect on some of our finest countryside, but it is not clear at all that HS 2 should be driven through any part of our country. HS 2 appears economically irrational: it requires tens of billions of pounds to increase the UK’s transport capacity by about 1%. Less money could be better spent. Moreover, that economic irrationality is almost certainly attributable to the prevailing orthodoxy in rail policy. It is an orthodoxy of planning, not the free market. We are at the end of a wasteful century of socialisation. Today, the basis of transport and, more broadly, infrastructure economics presupposes planning. It should therefore be no surprise that transport is characterised by scarcity, excessive prices and political tension.

To return to where I began, I applaud sincerely the Government’s noble intent, but I note that rail has not been governed by the free market for a very long time. There is no doubt that this country needs good-quality infrastructure. We should create the conditions in which unsubsidised enterprise can deliver the optimal solution. That would be the classical Liberal and Conservative approach. In my view, the solution that would emerge is not likely to be high-speed rail. I believe that this programme should be cancelled.

[Several hon. Members]

rose—

[Mr Mike Weir (in the Chair)]

Order. A number of hon. Members wish to speak, and obviously time is limited. I hope to start the winding-up speeches by 10.40 am, so I urge all hon. Members to be reasonably brief in their speeches. I call Frank Dobson.

09:55

[Frank Dobson (Holborn and St Pancras) (Lab)]

When I first looked at the plans for High Speed 2, I was principally concerned with its immediate impact on my constituency where it comes into Euston station. Its effect there would be the demolition of 350 flats, about two thirds of a small park, St James’s gardens, being concreted over, a massive inhibition on the much-needed rebuilding of Maria Fidelis Catholic girls secondary school, and problems for people in the Primrose Hill area, whose homes would be tunnelled under in a big way. However, the more I looked at the proposal, the more I thought that it was not just a matter of the damage that it was likely to do in my constituency, but that the whole project of bringing the line into Euston station and other aspects of the proposal were daft and expensive.

In saying that the London terminal should be Euston station, the projectors had to come up with ways of coping with the fact that Euston station is not on the Heathrow Express line and is not intended to be on the Crossrail route, so it does not have major connections that would be important for High Speed 2. To cope with that, the projectors proposed building a sort of super-parkway station at Old Oak Common—more commonly known as Wormwood Scrubs—and then rebuilding Euston as well. Bringing the line into Euston would also involve the boring of a 5½ mile tunnel, which as we all know is a fairly expensive item.

If the projectors had instead proposed that the line came into Paddington station, that would have made sense, because Paddington is already the terminus for the Heathrow Express and will be on the Crossrail route. The idea of coming into Euston seems to spring entirely from the fact that trains from Birmingham have always come into Euston. There is no more justification for it than that.

When I looked at the plan more widely, it seemed to me that there were other major shortcomings with it. High Speed 1 has been a great success, and certainly the refurbishment of St Pancras station in my constituency—I think that I was the first person to suggest that St Pancras should be the High Speed 1 terminal—has been a great success. The idea that we shall have just one leg of a high-speed system coming into London but not connected to High Speed 1 seems simply stupid. If we are to have a high-speed rail system that is on the end of the high-speed system in the rest of Europe, it would not be a bad idea if it was connected to it, which is not the present proposition.

Similarly, if only one leg of the system from the north will come into London, that will mean that the system is vulnerable to a major crash or terrorist activity that would close down the whole system. I make no comment on where the line should run outside London, but it seems to me that rather than a Y-shape arrangement, there ought to be an H-shape arrangement, so that coming into London are two legs, at least one of which is directly connected to High Speed 1 and would allow trains to come from the east side of Scotland, and the north-east and Yorkshire, and, if they wanted to, come into Paddington. Other trains from, say, Glasgow or Manchester would be able to cross over and come into wherever the link to High Speed 1 was located.

The scheme is badly thought out and extremely expensive. It will be amazingly damaging for my constituency. It should be withdrawn and criteria should be established that set out what on earth it is supposed to achieve. We should then come up with proposals that go some way towards achieving that.

I will move on to the scheme’s affordability. I have, in theory, a degree in economics. I am convinced that economic forecasts for more than 18 months nearly always turn out to be total rubbish. I therefore do not give much weight to anybody’s economic forecasts or assessments of viability for or against the scheme. History shows that all the major railway engineering projects of the 19th century went bust, were involved deeply in fraud or, more commonly, both. I do not think that a major railway project has ever paid back the original investors, unless they have benefited from fraud, such as the huge Ponzi scheme of the line to the north-east. I think we must accept that such projects never will repay their investors and that there is no free-market solution. Apparently, the Institute of Economic Affairs wants to rip up High Speed 1.

[Steve Baker]

On coming to this place, I did not think that I would find myself much in agreement with the right hon. Gentleman, but I am delighted to hear him speak against rail. Would it not have been good if the market had stopped the rail programmes that he has mentioned because insufficient people freely chose them to make them profitable? Money would then not have been wasted on such infrastructure.

[Frank Dobson]

I have never heard anybody suggest that the 19th-century railway boom in every industrialised country in the world did not contribute substantially to the economic development of those countries. Perhaps some people at the Institute of Economic Affairs are so stupid and reactionary that they believe that, but that is by the bye.

The impact of the scheme on my constituency will be dreadful and I reject it on a parochial basis. I also believe that it is ill thought out and will not achieve most of the things that are sought by people who are in favour of a high-speed system in this country.

10:03

[Mark Pawsey (Rugby) (Con)]

Like the right hon. Member for Holborn and St Pancras (Frank Dobson), I will focus on the narrow impact of high-speed rail on my constituency. I will make the point that development might not always be good. Rugby sits on the west coast main line, which has recently received substantial investment to focus on the city-to-city times for London to Birmingham, London to Manchester and London to Glasgow. A side effect has been a reduction in the service for towns such as Rugby. The service to the north-west is much less frequent because the city-to-city times have been improved by the trains not stopping at intermediate stations. The Rugby rail users group is campaigning for the reinstatement of those services and sees the development of high-speed rail as an opportunity to recover them, because city-to-city traffic might move from the west coast main line to HS 2.

The effects of HS 2 might not be entirely beneficial. I will give anecdotal evidence from France. For many years, I travelled to visit friends in Épernay, which is the home of Champagne. Épernay is about the same distance from Paris as Rugby is from London. In the ’70s and ’80s, I enjoyed a regular service to Épernay from the main east line out of Paris towards Strasbourg. When one turned up at the Gare de l’Est, there were plenty of trains. On making the same journey last summer, I found that there were no trains throughout the day. There was one commuter train from Épernay to Paris in the morning and one from Paris to Épernay in the evening. The reason was that the new TGV line through eastern France heads towards the bigger city of Reims, taking all of the traffic from the existing railway line. My concern is that towns such as Rugby may suffer from the introduction of a new high-speed rail line and receive a worse service.

The rail service is critical to the economic development of Rugby. That is recognised by the chamber of commerce. At a recent event, 50 businesses heard the case for high-speed rail and I understand that many left the presentation unconvinced and unsatisfied as to its merits. There needs to be a good understanding of business so that the project delivers benefits for it.

I will conclude because many hon. Members want to contribute, but I make it clear that the existing rail network will be affected by HS 2, and it is important that there is an assessment of the impact on the communities that will be affected.

10:06

[David Mowat (Warrington South) (Con)]

I will describe the context as I see it for such infrastructure improvements. The right hon. Member for Holborn and St Pancras (Frank Dobson) spoke of economic forecasts. I start with the economic figure that the average gross value added per head in London is about £30,000, whereas in the English regions, it is about £17,000. Such a huge difference does not exist in any other country in Europe. One way in which that can be fixed is through infrastructure investment. Even now, there is massively more infrastructure investment in London, with 60% more infrastructure capital spend per head in London than in the regions. The high-speed rail project is fundamental to the regeneration of large parts of the north of England and the midlands.

We have discussed the business case so I will not spend much time on it, although we could argue more about it. The Department for Transport will have to publish the business case. The net benefit ratio in the preliminary publications was 2.7, which is pretty high. However, that figure includes assumptions about factors such as idle time and optimistic passenger projections—I think that the figure was 278%. That must all be worked through. The business case does not include anything about the economic regeneration of the north, the carbon savings from the modal shift from road and air to rail, or the freeing-up of airport capacity. It is not possible not to go ahead with the third runway without a project of this kind.

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

I agree with the hon. Gentleman that the project will benefit Yorkshire and the north-east, as it will the north-west. Does he agree that when the Y-shaped line is built—as I hope it will be—both legs should be built at the same time to ensure that the benefits that he rightly identifies are brought to the north-west and the north-east simultaneously so that one region does not suffer at the expense of the other?

[David Mowat]

I agree that the Y-shaped solution is the most sensible one, but I do not want to get into which part should be built first. I would like to quote a few numbers on the transformational impact of the potential scheme. We are generating, potentially, many tens of thousands of jobs. In January 2010 KPMG published a report which estimated an incremental increase in employment of between 29,000 and 42,000—not directly from constructing or operating the line but due to the economic and productivity impact on the regions of much closer links with London. In itself, 40,000 jobs would generate a huge bonus for the Exchequer, but none of that is currently in the business case that is being debated.

A lot—in fact, nearly all—of the comments up till now have been on the environmental issues surrounding the line. I do not want to minimise their impact, but the Government are the Government of the whole country, not just of the south-east of England and London. It is important that we properly weigh up some of the unpleasant environmental impacts against the greater good.

[Jo Swinson]

I am very much enjoying the hon. Gentleman’s speech. Does he accept that building high-speed rail with a Y shape going as far as the north-west will bring benefits to other parts of the country, including Scotland? Extending high-speed rail to Scotland would cut the journey time from four and a half hours to more like two hours. Even as it is being built, it will start to decrease the journey times because people will be able to change trains part way through, if they wish.

[David Mowat]

I certainly agree that, in time, the line needs to go to Scotland. I have very much bought in to the productivity improvements and the step change in how we do business in the country that could be achieved with such a line—so, yes, I agree.

Going back to the environmental impact, it is obviously right that compensation is paid and that we do the right thing by the people whose property rights are being impacted. However, that cannot be our pre-eminent concern.

[Simon Hart (Carmarthen West and South Pembrokeshire) (Con)]

Does the hon. Gentleman accept that the environmental impact is about more than landscape? I think he was making that point. Environment is about people, communities, jobs and productivity as much as it is about the landscape that we might enjoy through the window of a train or, indeed, of a car.

[David Mowat]

I accept that. Indeed, where we have areas of high unemployment, the ability of people who live there to enjoy their environment is much less than it would be otherwise. The Government also have a duty to take into account the impact on prosperity and employment throughout the country.

I want to make a couple of slightly more detailed points. It is important that whatever we build is linked to Heathrow. Those are probably the Government’s plans, but it seems to be absolute nonsense to build a high-speed rail link to the north and not to link properly Manchester airport and Heathrow, so as to see some of the traffic from Heathrow move.

I am of the view that the line needs to go to Euston and should not stop and link to Crossrail. I am not an expert, but Euston seems to be close to the business centres of London, so the impact of achieving that would be substantial.

I would like to see a spur to Warrington and Preston as soon as possibly, but I realise that the Minister might not think that that is her highest priority.

With reference to an earlier point, not linking High Speed 2 with High Speed 1 would be absurd. In my understanding of the initial business case for High Speed 1, the reason why we went into St Pancras in the first place was to allow that line, eventually, to go north. We are now building a High Speed 2 line to the north, so it ought to be linked.

Finally, it is very important that the Government maintain their commitment to the plan and realise that they are the Government for the entire country, and the entire country needs this.

[Frank Dobson]

Will the hon. Gentleman give way?

[David Mowat]

I have finished now, so I will not give way.

10:14

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

It is a pleasure to serve under your chairmanship, Mr Weir. I warmly congratulate my hon. Friend the Member for Wycombe (Steve Baker) on securing this important debate.

I take a strong interest in the issue at two levels: strategically, as a member of the Select Committee on Transport and because High Speed 2 is a key component in the debate on our national transport infrastructure; and locally. Although the proposed route does not go through my constituency in Milton Keynes, it runs close by, just a couple of miles from my western border, which is close enough for me to have a say in the debate in a local context and to understand the justifiable concerns of many villagers along the proposed route.

I will put my cards on the table right at the start. From all the evidence that I have seen, there is a strong case for an additional north-south strategic rail route in the United Kingdom and for that route to be capable of running the latest generation of high-speed trains. However, I am far from convinced that the detail of the proposed route is correct.

We run the risk of an enormous and costly error in this country if we do not get the details right, which is why I warmly welcome the recent assurance by the Secretary of State and the Minister that the inquiry into High Speed 2 will examine both the strategic case and the specifics of the proposed route. Frankly, we get one shot at making the project work and, vitally, if it is to succeed, it must be done on the strongest evidence and commanding broad-based support in the country.

One strategic argument is that, instead of ploughing billions of pounds into constructing a High Speed 2 line, the money—smaller amounts even—could be better used upgrading what are known as the classic rail routes. I regard that as a false choice.

As any regular user of the west coast main line knows, it is already getting pretty close to capacity, even after the substantial investment and upgrades in recent years. If anyone doubts that, I invite them to go to Euston station at 7 o’clock on a weekday evening and try to board the Manchester train. Virgin has to employ people who are basically crowd-control managers to prevent ugly scenes. The line has other pinch points as well.

[Steve Baker]

Does my hon. Friend agree that ugly scenes as a result of scarce resources are typical of socialism?

[Iain Stewart]

My hon. Friend tempts me down an interesting line of debate but, in the interests of brevity, I will resist that temptation.

At the moment, the classic network has pinch points. Yes, certain upgrades could be made—trains could be lengthened by a couple of coaches, there is room for one additional train movement in and out of Euston at peak times and the speed on the line could be increased a little. All those things can be done, but they would only buy time.

The choice, however, is not between doing those things and investing in High Speed 2. If we look at the time frame for High Speed 2, there is a gap between the existing capacity and what is needed in current years. I believe we have to do both—upgrade the classic rail routes and plan for the long term with High Speed 2. Simply, the forecast increase in the UK population and our increased willingness and desire to travel more and in comfort, mean that the extra capacity is required.

I accept the general case that there should be a route from London to Birmingham, Leeds, Manchester and cities in the north of England and in Scotland. However, it is important that the business case is rigorously tested. From a common-sense layman’s perspective, we need to challenge why certain aspects of the current HS 2 case seem to be omitted or rejected. Time constraints prohibit me from going into those in detail, but let me flag up one or two of the issues, which other Members have raised.

Why does High Speed 2 not connect with HS1? It is crazy not to connect them, in my view. I had a meeting with the chief executive of Crossrail recently, and I asked him, “Has anyone considered using Crossrail as a link between High Speed 1 and High Speed 2?” He said, “You’re the first person who’s ever proposed that to me.” Such a link may not be the answer, but it is surely the sort of issue that we should look at as we consider a multi billion pound scheme over many years. Has High Speed 2 been considered in the context of broader UK aviation policy? Should we not look at connecting Birmingham airport, Heathrow and other airports in the midlands and the south as part of our total transport policy?

Why are we not looking more at intermediate stops along the line? I have enormous sympathy for the point made by my hon. Friend the Member for Wycombe, who said that Buckinghamshire would have all the pain but none of the gain because there would be no access point along the route. The French TGV system has intermediate stops at different points. This summer, I travelled on the line down to the Mediterranean, and there is a stop at Valence. It is constructed in such a way that it does not impede the fast trains that shoot through, but it gives access to many towns and cities in that part of France. If I may, I would like to put in an early bid for an Iain Stewart international gateway station to serve Milton Keynes and the surrounding areas.

There are justifiable environmental concerns, but I urge those who are concerned about the environmental impacts to look closely at other high-speed lines around the world. The use of proper cuttings and natural cuttings can minimise a lot of the noise and visual damage.

I want now to make a more strategic point. Everyone who objects to rail schemes believes that they will be ugly and unsightly, but they need not be. This country has a proud tradition of building infrastructure projects—particularly rail infrastructure projects—that enhance the environment. The Forth bridge, the Ribblehead viaduct and Brunel’s bridges and tunnels are things of beauty, and, done properly, the projects that we are talking about could actually enhance the countryside. I do not want to create some ghastly, ugly concrete jungle, but for goodness’ sake, if we are going to make High Speed 2 a national project, let us use it to showcase what we can do. I have mentioned examples of older infrastructure projects, but we could look at modern ones, such as the Millau viaduct in France, which enhances the environment.

It is absolutely right that we consider the strategic case to make sure that the numbers stack up. Equally, everyone along the route must have their say as to why the line should or should not go through a particular locale. However, let us do things with a positive attitude. We need High Speed 2 in this country and we get one shot at it. When we have the inquiry, which I strongly welcome, let us undertake it with a positive attitude.

10:23

[Martin Horwood (Cheltenham) (LD)]

It is a pleasure to serve under your chairmanship, Mr Weir. I congratulate the hon. Member for Wycombe (Steve Baker) on securing the debate. He has put a strong case on behalf of his constituents, and it was also interesting, given his ideology of free market deregulation.

I want to make a couple of points before asking a few questions. The coalition agreement was absolutely right to commit to high-speed rail, which is a potentially incredibly important and transformational project. However, there is no either/or choice between high-speed rail and the conventional railway network. The Government have done extraordinarily well to protect almost the totality of the £14 billion of planned investment in the rest of the rail network during the battles over the comprehensive spending review. With the possible exception of my beloved redoubling of the Swindon to Kemble line, no rail project has been abandoned as a result of the CSR or the commitment to high-speed rail. The hon. Gentleman should be reassured by that.

The bigger picture is the UK’s ability to meet its long-term carbon emission targets, but we need more robust data. Some quite high numbers are being talked about, and we have heard about 23 million tonnes of carbon being saved over 60 years. However, there is a question mark over some of the numbers, given that about 77% of the journeys quoted by High Speed 2 Ltd apparently increase carbon emissions, as 50% of passengers shift from less energy-intensive railway journeys to high-speed rail and another 27% make new journeys. Of course, that probably underestimates the impact on the conventional rail network, given that other people might take up the capacity that is freed up there and we might see a parallel modal shift from car journeys to conventional rail journeys.

The figures also underestimate the impact of the long-term plan, which brings me to my first question. What is the Government’s latest thinking on the long-term commitment to connections to Scotland and the north-east? I might even add Wales and the west. There is clear evidence that there will be a profound impact on aviation over those longer distances—they are longer than the initial London to Birmingham stretch. A company called Travelport, which owns two of the four back-office systems that support airline and high-speed rail bookings around the world, has suggested to me that in the first month after the introduction of a high-speed rail link over such a distance, one third of the air travel on the same route vanishes, and that aviation drops by two thirds within three months. If that is true when we eventually have longer high-speed rail links in this country, it will have a profound impact on our carbon emissions.

[Christopher Pincher (Tamworth) (Con)]

Does my hon. Friend accept that air traffic north to south is already falling, so we should not expect a massive decline in air travel as a result of building High Speed 2?

[Martin Horwood]

I am not sure that that is right. I must confess past sins. I used to work for a marketing agency that had clients in Scotland and I am afraid that I regularly took the team on a flight up to Edinburgh. I am now very guilty about that, and it was probably very carbon-inefficient, but the truth is that high-speed rail could have a massive impact on such business journeys, on recreational travel and on other connections between Scotland and London. All the evidence from other parts of the world is that that impact is quite consistent.

Turning now to my questions, I want to ask first about the status of the Heathrow interchange in the Government’s plans. If one is trying to reduce carbon emissions, it seems illogical to make sure that people can get to airports even more efficiently, so I do not see the Heathrow interchange as particularly important. The fact that it is being retained even as a long-term objective or possibility might militate against the option pointed out by the right hon. Member for Holborn and St Pancras (Frank Dobson), who spoke of the logic of a connection between High Speed 1 and High Speed 2.

Secondly, I would urge sensitivity to local issues. Caroline Pidgeon on the London assembly has raised the issue of houses in London that might be only a couple of metres above the tunnel when it is eventually built. Even though those houses are built on London clay and often do not have deep foundations, the householders do not appear to have access to the hardship fund. I would welcome the Minister’s latest thoughts on that.

Finally, there is the issue of planning. I have long been an advocate of a democratic planning system. I have made the case for such a system to people who propose nuclear power stations and, for consistency, even to my friends in the wind energy industry. However, it is a bit more difficult to take a site-by-site approach with a long railway route; we cannot just take out Berkshire and expect there to be no impact on the rest of the network.

In that respect, I commend to hon. Members and Ministers the words of the Campaign to Protect Rural England, which has taken an enlightened approach to this issue. It points out that High Speed 1 runs through the Kent downs area of outstanding natural beauty, adding:

“Noise from trains is barely noticeable compared to the background noise of traffic, while earth mounds and wooden barriers help conceal the line itself…No stations are proposed for HS2 between London and Birmingham, so like the Central Railway proposal it would not offer local benefits. HS2’s trains are likely to whoosh past in seconds unlike noisy diesel freight trains proposed to trundle along the Central Railway, so the noise impacts should be less but this still would mean ‘something for nothing’ for the communities it would pass through.”

The “something for nothing” argument is important. The CPRE suggests that a number of benefits could be built into the long-term scheme. It says that “Electricity pylons” could

“run along much of the route including in the Chilterns AONB and these could be undergrounded next to the track…Low noise surfaces could be installed on local roads to improve tranquillity…New and improved Rights of Way and Open Access Land could improve outdoor opportunities around the path of the route”.

It makes many other suggestions for improvements that would benefit people along the route as this important project is put in place. There may be environmental consequences—there is no escaping that—but the bigger picture is important. As I said at the beginning, this could be a transformational project, very important for our long-term goal of reducing carbon emissions, and one I strongly support from the Liberal Democrat benches.

10:30

[Dan Byles (North Warwickshire) (Con)]

As we do not have much time, I will be brief. I congratulate my hon. Friend the Member for Wycombe (Steve Baker) on securing this important debate on a topic that is causing a great deal of concern up and down the route. We need to ensure that it causes more concern in the rest of the country, where people do not have the route coming through their back gardens and therefore do not realise how devastating it is going to be to communities and families.

The route will have a potentially devastating impact on my constituency of North Warwickshire. We face the prospect that the line as it runs in to Birmingham from the main line will branch off in my constituency, causing a huge amount of devastation to the villages of Gilson and Water Orton. The main line will continue further north, causing severe impact on the town of Coleshill and the village of Middleton. Potentially even more worrying, if the Y-shaped route happens, we might end up with the junction in my constituency, probably tripling the amount of blight and devastation in North Warwickshire. We do not know exactly where the Y-shaped junction is going to be, but there is a great deal of concern throughout my constituency. If the Y-shaped junction does end up in my constituency, it will probably be the single most affected in the country as a result of the route.

[Christopher Pincher]

Does my hon. Friend not agree that we need to know as quickly as possible where the Y-shaped route is going to diverge, so that residents in our part of the world—I represent Tamworth, just up the road from North Warwickshire—can begin to make dispositions as they see fit?

[Dan Byles]

I entirely agree and thank my hon. Friend. He and I have neighbouring constituencies and we are working closely together on this. We are watching closely, because if the Y-shaped junction is not in my constituency, it is likely to be in or close to his. People need to know about this issue. Knowing one is going to be devastated by something is one thing; believing one might be but not knowing is even worse. There are people on a route that appeared briefly on one map—with a dotted line that disappeared from subsequent maps—who were effectively blighted, but who were unable to take part in the exceptional hardship scheme or any other compensation scheme. They are blighted through uncertainty, not through an actual line on a map. It is important that that topic be addressed as quickly as possible.

However, I am going to be brief so that someone else can say a few words. I want to make two pleas to the Minister. The first concerns the exceptional hardship scheme. I ask her to look in detail at what has happened so far—at those who have been approved and those who have not—and satisfy herself that the current scheme is transparent and working properly. I have had constituents refused under the scheme, and who were given reasons that were not listed as factors on any previous document or in the frequently asked questions relating to the scheme. That suggests that the scheme is not transparent and that to a large degree, the panel is making it up as it goes along. It is fundamentally wrong for people, having looked at the published documentation and believed that they ticked all the boxes, to then be turned down on criteria they did not even know were to be considered.

[Steve Baker]

Does my hon. Friend agree that this is a rule-of-law point, as classically understood? People should know well in advance what the rules are—fixed, well-known rules that affect their property.

[Dan Byles]

I entirely agree that it is a rule-of-law issue, and it is also a moral point. People understand that Governments need to make difficult decisions such as this, but they have to make them within a framework that is open, transparent and understandable. If it looks as though decisions are being made in a murky way, that completely undermines what the Government are trying to do. By definition, people applying under the exceptional hardship scheme are going through a difficult time. I urge the Minister to look at how it is working and to point out to the panel that it is not there to be a hard-nosed gatekeeper, but to implement a clear and transparent process in a neutral and even-handed way.

[Christopher Pincher]

Of course, there are many people who qualify for the exceptional hardship scheme but whose homes are blighted by the prospect of the railway, and by its actualité if it is built. Does he not think that the cost of that extra blight—which means that homes cannot be sold, so stamp duty is forgone by the Treasury, as is the spending power of the people who cannot sell their homes or who sell at a lower price—should be factored in to the business case?

[Dan Byles]

I entirely agree. Getting the compensation right is every bit as important as getting the details of the route right. In many ways, it would be far cheaper. The sort of figures we are talking about for compensating people are dwarfed by the sums involved in building the railway scheme. I urge the Minister, do not be cheap when it comes to compensation. If we have to do this and blight people’s lives, compensate them adequately. That is really important.

My final plea to the Minister is, will she please bash some heads together at HS 2 Ltd and tell it to stop refusing requests from local councils to come and brief officers and members? The chief executive of the council in my constituency, North Warwickshire borough council, has just written an uncharacteristically strongly worded letter to HS 2 Ltd expressing his deep disappointment that before the general election, it had agreed to come and brief officers and members, but said running into the election that it was then in purdah and could not do it. It is now a long time since the general election and it is still refusing to brief the council. Local borough and county councils need to understand what is happening in their areas. They do not and they are not getting the help they need from HS 2 Ltd. It might be a little over-dominated by engineers; it needs some people who can explain, communicate and listen.

Those are my two pleas to the Minister. Will she please look at the exceptional hardship scheme and compensation, and satisfy herself on those matters, because I do not think the system is working fairly? Secondly, please tell HS 2 Ltd to engage more, particularly with local borough and county councils.

[Mr Mike Weir (in the Chair)]

I call Craig Whittaker, but remind him that I wish to start the wind-ups by 10.40 am.

10:37

[Craig Whittaker (Calder Valley) (Con)]

Thank you, Mr Weir. As people know, I represent the wonderful and beautiful constituency of the Calder Valley in west Yorkshire. Many would say, of course, that it rivals, or even exceeds, the beauty of Buckinghamshire. We live in an area that is rich in a history of industry, and more recently banking and financial services, as well as still being a major employer in manufacturing and distribution, with over 26% of our employees working in manufacturing. Imagine what economic benefits High Speed 2 would bring to those employees and manufacturers. Many of the 6,000 employees at the headquarters of Lloyds TSB and Halifax live in the Calder Valley, making our economy one of the most at-risk areas in Britain if we see a further slide in the banking and financial services industry.

I recently went to Paris on Eurostar from London. As we know, that line is Britain’s first high-speed rail link. It is incredibly useful to the economy of the south-east of England but not to Yorkshire’s, given that people can get a train and arrive at two different foreign capitals to do business more quickly than they can get a train in London and arrive in my constituency to do business. Pundits have spoken about the north-south divide in this country for many years. May I suggest that High Speed 1 to Paris has created not only a greater north-south divide, but also pushed the divide even further south? High Speed 2 would shorten that divide for Yorkshire.

The Calder Valley has a huge diversity of business.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

I apologise for missing the earlier part of the debate; I was at another meeting. High Speed 2 will indeed provide benefits to Yorkshire. Does the hon. Gentleman agree that those benefits will also extend in due course further north—for example, to Edinburgh where my constituency is located, and to other places in the north of England and Scotland?

[Craig Whittaker]

Without question, I agree with the hon. Gentleman. Indeed, let us get the first leg of the line into Yorkshire first.

As I said, the Calder Valley has a huge diversity of businesses—ranging from sole traders all the way up to some fantastic, world-leading businesses at the cutting edge—that contribute a gross value added average of £3.3 billion to our country. Our employees have the highest productivity rates in west Yorkshire and are among the highest in Britain, at £43,700 GVA per employee. Why should we not have access to our capital and other major cities at speeds equivalent to, or even better than, those available to the French or the Belgians?

We in Yorkshire do not advocate reducing access to our cities by foreign business with High Speed 1; we merely ask for a level playing field so that we can compete and play our part in our country’s economic growth. High Speed 2 will give Yorkshire just that—a level playing field, so that we can grow and continue to be the beating heart of England well into the next century. It is a place that we have earned, and deserve to have.

I thank the Government for consulting on the Y-shaped model for HS 2. I give the Minister the guarantee that we Yorkshire MPs will do all we can to ensure that it happens.

10:40

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

It is good to see you in the Chair, Mr Weir. I am pleased to be able to contribute to this important debate. I congratulate the hon. Member for Wycombe (Steve Baker) on securing the debate. I was glad to have the opportunity to listen to the views, opinions and concerns of right hon. and hon. Members.

The Labour Government brought forward the original idea for High Speed 2, and I welcome the fact that the coalition Government will continue with that project through the next stages. However, I note from reports in The Daily Telegraph over the weekend that high-speed rail is causing the Conservative part of the coalition some local difficulty, with at least three Ministers being publically opposed—including, if reports are correct, a Cabinet Minister. Indeed, the paper quoted the Secretary of State for Wales as saying:

“I would defy the party whip—be very, very sure of that.”

We will have to see whether Cabinet Ministers are willing to vote against the Government on this issue. None the less, the Minister who is here today obviously enjoys the support of the hon. Member for Warrington South (David Mowat), who made a valid case for the economy of the north-west of England—as a north-west MP, I certainly agree with much of what he said—and she has the in-principle support of the hon. Members for Milton Keynes South (Iain Stewart) and for Calder Valley (Craig Whittaker).

A project of this size and scale will, of course, not be without controversy. Without doubt, good travel links between Britain’s major cities are central to our economy. We need a transport system that is high-capacity, efficient and sustainable.

[Lilian Greenwood (Nottingham South) (Lab)]

Does my hon. Friend agree that, in developing the eastern part of the Y, it is important that core cities such as Nottingham are included, so that they too can reap the benefits not only of faster routes to London but of better connectivity to Yorkshire and Birmingham?

[Andrew Gwynne]

When we go into the details of what is proposed, we certainly need to ensure that connectivity with the English regions—the hon. Lady makes a powerful case for the city of Nottingham—are included.

As the economy grows, people will travel for employment and leisure, and there will be more demand to move freight, something that is not sufficiently considered in relation to rail. The Labour Government rightly believed that improved transport capacity would be needed between our major cities from the 2020s, starting with the route from London to the west midlands, two of Britain’s largest conurbations. Projections show that by then the west coast main line will be at capacity. By 2033, the average long-distance west coast main line train is projected to be 80% full, and severe overcrowding will be routine for much of the time. There will also be a significant increase in traffic and congestion on the motorways between and around London, Birmingham and Manchester, far beyond the problems experienced at these locations today.

The Labour Government’s view was that high-speed rail would be one way to provide more capacity between the UK’s main conurbations in the long term. The extra boost provided by a high-speed line would substantially increase existing rail capacity. That would happen not only as a result of the new track but because the track and stations would make possible a far greater length of train, and because high-speed trains would be segregated from other passenger and freight services.

It is worth bearing it in mind that upgrading existing rail lines would yield much less capacity than a high-speed line and at greater cost in both money and disruption, but without most of the journey time savings. That is something that we saw with the recent £9 billion upgrade of the west coast main line; although the benefits were considerable, they were essentially incremental, coming after years of chronic disruption to passengers and businesses.

Journey time savings from high-speed rail will be significant. The journey time from London to the west midlands would be reduced to between 30 and 50 minutes, depending on the stations used. Manchester could be brought within approximately an hour of London, down from almost 2 hours and 10 minutes. Through-services from Glasgow and Edinburgh to London would be down to just three and a half hours.

The connectivity gains of high-speed rail will come not only from faster trains but from the new route alignments that comprise the proposed Y-shaped network of lines from London to Birmingham, and eventually north to Manchester and Leeds.

[Mark Lazarowicz]

Will my hon. Friend confirm that the Labour party’s ultimate objective is that the high-speed line should go directly to Scotland, and that we should not rely on existing services for part of the line? Obviously, things cannot be done at the same time everywhere in the UK, but will he confirm that that is Labour’s objective?

[Andrew Gwynne]

When Labour was in Government it was always envisaged that the high-speed lines would eventually connect with Scotland. In the long term, that will be crucial to the economies of Scotland and the English regions.

The new network would overcome some of the limitations of the old network, which has three separate and poorly interconnected main lines, each with own its London terminus. An important factor is that the high-speed network would enable key local, national and international networks to be better integrated. In particular, including an interchange station with the new Crossrail line just west of Paddington on the approach of the high-speed line to central London would greatly enhance the benefits of both Crossrail and the high-speed line. A Crossrail interchange station could deliver a fast and frequent service to London’s west end, the City and docklands. The total journey time from central Birmingham to Canary Wharf could be just 70 minutes.

A boost to the west midlands economy is anticipated to the tune of £5.3 billion a year, and to that of the north-west of £10.6 billion a year at today’s rates.

[Christopher Pincher]

The hon. Gentleman said that there would be a benefit to the west midlands. Is he aware that I asked a parliamentary question of the Department for Transport in order to ascertain what the benefits would be to Staffordshire? The Department responded that it had made no such analysis.

[Andrew Gwynne]

I was referring to the west midlands metropolitan area, but I am not responsible for the replies given by the Department for Transport.

[David Mowat]

On that point, the figure cited by the hon. Gentleman of just over £5 billion came from the West Midlands chamber of commerce. The figure was generated in the region, and one would imagine that it is most unlikely that some of the money did not come from Staffordshire.

[Andrew Gwynne]

I am grateful to the hon. Gentleman for clarifying that point.

If, in time, an extension of the network to Scotland was to proceed, there would be a benefit of nearly £20 billion to its economy. HS 2 believes that the benefits of high-speed rail far outweigh the estimated costs, with the project yielding more than £2 of benefit for every £1 of cost.

There are clearly several arguments in favour of high-speed rail. It is a possible solution to the expected increase in passenger numbers, it will undoubtedly slash journey times and it could allow a much better integration of existing rail services regionally, nationally and internationally. However, we have to take on board the fact that not everyone is in favour of high-speed rail. I accept that, as the hon. Members for Wycombe and for North Warwickshire (Dan Byles) said, some communities will be impacted through the construction and operation of high-speed rail. The Labour Government were mindful of the fact that, in making proposals for a route, there has to be an attempt to minimise local impacts while achieving the wider objectives.

[Andrea Leadsom (South Northamptonshire) (Con)]

Does the hon. Gentleman agree that there would be merit in considering ways to give benefits to those communities impacted by the track—for example, by having spurs off the new tracks that offered interim stops on occasion?

[Andrew Gwynne]

That might be one solution to such concerns.

We need to ensure that people are fully consulted on changes that could affect their areas, and not only on the Chilterns or Buckinghamshire but, as my right hon. Friend the Member for Holborn and St Pancras (Frank Dobson) said, on Euston and Primrose Hill. Indeed, my right hon. Friend made some powerful points.

The coalition Government must have meaningful, extensive and detailed consultation, particularly with the local communities affected, and they must be keen to listen and to balance the concerns of those communities, many of which we have heard about today in this debate. No route in a project of this significance will be without controversy, which is why there absolutely must be adequate consultation of the affected communities, together with consultation on the exceptional hardship scheme for those whose properties may be affected by proximity to the preferred route.

May I ask the Minister how detailed the consultation process about the plan for the new route will be? Will it give us a detailed account of the streets, properties and landholdings that will be directly affected by the planning process? Significant time will be needed to ensure that consultation is properly conducted and considered. I welcome the proposed exceptional hardship scheme for those whose properties may be directly affected. What time scales do the Government have to introduce provisions for owners of properties nearby the planned route that may not necessarily be directly affected by the construction? Finally, can the Minister tell me how many applications have been received so far for the exceptional hardship scheme?

The Labour Government proposed the high-speed rail that would link London to Birmingham and eventually to Manchester, Leeds and beyond, which is the widely backed “Y”-shaped network. I welcome the fact that the coalition Government, after a few wobbles, have come out and supported that network instead of their unworkable “S”- shape. That was perhaps not so much a U-turn as a “Y-turn”, although my right hon. Friend the Member for Holborn and St Pancras has now thrown an “H”-shape into the mix.

I turn now to some specific issues. What consideration will be given to ensuring that the high-speed rail network is available to rail freight, which is an increasingly important part of the railway jigsaw? Does the Minister plan to have further talks with the Scottish Executive about possible network extension to Scotland in due course? Will she outline the time scale that the Government envisage for commencing construction of the first part of the network? Has her Department begun work on preparing the hybrid Bill that would have to be presented to Parliament to make the new network a reality in this Parliament?

The high-speed rail project could be of national strategic significance to this country, and I hope that we will be able to work across the House to secure a rail link that is worthy of a great country in the 21st century.

10:51

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

In the brief time that I have available, I will try to run through the points made by right hon. and hon. Members, and I will write to them about any points that time prevents me from covering now.

I am very grateful to have support for high-speed rail from across the House, across parties and across the country. That support is very welcome. There was a particularly vocal presence in the debate today from Yorkshire, which was particularly welcome.

However, we recognise that it is vitally important to think with great care about the local environmental impact of the project. Of course, we had some very comprehensive accounts of the potential impact, first from my hon. Friend the Member for Wycombe (Steve Baker) and then from my hon. Friend the Member for North Warwickshire (Dan Byles). It is important that they are here in Westminster Hall and able to put their constituents’ point of view.

I strongly believe that careful mitigation measures can eliminate the most intrusive local impacts of high-speed rail. Modern engineering techniques give us an expanding range of ways to use sensitive design to make transport infrastructure easier to live with and less intrusive; a number of Members have referred to the example of High Speed 1, where that mitigation work has been done with some success in many areas.

I believe that it is possible to find a solution that is balanced and fair; that generates the significant economic benefits of high-speed rail for the country as a whole, and that is fair to the local communities that are directly affected by whatever line of route is ultimately chosen. Hopefully, this debate will take us closer to finding a solution and choosing that route.

We intend the consultation to be inclusive, wide-ranging and comprehensive, providing a range of opportunities for Members and their constituents to go through these kinds of concerns about the impact on landscapes and communities. Our consultation is designed to run for about five months, which is longer than the statutory minimum. We take this process very seriously, because we know the gravity of the concern that is felt in some communities.

The business case for high-speed rail was discussed by a number of Members. We are absolutely confident about the very significant benefits that a line from London to Birmingham would generate and we believe that those economic benefits are even more significant when they are linked to a “Y”-shaped high-speed rail network that connects the capital with Birmingham, Manchester and Leeds.

I welcome the comments of my hon. Friends the Members for Warrington South (David Mowat) and for Calder Valley (Craig Whittaker) about the importance of using transport infrastructure to try to remedy imbalances between economic prosperity in different parts of the country. There is strong local support in much of the country for high-speed rail.

In answer to the questions from a number of Members about Scotland, as the hon. Member for Denton and Reddish (Andrew Gwynne)—the shadow Rail Minister—has already pointed out, the “Y”-shaped network to deliver high-speed rail to Manchester and Leeds could enable us to deliver journey times to London from Edinburgh and Glasgow of about three and a half hours. There is also the issue of promoting the air-to-rail switch, which is so important to the hon. Member for Cheltenham (Martin Horwood). In due course, we certainly want to see a genuinely national network built, and that is why we are in regular dialogue with the Scottish Government. We are happy to work with them on establishing how we bring that network about in the future.

A number of Members have talked about the carbon impact of high-speed rail. I believe that high-speed rail can play an important role in our plans to develop a low-carbon economy, particularly by promoting the air-to-rail switch that a number of Members referred to. Even with our current energy generation mix, high-speed rail is a much lower-carbon option than flying.

My hon. Friend the Member for Wycombe argued that the Government had overstated the expected increase in demand. He and a number of other Members sought to challenge the business case. However, there is no doubt that the benefits generated by the extension of high-speed rail to Birmingham will exceed the cost of building the line.

Furthermore, it is clear that there is already a significant crowding problem on our railways. The simple fact is that we need this new railway. Important parts of our rail network are already suffering from serious overcrowding problems. As my hon. Friend the Member for Milton Keynes South (Iain Stewart) mentioned, one only needs to go to Euston on a Friday night to see how popular the railways have become. There is simply no realistic alternative that would give us the level of benefit that high-speed rail will generate.

[Andrea Leadsom]

Does my right hon. Friend the Minister accept, however, that greater consideration should be given to using an existing transport corridor rather than tearing through great swathes of English countryside?

[Mrs Villiers]

It is always the case that, when efforts are made to construct these major transport projects, there are advantages to using existing transport corridors. However, sometimes using those existing corridors is simply not possible. Nevertheless, the Secretary of State for Transport asked High Speed 2 to look again at the route that it had proposed and at the environmental impact of that route. In a very short time, we will publish a package for consultation that will take on board a number of the concerns that have already been raised with the Government and with HS 2, to mitigate the environmental impact of the project.

I want to go back to the points that were made about using upgrades to the conventional rail network to relieve the capacity problem. It is simply not possible to relieve the capacity problem without a new line. Without delivering a further significant uplift in rail capacity, some of our key transport corridors will become even more overcrowded in the years to come. I strongly believe that high-speed rail is the best way to deliver that new capacity, not least because it would free up space on existing networks for more commuter, regional and freight services. My hon. Friend the Member for Rugby (Mark Pawsey) mentioned that issue and I think that there is potential for his constituents to benefit from the extra space on the west coast main line that will be released by high-speed rail. Dramatically improving connectivity between a number of our most important cities has the potential to change the economic geography of the country.

As for the environmental impact, I recognise that our plans for high-speed rail are already having an impact on some communities, even in advance of the final decisions on the project. That is why we have launched an exceptional hardship scheme, to assist those with an urgent need to sell their properties and move home.

The Secretary of State has made it clear that, as and when any final route is chosen, we will put measures in place to address blight, and those measures will go well beyond the requirements of statute. I say that in response to a number of points that were made about the exceptional hardship scheme. My hon. Friend the Member for North Warwickshire had some concerns about how the scheme was working. I was not aware of those difficulties, so if he wants to write to me about the specific issues I will be happy to look into them.

Earlier this year, the Secretary of State visited the line of route that has been recommended by HS 2 Ltd. He acknowledges the vital importance of designing a new high-speed rail line in a way that will reduce local impact where possible and that will take on board the types of points that we have heard this morning.

We fully recognise the need to balance the benefits of the high-speed rail project with the local impact on landscape and communities. In the summer, the Secretary of State instructed HS 2 to consider how best to improve its recommended route 3 to reduce any negative social and environmental impacts. An initial report has already been published that identifies a number of ways to reduce problems on the northern part of HS 2’s preferred route. That work is continuing in relation to a number of other areas of sensitivity—

[Mr Mike Weir (in the Chair)]

Order. I am afraid that we have run out of time for this debate. We now move on to the next debate.

Youth Service

Tuesday 23rd November 2010 Westminster Hall

11:00

[Julie Hilling (Bolton West) (Lab)]

Thank you, Mr Weir. It is with great pride, but also with sadness, that I open my first debate in Westminster Hall. I have a vested interest in this debate, in that I have spent almost all my working life as a youth and community worker, and Unite supported me in my election campaign. I am passionate about the sector. I have many important questions for the Minister, who I hope will address them all in his response.

I am proud to have been a full-time youth worker for many years in Nottingham, St Helens and Wigan. I loved my work, and I believe that my colleagues and I, who worked in a local authority-based youth service in partnership with voluntary organisations, made a difference to young people’s lives. Like all youth workers, we had a purely voluntary relationship with young people. They were not forced to come to our projects. The fact that they chose to relate to us without compulsion laid the basis for trusting relationships that enabled us to assist their informal learning and personal and social development. That is what youth work is. Youth workers are young people’s freely chosen and trusted adult supporters. They educate young people informally, support them, help amplify their voices and, critically, take their side when no one else does. It is part of society’s commitment to lifelong learning.

As official Government statements, academic reports and professional bodies recognise, youth workers enable young people to develop holistically, working with them to help them develop their voice, influence and place in society and reach their full potential. Youth workers recognise, respect and actively respond to the wider network of peers, communities, families and cultures that are important to young people, and seek through those networks to help young people achieve stronger relationships and collective identity by promoting inclusivity and equality.

Youth workers have long been experts in creating what is now called the big society. According to the Audit Commission, every £1 invested in youth work generates £8 worth of voluntary activity. Youth workers are trained to recruit and involve volunteers and to sustain their involvement. Some 500,000 volunteers work with established youth services, but volunteers do not come from thin air. They need to be encouraged and supported by professionally trained staff and, to be effective and happy, they need to volunteer in an organised environment. Youth and community work training equips practitioners to empower adults and young people in their communities.

In addition, youth workers are trained to raise funds to support their work. The state has never been the main provider in the sector. The last National Youth Agency audit of services showed that youth workers generated more than one third of the amount spent by local authorities on their youth services. I hope that the Minister will take careful note of the fact that cuts to local authority youth services also mean severe cuts to the voluntary sector and to the social enterprise and mutual organisations that provide youth services. For example, the current proposals to cut £2.6 million from Birmingham city council’s youth service mean about a £600,000 cut to the voluntary sector. He will no doubt be aware that the £2 million in cuts to the youth service in his county will practically wipe out voluntary sector funding as well. It is a fallacy to suggest that the voluntary sector can pick up the pieces left by a shattered local authority service.

On funding, incidentally, Lord Northbourne obtained an undertaking during the passage of the Education and Inspections Act 2006 that the Government would continue to collect youth service funding figures from local authorities. Will the Minister publish the figures for last year and tell me how they will be collected in future? The National Youth Agency used to do an annual audit of youth work, but I have been informed that now that its funding has been slashed, it will no longer be able to do so. I am also informed that Ofsted will no longer inspect youth work. Who will inspect it to ensure that standards are upheld?

I am proud to be introducing this debate almost exactly 50 years after Lady Albemarle produced her great report for the Conservative Government of the time. Her report introduced the modern youth service. In the 1950s, the early youth service had nearly disappeared as a result of cuts and general neglect. The voluntary sector and the early trade unionists who built the Community and Youth Workers’ Union, of which I am proud to have been president for nine years, campaigned hard for the Government to provide public resources and promote respect for youth work.

Lady Albemarle was asked to establish a committee in 1958 to consider those concerns. After two years of intense scrutiny, the committee recommended that specialist training for youth workers be developed, as it was a distinct educational profession. She and her committee recommended that youth centres be built throughout the country to provide places of warmth, free association, safety and fun, that national terms and conditions for youth workers and qualifications linked to those terms and conditions be introduced and that each local authority be funded to work in partnership with the voluntary sector to manage a youth service. The Conservative Government agreed with the recommendations of Lady Albemarle’s committee and laid a substantial foundation for the building of the modern youth service. A new public service depending largely on public investment was born.

Since that time, great progress has been achieved. In fact, Britain’s youth service—with its public funding and partnership with voluntary organisations, national professional standards and joint negotiating committee terms and conditions—has been admired throughout the world. It has pioneered many important developments in working with young people, including international exchanges between young people to help heal a war-torn Europe.

My sadness in presenting this debate comes from the recognition that those 50 years of progress could now come to an end. The youth service is likely to disappear shortly unless the Minister acts. Is he aware that the situation of the youth service is now so grave that the main professional journal in the field, Children & Young People Now, has organised a national campaign called “For Youth’s Sake”, and the main professional bodies and stakeholders have formed a campaign to save the service? The British Youth Council and the UK Youth Parliament, the recognised national bodies for young people, have formed similar campaigns and expressed concerns about rapidly deteriorating provision for the youth service. My hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) has also introduced early-day motion 1013 on the threat to youth services.

We need action now. Is the Minister aware that local councils value highly their ability to provide youth work directly, and are so concerned about the cuts, at least in England, that the Local Government Association recently published an excellent document, “Valuing Youth Work”? I am pleased to read in the foreword his quote that work with young people is not a “luxury add-on”. Has he read the powerful analysis of the cost-effectiveness of youth work by Unite and Lifelong Learning UK called “The Benefits of Youth Work”? If he has not considered those documents, I urge him to do so as a matter of urgency.

[Lilian Greenwood (Nottingham South) (Lab)]

Does my hon. Friend agree that cutting the youth service is incredibly short-sighted? Not only does the service give young people the opportunity to enrich their lives by taking part in interesting activities but it often prevents them from being drawn into antisocial behaviour or drug and alcohol use.

[Julie Hilling]

I thank my hon. Friend for that intervention. Yes, absolutely. I will talk more later about some of the studies that have shown that. If we destroy the infrastructure, it will take a long time and a lot of money to rebuild, as happened in Wigan in the 1990s when all the youth centres were closed. Wigan has not been able to regain the ground lost during that time.

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

I congratulate the hon. Lady on securing this important debate, but I remind her that the Labour Government planned to make 20% cuts. Does she feel that no cuts should have taken place in the youth service? Can she inform all those present where she would make the cuts?

[Julie Hilling]

I am not in the Government or even in the shadow Government, so I am not in a position to say where cuts should be made. However, making substantial cuts to a small pot of money—some £300 million is spent on the whole youth service throughout England and Wales, which is a very small pot of money nationally—does huge damage to the services provided.

It is with sadness that I report that Warwickshire county council is proposing to abandon its youth service all together, and it appears that Norfolk, Suffolk and Southampton city councils are planning to do the same. According to a recent survey of proposed cuts that was conducted prior to the comprehensive spending review by the National Youth Agency and the Confederation of Heads of Young People’s Services, 95% of services were predicting cuts during the current year, the majority of which would be in the region of more than 30%.

Bolton council has already had to cut £200,000 this year and is predicting a cut of £415,000 next year. Am I right to assume that the Minister is concerned about a cut of £2 million to West Sussex county council youth service, which covers his constituency? Does he support the thousands of young people across West Sussex who have been petitioning and campaigning against the cuts? The portfolio holder for the area, Councillor Peter Bradbury, admitted that young people had not been properly consulted. Again, is the Minister aware that consultation with young people on service provision is fundamental to the Education and Inspections Act 2006?

There is an illusion that mutuals, social enterprises or even the private sector will take up youth work provision. Although there are some excellent voluntary sector projects, there is little evidence that many providers are ready to take on the role of providing youth services. In any case, they are dependent on adequate public funding for the work. The staffing and resources of some services are already so depleted that even a small cut of 10% will effectively end their ability to function meaningfully.

[Rachel Reeves (Leeds West) (Lab)]

I congratulate my hon. Friend on securing the debate. In my constituency, Bramley and Rodley Community Action Trust provides a youth bank in the area. The trust also runs a youth inclusion programme, which helps people who are at risk of becoming involved in the criminal justice system. Does she agree that cuts to Leeds city council of 27% will mean that those services are at risk and that, as a result, we risk building up future problems of antisocial behaviour and criminal activity? With just a bit of funding, we could ensure that such organisations were able to continue providing those excellent services.

[Julie Hilling]

I thank my hon. Friend for that intervention. I absolutely agree that it is a false economy to make such cuts to youth services. Historical evidence shows that youth services will be harder hit than other services. Local authorities will have to protect some of the services relating to safeguarding issues and the care provision for older people. However, youth services always get squeezed. They have always been Cinderella services and will have greater cuts imposed on them unless action is taken—in particular action to enforce the legislation that is in place, which I shall come on to.

Such cuts will mean the end of universal out-of-school services for young people. Since January 2007, through working in partnership with the voluntary and private sectors, local authorities have had a statutory duty to promote the well-being of young people aged 13 to 19 years—in fact, it is up to 25 years for those with learning difficulties—and to promote access to educational and recreational leisure time activities, which are referred to as positive activities. The legislation that supports youth work is described in detail in statutory guidance published in March 2008 under section 507B of the Education Act 1996. That statutory guidance sets out the requirement for local authorities to provide youth work in three areas: positive activities, decision making by young people and 14-to-19 learning. The guidance refers to the fact that educational leisure-time activities are explicitly linked to youth work methods and approaches. The purpose of both forms of positive activities—educational and recreational—is the improvement of well-being. The definition of well-being in the legislation reflects the five Every Child Matters outcomes: be healthy, stay safe, enjoy and achieve, make a positive contribution, and achieve economic well-being.

The statutory guidance also refers to “Aiming High for Young People: A Ten Year Strategy for Positive Activities.” That strategy concludes with a very strong statement that recognises high-quality youth work. The Government’s view is that high-quality youth work delivered by third and statutory sectors is central to delivering our ambition of increasing the number of young people on the path to success. Is the Minister concerned about the ability of local authorities to fulfil their statutory responsibilities? If they do not fulfil their statutory responsibilities, will he intervene under sections 496, 497 or 497A of the Education Act 1996?

Would it not be helpful to revisit the recommendations of the “Resourcing Excellent Youth Services” document? Instead of aiming low for young people, as the Government appear to be doing, would it not be better to return to the recommendations of the “Aiming High for Young People” document? Does the Minister recognise that 70% of funding for the voluntary sector, particularly for youth services, comes from local authorities, and that decreasing that funding reduces the potential of what he might term big society organisations?

[Heidi Alexander (Lewisham East) (Lab)]

Does my hon. Friend agree that the big problem with the big society is that it is predicated on the belief that volunteers will do for free what paid youth workers do for a wage? Does she agree that the big society is something of a political convenience, given the huge cuts that will be made to local authorities during the next three years? The situation will be incredibly difficult for those voluntary and community groups that are providing excellent activities and outreach work—street-based youth work—for young people. It will be very hard for them—

[Mr Mike Weir (in the Chair)]

Order. I remind the hon. Lady that interventions must be brief.

[Heidi Alexander]

I apologise.

[Julie Hilling]

I thank my hon. Friend for that intervention. Yes, I absolutely agree. It is a bit of a fallacy to think that volunteering is not already taking place, as 500,000 people already volunteer to work with young people. They are effective in volunteering activities only if they are supported in their work financially and by professionally qualified and trained staff. Those staff can assist them in developing their work and can ensure that their work is of good educational value to young people.

[Guy Opperman (Hexham) (Con)]

I want to be clear about this. All of us accept that the debt situation is difficult at the moment. The hon. Lady referred to some 70% coming from local authorities to pay for such services. Is she saying that she would maintain the grants for this type of work on an ongoing basis?

[Julie Hilling]

I thank the hon. Gentleman for that contribution. Yes, absolutely. I am not simply saying that we should maintain the funding; I am saying that we should increase it. I will give some statistics at the end of my speech that will show how positive intervention and positive activities with young people saves the state a great deal of money. Such funding is an investment and, as I said, if the hon. Gentleman bears with me, I will provide some statistics later to show how when a small amount of money—it is a small amount—is put into services for young people, it saves the state thousands of pounds on much deeper interventional work.

[Mr Rob Wilson]

I am listening carefully to what the hon. Lady says, much of which seems to focus on the negative side of what is going on. Has she paid any attention to, for example, the plans for the national citizen service and the positive things that that can do for society cohesion?

[Julie Hilling]

I thank the hon. Gentleman for his contribution. If he will bear with me, I will talk about the national citizen service in just a few moments.

In reply to a parliamentary question that I asked the Minister on 15 November, he did not respond to me about the rapidly declining fabric of the maintained youth service, but instead seemed to state that the national citizen service would compensate for the decline in other provision. I hope that I misunderstood him. However, if I did not, perhaps he can explain how allocating £370 million to the national citizen service for, in effect, short-term summer scheme opportunities for 16-year-olds will possibly compensate for the loss of the current youth service budget of less than £300 million per annum that runs for 365 days a year?

Does the Minister share my concern that many child protection and health and safety issues are raised by the fact that inspecting organisations with no track record in residential work and professional youth work delivery will be running the short-term national citizen service? I am deeply concerned that they do not have the capacity or the experience to operate outdoor activities and residential work according to the Department’s health and safety guidelines. Can he give me any assurances in that regard? Also, who will inspect the quality of the service? The youth service was previously inspected by Ofsted, which has commented on its rising standards over the past four years, when other services were often declining.

I welcome the fact that the Select Committee on Education is conducting an inquiry into youth services and that it will be examining the introduction of the national citizen service. Youth service professionals and many of us in this place are beginning to wonder whether the Minister actually understands what the youth service is. The youth service has been recognised in the different jurisdictions of the United Kingdom as an integral part of the education system. Does he agree with the Welsh Assembly Government, the Department of Education in Northern Ireland, the Education and Inspections Act 2006 and the Scottish Government that the youth service is an integral part of the education system?

Youth work is based on a voluntary professional relationship between skilled youth workers and young people, so it has a broad spectrum of influence and success. The various youth councils across the country and the UK Youth Parliament, which so successfully engages people in political education and civic involvement, simply would not exist without the support of local authority professional youth workers. At the other end of the spectrum, as the work of Professor John Pitts has clearly shown, the youth work method is the most effective means of reducing young people’s involvement in gang crime.

[Mr Wayne David (Caerphilly) (Lab)]

Does my hon. Friend agree that the youth service provides an important element in improving the employability of young people because one of the things it does is improve the soft skills that employers are crying out for?

[Julie Hilling]

Absolutely. I could not have put it better. The youth service is important in encouraging social and political education, social interaction and decision making. There are far too many distinguished reports to mention that demonstrate conclusively that youth workers play a vital role for young people in re-engaging them in education; making their lives healthier; improving their access to learning; strengthening information, advice and guidance; supporting partnership working; participating in structured leisure-time activities; helping them to stay out of the youth justice system; and encouraging them to play an active and voluntary part in their local communities.

Such successful work is achieved by a relatively small cohort of 7,000 professionally qualified staff, working with 30,000 trained youth support workers and, as I have mentioned, an army of half a million volunteers. Those staff work for local authorities and voluntary organisations, but local authority funding is the key. The values, occupational standards and skilled training are the glue that holds the service together. It is therefore with great sadness that I report that youth and community work training courses may now face wholesale closure.

The sector is really proud of its training courses, which are offered by about 30 universities and other providers. The courses are themselves a product of a “big society” kind of effort. The standards of the courses are validated by the voluntary efforts of professional education and training standards committees, which rely on volunteers to create and monitor standards. Those committees have decided to apply an important set of criteria on training courses, one of which is the requirement that students are recruited after proven and committed experience as volunteers or part-time youth workers. As a result, youth work students are deeply committed to their profession and have all volunteered in it. That is a model of the big society ethos.

Most mature students enjoy a second chance to learn and do not come into higher education through the traditional academic routes. They are community activists and organisers who are concerned to become skilled in what they do. The qualification for youth workers relies on the successful completion of 50% of field work practice. Around 60% of the students are women, and more than 30% are from black and minority ethnic communities. The high demands of placement learning mean that they cannot easily supplement their student time with paid work.

Despite their strong virtues, youth and community training courses, which became degree-level courses in September, have never received funding equivalent to that for teachers or social workers. The students, who are by and large older and less well off than others, have had less resourcing in higher education, but now the situation is even worse. Is the Minister aware that the proposal to remove funding for bands B and C will hit youth and community work courses, and can he give me an assurance that he will look into that with a view to reversing the decision for those courses? I can assure him that failure to do so would be the final nail in the coffin of a valuable service that, ironically, his predecessors created at a time of much higher national debt.

Reducing the deficit and cutting public sector spending is the order of the Government’s day. Whatever we might think about the cuts, we all have an interest in cost-effective public services, so I will finish by highlighting the exceptional cost-effectiveness of the youth service and youth work. It is estimated that for just £350 a year for each young person, all young people could access a good youth work offer. Current spending is £100 a head per annum for 13 to 19-year-olds. More specifically, the Joseph Rowntree Foundation commissioned an exercise on the cost of detached youth work, which found that a project that provided a full range of services and was in contact with 125 young people a week would cost £75,000 a year, or £16 for each contact. It concluded that for disadvantaged neighbourhoods, a systematic street-based youth service would cost a fraction of the amount spent on other services targeting that group. It cited, in particular, the £450 million budget for the Connexions service.

Other research has highlighted the relative costs of the criminal justice system and other forms of intervention, including youth work. The Green Paper, “Every Child Matters” stated:

“Society as a whole benefits through reduced spending on problems that can be avoided and through maximising the contribution to society of all citizens. For instance, a child with a conduct disorder at age 10 will cost the public purse around £70,000 by age 28”.

The Audit Commission’s report on the benefits of sport and leisure activities in preventing anti-social behaviour among young people estimates that a young person in the criminal justice system will cost the taxpayer more than £200,000 by the age of 16. The young person who is given support to stay out of the system, however, costs less than £50,000. Other comparative costings include: £1,300 a year per person for an electronically-monitored curfew order; around £35,000 a year to keep one young person in a young offenders institution; an annual average of £3,800 a year for secondary education; and around £9,000 per person for the average resettlement package after custody. Against those, £350 a year for each young person would be a small price to pay to unlock the rich benefits of community-based provision for all and to provide extra opportunities for personal and social development for those young people who, by virtue of life experience and circumstance, are so disadvantaged that they cannot successfully make use of mainstream services.

I could speak about the young people I have worked with over the years and the difference that youth work and youth workers have made to their lives, but I have spoken for long enough. I will end with a plea. We are entering a period that will be even harder for young people. They will have to deal not only with the normal trials and tribulations of entering adulthood but with unemployment, cuts to local services and higher costs for everything. I plead with the Minister to take action now to protect and invest in a highly cost-effective service. I ask him to please take action to defend youth work and youth services before it is too late. Youth work has always been known as a Cinderella service, but please let Cinders go to the ball.

[Several hon. Members]

rose—

[Mr Mike Weir (in the Chair)]

Order. A considerable number of Members wish to speak. I intend to start the wind-ups at about 12.10 pm, so I encourage brevity.

11:27

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

I thank the hon. Member for Bolton West (Julie Hilling) for securing this debate on what is undoubtedly an important issue. Young people deserve our support, and youth services are vital to all our communities. She is absolutely right that if young people get a better start in life, our communities are safer and more cohesive as a result. It is also correct to say that prevention—she gave us many figures on that—is better and much more cost-effective than simply waiting for the cure.

The number of young people who are not in education, employment or training—NEETs—is horrifying, and it is crucial that we engage those individuals in our communities. In my part of the world, Devon, 1,190 young people between 16 and 18—5.7% of the people in that age bracket—are unemployed, do not have training and, frankly, have very little hope. As the hon. Lady explained, that has a cost to society, and it is not insignificant. The figures vary, depending on how they are calculated, but those I have looked at show that each NEET costs around £97,000 over their lifetime. That figure could exceed £300,000, depending on the benefits they have to look for.

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

I congratulate the hon. Member for Bolton West (Julie Hilling) on securing the debate. On the point made by my hon. Friend the Member for Newton Abbot (Anne Marie Morris) about NEETs, in Medway, 666 people in a population of 260,000 are NEET. Does she agree with me that we need to do all we can to support organisations such as the Medway Youth Trust, a charity that does excellent work in giving people who are NEET support and help to move into working life?

[Anne Marie Morris]

I thank my hon. Friend for that intervention and endorse what he said. Such organisations should, undoubtedly, be encouraged.

We are missing one key piece: providing youth services must be about providing quality. It is not a matter of how much money is thrown at something but how it is spent to get the best possible result. I am lucky, because Teignbridge, which is my local area and a large part of my constituency, has an excellent youth services record. The portfolio holder described Mike Stevens, who is the leader of the unit in Teignbridge, as outstanding and said that, if she could, she would clone him. There are some extremely able people who deliver high-quality services.

There are two outstanding examples in Teignbridge district. In Newton Abbot, which is at the heart of my constituency, an organisation called Chances, which operates out of a building called The Junction, is responsible for giving many young people who are excluded from school hope and a future that they would otherwise not have. I have seen the kind of outward-bound courses that are offered and the engagement of the teachers who work there, and they are fantastic.

More recently, a new centre was opened in Dawlish, which is another key town in my constituency. It is called Red Rock, and what is special about it is that it is a fine example of the big society. I would take issue with the hon. Member for Lewisham East (Heidi Alexander), who suggested that the big society was merely a convenient label. The centre evolved from the local business community, the local voluntary sector and the local authority working together.

[Kelvin Hopkins (Luton North) (Lab)]

The hon. Lady speaks about the big society. One imagines that that means that local voluntary and third sector groups will take over where public services are cut. In my constituency, we have had a meeting with a dozen local organisations that are fearful that their funding will be cut, and that they will be able to provide less, rather than more, in future.

[Anne Marie Morris]

I thank the hon. Gentleman for his contribution. I shall turn to funding in a minute, because clearly it is relevant, but let me stick with quality, which is key.

That project involves real engagement, and it is not the intention of anyone—certainly not the county council—that group A should take over from group B. What people see in the future is an integrated approach among different parts of our community, which we should commend.

I believe that there is a misunderstanding about funding. The hon. Member for Bolton West spoke about cuts. It is known across the House that this country is plagued with a huge national debt, and that the Government have to look at the measures to be taken. However, they have not cut youth services. They have taken away the barriers between individual prescribed funding streams that central Government used to pass money down to local government, but the amount of money going from central Government to local government remains unchanged.

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

Will the hon. Lady give way?

[Anne Marie Morris]

May I finish? Local government has been given the opportunity to use money sensibly. Ninety funding streams will be reduced to 10, and that will substantially reduce the bureaucracy. It will also liberate £7 billion-worth of funds for local authorities to use appropriately. There is certainly no intention that this should be about cuts between between national and local government.

[Stella Creasy]

rose—

[Julie Hilling]

rose—

[Anne Marie Morris]

I will allow interventions in a moment. Let me just clarify my point on funding. What we will see in local government is a review of what quality and value for money should look like. In speaking to my county council, I have found no evidence that youth services per se will be any harder hit than any other part of the budget. On community engagement, we are looking for more, not less, but before I move on, I am more than happy to give way.

[Stella Creasy]

Can the hon. Lady clarify what she thinks the cuts to the Department for Education’s non-school budget and the cuts to the voluntary youth sector development grants will mean? That central Government funding for youth services has been cut—that is a national cut in funds for youth services. What does she think will be the impact of that?

[Anne Marie Morris]

I thank the hon. Lady for her intervention. I am sure that in due course the Minister will clarify exactly how that will work, but my understanding is that it is not about reducing money but about taking away artificial barriers between individual pots of money.

[Julie Hilling]

To add to what my hon. Friend the Member for Walthamstow (Stella Creasy) said, the cuts to the youth opportunity fund and youth capital fund were cuts in central Government funding, so this is not just about local authority cuts. In addition, money that was coming from the Department for Education specifically for youth work has been cut. That is a double whammy for local authority and area-based youth services.

[Anne Marie Morris]

I thank the hon. Lady for her intervention. Again, she is talking about structure rather than amount. As the Minister will explain, we absolutely will support youth services because they are important. The hon. Lady mentioned several new initiatives, including the national citizen service. Actually, there is a new group in the constituency adjoining her own. It is called the Bolton Lads and Girls Club, and I hope that she will welcome it. I am lucky, because the national citizen service, which provides an outward-bound social action experience for young people, will see 900 places created across the south-west by Young Devon and the South West Consortium. That must be a good thing for the future.

[Julie Hilling]

rose—

[Anne Marie Morris]

If I may, let me get back to the principle. We have been asked to keep contributions short, so I will not take any further interventions.

Quality is key. In conversations that I have had with my county council, I have found that people like Mike Stevens and what he contributes are highly valued. That kind of provision is not at risk. What any responsible council must do is look across their patch for the best way to provide best-quality services. Our young people deserve no less.

11:29

[Rachel Reeves (Leeds West) (Lab)]

Again, I thank my hon. Friend the Member for Bolton West (Julie Hilling) for securing this debate. I am sure that we have all seen in our constituencies the excellent work that youth services do. In Leeds West, there are several vital services. Earlier, I mentioned one of them—Bramley and Rodley Community Action Trust—and now I would like to highlight the role of another one.

Armley Juniors is a small group in my constituency. It is run by just three people in a deprived part of a constituency that already has low incomes and low educational attainment. Armley Juniors took over an old post office in the constituency and has managed to turn it into a youth centre with a kitchen for cooking classes. It also offers computer lessons and a communal area for children on the estate, and runs sports teams and outdoor activities during term and school holidays. It benefits from funding from Leeds city council and a peppercorn rent on its site, but, like many youth services across the country, it operates on a shoestring budget.

Leeds city council faces 27% cuts across the board during this Parliament, and the people in the dedicated team running Armley Juniors, whom I visited recently, are extremely worried about their future. Such issues may not register on the national scale, where we are seeing significant job losses and cuts across the board following the comprehensive spending review—indeed, in Leeds alone, we are facing the loss of 3,000 council jobs—but on the Heights estate in Armley, where Armley Juniors operates, the removal of funding would deprive young people in the community of the only communal space in the area.

The estate is a densely populated inner-city area with no playing fields, no other youth clubs and no sports halls. To make matters worse, Government cuts mean that the council now has to charge local youth groups for their use of school playing fields and community areas, which is a double whammy for groups such as Armley Juniors that need to use those facilities if they are to provide activities, especially sports activities, for young people.

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

Does my hon. Friend agree that with a comprehensive spending review that will hit children and families even harder than other sections of society, the need for services such as those in her community will be even greater?

[Rachel Reeves]

I agree with my hon. Friend. As well as having some excellent youth services in my constituency, we have Armley prison, and the point made earlier by my hon. Friend the Member for Bolton West about the long-term impacts of cuts to youth services rings true to me. A lot of people who provide youth services in my area say that their aim is to ensure that young people from very deprived backgrounds do not become the future inmates of Armley prison. During these difficult economic times, it is very worthwhile considering long-term impacts. Many hon. Members here today will recognise that this is an issue in their constituencies, and I fear that the cuts will cost us more in the long term.

Alongside the cuts to the police in Leeds, there are cuts to sports funding in schools, which we read about over the weekend and on which we will hopefully—although I fear not—hear some more positive news this week. There are also cuts to free swimming, and cutting services such as Armley Juniors on top of all that will have costly implications for both the community and for Government spending in the long run.

Most of us remember the 1980s and the generation of young people who were condemned to the scrap heap then. I was at school in that decade, and remember well the funding cuts that meant that sports clubs and after-school activities were available to children if their parents had money, but that children whose parents did not have money and who lived in inner-city areas without open spaces or playing fields, missed out. I urge the Minister not to allow us to go back to those bleak days. The value of organisations such as those that we are championing today cannot be measured, as my hon. Friend the Member for Bolton West said, just by their cost on a balance sheet. They educate, engage and inspire young people and make a huge difference to their lives. Cuts on the scale envisaged by this Government will devastate youth services across the country, and I urge the Minister to think again.

11:42

[Justin Tomlinson (North Swindon) (Con)]

I congratulate the hon. Member for Bolton West (Julie Hilling) on securing this extremely important and interesting debate. I am not sure whether I will be able to share her passion, but I shall do my very best.

During my 10 years as a councillor before becoming the MP for North Swindon, this was one of the most important issues that came up in the residents surveys and in the public meetings that I held. Parents generally accepted that their children were well catered for during school hours, but there were often concerns about after-school hours and the weekends. I have very many happy memories of going to youth clubs in the 1980s, and I know that youth provision is essential. It channels energies, and provides support and opportunities to develop, and many hon. Members who have already spoken have gone into detail on that. I sympathise with those who highlight funding pressures, or even call for youth provision funding to be made statutory. However, I think that far more can be done without money, services and facilities, and so in my brief speech I shall touch on some positive suggestions based on my experience as a councillor and my work with the youth service.

Local authorities should do a lot more with their buildings. I recently secured a Westminster Hall debate on the future provision for libraries, and I think that councils could do a lot more to open up community buildings such as libraries to organisations for the provision of facilities. It does not cost much to put shelves on wheels and to push them to the side in the evenings. It is a great crime that we have many facilities that are open for only 10 hours for their primary function, with the community being locked out for the remainder of the week. More should be done also with schools. I was interested to hear the comments of the hon. Member for Leeds West (Rachel Reeves) about her experience in the ’80s. Today, we have huge swathes of private finance initiative schools, but the communities that I represent cannot afford to access those wonderful facilities and, therefore, far more should be done to open up the schools.

Our leisure facilities—sports facilities predominantly—should do a lot more with the youth service. The Twilight Football schemes target children from challenging circumstances and promote positive engagement, and that makes a big difference. Also, where there is funding to build new facilities, those facilities should be accessible. I have seen many facilities that in hindsight were built in the wrong place, and I am delighted that the new £1.2 million youth facility in my constituency was built in the town centre, which is easily the most accessible place.

Many hon. Members have also talked about the big society, and Labour Members often try to produce scare stories about that being a way to cover for potential funding cuts. The reality is, however, that it is about empowering local organisations, and the Government and local authorities can do more to support them.

[Mr David]

I am president of the Council for Wales of Voluntary Youth Services and all the voluntary organisations involved are extremely keen to play a bigger role in the big society—there is no question about that. However, they all say to me, “We cannot do that if our grant aid from the public sector is being cut dramatically.” Does the hon. Gentleman not accept that the things that he is talking about are almost incidental to the major cuts that will affect the voluntary sector over the next couple of years?

[Justin Tomlinson]

I was speaking at the Voluntary Action Swindon annual general meeting on Friday, and I got similar messages there. We cannot hide away from the current economic challenges, and I am trying to set out some areas in which we can make a positive difference. The shadow Minister will confirm whether it is the Labour party position to find some money—good luck if it can—and the Minister will set out the Government’s position. We cannot ignore the situation that we are in.

I have talked about making more of our buildings accessible. Many organisations have said to me, “We’ve got willing volunteers and enthusiasm. We can see a problem and we want to tackle it, but we don’t have access to facilities.” Whether as Government, local authorities or local businesses, we could do far more to provide those facilities, along with advice and support. One challenge in getting funding is the need to fill in extremely complicated forms. When I set up the sports forum in Swindon, a lot of effort was put into filling in forms. Volunteers are keen to make a difference on the front line, but not to lock themselves away in offices for many hours with complicated forms.

The youth service also needs to be a lot more proactive in matching with the times at which children or young people actually want to use its services. I am delighted that many authorities have changed their hours to match when children are outside school, and they should also go to where the children are. Too often, I have visited youth centres where a service is being provided to just a handful of children. In my constituency, we have an ice-skating disco on a Friday night. There are 650 children there, and the youth service should be parked outside providing help and support to those children who require it. Not every town has an ice-skating disco, but the same principle would apply to a cinema or bowling, or to teenage nightclubs, which I am assured are still very popular. In communities where there are open spaces, the leisure or youth teams could turn up with footballs and bibs, or rounders equipment, and organise impromptu games. I am sure that all hon. Members see when out in their constituencies that there are lots of kids hanging around, and they feel that someone should go along and positively engage with them.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

On the point about reaching out to small groups and how it would be better to reach out to larger ones, some of the hardest-to-reach young people in some of the most difficult-to-reach communities need youth work outreach and support on a very small scale. I have seen youth workers in some of the most difficult parts of my constituency just hanging out with children on the streets of an evening, so that the children at least engage in positive dialogue while they hang out. That is the kind of youth outreach work that is in danger when we focus on big projects and on the big national citizen service, rather than on smaller initiatives directed at particular groups of young people.

[Justin Tomlinson]

I am not sure that I agree. My point was about going to the young people, but the hon. Lady has made a good point. Engaging with certain children is very challenging, and the youth service must be as proactive as possible. If that means that it parks itself right in the heart of communities and engages directly, that is only a good thing. The service can also be there through the leisure facilities—teenage discos for example—so I sort of agree with the hon. Lady.

Finally, the principle of the National Union of Students discount card, which applies to students, should be extended. A lot more could be done to get young people discounts so that they can make more of the leisure facilities that are accessible to them. As a consumer body, young people are huge in number. By being proactive, we can make those facilities more accessible, to tackle the problems of boredom.

11:49

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

I, too, congratulate my hon. Friend the Member for Bolton West (Julie Hilling) on securing this important debate. There is no doubt that all hon. Members in this Chamber are concerned about the personal development of Britain’s young people and how best to secure that. As somebody with a background in the voluntary youth sector as well as local government, I recognise well the concerns expressed by many hon. Members today.

I want to make three points. First, the message that came through strongly in my hon. Friend’s speech is that early intervention is valuable. The benefits to society from working with young people accrue much later on, but that does not mean that we should not recognise them early on. It is about understanding the best way of intervening. One of the challenges—one thing that we Opposition Members see in some of the things the Government are doing—is that the ability to be flexible and work with young people in a range of different ways seems to be narrowing rather than broadening.

It is about not just spaces and places for young people, but the people who work with them and the purpose of that work. We need both generalist activities that help and support young people, many of which come from the voluntary youth sector, and specialist services. I have worked in setting up both kinds of activities in my local community in Walthamstow—working with young people at risk of joining gangs, and with young people to help them achieve their potential in a broader sense. I am concerned about the idea that the national citizen service can be mixed with those more integrated services.

[The Parliamentary Under-Secretary of State for Education (Tim Loughton)]

indicated dissent.

[Stella Creasy]

I am glad to see the Minister shaking his head. Those two things cannot be comparable. We in the youth sector know that they are apples and pears. The national citizen service, which is interesting, should in no way be regarded as a compensation for the ability to integrate services and work with young people in their communities in the long term. In areas such as Walthamstow, it is important for people on the ground to build up trusting relationships over time with young people to help them make the right choices in their life. It is critical that we understand the need to intervene differently in respect of various age groups and children in differing circumstances. Youth services in local areas have been able to develop ways of working around young people, rather than around the service that is delivered. I accept that that differs in various places. There are issues about how youth services are delivered, but we Opposition Members are concerned that the cuts that are coming through now will hamper youth services’ ability to be more flexible in working with young people in different ways and producing the interventions that people need to get the outcomes we all want.

Secondly, the consequences of the public sector cuts, nationally and locally, are already clear. I urge the hon. Member for Newton Abbot (Anne Marie Morris) to look again at the impact of the cuts on the national and local youth sector, particularly the voluntary youth sector. We recognise the interconnectedness of the voluntary youth sector and local youth services; that is the challenge for us. The National Council for Voluntary Youth Services has said that already this year youth sector organisations have lost 20% of their budget, and that 80% of the programmes that are closing are those working with people who are not in education, employment or training—the very group we are especially concerned about. That is already happening as a result of the in-year cuts.

There is understanding about the relationship between the voluntary youth sector and youth services locally, and other public services. It is important to put on the record the great support that the police and health care services in my area provide to youth projects. However, before we can get to the great world in which the voluntary youth sector is more involved in running services, we will see it being cut off at the start, so that it will be unable to do some of the more innovate partnership work we all want to see happen.

I shall make my third and final point brief because I recognise that we are short of time. The challenge we are facing is not difficult economic circumstances but the question, “What are our priorities?” If our priority is to get best value for money, it is clear from the case made by my hon. Friend the Member for Bolton West that investment in voluntary youth services and youth services locally reaps dividends well beyond the initial financial investment.

What is the best way to tap into the ability and interest in volunteering with young people locally, and how best to support it? I welcome some of the ideas the hon. Member for North Swindon (Justin Tomlinson) has come up with, but he did not say how he would get the youth services bus to the youth disco, or who would pay for the person who organises and manages that. That is our critique. The hon. Gentleman’s ideas are fantastic, but how will he make them happen? Delivery and implementation—

[Justin Tomlinson]

There is still funding, although all hon. Members accept that that there are challenges in that regard. My point is that people should make the best use of their resources. I would expect that to be a priority in respect of organisations’ funding.

[Stella Creasy]

No one doubts the need to make the best use of resources, but cutting resources year in, year out with no alternative and asking the voluntary sector to pick up the slack does not add up. For example, it is explicit in the tender document for the national citizen service that the Government are already saying, “We will not fund this properly. We’re expecting the voluntary sector to pay for it.” Many voluntary sector organisations that might work with youth services in future to provide the more creative services that the hon. Gentleman was talking about are dependent on public sector funding, so they will be unable to do the work he wants to happen, let alone to provide services not just for 16-year-olds for three weeks over the summer, but for every age group at the point at which they need intervention.

I plead with all hon. Members to give the Minister the evidence and encouragement he needs to return to his colleagues and fight for the funding that youth services so desperately need to deliver services that we all want for young people in our communities. I am looking forward to welcoming the Minister to Walthamstow tomorrow, so that we can have a conversation about how he can fight for the funding he needs to deliver the services that all hon. Members in this Chamber want to see delivered.

11:56

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

I am grateful for the opportunity to say just a few words in this important debate, and I am grateful to the hon. Member for Bolton West (Julie Hilling) for securing it.

I am ashamed to admit that I have been involved in the youth service for nearly 40 years, since I was a teenager, particularly in detached youth work, which is, for me, one of the most important areas of youth work in urban Britain and many other places, too. I want to say a few words and join other hon. Members in pleading for the Government to ensure that they understand the importance of Government and local authority support for the youth service.

I have always believed that there ought to be a statutory youth service. That is my party’s policy, it is still my belief, and I hope that before long that can be the position. It has always been a Cinderella service, although it is the bit of support for young people that is needed to complement parental and family support, and school and educational support. Other role models who are not authority figures can often be far more influential in ensuring that young people have the development, security and safety they need.

I welcome the Education Committee’s inquiry. The Government are looking forward to introducing comprehensive proposals in the new year. I welcome that. The Minister has often been well received since taking on his job. I thank him for that. I am keen for him to be bold and ambitious, both in his Department and across Government, because this is not only the responsibility of the Department for Education.

The national citizen service is a good idea, but as colleagues have said it is a time-limited, specific activity for some people at some time. It will grow slowly. The reality of the youth service is that it can be found by and is accessible to everybody in every community. That is the difference. The youth service is there now. We have to ensure that we do not lose any of its validity or accessibility.

May I make a special plea to ensure that the funding for people to be qualified and trained as youth workers is increased, not decreased? Some of the best, most talented people, who may not have a great academic background, come through the youth service as volunteers, then realise that it is their vocation. They have just the sort of skills that are needed. Often, they are women or people from black and minority ethnic communities. They are really good role models who have been where the youngsters are now. They understand the score, because they have been in the front line and have come through. We need to ensure that they are given the educational support to go on and do practice-based qualifications.

I have said that my engagement has mainly been with detached youth work, but that is not to underestimate club-based or specialist youth work. The benefit that the hon. Member for Bolton West mentioned in being out on the street, engaging with youngsters where they are, not expecting them to come to where the service is, is fundamentally important. If people are to gain the confidence of young people, they do not say, “Come and do it my way”; they say, “We’re going to come alongside you and understand what you want.”

We know that local government will have a hard time, as will central Government, because the settlement is difficult. But local government does not have to find all its savings by cutting grants to the voluntary sector and does not have to cut equally across the board. I plead with every council, no matter who runs it, to make sure that they do not think that the implication of a severe spending cut means cutting the voluntary sector rather than reducing the in-house services. Often, the latter needs to be done, because money for the voluntary sector can multiply in terms of its benefits in the community.

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

Will the hon. Gentleman give way?

[Simon Hughes]

I will not because I am conscious that other hon. Members want to speak.

I am keen to ensure that evening and weekend work is supported. One of the problems with a lot of traditional youth services is that they were there—fantastically—on Monday to Thursday evenings, but not on Fridays, Saturdays or Sundays. That is exactly when young people need places to go to.

A good example of a youth service was a place I went to in south Wales a few years ago. The kids wanted somewhere to hang around safely. They were given support locally in the valleys and they were able to build a shelter. It was a very simple shelter, but they built it and it was their place. It was a sort of glorified bus shelter, but it meant they had somewhere they could go, supported by individuals. Often, simple things that cost small amounts of money can transform people’s self worth and allow them to have a place they can call their own and build on.

Lastly, the hon. Member for North Swindon (Justin Tomlinson) pointed out that there are often many unused buildings. In difficult financial circumstances there is an imperative for organisations to work together complementarily, to ensure that facilities are shared and that people do not just do their own thing. That is often a danger in the statutory youth sector if there are schools that do not stay open after school hours or youth clubs that open only in the evenings. Local authorities need to lead on that, and my plea is for the Minister to say to every council, “You lead with the voluntary and faith groups. Do the work on the ground.”

The Minister must also ensure that we have funding for youth workers whom we need to do their job, and that we do not lose them; we need them now more than ever. We must not lose key services, which are often the glue that keeps communities together as well as keeping young people and their communities safe.

12:01

[Kelvin Hopkins (Luton North) (Lab)]

I am pleased to have the opportunity to contribute to this important debate, and I congratulate my hon. Friend the Member for Bolton West (Julie Hilling) on her excellent speech. She is clearly not just an expert but passionate about her working life before Parliament, and she probably knows more than anybody in the House about the youth service. I hope the Government will listen to her.

Luton North is an unusual constituency. When I was elected in 1997 it had the highest proportion of children aged under five in the whole country. In more recent years, it had the highest proportion of school-age children in the country, and those are now young people. There has been a surge of young people, and although Luton has wonderful educational and youth facilities, we have a considerable number of young people who are disaffected and perhaps not so successful in education, and they need much more support. We had a large number of people not in education, employment or training, and until recently, we did not quite know what was happening to them every year.

A number of community centres were built by Labour councils in the past. When I was a councillor in the 1970s, we built superb facilities that are still in operation today. However, facilities alone are not enough. We need staff to operate them. Some of that staffing is now being squeezed, and some of the services in those centres for young people are being trimmed at the edges, despite the fact that we have an excellent Labour council that is doing its best. There are problems now, and unless something is done it will get much worse once the serious cuts come through. To pretend that youth services do not need to be cut and that we can squeeze somewhere else is playing with words. The cuts will affect every service one way or another. The youth service has been underfunded in the past and it does not need less funding; it needs much more.

[Andrew Rosindell in the Chair]

One factor is safety, which my hon. Friend mentioned. Young people are on the streets. It is not just those in gangs, but those not in gangs who do not feel safe. They need places to go and professional staff to organise activities in which they can participate. In a letter that I received this morning, Tracey Quinn, the integrated youth support team manager for Luton North and a senior youth worker, wrote,

“we are proud of the good youth work we do with young people in the north of Luton and any future cuts to this young people’s service will be detrimental to both youth work and young people as part of the North Luton community.”

There is serious concern at local level in Luton. I worked for Unison for many years as a researcher. It has said that Connexions will face cuts of up to 50% across the country. That has serious implications, especially for NEETs.

I must take issue with the hon. Member for Bermondsey and Old Southwark (Simon Hughes). He was talking about a national youth service and implying that the Government should take a central role in that. However, when asked to justify current cuts to youth services at a recent meeting with young people, he told them that the decision was not for central Government, but for local councils. That is saying, “We’ll cut your money, but you’ll get the blame.” We cannot blame local authorities when they are facing savage cuts.

My major point is that I do not accept the need for cuts. I have raised that point in the Commons and, before anybody intervenes, I also raised it with Ministers in the last Government before the election. We should be targeting employment creation to bring down unemployment. That will increase tax revenues and reduce the need for benefit payments. The by-product of that will be a reduction in the deficit.

Some countries have gone for savage cuts. I feel deeply sorry for the Irish; they have gone for savage cuts, but that makes their economy perform less well. Setting aside their massive debts, they have seen output decline, and going for deeper cuts will make the problem even worse. The developed world should be reflating not deflating, but we are moving towards deflation. Cutting expenditure on youth facilities will make the situation worse. Employment generation should be used in that area to bring down levels of unemployment and start to reduce the deficit. I could go on at greater length but I have probably said enough. I will listen with interest to what the Minister has to say.

11:59

[Toby Perkins (Chesterfield) (Lab)]

Thank you, Mr Weir. [Interruption.] I am sorry, Mr Rosindell, you don’t even look like Mr Weir.

This has been an excellent and thought-provoking debate. I congratulate my hon. Friend the Member for Bolton West (Julie Hilling) on securing the debate and on her contribution, and I will reflect on some of the other contributions.

One point that my hon. Friend made particularly powerfully was about the value that youth work provides in generating money into our communities. The fact that for every £1 spent on youth services, another £8 of voluntary activity is generated is a powerful statistic. She also reflected on the national citizen service, and whether it should be seen as an alternative to youth service provision. The general mood of the debate was that it should not.

I would be interested to hear the Minister’s comments to the question raised by my hon. Friend during Education questions:

“As youth services nationally have already been cut by 30 to 40%...how will the Secretary of State ensure the quality of youth service provision in future?”

The Minister responded:

“The hon. Lady underlines the great importance of engaging the young people of this country as proper citizens, which is why we are carrying forward the national citizen service programme,”—[Official Report, 15 November 2010; Vol. 518, c. 643-4.]

To an impartial observer, that sounds rather as if the national citizen service was the replacement for youth services.

My hon. Friend the Member for Leeds West (Rachel Reeves) said that cuts to the youth service are a false economy. That is a powerful and central point that we should all reflect on. Making such cuts to youth services will lead to additional costs in policing, social work, education, health services and fighting crime in our communities. If we do not get it right, we will be paying for the cuts to the youth service time and time again.

[Justin Tomlinson]

Will the hon. Gentleman confirm exactly what level of funding the Labour party would provide and how they would pay for it?

[Toby Perkins]

I will come to the hon. Gentleman’s contribution in more detail. We had a Budget in 2010, and people could see from the direction of travel taken by the Labour Government over previous years just how much of a priority we placed on youth services. The improvement in youth services is clear as a result of that.

My hon. Friend the Member for Leeds West also said that she did not want us to return to the bleak days of the 1980s. My hon. Friend the Member for Lewisham East (Heidi Alexander) talked about the big society as a political convenience. She is in good company because the Minister himself is completely unclear about what the big society means. He says:

“The trouble is that most people don’t know what the Big Society really means, least of all the unfortunate ministers who have to articulate it.”

We look forward to him attempting to do that in a moment. He says:

“What actually is the Big Society, let alone is it good or not? Exactly how big is it now or is it going to be?”

I can answer that question: it is getting smaller by the moment. However, I look forward to him perhaps attempting to articulate better in the future than he has been able to in the past what the big society is and what the contribution of youth services should be to the big society.

The hon. Member for Newton Abbot (Anne Marie Morris) made a thoughtful contribution, which started well when she said that prevention was better than cure. She focused on how important it was for us to take serious action on NEETs. She may be aware of the piece in The Times Educational Supplement with the sub-heading “Experts predict rise in Neets as young people are left without support following local authority raids”. It stated:

“Local authorities are slashing Connexions budgets”

and youth services,

“raising fears that young people out of work or education will be left without support.”

In raising the initial question, the hon. Lady was on exactly the right lines. It is just a shame that she did not follow that through, but decided instead to divert us to the line we heard a number of times that the issue is the quality of the service, rather than the money. It is deeply disingenuous for us as politicians and for those in government to talk about the level of cuts that local authorities will see and say that they must not cut safeguarding—the Minister has already told them that, and the Prime Minister said that they should not cut the voluntary sector—but that it is totally up to local authorities what decisions they make. Some responsibility must be taken at central Government level. If cuts of 27% in local authority funding are to be made, youth services in particular will be affected, but services will be affected across the board. We cannot keep saying to local authorities, “Well, it’s your decision what you choose to cut.” The Government have to take some responsibility for that.

The hon. Member for North Swindon (Justin Tomlinson) had obviously given youth services considerable thought and he reflected positively on his experiences as a councillor and the importance of youth services in that area, but he repeated the idea that the cut in funding should not necessarily lead to a cut in services. That is the elephant in the room that we need to be honest about. If youth service professionals are to take us seriously in this debate, we need to be honest about the fact that they will see very substantial cuts. I think that 95% of local authority youth services say that their budgets for providing services to young people in their area are being cut. That will make a real difference to the level of service provided.

The hon. Gentleman had some good ideas about how school and council buildings could be used more effectively, but we must be realistic. The big cost for youth services is actually for the people employed within them, so yes, we can use buildings more effectively, but there is still a cost attached. We ought to be realistic about the cost attached to improving those services. The hon. Gentleman’s ideas about taking people on trips and so on all have a cost attached to them.

[Justin Tomlinson]

Just to clarify, opening up those facilities was as much for external organisations, whether those are scout groups, dance groups, sports clubs or whatever.

[Toby Perkins]

Okay. Certainly the voluntary sector will play a very important role. As someone who has been involved in youth sport coaching for the last six or seven years, I know how important the role of the voluntary sector and sports organisations is and completely support that. That is why I have been so horrified by the cuts that the same Minister has been making to the school sports partnership. That was a very important way of engaging children in sport, which led to their involvement in sports clubs.

My hon. Friend the Member for Walthamstow (Stella Creasy) reflected on the interconnectivity of all these services. That is a central point that we need to consider. The hon. Member for Bermondsey and Old Southwark (Simon Hughes) reflected on a lifetime dedicated to youth work and youth services and made a thoughtful contribution. When he reflected on the success of youth services in their contribution to the education of people who then go on to develop themselves further and become mature students, he made a very powerful point. He also reflected on the importance of street engagement in terms of youth services. That is another of the central areas in which the national citizen service will be no replacement for youth services, because the national citizen service is a universal service and the activity that it involves will take place over a very short period of a young person’s life, whereas youth services are there every single day of the year, providing a service, particularly to people from more deprived communities, out on the streets. It is a service that they have to engage with; they have to make that contribution.

When the hon. Gentleman said that councils do not have to cut the voluntary sector, he was repeating the line that we have been hearing, which does not take into account the serious level of cuts that there will be for local authorities. Inevitably, when so much of local authorities’ money is already tied up in contracts with external providers, the cost of redundancies and so on, the voluntary sector is an easy area for them to cut. The reality that we all recognise, and that the voluntary sector is very worried about, is the amount of cuts that there will be.

My hon. Friend the Member for Luton North (Kelvin Hopkins) focused on the fact that the cuts will not spare youth services. I put it to him that in fact the cuts will specifically focus more on an area such as youth services than on some of the statutory areas, such as safeguarding, which councils will be very sensitive about cutting.

I think that all of us, right across the House, would support the general ethos of a big society and the general principle behind it. The Minister is right to say that it still defies an exact description, but we all have an idea of what we think it ought to mean.

The lack of co-ordination between different organisations has implications for how we keep our children safe. Safeguarding is an area that many councils will be protecting, but safeguarding often applies after the problem has been identified. Youth workers play a central role in identifying children who are at risk and in making referrals. There are many cross-referrals from youth services, police services and adult social services to child social services. If those services are diminished, the number of referrals will reduce and many children will never be identified as having problems.

I would like the Minister to respond to the question about whether he agrees that youth services are an integral part of our education system. Does he still see a central role for youth services in our education system? Does he accept that local authority funding is the glue that holds a wide range of youth services together? We currently spend about £100 per year per young person. How much does the Minister think that we will spend in 2011-12? Does he see youth work as a professional role? Does he recognise the professional qualifications that youth workers have now and how important they are?

[Stephen McPartland (Stevenage) (Con)]

Will the hon. Gentleman accept that the majority of youths in an area have no interaction whatever with youth services, and that within areas there is often tension between a number of voluntary organisations and the local authority? It would be much better if the local authorities worked much more closely with the youths and if the local voluntary organisations provided the activities and services that those young people wanted.

[Toby Perkins]

The hon. Gentleman makes a powerful case for expanding funding for youth services. I would certainly support him in that campaign, but at this time we are trying to protect what we have. The key point is that youth services work across our communities, but they work most closely with those in the most deprived areas, those most likely to drop out of school and those most likely to get involved in crime. The central role played by youth services in this country and their success has been recognised by people across the world.

Finally, the Minister must set at rest the minds of people involved in youth work and say that he values their work. If he does value it, he should say what he will do to ensure that the excellent youth services that are provided in this country are protected.

12:19

[The Parliamentary Under-Secretary of State for Education (Tim Loughton)]

It is a pleasure to serve under your chairmanship for the first time, Mr Rosindell. This is the worst kind of debate to which to respond. I have been left with 11 minutes to take on board the excellent contributions of seven Back Benchers in this worthwhile and informed debate. It has not been quite as well attended as the debate on high-speed rail, but this matter is of great importance to everybody who is present and to people in our constituencies.

I will discard most of my speech and respond to the points that have been raised by hon. Members. At the end, I will respond to the points made by the hon. Member for Bolton West (Julie Hilling). She provided some questions to the Department at 21 minutes past midnight last night. Unfortunately, I was not at my desk and have not had time to go into them in detail. [Interruption.] I was at my desk at 21 minutes past 11 last night, but not at 21 minutes past 12. I am happy to provide the hon. Lady with more detail and to have a meeting with her to take up the more substantive issues.

I congratulate the hon. Lady on securing the debate and recognise her great experience in this area as a former youth worker, a former president of the Community and Youth Workers Union and a committed campaigner for young people. I believe that services for young people are vital. I have had the pleasure of visiting the fantastic Bolton Lads and Girls Club, which has been mentioned no fewer than three times. The Prime Minister has been there at least twice and the Prime Minister’s wife has visited it. It is in the constituency neighbouring the hon. Lady’s. Recently, I was delighted to join a group of business leaders in Blackburn who are working with the founders of that club to establish a series of similar facilities across the north-west of England, which is tremendously exciting. The commitment shown to young people by the OnSide project and by local people and businesses in Bolton is second to none, so the hon. Lady can speak from great experience.

I will set out briefly the principles of the Government’s approach to youth services before responding to specific questions. We want to promote a culture of being positive about young people in this country, which engages with the media, central and local government and people of all generations. Intergenerational trust has taken a knock in recent years, and has been exacerbated by negative stories about young people and mixed messages from the previous Government. The good projects supported by the previous Government sat uneasily with the negative messages given by the respect agenda, antisocial behaviour orders, curfew orders and the proliferation of those ghastly Mosquito devices.

We want to promote the involvement of young people in decision making at the top table on matters that affect them, not just on specific youth budget issues. That is not tokenism. As money is tight, we are freeing local authorities to decide what money should be spent on in the light of local priorities. We have ended ring-fencing to give greater autonomy to local authorities. We want to introduce an early intervention grant to help disadvantaged young people get on track for success, using proven effective practices. That is the best use of public funds. The hon. Lady rightly catalogued the cost of failure in this area.

Yesterday, I visited Nottingham, the early intervention city, to see a series of projects that are being led by the hon. Member for Nottingham North (Mr Allen), who I am delighted to say is undertaking an early intervention review for the Government. That is where the hon. Lady has her roots as a youth worker. As many hon. Members have said, early intervention is key. It is important not just in the early years, but in identifying teenagers who are at risk of indulging in dangerous behaviour, before they get on a slippery slope.

We also want to promote new partnerships and sources of finance with the private sector and voluntary bodies. We want to enable voluntary bodies to challenge the monopoly provision of youth services departments. The big society bank is a particularly interesting way in which huge amounts of money might be leveraged into innovative and exciting youth projects.

I have talked to a huge number of people who are passionate about achieving excellent services for young people and I will be talking to young people, youth services representatives, businesses and the media over the coming months to develop our thinking. I have set up a youth forum of key players in the youth sector, which will meet again in two weeks. That is an important source of information, as are the various panels of young people that I have set up to inform the Government about how best to shape policy.

Young people contribute a massive amount to their communities, but the press they get is out of keeping with that and unduly negative. Antisocial behaviour must be tackled firmly, but one of my first responsibilities is to celebrate young people’s achievements, and to promote a culture in the country and in the media of doing so. I am sure that all hon. Members present will want to contribute to that.

My hon. Friend the Member for Newton Abbot (Anne Marie Morris) made the strong point that prevention is better than waiting for the cure, hence our emphasis on early intervention through the early intervention grant. How that money is spent is important. We should not just throw money at projects. Their success should be determined not by the number of participants, but by whether they provide a life-changing experience for the young person, by the value added and by the quality of the experience. There has been too much concentration on how many people have participated, regardless of the outcomes.

My hon. Friend rightly said that the big society is not a political convenience, but something that has been going on in parts of the country beneath the radar for many years. We want to raise it on to the radar and to encourage more people to participate in it. The Opposition spokesman fell into the trap of lazy journalists. Occasionally, it is useful to let detail get in the way of a good headline. If he reads my speech at the Edith Kahn memorial lecture, he will see that the 17 pages subsequent to the initial setting out of the problems are rather good and set out what the big society is all about. I recommend that he reads it in full; it is available on the Department for Education website. It sounds as though Mike Stephens is something of a one-man big society in his own right.

The hon. Member for Leeds West (Rachel Reeves) went on about the bleak days of the 1980s. She clearly got her headline because she has now legged it elsewhere. She mentioned Armley Juniors, which has set up a youth facility in a local post office—one of the few things to come from the previous Government’s wholesale closure of the post office network.

The Government’s policy is not about cuts, but about new and smarter ways of doing things. Just yesterday, we launched the voluntary and community sector grant scheme, which encourages youth services organisations to come forward with their good ideas to get funding from the Department for Education. There is a new £110 million education endowment fund that will allow schools, charities, local authorities, academy sponsors and other groups to bid for funding to boost the attainment of disadvantaged pupils. There is about £470 million to help fund key programmes, including the training of community organisers, the creation of a new neighbourhood grant programme and so on. We should look beyond the headlines.

My hon. Friend the Member for North Swindon (Justin Tomlinson) is right that we should use existing facilities in a smarter way. We want to use children’s centres more out of hours and at weekends for youth activities. We should make more use of schools and sports facilities that are lying idle for much of the time. In my constituency, I set up a midnight football project that runs from 10 o’clock to midnight on Saturdays at a leisure centre after it has closed. That is when it is not being used and when the problems happen.

I will come on to the points made by the hon. Member for Bolton West, but because I have so little time I think that we will have to have a meeting. She asked about collecting information on youth services and auditing them. The Government collect annual figures on local authority expenditure on youth work through what have become known as section 52 returns. We are reviewing all data requirements on local authorities, but we have no plans to discontinue the collection of that information. I hope that that answer is helpful.

It is important that youth services are scrutinised by local young people. Youth mayors—there is one in Worthing—youth cabinets and UK Youth Parliament members should scrutinise the quality of youth services. They should use their voice to challenge local authorities and the Government. I spend a lot of time with them.

The hon. Lady mentioned West Sussex and I am aware of the pressures on local authority budgets. In fact, West Sussex county council has changed the way in which it does things and the cuts will not be of the level that she mentioned.

I look forward to visiting the project tomorrow with the hon. Member for Walthamstow (Stella Creasy). The national citizen service is not compensation for youth services. The funding will not come out of the Department for Education’s funding for youth services, but will be completely separate. However, it does bring lessons for new ways of doing things that can be applied to the youth sector—it is about inspiring young people. We are not discussing just a short summer camp, but an experience of a lifetime at the transition to adulthood that will engage and re-engage young people in their communities on an ongoing and lasting basis. Let us not confuse it with a glorified summer camp.

There are many more questions, but I am running out of time in which to answer them. I would be delighted to meet the hon. Member for Bolton West.

[Andrew Rosindell (in the Chair)]

Order. We must move on to the next debate.

Heritage Sites (Halesowen)

Tuesday 23rd November 2010 Westminster Hall

12:30

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

It is a pleasure to speak under your chairmanship for the first time today, Mr Rosindell.

At first glance, the debate seems specific to my constituency of Halesowen and Rowley Regis. However, potentially wider implications regarding the role of English Heritage should become clear and might well require further investigation.

People in Halesowen are proud of their cultural heritage and are concerned about one particular site of historic interest, which I want to talk about in some detail, as it illustrates some of the wider points that I want to make in the debate.

Halesowen abbey has been an intrinsic part of the heritage of Halesowen since it was founded nearly 800 years ago, in 1215. It was used as a monastery until the 16th century, when it was closed down by Henry VIII. The site was later granted to Sir John Dudley, the Duke of Northumberland, before being sold to the Lyttleton family in 1558. It later descended to Lord Cobham, who sold it to the current owner in 1993. A number of impressive tiles from the abbey are now held in the British Museum. The County Express, on Saturday 3 August 1938, reported a major archaeological find at the site. Many local people and the Halesowen Abbey Trust, which has been influential in looking after the site, are convinced that there are other archaeological deposits on the site of major historical significance.

The abbey is, under law, a scheduled ancient monument of national importance, which comes with certain implications that I will touch on later. The abbey was first classified with such significance in the early 20th century. Since 1950 it has also been a grade I listed building due to its special architectural and historic interest. The abbey is, evidently, not just another old building, but rather a demonstrably iconic piece in the Halesowen historical jigsaw.

Concern has been expressed on decisions about the site over a long period of time. Since 1993 many local people and groups have expressed concern that changes at the site have run roughshod over planning law and local opinion in Halesowen, even choosing to ignore and contradict the stipulations laid down by the Secretary of State in 1995, when giving scheduled monument consent. At that time, rather than knocking down an outbuilding, as approved by the Secretary of State, an extension was built on to an existing building.

I have no personal animus towards the current owner of the site, but several retrospective planning permissions have been applied for on multiple occasions, and the local group the Halesowen Abbey Trust argues that lasting damage has been caused, for example through repeated unauthorised tipping, to this site of national significance. As a consequence, there has been a substantial drop in the number of visitors to the site, from around 1,800 visitors in one weekend alone in 1989 to the temporary ending of public access in 2001. Furthermore, in spite of poor upkeep, when the site was opened for a three-day period earlier this year, more than 500 people visited, illustrating the importance of the site to local people and those from the surrounding area.

English Heritage itself has, on a number of occasions, observed the poor condition of the site, reporting

“broken glass, barbed wire, bricks, pieces of steel piping, fallen roof tiles and beer barrels”

among the reasons for a failure to open the site and as a general comment on its deterioration. English Heritage has also accepted that the unauthorised works that went on might have damaged buried archaeological artefacts.

As I said, I do not hold any personal animus towards the current owner, and it is up to the development control committee of the local authority to determine whether the current owner has the best intentions of Halesowen at heart when it considers his planning application. It will be for the committee to decide whether the conversion of a number of abbey outbuildings and barns into residential properties offers any improvement to the site—I understand that, last night, the most recent application for the barn conversion was accepted and passed by the development control committee.

As a result, it is absolutely imperative that English Heritage plays a proactive role in the future of the site, and that it answers some important questions about its role in the future preservation and development of this important historical site. What monitoring and level of active interest will English Heritage now exercise as a consequence of the decision? Will it oversee necessary archaeological work? Will it conduct impromptu site visits, to ensure that access is properly available? Will we be able to see a report of what was found during the development? What level of public visiting does English Heritage envisage in the future?

There are significant question marks over the role of English Heritage in the whole saga. Supposedly, its role is regularly to monitor scheduled monuments such as Halesowen abbey and to ensure that they are conserved or enhanced if conservation work is undertaken. However, I would question the ability of English Heritage properly and regularly to monitor the sites put into its care and its efforts to act upon any unauthorised material changes to historical sites such as Halesowen abbey.

At this point, Mr Rosindell, I should make you aware that Stonehenge has the same statutory protection as Halesowen abbey. Therefore, the role of English Heritage at Halesowen abbey, upon which I will expand, has potential implications for the heritage of ancient sites across the UK.

English Heritage has had unrivalled access to Halesowen abbey, through its statutory rights under law. In spite of that, it took a third party, the Halesowen Abbey Trust, to notice and report unauthorised works by the current owner. Indeed, the trust noticed that the works were of

“sufficient magnitude for them to be clearly visible from a considerable distance outside of the scheduled area, with the naked eye”.

The Halesowen Abbey Trust also helpfully informed me that English Heritage offices are based in Colmore row, Birmingham, which is just a 20-minute bus journey away from the site in Halesowen. Such material facts call into question the ability of English Heritage, in its current guise, effectively to operate and protect our national heritage, and illustrate an apparent lack of commitment and will to protect this particular site.

When the first instance of unauthorised work at the site occurred in 1996, English Heritage and the local council chose not to use the legal and practical means at their disposal to seek any meaningful move to restoring the site to its state before the unauthorised work. The local authority decision was made in a particular context, which involved an attempt to take the site forward in co-operation with the new owners. At the time, a number of assurances were made in good faith that there would be no repetition of such unauthorised works. As the Minister will understand, the Halesowen Abbey Trust was somewhat surprised in 2005 when English Heritage took the same position on further unauthorised work.

As far back as 1996, English Heritage wrote to the local press explaining that it had been unable to uphold its statutory functions because it lacked the necessary resources. If English Heritage is saying now that it has neither sufficient resources to protect our heritage from unauthorised works, nor the will to take appropriate action against those undertaking such works, there are some serious questions about its role and validity in this case. Although English Heritage survived the recent review of quangos by the Minister for the Cabinet Office and Paymaster General, there is an argument for saying that that might, in some respects, have been slightly fortuitous.

English Heritage has made a number of decisions about the abbey that could be construed, at best, as very surprising and, at worst, as bizarre and lacking any credibility, and I want to give one illustration. The current owner built an unauthorised 2.3 metre high wall on the site, citing the need for a flood barrier. When the retrospective planning application was put before English Heritage and the Environment Agency in October 2002, it was noted that the constructed wall would

“not provide any flood defence to the buildings”,

and both bodies advised that the planning application should be refused. Yet just months later, in August 2003, both organisations decided to approve a retrospective planning application on the basis that the wall would be reduced from 2.3 to 1.5 metres. That change would not of course make any material difference to the flooding issue that was originally cited. However, the creation of the wall leaves the monument and its setting damaged in perpetuity.

Halesowen abbey is not the only heritage site that is being poorly maintained in my constituency. The Ice house, which was built in the late 18th century and which is located in close proximity to Halesowen abbey, was given grade II listed building status last year. However, it has been vandalised on a number of occasions, and little has been done to protect and maintain it. Although Halesowen has a long history of heritage, there are few sites, and residents in Halesowen and the surrounding area are rightly concerned and angry about the deterioration of a number of them and want action to be taken. Constituents have written to me, and others have spoken to me directly, to express their unhappiness. I am therefore grateful that the Minister is here to address some of my points, and I have some specific questions for him.

What ability and competence does English Heritage have in terms of upholding laws and regulations relating to ancient and historical monuments such as Halesowen abbey and surrounding sites? Would a significant change to an historic site, such as the conversion of nearby outbuildings to residential use, represent a material deterioration, conservation or an enhancement to such a site? Would the Minister support a decision by English Heritage not to take action against the owner of an historic site for breaking the law on the basis that it wanted to avoid upsetting the owner? Will the Minister consider introducing an independent review of the current legislation on, and role of, regulatory bodies in respect of heritage sites of national significance?

The people of Halesowen want the proper preservation and enhancement of their sites of historical interest. They are concerned by the ongoing deterioration of such sites and by the apparent lack of will on the part of public agencies to preserve them. I look forward to hearing from my hon. Friend, and I thank him once again for being here to engage in this important debate.

12:44

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (John Penrose)]

Let me echo the comments of my hon. Friend the Member for Halesowen and Rowley Regis (James Morris) by saying that this is my first opportunity to serve under you on one of these occasions, Mr Rosindell, and I am sure that it will be a pleasure. I saw you running the previous debate with military efficiency, so I am sure that we will make good progress in this one, too.

I congratulate my hon. Friend on gaining this debate and on setting out his case so clearly. He has made it clear to everybody here that Halesowen has elected a doughty champion for local people, who is willing to fight for local issues and to take them right the way to debates in the Houses of Parliament, when necessary. Heritage is not everybody’s cup of tea, but my hon. Friend has shown that he is willing to engage with issues right across the breadth of political discourse, and I congratulate him.

I will endeavour to respond to my hon. Friend’s points one by one in order, because he asked some quite specific questions. Before I begin that detailed response, however, I should say that if my hon. Friend hears anything in my response that, on further reflection and after discussion with local constituents, he wants to come back to me on, I am of course at his disposal. He can write to me, or we can have a conversation, if there are any points to follow up after the debate.

It might be helpful if I give a small amount of background about the site. My hon. Friend rightly said that it is quite a complicated site. On frequent occasions, it has been quite messy, and all sorts of different layers of usage have built up during its long history. Most recently, it has been quite a hard-working agricultural area, so the site has been used as a farmyard and a working area for quite some time. He is therefore right that the site has been messy, but he will understand that although everyone would obviously like all parts of the country to be beautiful, gorgeous and well maintained, the important issue from the point of view of English Heritage and the Government is whether the heritage has been damaged for future generations and whether the public has access, albeit messy access. Those are the crucial points that he is driving at, and I shall try to confine my remarks to the thrust of his questions.

My hon. Friend asked some quite specific questions about the controls that English Heritage may or may not exercise with regard to the development process. As he said, the local authority, in its planning authority role, gave permission just yesterday for the proposed developments to go ahead. He is absolutely right that English Heritage will expect to maintain quite close scrutiny of the development process for a monument of this importance and seniority to make sure that it is not harmed and that the development goes as planned and does not depart from the original plans.

Where such developments take place, the requirements are very specific to each individual site, so I shall ask English Heritage to write my hon. Friend a letter detailing precisely how it plans to engage with the development process in this case. If I describe generalities, that might not necessarily do the trick for this specific site, which will have its own idiosyncrasies. However, if I ask English Heritage to write to my hon. Friend to lay out precisely how it plans to engage with this process, he will have something in black and white, and he will be able to check whether it is being done. Equally, constituents and the Halesowen Abbey Trust will know what to expect from English Heritage, so that they can make sure that the development process is being conducted sympathetically and in a controlled fashion. I am sure that my hon. Friend, his constituents and I would all agree that that will be essential over the coming weeks and months as the development process moves forward.

My hon. Friend asked whether the Government believe that a significant change to an historic site, such as the conversion of nearby outbuildings for residential use, represented a material deterioration, conservation or an enhancement to the site in question. That is a tremendously important question generally and in the specific case of this site. It is undoubtedly true that any change or development can constitute a risk to a site of heritage importance. However, it is also true that sympathetic development, when done correctly, can be the saving of an awful lot of such sites. In general, English Heritage, other heritage bodies up and down the country and the Department for Culture, Media and Sport have found that it is far better to have a sympathetic site owner or manager, and a site that is in continuous use with a sustainable use going forward. That is simply because it then has a continuing purpose and is likely to be invested in as necessary, to ensure that the new and historical structures are well maintained.

[James Morris]

I totally understand the point that my hon. Friend makes, but in this case there has been a lot of evidence over a long time of a lack of confidence on the part of the local community and, in particular, the Halesowen Abbey Trust, in the will to make the necessary changes and ensure that, where there is controlled development, it is done in a way that is suitable for the site and preserves its potential archaeological interest.

[John Penrose]

I thank my hon. Friend for that intervention. As I understand it, the plans that have just been approved were originally developed a couple of years ago, starting in 2008, in full consultation with English Heritage. It had extensive input into those plans and has indicated that it is comfortable with how the plans will treat the monument and the listed remains.

Of course, the question is not just whether the plans are sympathetically drawn up, and whether the intention is to use sensible materials that will frame the heritage parts of the site in an impressive and academically acceptable way, but whether those plans will genuinely be delivered, as the development process goes through. I take my hon. Friend’s point on that.

I shall come on to answer some of his questions about developments to the site that were made without planning permission and that needed retrospective planning permission. I hope that my answer to my hon. Friend’s question about controls over the development process and how English Heritage is planning to engage with those—and the fact that I am going to ask English Heritage to write to him with a list of how it is going to do that—will help to address both his concerns and those of local people. In the unlikely event that English Heritage does not live up to what it plans to do on that site during the development process, I am sure that he and the trust will be on its case and will contact me as necessary to ensure that there is no slippage or backsliding.

To pick up on the final point I was making in answer to the last question, it is better to have a living building that is being used in a sustainable fashion, provided that that is done sympathetically to the heritage asset concerned, than something that is unused and not cared for, that does not attract investment, and that is therefore unlikely to be maintained. That is something that we find across the country.

Last week I was lucky enough to visit some of the new developments taking place by King’s Cross station in north London, where a number of listed buildings are being incorporated into some stunning modern architecture. There is a wonderful juxtaposition of old and new; it is being done very carefully with a great deal of respect for the heritage assets. The future of those heritage assets will be hugely improved as a result of being brought back into use in a modern way. I hope that is a clear answer to my hon. Friend’s original question.

My hon. Friend asked whether the Government would support a decision by English Heritage not to prosecute the owner of an historic site for breaking the law, on the basis that it wanted to avoid upsetting the owner. He mentioned the case of the flood wall, but I understand that there have been other, smaller cases, too. I understand that English Heritage did consider prosecution and took the case to the Crown Prosecution Service, which indicated it would not be prepared to take forward the prosecution of Mr Tudor for the unauthorised works. That is not to say that it is never right to prosecute. In fact, English Heritage has prosecuted in the past, though not frequently because the cost is very high and, technically, achieving a positive result in court in these cases is hard. However, it has happened, and successfully. I do not think that there is any theoretical or practical obstacle to doing so, but it happens rarely.

Given that the CPS said it was reluctant to take the case forward because it felt that there was a low probability of success, I think English Heritage’s approach of saying that it needed to work constructively with the owner was probably the best opportunity in that specific option. That does not mean that it should not come down hard on examples of bad behaviour. On occasions, it is necessary, as the French said of the English Navy, to hang an admiral pour encourager les autres. It is important to make it clear that there is a line in the sand beyond which people should not go. The principle is clear and is as my hon. Friend describes.

My hon. Friend’s final question was whether we should introduce an independent review to check on the ability of English Heritage to uphold laws and regulations. I think that English Heritage is held in pretty high regard across the wider heritage community, if I can put it that way, although obviously no organisation is perfect. A lot of people, including within English Heritage, would say that they wanted it to improve in a number of ways. However, English Heritage, among others, also agrees that in the wake of the comprehensive spending review, like any other part of the public sector, it has to do more with less. At the moment it is busy re-organising in order to become more efficient and is cutting its cloth to fit, in the same way that everybody else has to. It is not pleasant or fun, but it has to make do, and is doing so professionally.

It is clear that, once the dust has settled, English Heritage will have to look at some of its current processes—for example, the listings process—to work out how to perform those statutory tasks in a way that is more efficient, faster and cheaper, while at the same time ensuring that it provides the important protection of heritage assets that my hon. Friend and I have been debating.

[James Morris]

Again, I understand the point that my hon. Friend makes. Will he emphasise to English Heritage the importance of sites in areas such as Halesowen? If one mentions Halesowen heritage outside of Halesowen, people do not realise the rich tapestry of culture and heritage that there is there and in other areas of the black country. English Heritage should prioritise and give thought to the importance of monuments in places that are not typically thought of as traditional areas of English heritage.

[John Penrose]

I am happy to do so. My hon. Friend has touched on an important point, because heritage assets are wrongly viewed as a crumbling piece of an awkward obstacle to development. In most communities, they are rightly seen as huge assets from which the community can benefit. They make each community distinct and different, and keep us in touch with our local past. In many cases they are great sources of tourism income, too. I agree completely that there are a lot of opportunities there.

To conclude, English Heritage knows that it has to react to the recent comprehensive spending review by becoming more efficient, in the same way as many other bodies in the public sector. It is starting that remodelling, and I expect it to go a great deal further over the next months. I hope it will do so in a way that will please my hon. Friend. In the meantime, I will ask it to write to him with the details of how it proposes to protect this site.

[Andrew Rosindell (in the Chair)]

Order. The sitting is suspended until 1 o’clock.

12:58

Sitting suspended.

Education Policies (Warrington North)

Tuesday 23rd November 2010 Westminster Hall

13:00

[Helen Jones (Warrington North) (Lab)]

It is a great pleasure, Mr Rosindell, to serve under your chairmanship. It is a pleasure, also, to see the Minister in his place; he and I used to serve on the Select Committee for Education and I know that he has a genuine interest in education. I hope that he will take seriously what I am about to say.

I welcome the opportunity to discuss the impact that the Government’s education policies are having, and will continue to have, on my constituency. In truth, however, the Government’s decisions and their cuts to the education budget will seriously hamper the life chances of many young people in my constituency, especially the poorest.

The borough of Warrington does not rank high in the indices of deprivation. It contains some affluent areas, but it also contains areas of multiple deprivation. Many of the poorest wards in the borough are in my constituency—indeed, they are among the most deprived in Cheshire—and it is those areas that are now being hit.

The cuts began with the Government’s decision to cancel the Building Schools for the Future project. As a result, two schools in my constituency—William Beamont high school and Lysander high school—saw their hopes of new buildings disappear rapidly over the horizon.

We opened one new school in my constituency under the BSF project. It was Culcheth high school, and I went to the opening in the autumn. It is a fantastic building, and it will enhance the opportunity for teaching and learning in the area, as well as providing more facilities for the community. It is so good that Warrington’s cabinet executive member for education, Councillor Sheila Woodyatt, called it the best thing to happen to Culcheth in 100 years—and she is a Conservative. It is sad that some of the more deprived areas in my constituency will not have the same opportunities.

The BSF project was cancelled without properly assessing the need to rebuild in certain areas. Indeed, I asked the Department what assessment it had made of the need for rebuilding at a number of schools in my constituency, but it took a long time to answer. I asked the question in July; I received the answer on 26 October. The answer made it clear that no real assessment of need had been made before cancellation, yet BSF would have given us £80 million to rebuild Warrington’s schools. That sum would have enabled the rebuilding of William Beamont high school and modernised Lysander high school. Those schools serve some of the most deprived areas in the borough. They serve wards where many have low incomes, and where an increasing number of people are unemployed. Above all, they serve areas where many have no qualifications, yet those schools have done a fantastic job in increasing aspiration and improving educational outcomes.

William Beamont is a specialist sports college with a second specialism in IT. Lysander high school is another specialist school. William Beamont has increased the number of children getting five good GCSEs; it has cut its exclusion rate, and it has increased attendance. Lysander school has exceeded its targets for improving its GCSE results, and it has also exceeded the council’s targets. They did all those things in old and unsuitable buildings. I ask the Minister to imagine what could be done if they had decent, up-to-date facilities.

Facilities matter. Conservative members of Warrington borough council know that they matter. When the BSF project was announced, Councillor Woodyatt told the Warrington Guardian that she welcomed the difference that it would make not only to teachers and pupils but to the community. Her allies, the Liberal Democrats—Warrington, too, has a Conservative-Liberal coalition—trumpeted about the BSF money in their newsletter, saying that

“substantial sums of money have been secured to modernise our schools”.

They did not say then that it was not necessary, and they did not foresee any problems. They were glad of it. Now, however, those schools will have to bid again for money from a much-reduced capital spending pot.

The Government’s criteria in the Treasury’s Green Book for allocating that money are clear; they are population growth and modernisation. Deprivation is not mentioned anywhere. We know that population growth will lead to a bulge in primary school pupil numbers, which will necessitate the spending of more money. The Government also want to spend money on free schools and academies, thus depleting the pot even more. The Warrington schools will be bidding for money from a reduced pot, but experience shows that many of those that have already been given the go-ahead are receiving only 40% of what they expected. That is a huge slap in the face for the poorer communities in Warrington.

[David Mowat (Warrington South) (Con)]

Will the hon. Lady give way?

[Helen Jones]

I am sorry, but I have limited time and the hon. Gentleman did not seek my permission to participate in the debate.

The BSF cuts are not the only problem faced by Warrington schools. As I said, those two schools are specialist schools, yet specialist funding has been stopped. William Beamont is part of the school sports partnership, which hugely increased the number of young people taking part in sport in Warrington. That funding, too, is to be axed.

As for the overall settlement, we foresee further problems. The Government are keen to tell us that they are to increase spending on schools by 0.1% each year. However, that takes no account of the fact that the pupil premium, which we were told would be extra, is included in that settlement. It is not extra money. It also fails to recognise that the growth in pupil numbers will mean a reduction in spending per pupil over the next four years.

Those schools will be left in unsuitable buildings, with a decreasing amount of money per pupil. They will also have to suffer the problems caused by council cuts. Services that they used to receive from local councils are gradually being reduced, and they will have to purchase them elsewhere. I give one example; the council is already considering withdrawing IT support for schools. That would give rise to further problems.

I turn to the Government’s decision on the education maintenance allowance. Almost 2,000 young people in Warrington receive the EMA. That money has made a real difference to participation rates in education; £10, £20 or £30 may not seem much to some, but it allows the poorer families in my constituency to pay bus fares to college, gives young people money to buy lunch and is has helped some to buy stationery and other things that they need for their courses. Those are all things that the poorer families find difficult to purchase.

Reducing that allowance will make a real difference to participation rates in education, because the money has worked during the past few years; it has increased the number of students staying on and the number of students in my constituency who go into higher education. The number of students in my constituency going into higher education rose by more than half in the 10 years from 1999 to 2009.

It seems that we will get in return a fund that will be used by head teachers and principals. I have tried asking the Government what the criteria will be for the allocation of that money and I cannot find out. In the last Education questions, I asked whether head teachers had been consulted about this change and the Minister for Further Education, Skills and Lifelong Learning was terribly courteous, but he just did not answer my question. He also did not tell me whether there would be an appeals process. So we do not know how that money will be allocated and it seems that we are moving from a system in which people receive money according to their income—as of right—to a type of “Lady Bountiful” system, in which money will be dished out by head teachers. Actually, I doubt that many head teachers want to do that.

What we do know is that the Government will be saving more than £500 million on the EMA, but they will be allocating only £150 million to the new scheme. That means a huge reduction in the cash available to the poorest students. Although the Government tell us that they want to increase participation and staying-on rates, they will the ends without willing the means.

At Warrington Collegiate in my constituency, 61% of students aged between 16 and 18 are in receipt of EMA and a third of the intake is from areas of multiple deprivation. Warrington Collegiate strongly fears that removing EMA will mean fewer students coming through the college.

Warrington Collegiate also faces another cut in its budget. It is clear from the comprehensive spending review that the unit costs for 16 to 19-year-olds will be reduced. Warrington Collegiate does not yet know how that reduction will feed through into its budget. It expects a cut of at least 3%. May I repeat that those 16 to 19-year-olds are the very people whom the Government say they want to keep in education?

To add insult to injury, the university of Chester, which has a large campus in Warrington, has seen 88.5% of its teaching funding go. That is all the teaching funding for group C and group D courses, and probably half the funding for group B courses. The university estimates that to fill that gap it will have to charge fees of £7,000. The university is vital to Warrington and its economic development and to the development of the Omega site, which is a huge employment creation site in my constituency. The university of Chester has done tremendous work with schools to increase aspirations and to get more young people from families where no one has been to university before to enter higher education.

The results of this decision to cut funding could be very serious indeed for the courses that are provided at the Warrington campus such as courses in creative industries, business, media and sport. It is fashionable to sniff at those courses, but the Minister knows as well as I do that most of the graduates from those courses actually get jobs. It will be a very serious matter for young people in my constituency if they can no longer gain access to that facility.

In effect, what we are seeing is a triple whammy. I have no time today to go into the axing of the programmes for rebuilding special schools in my constituency, or what will happen with the reduction in school support staff, or the further reductions in council services. However, we have seen the building programme cut, we are seeing funding cut and we are seeing support for students cut. The impact of those cuts on the poorest wards and the poorest families in my constituency cannot be overestimated. The Government tell us that we are all “in this together”, but these are the very people who do not have the resources to replace that funding.

I say to the Minister that that is wrong on two counts. First, it is wrong economically. We all know that in the future unskilled jobs will start to disappear, and that the future of this country is in producing a skilled and educated population. We cannot underbid other countries in wages all the time; we have to gain on skills. Without education provision, however, our skills will not improve.

Secondly, it is wrong morally. “Morally” is not a word that we often use in Parliament, but I believe that these cuts are wrong morally. It is morally wrong to penalise our poorest communities and our poorest families in this way.

I know that the Minister is a decent man and that he has a real concern for underprivileged students in education. I hope that he will listen to the case that I—along with many others in their own communities—am making, because if we do not get changes in this policy what will happen is very simple. Fewer of our young people will stay on in education; fewer will go into higher education, and this country will suffer for many years ahead as a result. Young people are our most precious resource. We ought to be caring for and husbanding that resource, rather than chopping it off.

There used to be a slogan among the teaching unions—I think that it was used at the time of the last Tory Government—that, “If you think education’s expensive, try ignorance”. I think that we are in danger of trying ignorance. The people in my constituency whom I have talked about today will suffer hugely as a result, and I hope that the Minister will give the facts that I have outlined serious consideration.

13:16

[The Minister of State, Department for Education (Mr Nick Gibb)]

It is a pleasure to serve under your chairmanship, Mr Rosindell.

I congratulate the hon. Member for Warrington North (Helen Jones) on securing the debate. I know that she has been a tremendous champion of education, not only in Warrington but nationally, having served for many years on the Select Committee on Education. As she kindly said, for some of those years we served on the Committee together. I always enjoyed working with her on the various reports that the Committee produced and I have listened very carefully to her comments today.

In Warrington, the attainment of children and young people across each key stage is consistently above, or well above, the national average. For example, the proportion of 16-year-olds in Warrington achieving five or more GCSEs at grades A* to C was 10% higher than the national level or the level in similar local authority areas.

[Helen Jones]

I am sorry to interrupt the Minister before he gets into his stride—he is very generous in giving way. However, does he accept that those figures mask huge disparities within the borough and that, although schools in deprived areas have taken tremendous strides, there is still a disparity between the more affluent areas and the poorer areas?

[Mr Gibb]

Yes—I was coming on to that point. I was not citing those figures as a reason not to take action; I merely wanted to point out what has been achieved in Warrington already.

In 2009, the proportion of 11-year-olds in Warrington achieving expected levels of attainment in both English and maths was 77%, compared to 72% in all schools in England. However, as the hon. Lady intimated, within Warrington, as in many other areas of the country, performance varies significantly from school to school. There are excellent schools in Warrington, as there are many excellent schools nationally, but it is also the case that too many schools are still struggling or coasting. The results at national level and the large gaps in performance between different groups of pupils are why we believe urgent reform is needed.

It is the Government’s ambition to raise academic standards in all this country’s schools to ensure a high-quality education for all children, particularly those from poorer backgrounds. The Government’s key objective is to close that attainment gap between those from the wealthiest backgrounds and those from the poorest backgrounds. We therefore share the hon. Lady’s aim that she set out in her remarks. Education is key to social mobility—indeed, in my opinion it is the only route to social mobility. That is why we announced yesterday our focus on ensuring that every child has mastered the basic skill of decoding and reading words by the end of the second year of primary school, through a light-touch screening check.

That is why we also sought to put onto the statute book the Academies Act 2010, to enable us to expand the academies programme, with 144 new academies having opened since the start of the academic year. That Act for the first time enables primary and special schools to become academies and to enjoy the greater freedoms that academy status brings.

[David Mowat]

I am interested in what the Minister is saying about social mobility. Does he recognise that in the past decade, we as a nation have slipped from fourth to 14th in science teaching and from eighth to 24th in mathematics teaching? The impact of that will have been felt in Warrington. Those statistics are a damning indictment of our ability to be socially mobile. Science, technology, engineering and maths, more than anything else, will provide jobs and skills for the future.

[Mr Gibb]

My hon. Friend makes a good point. I know that he has been campaigning in Warrington for his schools, and I congratulate him on his work, as I congratulate the hon. Lady on hers. On his point, that is why we are considering the national curriculum with the intention of restoring it to its intended purpose of providing a minimum core entitlement built around subject discipline. It is also why we are enabling parents, teachers and other education providers to set up free schools, so parents have a real choice for their children.

Good school buildings, though, are part of that package. School buildings need continuing investment, but it is vital that future spending represents the best possible value for money. Building Schools for the Future was an important programme of the previous Administration, which aimed to rebuild or refurbish every one of our 3,500 secondary schools by 2023. That was a bold and impressive ambition, but unfortunately the programme has failed spectacularly to live up to the hype. During five years of the programme, just 263 schools have benefited. The number of schools completely rebuilt under the programme is even smaller: just 136. That is a very small number for such a grand ambition.

Where BSF has delivered, it has been at exorbitant cost. As has been pointed out, rebuilding a school under BSF has turned out to be three times more expensive than constructing a commercial building and twice as expensive as building a school in Ireland, while the BSF budget has grown from £45 billion to £55 billion and the time scale has increased from 10 years to a projected 18. Some of the reasons for the additional cost and delay are understandable, but the fact remains that BSF had become a vast and confusing morass of process and cost by the time it was ended, and it represented extremely poor value for money. Some £60 million of the £250 million spent on BSF was frittered away on consultants and advisory costs before a brick had even been laid.

[David Mowat]

The Minister might be aware that the average cost of bidding for a BSF project was about £1 million, which is approximately the cost of a new primary school. Does that not say all that there is to be said about the waste implicit in the programme? Everybody wants more and better schools. Two schools in my constituency, Sir Thomas Boteler and Penketh high schools, desperately need refurbishment, but that must be done cost-effectively, not while frittering away money as BSF did.

[Mr Gibb]

That is where we want the money to go: not on consultants, but on refurbishment and bricks.

Nobody comes into politics to cut funding, least of all a new Government who have inherited a school system that we are worried lets down too many of its pupils. However, we are faced with a £156 billion budget deficit, and it is our responsibility—difficult and painful though it might be—to tackle that problem. Although we have announced the end of the BSF programme, that does not mean the end of capital spending on schools.

The hon. Lady will be aware that my hon. Friend the Member for Warrington South (David Mowat) has organised a meeting with my noble Friend Lord Hill at the Department for Education to make the case for Warrington schools. Also present will be the leader of the council and the head teachers of several schools that have been affected. I know that she is to attend that meeting as well, to represent the schools in her constituency.

In determining which projects would go ahead and which would cease, the Government developed a single set of criteria and applied it nationally. The three types of school project allowed to continue were: those projects that were part of their area’s initial BSF schemes and had reached financial close; the so-called sample projects that were part of their area’s initial BSF schemes, where financial close had not been reached but a preferred bidder had been appointed at close of dialogue; and some planned school projects in addition to a local authority’s initial scheme.

As the hon. Lady will know, Warrington formally entered the BSF programme in February 2010. As Warrington did not have any sample schemes or an outline business case approved before 1 January 2010, the Warrington scheme was stopped. I recognise that those areas close to the cut-off point for BSF, including the hon. Lady’s constituency, might find that extremely frustrating and upsetting, and I am acutely aware that stopping the BSF programmes for schools in her constituency has, understandably, caused dismay among students, teachers and parents. However, it is important to remember that the end of BSF does not mean the end of capital spending on schools. Money will still be spent on school buildings, but it is imperative, as my hon. Friend pointed out, that that money is spent on school infrastructure and buildings, not on the process, especially if we are to meet increasing demand for school places over the coming years as the birth rate rises.

To correct the hon. Lady, cash per pupil is per-pupil cash. Funding for schools will be maintained at the same amount of cash per pupil, so schools’ expanding pupil population will not affect it. On top of that, the pupil premium will come from outside the schools budget, meaning that over four years, spending on schools will rise in real terms.

[Helen Jones]

Will the Minister confirm that the pupil premium is included in the 0.1% increase and is not extra money? That is what the figures say that I have seen.

[Mr Gibb]

Yes. The £2.5 billion is what enables us to deliver real-terms increases across the schools budget.

We appointed a review to consider how capital spending will be allocated in future. The hon. Lady discussed the Green Book allocation process; we will be considering the new basis on which scarce resources will be allocated. We appointed Sebastian James to conduct a root-and-branch review of all capital investment in schools, sixth-form colleges and other services for which the Department is responsible. The review is due to report back at the end of December. It will consider how best to meet parental demand, make design and procurement cost-effective and efficient, and overhaul the allocation and targeting of capital. That will give us the means to ensure that future decisions on capital spending are based on actual need and that all schools provide an environment that supports high-quality education.

Given the fact that the review is still in progress, I am sure that the hon. Lady and my hon. Friend will understand that I cannot make any specific commitments today on how much money will be allocated or exactly when. However, I assure them that the Department will continue to make capital allocations on the basis of need, in particular on dilapidation and deprivation, and that the end of BSF does not therefore mean the end of school building.

[David Mowat]

Does the Minister agree that this week’s announcement by Councillor Woodyatt, who has been mentioned extensively in this debate, of a new primary school in Warrington North, Oakwood avenue, is an example of the fact that capital spending is continuing? Not everything has been stopped by the hiatus in BSF.

[Mr Gibb]

Again, my hon. Friend makes a worthwhile intervention, for which I am grateful. Capital spending is being conducted, and several hundred schools are continuing work under the BSF programme.

The hon. Lady spoke about the education maintenance allowance. I acknowledge that evidence from the pilots shows that the EMA was successful, in its early days, in encouraging young people to stay in education. The decision to end the scheme will be disappointing to many young people, but I do not believe that anyone will have to drop out of education as a consequence. Already, 96% of 16-year-olds and 94% of 17-year-olds participate in education, employment or training. Attitudes to staying in education post-16 have changed. We are committed to going further still and attaining full participation by all young people up to the age of 18 by 2015.

However, a payment designed as an incentive to stay on is no longer the right way to ensure that those facing real financial barriers to continuing their education get the support that they need. We must reconsider the most effective way to support the most vulnerable young people to stay on in education. There is evidence that the EMA has helped a small number of young people stay on, but the same evidence suggests that the scheme has a significant dead-weight cost. Pilot evidence throughout the scheme and more recent research from the National Foundation for Educational Research found that almost 90% of young people receiving the EMA believe that they still would have participated in their courses if they had not received it.

The EMA is a hugely expensive programme, costing more than £560 million a year, £36 million of which is administration. Of course we do not want any young person to drop out of education due to financial difficulty, but we cannot justify continuing to fund a programme so expensive and poorly targeted. Currently, a discretionary learner support fund gives £25 million a year to schools, colleges and training providers to enable payments to be made to young people to help them meet the cost of their education. Colleges value the fund and are happy to play Lady Bountiful, as the hon. Lady said, by handing out the money to the young people whom they consider to be most in need. They can also respond to changes in students’ household income during the year. After the EMA is abolished, the fund will be increased significantly over the spending review period. The detail of future arrangements is still being considered.

Dartford Crossing (Congestion)

Tuesday 23rd November 2010 Westminster Hall

13:30

[Gareth Johnson (Dartford) (Con)]

I am pleased to open the debate and to have secured a discussion on the biggest local issue facing Dartford. As the time allowed for the debate is short, I will try to cover as many points as I can and, with your leave, Mr Rosindell, I will take interventions, about which I have spoken to the Minister. Of course, I will also leave time for the Minister to respond.

Hon. Members will know that the Dartford crossing is probably the most congested part of the country’s motorway network. Tailbacks regularly stretch for miles on both the Kent and Essex sides of the crossing and cause delay and misery for motorists. The crossing is a scar on the face of Dartford. When a problem exists by the crossing, local roads in Dartford also become congested with motorists trying to find alternative routes. The crossing should open up Dartford and encourage businesses to base themselves in the area; instead, it holds it back and strangles commerce. A continuation of the status quo is not an option for the Dartford crossing.

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

I congratulate my hon. Friend not only on securing the debate, but on the passionate way he has fought for the issue with different agencies over the years. I applaud his commitment to that. He mentioned Dartford being affected by the crossing, but does he also agree that it affects constituencies around Dartford in terms of businesses, people travelling and holiday makers? It is absolutely vital for the whole of the south-east that we get this right.

[Gareth Johnson]

I am grateful to my hon. Friend for his comments. I totally agree with him. The issue affects the whole of the Thames Gateway area—not least Gillingham and Rainham, which are particularly pertinent to him. It is essential that we tackle congestion on the Dartford crossing in order to open up the whole area and allow business to flourish across the Thames Gateway network.

I am pleased that the Minister shares my view that a continuation of the status quo is not an option for the Dartford crossing. Although we may disagree on some issues regarding the crossing, I pay tribute to his work on tackling the problem. His positive, can-do attitude to dealing with the problem has led to more progress on the issue during the six months he has been the relevant Minister than in the whole of the last 13 years. His determination to remove the toll booths, which ultimately cause the congestion, is to be welcomed. I have noticed that each time a difficulty with removing the toll booths has been presented to him, he has not simply thrown the papers away and given up on the notion of removing the booths; instead, he has sought to find a solution that tackles that problem.

I want to make it clear that the tolls on the Dartford crossing should be scrapped in their entirety. That is what was promised to the residents of Dartford by the previous Government. We were told that the tolls would be scrapped when the bridge had been paid for. That happened in 2003, yet the tolls remain. Today, I call on the Minister to scrap the tolls completely.

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

I congratulate my hon. Friend on securing this important debate. He and the Minister will be well aware that I am also in favour of scrapping the tolls on the crossing. There has been a betrayal of what we were initially told about the bridge being free when it has paid for itself. However, I appreciate that we are currently in a tough financial and economic situation. Congestion is a real issue in my borough of Bexley and for my constituents of Bexleyheath and Crayford, as well for businesses and residents of other constituencies. I therefore endorse what my hon. Friend says. Does he agree that we should pursue more radical solutions with the Minister, such as removing the toll booths, and that we should also consider the more effective use of free-flow technology by promoting and developing the DART-Tag scheme further?

[Gareth Johnson]

I totally agree with my hon. Friend’s comments. I am fully aware of the problems that Bexleyheath and Crayford suffer as a result of the congestion at the Dartford crossing. The No. 1 challenge is to remove the booths themselves, because they are the cause of congestion on the crossing. The tailbacks emanate from the booths and, without them, there would be a dramatic improvement in—and perhaps even the eradication of—the congestion on the Dartford crossing that causes problems in Bexleyheath, Crayford and, of course, Dartford, Thurrock and the surrounding areas.

[Jackie Doyle-Price (Thurrock) (Con)]

My understanding is that by introducing free-flow technology, of course, there would be an increase in capacity on the crossing. However, that would give only a one-off increase of approximately 20%. In recent years, the volume of traffic using the crossing has increased exponentially. Does my hon. Friend agree that ultimately we need an additional crossing somewhere else on the Thames to enable traffic to be diverted from the M25 on to another crossing?

[Gareth Johnson]

I am grateful for that intervention. In principle, I accept that there should be a further crossing over the Thames. The big issue is, of course, where that crossing should be. It is a classic case of nimbyism. I do not think anyone here would hold their hand up and ask for a further crossing to be placed in their constituency. Doing so would add further congestion and difficulties to the particular areas that we represent. Finding a location for an extra crossing over the Thames area is problematic and will be the biggest challenge of all in trying to ensure that we have greater capacity for vehicles to get across the Thames.

We have recently had an announcement that the price of the tolls should be increased. I cannot accept that extra levy on the motorist, who is feeling fairly beleaguered in this particular part of the country. At the general election, I said that unlike my predecessor I would never vote to keep the tolls on the Dartford crossing and that I would only vote to scrap them. I meant that. The Transport Act 2000 was supported by Labour MPs and opposed by Conservative MPs. That piece of legislation allowed the tolls to continue and, ironically, changed them from a toll to a form of congestion charge. I say “ironically” because the tolls actually cause the congestion on the crossing. In this case, the congestion charge itself is responsible for causing the congestion.

I welcome the Department for Transport’s confirmation that the previous Government’s announcement of the privatisation of the crossing will not take place. We have overturned the previous Labour Government’s policy of selling off the Dartford crossing. If the Labour party had won the last general election, the crossing would have been sold to a private company and we would have lost control over the levying of charges on the motorist. Perhaps that is why there are not too many Labour MPs in this Chamber championing this cause. The local resident discount scheme has financially helped some local residents who are frequent users of the crossing, but the initial outlay for the DART-Tag has put off local residents who use the crossing only occasionally.

[Tracey Crouch (Chatham and Aylesford) (Con)]

My hon. Friend knows that I share his long-term desire for the removal of tolls on the Dartford crossing. However, he will also be aware of the enormous sense of unfairness felt by many people in north Kent, who do not qualify for the resident discount scheme. Does he not agree that if the tolls are to stay in the foreseeable future, the local discount scheme should be extended to neighbouring authorities, such as Medway?

[Gareth Johnson]

My hon. Friend has championed that cause for the residents of Chatham and Aylesford for a considerable time, and I pay tribute to the work that she put into the issue. I am pleased that she shares my view that, ultimately, the solution to the problem is the removal of the tolls.

I hope that there is some scope to expand the local persons discount scheme. I am pleased to note that, although the scheme has some limitations, it is likely to apply to the proposed increases in the tolls. The introduction of the scheme coincided with an increase in the toll from £1 to £1.50, which left many more motorists needing change. The highways authority has informed me that it has had to remove some of the automated toll booths to allow for that, which of course has increased the length of the queues and led to the dreadful congestion we see today. It is no advantage to a local person who receives a discount if they have to wait in a queue for three hours to get it.

Removing the booths and replacing them with modern technology to levy a charge on motorists would remove the two worst aspects of the crossing, the congestion and the pollution, but it would not remove the costs. Local businesses have told me that the congestion is the worst problem for them. They can budget for the cost of using the crossing, but they cannot budget for the unpredictable nature of the congestion.

[Jackie Doyle-Price]

I endorse that point on behalf of businesses in my constituency. The cost of congestion is really adding to the cost of doing business, and at a time when we want to see expansion in south Essex, that is unacceptable. We really need to grip that problem.

[Gareth Johnson]

Members will be aware that the area of Thurrock that is closest to the crossing is an industrial area, and the same is true in some parts of Dartford. We have the Crossways boulevard, which is as area of industrial strength, but it could be so much better were it not for the congestion. For the reasons to which my hon. Friend alluded and the potential benefit for businesses in Dartford, I believe that local businesses will welcome the Minister’s proposals and the removal of the booths themselves, which should lead ultimately to the removal of the congestion.

The congestion at the Dartford crossing has united Dartford against the current toll booths system. Local people despise the impact that it has had on the area, as we have had nothing but misery, congestion and pollution as a result. The local media have played their part in lobbying for the congestion to be tackled. The Dartford Times has had a “Stop the Toll” campaign, the Dartford Messenger has had the “Axe the Tax” campaign, and the News Shopper has also campaigned hard on the matter. They are all correct to do so, because I believe that the only complete solution to the enormous problem is for the tolls to be scrapped entirely.

The Minister’s proposals are a vast improvement on the current situation. They will ensure that there need be no more congestion at the Dartford crossing than anywhere else on the M25. The previous Government did absolutely nothing about the congestion at the Dartford crossing. We had 13 years of inaction. They introduced a local discount scheme, but although it lowered costs, it increased congestion. They announced a plan to sell off the whole crossing. It is yet another mess that we have inherited and that we are trying to resolve. It is a problem that has been ignored for the past 13 years, a problem with which I am pleased that we are now beginning to get to grips.

13:43

[The Parliamentary Under-Secretary of State for Transport (Mike Penning)]

It is a pleasure and an honour to serve under your chairmanship for the first time, Mr Rosindell. What an ironic coincidence it is that you are chairing a debate on a matter that is so important in your constituency, a part of the world that I know well. I know that the correct protocol for Ministers, quite rightly, is to address the Chamber when speaking on behalf of the Government, but it will be quite difficult to do so as the Opposition Benches are completely empty. I apologise if I have to turn my back to Members who are present for this important debate. I congratulate my hon. Friend the Member for Dartford (Gareth Johnson) on being so persistent about the matter, and on securing the debate. It is a shame that it is only a half-hour debate, as I know that colleagues on this side of the Chamber would have liked to spend more time debating the issues that are so relevant to their constituents.

In the short time I have been a Minister, I have encountered few issues that raise as much local and national concern as has the Thames crossing between Thurrock and Dartford. As a former fireman, I have on too many occasions attended incidents on the Essex side of the crossing where road traffic accidents—road traffic collisions, or whatever modern term we use today—have taken place because people were so frustrated that they took risks. I would ask the drivers and passengers what the cause of the accident was, and all too often they replied that it was anger, frustration and concern that they were being delayed in going about their business or doing their personal duties. Whether they were going north or south, they were usually delayed for one reason: the toll booths on the Kent side of the river.

I am determined, with the Secretary of State’s permission, to do everything we can to alleviate that congestion and pollution. We have not had enough time to debate the pollution, but on both sides of the river it is blighting the lives of many constituents. Visitors to the country are also affected, as 20% of all heavy goods vehicles travelling north through both bores are foreign. The crossing is the lifeblood of the country’s economy. It is invariably how traffic gets from the south to the north.

We have looked carefully at the situation in these difficult times. I fully respect the position of hon. Members who have campaigned over the years to have the previous Government’s promise to remove the tolls honoured. However, we are in really difficult economic times, and the £70 million a year gross revenue that the tolls take in is an important part of the money available for the infrastructure and transport network for the whole country. I know that the matter is really personal for those in that part of the world, but it is a piece of national infrastructure, and the Transport Act 2000 specifically states that the net value of the tolls should be used in transport infrastructure. It is one of the few hypothecated sources of revenue that we have.

I will outline quickly what we have done in the short time we have been able to address a situation that has been going on for years. The first thing we asked was whether it is right in the 21st century to delay people, sometimes for hours, when we expect them to pay a fee to use a crossing. When the tolls are causing the problem and the resulting tailbacks become unacceptably long, we have been releasing the toll charge. In other words, we have lifted the barriers at those times and people are not being charged. There is currently no guidance on how long the tailbacks have to be before we do that, so we hope to have a protocol in place in the new year so that people will know exactly what that distance will be.

That is just an interim measure, because we all know that the way to address the congestion and pollution is to have free flow charging. For the foreseeable future we will have to impose a toll, so how do we minimise the effect on the user while recouping the income? Fantastically, the congestion charge uses vehicle number plate recognition, and it works well. We intend to use that technology to remove the barriers at the north and south of the crossing.

The toll booths are what is really holding up the traffic. As we heard earlier in the debate, the delays are actually being caused by people trying to find change, not realising that they have to pay, or losing their DART-Tag. If we remove the toll booths altogether so that people can drive across the bridge or through the bores, that delay will be removed. Although we are looking at whether we can enhance the number of vehicles that can use the bridge, and 20% seems to be the figure we are looking at, particularly for the bridge—I will come back to the bores in a moment—it is surely fair to the user, whether local or national, that there is free flow.

A considerable amount of construction work is required to realign the road so that there is a straight run, particularly when vehicles come off the bridge. Otherwise, at junction 1A, as those of us who are familiar with that part of the world know, they would be dog-legging to the right at that optimal speed of 50 mph, which will be the speed at which they will be allowed to come down. There will be a great deal of work and cost involved in doing that, and a great deal of technology needs to be put in place as well. Some of that technology is already there. The average-speed cameras will be commissioned soon, and we intend to start commissioning beyond the bridge and back towards junction 2 as the public get used to the 50 mph speed that we want them to use to come across the bridge safely and go towards the bores.

The money will come specifically from the increase in the toll. I would love to have informed the House today that we do not need the 50p from 2011 and 2012, because, obviously, I do not like taxing the British public. However, we need that money, which will be hypothecated for the work we need to do and to pay not only for the non-charging, which we will implement as a short-term measure, but for the free-flow tolling and then—this was touched on by colleagues—to look at a business plan for a new lower Thames crossing.

We all know that the capacity and growth that this country needs will mean that we will struggle, particularly going north. Why will there be such a problem going north? It is because the two bores are not the same size. The inside bore is smaller, so we will struggle to keep a free flow going while oversize vehicles move into the outside lane to go through the larger bore. That is a big technical issue. We still intend to remove the barriers, but we will have to use the matrix signs to slow the traffic going north or halt it so that those vehicles can move across. That will always be a problem.

Secondly, where there is congestion—for example, on the M25 in the Essex section—we cannot legally allow traffic to sit in the tunnel for any length of time. It is not safe, and we have no intention of doing that. Therefore, as we look forward to developing different plans, we have to start to ask whether we will invest some of the money that we are recouping from the region—the net income at the moment is £45 million—in a business plan. As we develop the concept, we must ask, first, whether we should build a bridge or a tunnel, and, secondly, where it will go. Of course, there will be investment not just in the crossing but in the infrastructure on the Essex and Kent sides, which must be linked in.

That was brought home to me starkly when I visited some of my old stomping grounds in Essex recently and, as the Minister with responsibility for shipping, was taken on to the river by the Port of London Authority. I have a dual role when it comes to that part of the country. I spoke to business people who told me that they owned land on the Kent side but had no intention of using it because they could not guarantee that they would be able to get their vehicles across the bridge and back. That is stifling the economy and growth. I freely admit that not one of them has said to me, “We can’t afford to do this; we think that the 50p is going to be a problem for us.” I am sure that there are businesses that will be affected by it, but what they were looking at was the ability to have a business plan that worked. In other words, if they need to get from A to B, and that happens to be from the Kent coast up through the midlands, how can they plan for that when they know, for instance, that they will be queuing at peak times—and sometimes not at peak times?

Several colleagues have written to me in the past couple of days to ask why we did not suspend the toll charges when the winds were bad the other day. The reason was that it was not the barriers that were causing the problem; we had to close the bridge because of the wind. The bridge was not designed brilliantly well—hindsight is a wonderful thing—and does not have the kind of protection from winds exceeding 50 mph that we would expect from a modern bridge. That meant that use of the bridge had to be suspended, and we reverted to using the two bores in the two tunnels—that almost took me back to my youth. I accept that that caused a great deal of trouble. Was the problem caused by the infrastructure or by the tolling? It was caused by the infrastructure not being fit for purpose.

As we work together—I hope that we can—on this project in the next couple of months, I hope to be able to bring in colleagues from all parties who represent constituencies in and around the Dartford river crossing area. I always wonder why we call it the Dartford river crossing area when Thurrock is on the other side. We should call it the Thurrock-Dartford river crossing. I stood as a parliamentary candidate in Thurrock in 2001, and I know only too well that it could be a fantastic growth area if there were confidence in the bridge.

I understand that there may be disappointment that the tolls were not removed when the previous agreement was in place, but I have to stand here as the Minister and say what will be the best outcome for the country as a whole, and for the constituents of hon. Friends who are here today. There are two things that I can do: I can give them confidence in the future that, by removing the barriers so that traffic will have free flow, local people will be able to cross regularly, whether they are going to work or moving socially from north to south and south to north.

The other thing that I need to come back to is the effect on the environment when that free flow comes in. It is of paramount importance that we look after not only the economy of this country but our constituents. We know that the levels of pollution are unacceptably high—particularly when there are problems going north, and because of how close residential properties are to the roads—and are likely to increase. Even though we are driving down emissions, we know from the sheer number of HGVs that come through that we will have issues with that.

We can move as fast as we can for free flow to take place, but we must ensure that the technology works and that local residents have confidence in the local discount schemes. I hope you will not mind my saying this, Mr Rosindell: the take-up of the schemes was as high as we all expected. However, if there are complications—I know that local residents find the schemes complicated—perhaps hon. Members could drop me a line about their concerns.

We are spreading the scheme. My hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) was looking at that, and it has been put forward many times. The problem is where to stop. I fully understand that the people who live nearby get a discount and that others just down the road do not, but we have to draw the line somewhere.

[Mr Evennett]

Bexley residents are much closer to the bridge and the tunnel than many others, but they do not have a discount scheme. Will they be included in the Minister’s thoughts?

[Mike Penning]

They are certainly included in my thoughts—my hon. Friend uses a good piece of terminology. I am more than willing to look at that, but if I take the discount away from some and give it to others, I will get just as many complaints from the other side. I have to look at the revenue. The key at present is not to have a cash cow but to use the money to make the environment better for my hon. Friend’s constituents in the future.

I hope that this will not be the last debate on the subject. This is not a bid for being here every day, or on a regular basis, but I hope that colleagues will engage with my officials, my Department and me to get the best option. My hon. Friend the Member for Dartford said earlier that we may not agree on everything, but let us work together on those things we do agree on. Let us use this opportunity to develop the economy and the environment, and to make the area a much better place for everyone to live and work in.

[Rehman Chishti]

Will every avenue be followed to ensure full and thorough consultation with local authorities and residents in the areas that are proposed for any future Thames crossing?

[Mike Penning]

There will be full consultation on that, just as there will be consultation now on the toll increases. Of course consultation will take place, but we must ensure that whatever is built is fit for purpose not just for us today, but for future generations.

I congratulate my hon. Friend the Member for Dartford on securing this debate, and I hope we can work with other colleagues on this project.

Question put and agreed to.

13:59

Sitting adjourned.

Written Ministerial Statements

Tuesday 23rd November 2010 Written Statements

Tuesday 23 November 2010

Departmental Expenditure Limits

Tuesday 23rd November 2010 Written Statements

[The Attorney-General (Mr Dominic Grieve)]

Subject to parliamentary approval of any necessary supplementary estimate, the Attorney-General’s total DEL will be increased by £10,977,000 from £686,875,000 to £697,852,000. Within the total DEL change, the impact on resources and capital are set out in the following table:

Departmental Expenditure Limits

Tuesday 23rd November 2010 Written Statements

[The Secretary of State for Business, Innovation and Skills (Vince Cable)]

Subject to parliamentary approval of the necessary supplementary estimate, the Department for Business, Innovation and Skills’ DEL will be reduced by £3,796,000 from £20,805,607,000 to £20,801,811,000 and the Administration budget will be increased by £2,300,000 from £321,187,000 to £323,487,000.

Within the DEL change, the impact on Resources and Capital is as set out in the following table:

Departmental Expenditure Limits (HM Revenue and Customs)

Tuesday 23rd November 2010 Written Statements

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

Subject to parliamentary approval of the supplementary estimate, the HM Revenue & Customs total DEL will be decreased by £500,000 from £3,706,842,000 to £3,706,342,000. Within the total DEL change, the impact on resources and capital are as set out in the following table:

Departmental Expenditure Limits (Resource)

Tuesday 23rd November 2010 Written Statements

[The Economic Secretary to the Treasury (Justine Greening)]

Subject to Parliamentary approval of the winter supplementary estimate, HM Treasury’s Resource DEL will be decreased by £20,657,000 from £206,740,000 to £186,083,000. The Administration Budget will be decreased by £21,957,000 from £159,551,000 to £137,594,000. The impact on resources, including the administration budget, is set out in the following table:

Departmental Expenditure Limits (National Savings & Investments)

Tuesday 23rd November 2010 Written Statements

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

Subject to parliamentary approval of any necessary supplementary estimate, National Savings and Investments (NS&I) departmental expenditure limit (DEL) will be increased by £15,994,000 to £168,402,000. Within the DEL change, the impact on resources and capital are set out in the following table:

Terrorist Asset-Freezing etc. Bill (Ministerial Correction)

Tuesday 23rd November 2010 Written Statements

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

On 15 November the Financial Secretary to the Treasury reported to Parliament on the operation of the UK’s Counter-Terrorist Asset Freezing Regime for the period July to September 2010.

During the Second Reading of the Terrorist Asset-Freezing etc. Bill, I responded to the right hon. Member for Leicester East (Keith Vaz) about figures published in the report. My response appears on 15 November, Official Report, column 708.

The explanation I gave of the figures was incorrect. For the purpose of transparency and to ensure the report is correctly interpreted in the future I would like to clarify that explanation.

As of 30 September 2010, a total of 205 accounts containing just under £290,000 of suspected terrorist funds were frozen in the UK.

Of that £290,000 approximately £140,000 was frozen under the UK’s domestic terrorist asset freezing regime, which is mandated by UNSCR 1373 and implemented by the legislation which the Bill is intended to replace. The remaining £150,000 was frozen under the UN al-Qaeda and Taliban asset-freezing regime.

Directgov (Review)

Tuesday 23rd November 2010 Written Statements

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

I invited Martha Lane Fox, the Government’s digital champion, to undertake a strategic review of Directgov which was completed on 14 October 2010. This supported the work that the Efficiency and Reform Board had undertaken on channel shift and the opportunity for digital channels to support delivery of the spending review. The Chief Secretary to the Treasury and I wrote to Departments in September outlining our commitment to improving services and driving efficiencies by making digital the default channel for Government information and transactional services.

Martha Lane Fox submitted her report “Directgov 2010 and beyond: revolution not evolution” to me in October. The report places Directgov in the context of how Government should use the internet both to communicate and interact better with citizens and to deliver significant efficiency savings from making digital the default delivery channel for Government information and services.

I have written to Martha Lane Fox today thanking her for her report and saying that I am minded to accept her proposals in full, but that I will need to consult colleagues before making any final decisions about how to take them forward. I have placed Martha Lane Fox’s report and my response in the Library. Both documents are also available on the Cabinet Office website (www.cabinetoffice.gov.uk)

I expect quick and broad agreement on some of Martha Lane Fox’s proposals where we can make rapid progress and that in some areas—such as moving to a single domain for Government—I will have to work with Departments to test different approaches and work through the details and timescales. It is important to set a clear direction of travel and that is what I have done in my reply as the initial Government response to Martha Lane Fox’s proposals.

Departmental Expenditure Limits

Tuesday 23rd November 2010 Written Statements

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

Subject to parliamentary approval of the winter supplementary estimate 2010-11, the Cabinet Office total departmental expenditure limit (DEL) will be increased by £229,588,000 from £329,499,000 to £559,087,000.

The impact on resources and capital is set out in the following table:

£’000Main Estimate DELChangesWinter Supplementary Estimate New DELVoted Non-voted Total Voted Non-voted Total Voted Non-Voted Total Resource DEL 259,942 49,196 309,138 +105,452 +100,985 +206,437 365,394 150,181 515,575 Of which: Administration Budget 171,459 10,400 181,859 +53,858 - +53,858 225,317 10,400 235,717 Capital DEL 245,887 2,000 47,887 +23,250 - +23,250 69,137 2,000 71,137 Depreciation 1 -27,526 - -27,526 -99 - -99 -27,625 - -27,625 Total DEL 278,303 51,196 329,499 +128,603 +100,985 +229,588 406,906 152,181 559,087 AME 1 Depreciation, which forms part of resource DEL, is excluded from the total DEL since Capital DEL includes capital spending and to include depreciation of those assets would lead to double counting.2 Capital DEL includes items treated as resource in estimates and accounts but which are treated as Capital DEL in budgets.

Summary of Changes in Departmental Expenditure Limit (DEL)

The change in the resource element of DEL is an increase of £206.437 million which comprises £163.636 million for x3 Machinery of Government transfers from other Government Departments, £47.303 million of agreed claims on the Reserve, £4.290 million budget covers transfers to other Government Departments and a reduction of £0.900 million for dividends receivable from Buying Solutions and an increase of £0.688 million for purchase of goods and services relating to the Office of Government Commerce, both excluded from the Machinery of Government transfer.

The change in the capital element of DEL is an increase of £23.250 million which comprises £21.750 million Capital DEL End Year Flexibility drawdown and a claim on the Reserve for £1.500 million.

Changes in Resource DEL (RDEL)

The changes which result in a net increase in Resource DEL (RDEL) of £206,437,000 are as follows:

Agreed Claims on the Reserve £47,303,000

A Claim on the Reserve for Grassroots Grants increases Resource DEL, Net Resource and Net Cash Requirement by £18,000,000.

A Claim on the Reserve for v Match Funding increases Resource DEL, Net Resource and Net Cash Requirement by £8,828,000.

A Claim on the Reserve from the Modernisation Fund to cover estate rationalisation and early departures increases Resource DEL, Net Resource and Net Cash Requirement by £10,475,000.

A Claim on the Reserve from the Transition Fund to support civil society organisations in adapting to a changing funding environment increases Resource DEL, Net Resource and Net Cash Requirement by £10,000,000.

Machinery of Government Transfers £163,636,000

The transfer of Directgov from the Department for Work and Pensions (DWP) to the Cabinet Office increases Resource DEL and Net Resource Requirement by £28,985,000 and Net Cash Requirement by £28,886,000.

The transfer of the Office of Government Commerce and its executive agency, Buying Solutions, from HM Treasury to the Cabinet Office increases Resource DEL and Net Cash Requirement by £20,657,000, increases Resource AME by £529,000 and increases Net Resource Requirement by £21,186,000.

The transfer of responsibility for political and constitutional reform from the Ministry of Justice to the Cabinet Office increases voted Resource DEL, Net Resource and Net Cash Requirement by £11,794,000. A transfer relating to the costs of the general election 2010 increases non-voted Resource DEL by £102,200,000.

Other changes outside Machinery of Government transfer £212,000

Dividends receivable from Buying Solutions of £900,000 and an increase of £688,000 for purchase of goods and services relating to the Office of Government Commerce. These adjustments are in addition to the Machinery of Government transfer. These changes decrease Resource DEL, Net Resource and Net Cash Requirement by £212,000.

Budget Cover Transfers to other Government Departments £4,290,000

A budgetary cover transfer from the Office for Civil Society to the Department for Communities and Local Government to cover the costs of the Government Office Network reduces Resource DEL, Net Resource and Net Cash Requirement by £290,000.

A budgetary cover transfer to the Security and Intelligence Agencies (SIA) for Information Assurance reduces Resource DEL, Net Resource and Net Cash Requirement by £4,000,000.

Transfer from non-voted to voted within Resource DEL

A switch within Resource DEL of £1,700,000 from non-voted to voted programme reflects savings made by executive NDPBs and reduces the Grant-in-Aid to eNDPBs and their non-voted expenditure and increases Office for Civil Society voted grants. The impact on Net Resource and Net Cash Requirement and Resource DEL is neutral.

Other neutral adjustments within Resource DEL

A switch within RDEL from administration to programme to cover costs of additional programme expenditure of £14,000,000.

A switch from Office for Civil Society resource grants to core Cabinet Office programme expenditure to re-profile the budget cuts reflected in the main estimate 2010-11 of £11,000,000.

Programme income has been reduced by £29,000,000 offset by a reduction in expenditure due to various programmes coming to an end.

An increase in administration income by £4,800,000 offset by administration expenditure on wages and salaries relating to the Office of Government Commerce; this adjustment is in addition to the Machinery of Government transfer.

A virement of £485,000 from independent offices—Civil Service Commissioners administration expenditure to the newly created executive non-departmental public body—Civil Service Commission—programme expenditure. The impact on Net Resource and Net Cash Requirement and Resource DEL is neutral. Non-Budget expenditure outside DEL has increased by £485,000.

A virement of £126,000 from independent offices—Civil Service Commissioners administration expenditure to core Cabinet Office. The impact on Net Resource Requirement, Net Cash Requirement and Resource DEL is neutral.

Changes in Capital DEL (COED

The changes which result in a net increase in Capital DEL (CDEL) of £23,250,000 are as follows:

End Year Flexibility / Claim on the Reserve

A drawdown to cover capital grants programmes run by the Office for Civil Society (OCS) increases Capital DEL and Net Cash Requirement by £21,750,000.

A drawdown on the Reserve from the Modernisation Fund to cover the costs of estate rationalisation increases Capital DEL and Net Cash Requirement by £1,500,000.

Neutral adjustment within Capital DEL

A switch within Capital DEL from Office for Civil Society capital grants to core Cabinet Office non-current assets to re-profile the budget cuts reflected in the main estimate 2010-11 has a neutral impact on Capital DEL and Net Cash Requirement, whereas Net Resource Requirement decreases by £2,500,000 and Net Voted Capital increases by the same amount.

Departmental Expenditure Limits

Tuesday 23rd November 2010 Written Statements

[The Secretary of State for Communities and Local Government (Mr Eric Pickles)]

Subject to Parliamentary approval of any necessary supplementary estimate, the Department for Communities and Local Government’s departmental expenditure limits for 2010-11 will change as follows:

Section 1: Main Programmes DEL

1. The Department for Communities and Local Government’s Main DEL will be decreased by £83,471,000 from £9,937,138,000 to £9,853,667,000 and the administration budget will be increased by £290,000 from £261,722,000 to £262,012,000. Within the DEL change, the impact on resources and capital are as set out in the following table:

Departmental Expenditure Limits

Tuesday 23rd November 2010 Written Statements

[The Secretary of State for Culture, Olympics, Media and Sport (Mr Jeremy Hunt)]

Subject to parliamentary approval, the Department for Culture Media and Sport’s departmental expenditure limit (DEL) will be increased by £39,700,000 from £1,957,263,000 to £1,996,963,000 and the administration budget will increase by £7,200,000 from £44,288,000 to £51,488,000. Within the DEL change the impact on resource and capital are set out in the following table:

Departmental Expenditure Limits

Tuesday 23rd November 2010 Written Statements

[The Secretary of State for Defence (Dr Liam Fox)]

Subject to parliamentary approval of the necessary supplementary estimate, the Ministry of Defence departmental expenditure limits (DEL) will be increased by £102,744,000 (Voted and Non Voted) from £37,219,510,000 to £37,322,254,000. Within the DEL change, the impact on Resources and Capital are as set out in the following table:

Departmental Expenditure Limits

Tuesday 23rd November 2010 Written Statements

[The Secretary of State for Education (Michael Gove)]

Subject to parliamentary approval of any necessary supplementary estimate, the Department for Education (DfE) departmental expenditure limit (DEL) will be increased by £580,339,000 from £57,318,757,000 to £57,899,096,000; the administration cost budget will increase by £1,500,000 from £180,503,000 to £182,003,000. The Office for Standards in Education, Children’s Services and Skills (OFSTED) which has a separate Estimate and DEL, will remain at £190,196,000 with the administration cost budget remaining at £27,337,000. The Office of Qualifications and Examination Regulation (OFQUAL) which has a separate Estimate and DEL, will remain at £23,400,000.

Within the DEL change, the impact on resources and capital are as set out in the following table:

Departmental Expenditure Limits

Tuesday 23rd November 2010 Written Statements

[The Secretary of State for Energy and Climate Change (Chris Huhne)]

Subject to parliamentary approval of any necessary supplementary estimate, the Department of Energy and Climate Change departmental expenditure limit (DEL) will increase by £650,000 from £3,111,948,000 to £3,112,598,000.

Within the DEL change, the impact on resources and capital are as set out in the following table:

Departmental Expenditure Limits

Tuesday 23rd November 2010 Written Statements

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

Subject to parliamentary approval of any necessary supplementary estimate, the Department for Environment, Food and Rural Affairs departmental expenditure limit (DEL) will be reduced by £218,000 (0.01%) from £2,417,291,000 to £2,417,073,000. The Administration Budget will be reduced by £662,000 (0.23%) from £282,750,000 to £282,088,000. Within the DEL change, the impact on resources and capital is set out in the following table:

Departmental Expenditure Limits

Tuesday 23rd November 2010 Written Statements

[The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)]

Subject to parliamentary approval of any necessary supplementary estimate, the Foreign and Commonwealth Office departmental expenditure limit (DEL) will be increased by £95,878,000 from £2,127,148,000 to £2,223,026,000. The administration budget will be increased by £64,250,000 from £420,448,000 to £484,698,000. Within the DEL change, the impact on resources and capital are as set out in the following table:

Departmental Expenditure Limits

Tuesday 23rd November 2010 Written Statements

[The Minister of State, Department of Health (Mr Simon Burns)]

Subject to the necessary supplementary estimates, the Department of Health’s element of the departmental expenditure limit (DEL) will increase by £20,860,000 from £106,260,372,000 to £106,281,232,000 the Administration Cost Limit has increased by £4,201,000 from £211,079,000 to £215,280,000. The Food Standards Agency DEL decreases by £16,059,000 from £130,989,000 to £114,930,000. The Administration Cost Limit will reduce by £5,389,000 from £56,299,000 to £50,910,000. The overall DEL including the Food Standards Agency will increase by £4,801,000 from £106,391,361,000 to £106,396,162,000. The impact on resource and capital are set out in the following table:

Departmental Expenditure Limits

Tuesday 23rd November 2010 Written Statements

[The Secretary of State for International Development (Mr Andrew Mitchell)]

Subject to parliamentary approval of the necessary supplementary estimate, the Department for International Development’s departmental expenditure limit (DEL) will be reduced by £74,465,000 from £7,618,569,000 to £7,544,104,000.

Within the DEL change, the impact on resources and capital are as set out in the following table:

Serious Further Offence Review (Jon Venables)

Tuesday 23rd November 2010 Written Statements

[The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)]

Following the recall to custody and subsequent conviction of Jon Venables for the possession of indecent images of children, I commissioned Sir David Omand GCB to undertake an independent review of the post-release period of the case, covering Jon Venables’ supervision from release on life licence in June 2001 until 24 February 2010, when he was recalled to custody.

The review has encompassed the general principles of a serious further offence (SFO) review but has also considered the wider lessons to be learnt for the future management of this and similar cases.

The terms of reference of the review were:

to review the supervision of the subject, from his release on life licence until his recall to custody, in order to establish whether he was effectively supervised, having regard to national standards and guidance and to the particular circumstances/challenges of his case;

in doing so, to consider the actions of his offender managers, their supervisors, the local police, the local MAPPA meetings and the role of the National Management Board; and

to establish whether everything was done which might reasonably have been expected of all agencies involved in supervising the subject to monitor his compliance with his licence conditions and to assess and manage any risk of harm which he presented.

Sir David Omand has completed the review and submitted his report to me.

I have placed in the Libraries of both Houses a copy of his report, which has been redacted in a few places to comply with the terms of the injunction amended in the High Court on 23 July 2010 (commonly known as the Butler-Sloss injunction), to take account of data protection and other confidentiality laws and to protect very sensitive operational policing information.

Sir David has concluded that Jon Venables was effectively and properly supervised at an appropriate level and frequency of contact, having regard to the particular circumstances of his case. Sir David also concludes that no reasonable supervisory regime would have been expected to detect his use of the computer to download indecent images.

I have accepted the review’s recommendations, which will be taken forward by officials in the National Offender Management Service. Officials will provide me with an update on the implementation of the recommendations in due course.

Departmental Expenditure Limits

Tuesday 23rd November 2010 Written Statements

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

Subject to parliamentary approval the Northern Ireland Office (NIO) will be taking a 2010-11 winter supplementary estimate. The effect this will have is to decrease the NIO’s Total DEL (excluding depreciation) by £1,169,047,000 from £1,203,205,000 to £34,158,000.

Departmental Expenditure Limits

Tuesday 23rd November 2010 Written Statements

[The Secretary of State for Scotland (Michael Moore)]

Subject to parliamentary approval of the necessary supplementary estimates, the departmental expenditure limit (DEL) for Scottish Government will be increased by £302,413,000 from £28,401,374,000 to £28,703,787,000. Within the total DEL change, the impact on resources and capital is set out in the following table:

Departmental Expenditure Limits

Tuesday 23rd November 2010 Written Statements

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

Subject to parliamentary approval of the necessary supplementary estimate, the Department for Work and Pensions Resource departmental expenditure limit will decrease by £35,781,000 to £8,730,218,000 and the Capital departmental expenditure limit will remain unchanged at £243,052,000. The Administration budget will decrease by £31,185,000 to £6,076,705,000.

Active at 60 (Community Agents)

Tuesday 23rd November 2010 Written Statements

[The Minister of State, Department for Work and Pensions (Steve Webb)]

Today, I am pleased to announce that the Government are providing £1 million to help older people keep active and make the most of their later lives. This money is available for local community groups or organisations within 30 selected areas¹ to bid for small grants of between £250 and £3,000.

Each local community group within the selected areas will recruit at least one Active at 60 Community Agent who will volunteer their time to help motivate, encourage and organise people within their own communities to become more active, physically, socially and mentally. Active at 60 Community Agents will be from the communities they are helping, and will have the flexibility to design innovative ways of encouraging and inspiring activity to help improve people’s later lives.

Through the Active at 60 Community Agent initiative those people who are more at risk of social isolation in their later lives will be supported in becoming more active, independent and positively engaged with society. Active at 60 Community Agents will help people within their communities:

take the first step in trying something new

understand the benefits they can get from being more active, engaged and contributing to their communities

build social contacts to help make being active part of their routine

This project is part of the Government’s ambition to build a big society in which power is transferred from Whitehall to local communities, and organisations and voluntary groups play a far greater role in their community.

¹ The following areas have been selected on the basis of level of deprivation and age structure, while ensuring a broad split across the English regions, encompassing both rural and urban areas:

Liverpool, Middlesbrough, Hackney, Sandwell, Kingston Upon Hull, Nottingham, Bournemouth, Southend-on-Sea, Brighton and Hove, Redcar and Cleveland, Wirral, Doncaster, Cornwall and The Isles of Scilly, East Sussex, Norfolk, Herefordshire, County of Lincolnshire, Enfield, Knowsley, Blackpool, Manchester, Stoke-on-Trent, Birmingham, Salford, Hartlepool, Tower Hamlets, Wolverhampton, South Tyneside, Rochdale, Sunderland.

Work Capability Assessment

Tuesday 23rd November 2010 Written Statements

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

The Government are pleased to announce the publication of Professor Malcolm Harrington’s independent review of the Work Capability Assessment (WCA). This is a substantial and thorough review of the WCA which the Government fully endorse. Alongside the review, the Government are publishing their response which sets out how we will implement the review’s recommendations.

A central part of the Government’s plans to reform the welfare state involves action to tackle incapacity benefit dependency. More than 2.2 million people in Britain today are on incapacity benefits and many have been abandoned, with little or no contact from the welfare state for as long as a decade or more.

Through the WCA we seek to change this, and to try to find a better way forward for those people. From April 2011 we will put 1.6 million people, all of those on incapacity benefits who are not close to retirement, through an independent medical assessment, the WCA. Those found fit for work or with the potential to return to work will be given support to help them do so, those who are deemed unable to work will continue to receive full support.

We believe that the principles of the WCA are right but we are clear that the process of assessment must be fair and honest about people’s potential. We do not wish to see people who are genuinely unable to work put in a position where they are expected to do so.

Professor Harrington’s review sets out how we can refine the system and significantly improve the process so that it continues to be fit for purpose. We intend to implement these changes as quickly as possible. Many will be put in place in time for the first assessments from the national migration in April 2011.

We will continue to review the WCA and to make further changes where necessary. We have invited Professor Harrington to continue in his current role as independent reviewer for another year and to make further recommendations to us as appropriate.

Copies of both documents are available in the Vote Office.